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Question 1 Report
MPC + MPS equals
Answer Details
The terms MPC and MPS are concepts from economics that describe how households make spending and saving decisions out of their income. Let's break these down for a better understanding:
The sum of MPC and MPS must equal 1 because the additional income can only be spent or saved, meaning there aren’t any other alternatives for allocating this extra income. Therefore, mathematically, we express it as:
MPC + MPS = 1
In a closed economy model, the whole of any extra income is divided into consumption and saving, thereby making 1 the correct answer. So, whenever income changes, whatever portion is not spent (MPC) is saved (MPS), summing it up to one.
Question 2 Report
What is the median term in the distribution below; 14, 13 29,15,13,17,12.
Answer Details
To find the median of a set of numbers, the first step is to arrange the numbers in ascending order (from smallest to largest).
The given numbers are: 14, 13, 29, 15, 13, 17, 12.
Arrange them in ascending order: 12, 13, 13, 14, 15, 17, 29.
The median is the number that appears in the middle of this ordered list. Since there are 7 numbers in this list, the middle number is the fourth one.
In the ordered sequence 12, 13, 13, 14, 15, 17, 29, the median is 14.
Question 3 Report
A market situation with few sellers and many buyers is called
Answer Details
The market situation you are referring to is called an oligopoly.
To put it simply, an oligopoly is a market structure where there are only a few sellers, or producers, who dominate the market, while there are many buyers. This creates a situation where the few sellers have significant control over the prices and market dynamics.
This structure is different from a perfect competition, where there are many sellers and buyers, with no single seller having significant market power. It is also different from a duopoly, which specifically refers to exactly two sellers.
The presence of a small number of sellers in an oligopoly leads to competitive strategies where the actions of one seller can influence the actions of others. This often results in strategic collaboration or competition, which affects prices and product offerings.
Question 4 Report
Which of the following is the correct order in the chain of distribution?
Answer Details
The correct order in the chain of distribution is: Producer → Wholesaler → Retailer → Consumer.
Let's take a closer look at each stage in this sequence:
Producer: This is the first stage where the initial product is manufactured or created. The producer could be a manufacturer or a farmer, or anyone who creates goods or services to be sold.
Wholesaler: After the producer creates the goods, they typically sell them in large quantities to a wholesaler. The wholesaler buys in bulk and often offers products at a lower price, allowing them to distribute to various retailers.
Retailer: The wholesaler then sells these products to retailers. Retailers have stores or online platforms where consumers can purchase products in smaller quantities. Retailers make these products accessible to the general public.
Consumer: Finally, the consumer is the person or entity that purchases and uses the product. This is the last step in the distribution chain, where the goods reach their intended end-users.
This sequence ensures that goods move efficiently from creation to the hands of consumers through different intermediaries, making the distribution process systematic and effective.
Question 5 Report
If the standard deviation of a set of numbers is 3.6, what is the variance?
Answer Details
The **variance** of a set of numbers is a measure of how much the numbers in the set differ from the mean (average) of the set. It is calculated as the average of the squared differences from the mean.
The **standard deviation** is simply the square root of the variance. It gives a measure of how spread out the numbers in the set are, using the same units as the original numbers.
Given that the standard deviation of a set of numbers is **3.6**, you can find the variance by squaring the standard deviation. This is because the variance is the square of the standard deviation.
So you calculate the variance as follows:
Variance = (Standard Deviation)2 = **3.6** x **3.6** = **12.96**
So the **variance** is **12.96**.
Question 6 Report
The contribution of petroleum to the economy of Nigerian is most prominent in the area of
Answer Details
The most prominent contribution of petroleum to the Nigerian economy is in the area of revenue generation.
Here’s why:
1. Major Source of Government Revenue: The petroleum industry is the backbone of Nigeria's economy, significantly impacting the nation’s fiscal landscape. It contributes a substantial portion of government revenue through the sale of crude oil globally. This revenue is critical for funding various government activities and programs.
