Correct Answer: A. average variable cost

Correct Answer: C. perfectly inelastic

Correct Answer: D. undertake effective planning

Correct Answer: B) at zero price, quantity supplied exceeds quantity demanded

Explanation

This question is asking about a free good and which situation represents a free good. A free good is a good that is available in abundance and has no opportunity cost. In other words, it is a good that can be obtained without paying a price.

Option A states that when more is demanded than supplied at zero price, we have a free good. This is incorrect because if there is more demand than supply, it means the good is scarce and not freely available.

Option C states that at equilibrium price, quantity supply is equal to quantity demanded. This does not represent a free good because there is still a price attached to it.

Option D states that any quantity can be obtained when the price is low. This does not represent a free good because there is still a price attached to it.

Option B states that at zero price, quantity supplied exceeds quantity demanded. This represents a free good because it is available in abundance and there is no price attached to it. Examples of free goods include air, sunlight, and water from natural sources.

In summary, the correct answer is Option B, which represents a free good. To learn more about this, please read the relevant sections of the recommended textbooks.

Correct Answer: A. Improvement in transport system

Explanation

Efficient transport system encourages international division of labour.

Correct Answer: C. Fairly elastic.

Correct Answer: A. per capital output is maximized

Correct Answer: D. rises and later falls

Correct Answer: A. enjoying free entry and exit

Explanation

Elastic supply curves indicate that the quantity supplied responds to price changes in a greater than proportional manner. An industry supply curve would most likely be elastic if the industry is operating in a market where there is free entry and exit. The industry may decide to exit the market if the prices offered for its products are not good enough, and decide to come back when the products are well priced.

Explanation

(a) Supply of a commodity is the quantity.of a commodity a producer is willing to sell at a given price over a period of time. It means the total quantity that the producer brought to the market for sale. The law of supply states that "the higher the price, the higher the quantity offered for sale".

(b) Factors that affect supply are:

(i) If the cost of production increases, the producer will charge a higher price for his product to cover cost

(ii) Government policy, particularly taxation can affect the supply of a commodity. For example, a tax on farming equipment will affect supply of beans.

(iii) The supply of a commodity will be affected if the prices of other commodities rise. If the price of substitutes like maize or rice increases, the quantity produced of beans will fall.

(iv) lithe number of producers of beans increases there will be a corresponding increase in quantity supplied.

(v) Improved techniques and technologies reduce cost per unit of product and increase output or supply.

(vi) A plague of insects, flood, drought or fire will affect the supply of a commodity like beans.