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JAMB Economics 1985 Question 10

Question 10

Theory of Supply

If in the short-run commodity X and commodity Y are supplied jointly, which of the following is correct?

  1. A.An increase in demand for X will increase the supply of Y
  2. B.An increase in demand for X will shift the supply of Y
  3. C.An increase in demand for Y will raise the price of X
  4. D.An increase in demand for X will cause less of Y to be produced
  5. E.A probable tax on Y will cause more of X to be supplied.
Show the answer and explanation

Answer: A (An increase in demand for X will increase the supply of Y)

Explanation

Jointly supplied goods come out of the same process (e.g. beef and hides), so producing more X to meet demand automatically produces more Y.