2. Foreign Exchange Earnings: Crude oil and natural gas exports are a primary source of foreign exchange earnings for Nigeria. These earnings are vital as they enable the country to engage in international trade, import goods, and services, and stabilize the national currency.
3. Budgetary Funding: The Nigerian annual budget heavily relies on oil revenues. Oil sales provide the funds necessary for the government to execute national projects, maintain public services, and drive economic policies.
In summary, while petroleum impacts Nigeria's economy in various ways such as infrastructure development and employment generation, its contribution to revenue generation is by far the most prominent and crucial for sustaining government functions and the overall economic health of the nation.
Question 7 Report
Holding money to take care of contingencies is
Answer Details
Holding money to take care of contingencies is known as the precautionary motive.
Let me explain this further in a simple way:
Question 8 Report
The following are problems of development planning in Nigeria EXCEPT
Answer Details
Nigeria, like many developing countries, faces several challenges in its development planning. These include issues such as inadequate capital, which limits the ability to fund critical development projects and infrastructure, thus hindering economic growth. Another significant challenge is the inadequate statistical data, which affects the ability to make informed, evidence-based policy decisions. Without reliable data, it's difficult to plan effectively and measure progress.
Poor implementation of economic planning is also a notable problem, as even the best-laid plans cannot yield results if not properly executed. This might be due to bureaucratic inefficiencies, corruption, or lack of capacity.
However, the statement under-population is not a commonly recognized problem in Nigeria. In fact, Nigeria is known for having a large and rapidly growing population, which sometimes poses its own challenges in terms of resource management and service provision. Therefore, the issue of under-population can be seen as an exception to the typical problems of development planning in Nigeria.
Question 9 Report
The formular used by the Expenditure approach to calculate National income is
Answer Details
The expenditure approach is a common method used to calculate the national income, specifically the Gross Domestic Product (GDP) of a country. This approach sums up all expenditures or spending in the economy.
The correct formula for the expenditure approach is: Y = C + I + G + (X - M), where:
Putting it all together, this formula helps to calculate the total economic activity within a country by summing up consumption, investment, government spending, and net exports, giving a comprehensive picture of the national income.
Question 10 Report
The following determine the level of consumption EXCEPT
Answer Details
The level of consumption generally refers to the amount of goods and services that households are willing and able to purchase. This can be influenced by several factors:
Level of Income: The more income people earn, the more they can spend on goods and services, which directly affects consumption levels. With higher income, households typically increase their consumption.
The Rate of Taxes Paid: Taxes directly impact disposable income, which is the income available after tax deductions. Higher taxes reduce disposable income and may lead to lower consumption, while lower taxes increase disposable income and can potentially boost consumption.
Savings: When households allocate a portion of their income to savings, this reduces the immediate level of consumption. Therefore, high levels of savings can indicate lower levels of consumption.
The Political Climate: Although the political climate can affect the economy in various ways, it is generally not a direct and immediate determinant of consumption levels. The political climate can influence factors like economic stability and government policies, but it is not a direct factor in determining how much households consume.
Based on these explanations, the factor that determines the level of consumption the least is the political climate, because its effects are indirect and less immediate compared to the direct effects of income, taxes, and savings on consumption.
Question 11 Report
The following are the objectives of agricultural policies in Nigeria EXCEPT
A. provision of food
B. provision of agricultural raw materials to industrial sectors
C. increasing prices of agricultural Inputs
D. creation of rural employment
Answer Details
Nigeria's agricultural policies are fundamentally designed to enhance and support the agricultural sector for the overall benefit of its economy and citizens. Let's analyze the objectives given:
Therefore, the statement that does not align with the typical objectives of agricultural policies in Nigeria is the increasing prices of agricultural Inputs. Instead, policies are often geared towards making inputs more affordable to support agricultural growth.
Question 12 Report
The willingness of an individual backed up with purchasing power at a given time is
Answer Details
The concept you are referring to is effective demand. Let me explain it to you in a straightforward way:
Demand: Generally, demand refers to the desire or willingness of a consumer to purchase goods or services. However, just having the desire is not enough. Demand becomes impactful only when it is supported with the capability to purchase.
