Correct Answer: D. fixed cost

Explanation

The short run is a production phase where at least one factor of production is fixed. Fixed costs are expenditures that do not change based on the level of production, at least not in the short run. Whether you produce a lot or a little, the fixed costs are the same.

Correct Answer: B. 20%

Correct Answer: B. factors of production

Correct Answer: A. cause increase in price

Explanation

Reasons why small scale firms are common in West Africa.

(i) Where the work is done by craftsmen to satisfy tastes

(ii) Small firms are easy to set up because of small capital requirements.

(iii) General economic boom The economy as a whole may be growing with new opportunities of expansion being created open to both large and small rims, hence there is room for small firms.

(iv) The self motive. Some people like to remain their own boss, to enjoy the pride of ownership. They therefore remain because expanding may mean inviting partners

and so sharing ownership

(v) For security sake It may be risk to depend only on one large supplier, Therefore orders may be placed with small firms regularly just to keep them in business.

(vi) The size of the business unit tends to be small where the work involves the provision of direct services.

(vii) Fear of the risk: The nature of the product may be such that there are frequent changes in demand e.g. in the fashion trade, production will be on small scale so as to minimize loss if there is a fall in demand.

(viii) Government policy. Governments may institute anti-monopoly polices or policies to assist small firms.

(ix) Where the market size is small, production must be on a small scale.

(x) Small firms are easy to manage and control/ inadequate expertise in managing large scale enterprise

(xi) Small firms require small legal and administrative procedures to set up.

Correct Answer: A. less than normal profit

Explanation

The long run is a phase where all factors of production are variable and firms are able to adjust all costs. If its earnings are less than the normal profits, it will shut down. A firm should earn enough to cover its total cost per unit in order to remain in business.

Explanation

(a)

(b) Ratio of P.S to total. = \(\frac{18,000}{45,000}\) = 2.5 Or 1:5

Ratio of SS to total = \(\frac{12,000}{45,000}\) = 4:15 Or 1:3.75

Ratio of TS to total = \(\frac{15,000}{45,000}\) = 4:15 Or 1:3

Correct Answer: A. anyone can become a buyer or a seller

Explanation

This means that the firms can enter or quit the industry as they wish

Correct Answer: A. money supply

Explanation

Commercial bank refers to a financial institution that accepts deposits, offers cheque account services, makes various loans etc. The deposits of commercial banks make up part of the money supply in an economy, which is the total amount of money in circulation or in existence in a country

Correct Answer: A. Px = MUx

Explanation

Utility is maximized When price is equal to marginal utility.