Correct Answer: A. preference shares

Correct Answer: C) the marginal rate of substitution for the function depends only on the ratio of the amount of the two goods

Explanation

This Economics question is asking about a type of utility function called homothetic. A utility function is a mathematical equation that represents an individual's preferences for different goods or services. Homothetic utility functions have a unique property that can help economists understand how people make choices.

The question is giving us four options to choose from, and we need to select the correct one. Option A says that the marginal utility depends on the average of the goods. Option B says that the total utility depends on the sum of the goods. Option C is the correct answer, and it says that the marginal rate of substitution (MRS) for the function depends only on the ratio of the amount of the two goods. Option D says that the MRS for the function depends on the total quantities of the two goods.

Let's focus on Option C, which is the correct answer. The MRS refers to the rate at which a person is willing to trade one good for another while keeping their overall level of satisfaction constant. In other words, how much of one good someone is willing to give up for a little more of the other good. For a homothetic function, the MRS only depends on the ratio of the two goods, not their absolute quantities. This means that a person's preferences between two goods remain the same regardless of how much of each good they have.

Understanding homothetic utility functions is important because it allows economists to make predictions about how people will behave when faced with different choices. For example, if someone's utility function is homothetic, we know that they will always be willing to trade the same amount of one good for another, regardless of how much of each good they have.

In summary, this Economics question is asking about homothetic utility functions, and the correct answer is Option C. Homothetic utility functions have the unique property that the MRS for the function depends only on the ratio of the amount of the two goods. This means that a person's preferences between two goods remain the same regardless of how much of each good they have.

Correct Answer: D. price control

Correct Answer: C. Nigerian Ecoonomic Society

Correct Answer: D) consumers suffer larger proportion of the increase in tax on the product

Explanation

This question is asking what happens when the demand for a product is price inelastic and there is an increase in tax on the product. There are four options to choose from. Option A states that consumers will suffer the entire increase in tax on the product. Option B states that producers will suffer the entire increase in tax on the product. Option C states that producers will suffer a larger proportion of the increase in tax on the product. Option D (which is the correct answer) states that consumers will suffer a larger proportion of the increase in tax on the product when demand is price inelastic.

Price elasticity of demand refers to the degree of responsiveness of the quantity of a product demanded to a change in its price. When demand for a product is price inelastic, it means that a change in its price results in a relatively smaller change in the quantity demanded. In other words, the demand is not very sensitive to the price change.

When there is an increase in tax on a product, the price of the product increases. If the demand for the product is price inelastic, consumers will continue to buy the product despite the increase in price. This means that consumers will bear a larger proportion of the increase in tax on the product. On the other hand, producers will not be significantly affected as their sales will not decrease significantly. This is why Option D is the correct answer.

In summary, when the demand for a product is price inelastic and there is an increase in tax on the product, consumers will bear a larger proportion of the increase in tax. Producers will not be significantly affected as their sales will not decrease significantly.

Explanation

(a)(i) Money as a measure of value means that money serves as a common denominator for measuring the relative values of goods and services. In other words, money is used to express the value of one commodity in terms of other commodities. As the values of commodities are stated in terms of money, their relative values are automatically established. For example, if a cutlass sells for $4 and a table is priced at $40, it means one table is worth 10 cutlasses.

(ii) Money as a store of value means that money makes it possible for a person to save part of his current income or produce for later use. Whatever is produced can be sold and kept in the form of money for future use. This is because goods may be perishable Services are also intangible. It will be difficult for a

teacher or a doctor to save part of his output in the absence of money.

(b)How inflation affects money as a measure of value: Since inflation reduces the value of money, its function as a measure of value is affected. If the inflation is general, prices may rise to the same extent so that relative values of commodities would remain unchanged. On the other hand, if the inflation affects some commodities more than others then the relative values between commodities would change.

How inflation affects money as a store of value: When there is inflation money loses value. More money is exchanged for a particular commodity.

In other words, a given unit of money exchanges for less goods. In such circumstances people hesitate to store their wealth in terms of money. The money

saved would lose part of its value. It would exchange for less output in future than now. In such circumstances people prefer to save in terms of assets which are likely to appreciate in value like land and buildings.

Correct Answer: B. price control

Correct Answer: B. working population

Correct Answer: D. speculative purposes

Explanation

(i) To protect the interests of its members (ii) It has helped in the stabilization of world Oil prices thereby preventing wide fluctuations in oil prices and output.

(iii) t has been responsible for seeking favorable markets for produced by its members.

(iv) The existence of OPEC has led to Improved trade relations among members and the International community as a whole.

(v) OPEC provides employment for many people especially from the member nations.

(vi) OPEC helps to educate its members and the international community through its regular meetings where Issues are thoroughly discussed and communiques issued