Effective demand: This is more than just a simple desire or demand. It represents the situation where an individual not only wants to purchase a product or service but also has the actual purchasing power to do so. This means they have the money or resources to back up their desire at a given time.
Desire: This term simply denotes a wish or want, without any implication of capability to fulfill it. For instance, many people might desire a luxury car, but not everyone can afford it.
Utility: This is a different concept entirely, referring to the satisfaction or benefit a consumer receives from consuming a product or service. It does not necessarily align with the ability to purchase.
In summary, when discussing the willingness to buy something and having the funds ready at that moment, it's referred to as effective demand because it combines the desire with the actual capacity to fulfill that desire.
Question 13 Report
Which of these is NOT associated with the problem of internal trade?
Answer Details
Market trade unions are not typically associated with the problem of internal trade. Trade unions are typically formed b workers or employees to protect their rights, negotiate better working conditions, and advocate for their interests. While trade unions can have an impact on labor markets and industrial relations, they are not directly linked to the challenges or problems specifically related to internal trade.
Question 14 Report
From the diagram below, moving from point A to B and from B to c is due to
Answer Details
Opportunity cost is a key concept in economics that refers to the value of the next best alternative forgone when making a choice. It plays a significant role in determining the downward shift in the production possibilities curve (PPC).
The PPC represents the different combinations of two goods or services that an economy can produce given its limited resources and technology. It illustrates the trade-offs that occur when resources are allocated between the production o different goods.
When there is a downward shift or inward shift in the PPC, it indicates a decrease in the economy's productive capacity. This shift can be influenced by several factors, including changes in resource availability, technology, or the efficiency of resource allocation. However, opportunity cost can help explain how these factors lead to a downward shift.
Question 15 Report
The following are type of business organization EXCEPT
Answer Details
In the context of business organizations, the term that stands out as not fitting among the others is **Entrepreneurship**.
To understand why, let's briefly define each term:
Thus, the odd one out is Entrepreneurship, because it describes the activity of establishing and managing a business rather than being a structured form of business organization like the others mentioned.
Question 16 Report
The formular (N + 1)/2 is used to determine the
Answer Details
The formula (N + 1)/2 is used to determine the median position in a dataset that is arranged in ascending or descending order. Understanding how to find the median is important because the median is a measure of central tendency that represents the middle value of a dataset. Here's a clear explanation of this concept:
When you have a set of numbers, the median is the number that falls in the middle when the numbers are arranged in either increasing or decreasing order. To find this middle value, you can use the formula (N + 1)/2, where N represents the total number of observations in the dataset.
For example, let's say you have a dataset with an odd number of observations: 3, 5, 7. Here, N is 3, so you apply the formula:
Median position = (3 + 1)/2 = 2
This calculation indicates that the second number in this ordered list is the median, which is 5.
If you have an even number of observations, such as 2, 4, 6, 8, you would calculate the median position as follows:
Median position = (4 + 1)/2 = 2.5
In this case, because 2.5 isn't an integer, the median is the average of the second and third numbers, which are 4 and 6. Therefore, the median is (4 + 6)/2 = 5.
In summary, the formula (N + 1)/2 is used to identify the position of the median in a list of numbers that are ordered, allowing us to understand where the middle point of the data lies.
Question 17 Report
The comparison of the standard of living between Nigeria and Ghana is best down through the use of
Answer Details
To effectively compare the standard of living between Nigeria and Ghana, the most suitable method is through the use of per capita income. Let me explain why this is considered the best approach:
Per Capita Income is a measure that calculates the average income earned per person in a specific country or region in a given year. It is determined by dividing the country's total income by its population. This method provides a clear indicator of how much income, on average, each individual has, which gives insight into the general well-being and standard of living of the population.
Let's break it down further:
In contrast, per capita income specifically focuses on the income available to each person, thus offering a more direct reflection of the purchasing power and financial well-being of an individual within these countries. Therefore, when comparing the standard of living between Nigeria and Ghana, per capita income is a more practical and clearer measure.
