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21.
Given Demand function: Q d = 5P + 10; Supply function: Q s = 7P – 5. The equilibrium quantity is
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A.
50
B.
55
C.
75.5
D.
47.5
E.
55.5

22.
In market economies, resources are allocated through the
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A.
government authorities
B.
price system
C.
banking system
D.
central planning bureau
E.
revenue allocation formula

23.
In the operation of market forces, the market is in equilibrium at the point where
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A.
demand and supply curve intersects in more than one point
B.
the excess in the market can be conveniently stored
C.
excess demand is positive
D.
demand and supply curves intersect
E.
excess demand is negative

24.
The basic feature of a market economy is
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A.
the reduction in the power of sellers
B.
the enthronement of consumer sovereignty
C.
the dismantling of barriers to trade
D.
the perfectly elastic price for every transaction
E.
the intersection of demand and supply curves

25.
The following are the conditions that must be fulfilled for price determination EXCEPT
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A.
market merger
B.
market segmentation
C.
demand elasticities
D.
product differentiation
E.
none of the above

26.
The main function of price mechanism is to
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A.
limit consumer demand
B.
enable producers make profits
C.
allocate scarce resources among competing ends
D.
ensure consumer sovereignty
E.
achieve excess capacity

27.
When government intervenes in price-setting, the regulated price is usually
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A.
higher than the last price
B.
lower than the last price
C.
higher than the equilibrium price
D.
lower than the equilibrium price
E.
higher than the ceiling price

28.
A firm achieves least cost in production by substituting factors until
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A.
their factor prices are equal
B.
their marginal products are equal to the factor prices
C.
their marginal products are each equal to zero
D.
the ratios of their marginal product equals the ratio of their prices
E.
none of the above

29.
A production possibility curve shows
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A.
how much of resources a society uses to produce a particular commodity
B.
the rate of inflation
C.
the rate of unemployment in an economy
D.
the various combinations of the commodities that can be produced
E.
all of the above

30.
A rightward shift in the production possibility frontier may be due to
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A.
use of inferior inputs
B.
inefficiency
C.
improvement in production techniques and practices
D.
changes in the product mix
E.
changes in consumer taste

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