Question 18 Report
Which of the following is NOT included in-measuring the National income through the income approach?
Answer Details
When measuring national income using the **Income Approach**, the focus is on summing up all the **incomes earned** by individuals and businesses in an economy for providing goods and services. This typically includes wages, profits, rents, and interest received. Let's examine each option:
Question 19 Report
If government in a fiscal year has its revenue receipts less than the expenditure, such country is having
Answer Details
When a government has its revenue receipts less than the expenditure in a fiscal year, the country is experiencing a deficit budget. Here's a simple explanation:
Revenue receipts are the funds government receives, mainly from taxes and other sources like fees, interests, etc.
Expenditure refers to the total amount of money the government spends on various needs like infrastructure, education, defense, welfare programs, and salaries.
If the money received (revenue receipts) is less than the money spent (expenditure), it indicates that the government is spending more than it is earning. This excess expenditure generates a gap which is known as a deficit.
To address this deficit, governments might need to borrow money or reduce spending to balance their finances in the future. Hence, when expenditure surpasses revenue, it results in a deficit budget.
Question 20 Report
If two bags of rice were sold for #1,250 a month ago and two weeks later, the same amount was used to procure one bag. This simply means that the value of money is
Answer Details
In this scenario, the price of rice has increased relative to the amount of money (N1,250) that could be used to purchase it. Initially, N1,250 could buy two bags of rice, but after two weeks, the same amount can only buy one bag.
This decrease in purchasing power demonstrates that the value of money has declined. In other words, the same amount of money can now buy fewer goods or services than before. This situation is often referred to as inflation, where the general price level of goods and services rises over time, reducing the purchasing power of money.
Question 21 Report
A firm's average cost decreases in the long-run because of
Answer Details
In the long run, a firm's average cost decreases primarily because of increasing returns to scale. This occurs when a firm's output increases by a proportion greater than the increase in inputs. In simpler terms, when a company gets bigger, it becomes more efficient at production. Consider the following reasons:
Other options, like **diminishing average returns** or **decreasing marginal returns**, generally pertain to situations in the short run or under different conditions and would not directly explain a decrease in average costs in the long run. Additionally, while **decreasing average fixed cost** could reduce cost in the short run, in the long run, all costs are variable and focus instead shifts to how efficiently inputs are converted to outputs.
Question 22 Report
Which of the following will NOT bring about an increase in Labour force?
Answer Details
To determine which option will NOT bring about an increase in the labor force, let's examine the impact of each one:
1. **Decrease in death rate:** When the death rate decreases, more people are living longer, which means that they remain available to be a part of the workforce. Thus, this can contribute to an increase in the labor force.
2. **Better medical services:** Improved medical services often lead to healthier individuals who can participate in work for longer durations. Good health can increase the number of individuals who can work and potentially extend their working life, thus leading to an increase in the labor force.
3. **Immigration:** Immigration allows people from other countries to enter and work in a new country. This directly increases the number of people who are available to work in that country, thereby increasing the labor force.
4. **Emigration:** Emigration is when people leave a country to work or live elsewhere. When individuals emigrate, they reduce the number of people available to work in the original country. Thus, **emigration** will NOT bring about an increase in the labor force; instead, it can contribute to a decrease.
In summary, the option that will NOT bring about an increase in the labor force is **Emigration**.
Question 23 Report
Which of the following is NOT a function of the IMF?
Answer Details
The International Monetary Fund (IMF) is an international organization that primarily focuses on ensuring the stability of the international monetary system. Here are some of its core functions:
The statement that is NOT a function of the IMF is "assisting member countries in printing and issuing their currency." The IMF does not assist countries in printing or issuing their currency. This activity is typically managed by each country's own central bank or monetary authority. Thus, this function does not fall under the responsibilities of the IMF.
Question 24 Report
The middle value of an array figure arranged in descending order is referred to as the
Answer Details
The middle value of an array of figures arranged in descending order is referred to as the median.
To understand this concept, imagine you have a collection of numbers, and you want to find the one that sits right in the middle when all numbers are lined up from the largest to the smallest (or even from smallest to largest, as the median remains the same).
The median is very useful as a measure of central tendency because it is not affected by extremely large or small values in the dataset, which could skew other measurements like the mean. Thus, it provides a better representation of a typical value within the dataset, especially when dealing with outliers.
Question 25 Report
The following can be used to improve a country's balance of payment EXCEPT
Answer Details
The balance of payments is a record of all financial transactions made between consumers, businesses, and the government in one country with others. It includes trade in goods and services, investments, and money transfers. To improve a country's balance of payments, particularly the trade balance, countries may implement certain policies.
Anti-dumping policies are used to prevent foreign companies from selling goods at a price lower than their market value to gain an unfair advantage. By implementing anti-dumping policies, a country can protect its domestic industries from unfair competition, which can help improve the balance of payments by reducing imports or encouraging domestic consumption.
Granting subsidies to export producers can help improve the balance of payments by making domestic products cheaper and more competitive in international markets. By lowering production costs, subsidies can help increase exports, leading to an improvement in the balance of payments.
Increasing import duties is another way to improve the balance of payments. By imposing higher taxes on imported goods, a country can discourage imports and encourage consumers to purchase domestically produced goods. This can improve the trade balance by reducing the outflow of money used to purchase foreign products.
On the other hand, decreasing taxation on personal income doesn't directly affect the balance of payments. Reducing personal income tax may increase disposable income for consumers, which could lead to more consumption. However, this increased consumption might not necessarily focus on domestic goods, and could instead lead to higher imports. Therefore, among the options listed, decreasing taxation on personal income is the one least likely to directly improve a country's balance of payments.
Question 26 Report
The bank established to finances project aimed at promoting economic and social development within the African continent is
Answer Details
The bank that is primarily dedicated to financing projects aimed at promoting economic and social development within the African continent is the African Development Bank (AfDB).
The African Development Bank (AfDB) was established in 1964 with the main objective to reduce poverty, improve living conditions, and promote economic and social development in African countries. It achieves these goals by providing loans and grants for a variety of development projects and programs across the continent. These projects cover various sectors including infrastructure, education, healthcare, agriculture, and energy.
Unlike purely commercial banks, the AfDB is focused on development projects that may not always have immediate financial returns but are crucial for the sustainable growth and development of African nations. The bank works together with member countries and international partners to mobilize resources and expertise needed to tackle the continent's challenges, often adopting innovative financing solutions tailored to the unique needs of the African context.
Question 27 Report
In the equation Q = a - bp + e; Q and P are ... Variables respectively.
Answer Details
In the given equation Q = a - bp + e, we need to understand the roles of the variables Q and P.
In any equation where we are trying to establish a relationship between two variables, one of the variables is usually controlled or changed deliberately, while the other one is observed as it changes in response. In such equations:
In the equation Q = a - bp + e, **Q** is the outcome or result that we observe, and it depends on the value of **P**. Thus, **Q is the dependent variable** because it changes depending on the values of **P**. Conversely, **P** is the one that we can change or manipulate in the context of this equation, so **P is the independent variable**.
Therefore, the correct description for **Q** and **P** is that Q is the **dependent** variable, and P is the **independent** variable.
Question 28 Report
When combination of two goods which a consumer derive equal satisfaction is plotted on a graph, the graph is known as
Answer Details
The combination of two goods which a consumer derives equal satisfaction from is plotted on a graph known as an indifference curve. This graph represents all the different combinations of two goods that provide the consumer with the same level of utility or satisfaction.
For instance, if a consumer is equally happy with either 3 bananas and 2 apples or 2 bananas and 3 apples, both points will lie on the same indifference curve.
The reason it's called an indifference curve is because the consumer is indifferent between any two points on this curve, meaning they have no preference for one combination over the other since both provide the same level of satisfaction.
Unlike a demand curve which shows the quantity of a good that consumers are willing and able to purchase at various prices, the indifference curve focuses solely on the level of satisfaction from different combinations of goods, without considering their prices directly. It is an essential concept in the study of consumer behavior and helps understand how consumers make choices between different goods.
Question 29 Report
An exceptional demand curve can result from
Answer Details
An exceptional demand curve occurs when demand does not follow the typical downward slope from left to right. Instead, the demand curve may slope upward. Let’s consider some scenarios that could lead to this unusual situation.
Increase in Price of Raw Materials: This typically affects the supply side rather than the demand side. When prices of raw materials increase, production costs go up, possibly reducing supply, but not necessarily impacting demand directly. Therefore, this is not usually a reason for an exceptional demand curve.
Change in Taste of Consumer: If consumers suddenly prefer a particular product, they may be willing to buy more even if the price rises. This shift in consumer preferences can lead to an upward-sloping demand curve, reflecting increased demand despite higher prices.
Increase in the Size of the Population: More people can lead to higher overall demand, but each individual’s demand curve typically still slopes downward due to the law of diminishing marginal utility. Therefore, population increase alone generally does not cause an exceptional demand curve.
Expectation of Future Price Increase: When consumers expect prices to rise in the future, they may choose to buy more now to avoid paying higher prices later. This situation can lead to an upward-sloping demand curve as current demand increases with rising prices, due to future price expectations.
In summary, an exceptional demand curve is usually caused by changes in consumer tastes or expectations of future price increases, making current demand behave in an unexpected way compared to the usual downward slope.
Question 30 Report
At the equilibrium price,
Answer Details
The equilibrium price in economics is a fundamental concept where the market operates most efficiently. To understand it fully, consider the following explanation:
When demand equates supply, it indicates the price at which the quantity of goods consumers are willing to buy (demand) is exactly equal to the quantity of goods producers are willing to sell (supply). This is the point where the market reaches equilibrium. At this price, there is no excess supply or demand, meaning that resources are being used most effectively, and there is no pressure on the price to change.
In contrast:
Thus, at equilibrium price, demand equates supply, ensuring the market operates smoothly without surplus or shortage.
Question 31 Report
Which of the following is NOT a function of marketing boards in Nigeria?
Answer Details
In Nigeria, marketing boards were established to regulate and promote agricultural products. Their primary functions include activities like grading farm produce to ensure quality standards and marketing farm produce by finding markets where these products can be sold. They are also responsible for fixing prices for farm produce to stabilize farmers' incomes and protect them from market fluctuations.
However, one activity that marketing boards do not typically perform is the importation of farm produce. Marketing boards are mainly concerned with the domestic production and distribution of local agricultural products, whereas the importation would fall under international trade domains and different regulatory agencies. Thus, the importation of farm produce is not a usual function of marketing boards in Nigeria.
Question 32 Report
An economy in which decision of what to produce is taken partly by private individuals and state is referred to as Economy.
Answer Details
An economy in which decisions about what to produce are taken partly by private individuals and partly by the state is referred to as a Mixed Economy.
In a Mixed Economy, there is a combination of both private sector and public sector involvement. This structure allows private individuals to own businesses and make decisions about what to produce based on market demands and profitability. At the same time, the government also plays a significant role in economic decision-making, often by regulating certain industries or directly providing goods and services. The balance between these two forces aims to combine the benefits of both market dynamism and government oversight.
Here's a brief explanation of other economic systems to provide contrast:
In summary, a Mixed Economy represents a blend that includes elements of both market-driven and government-directed decisions, which sets it apart from other economic types.
Question 33 Report
An industry operating in a perfect competitive market situation will maximum profit when
Answer Details
In a perfectly competitive market, an industry or firm will maximize its profit when its Marginal Cost (MC) equals Marginal Revenue (MR). This is a fundamental principle of microeconomics that ensures the firm's resources are being used most efficiently.
Here's why:
If MC = MR, the cost of producing an additional unit is exactly equal to the revenue it generates, meaning any increase or decrease in production would not improve profitability. At this point, the firm is efficiently allocating its resources.
If MC < MR; it means that the cost of producing an extra unit is less than the revenue it brings. The firm can increase its profit by producing and selling more units.
Conversely, if MC > MR; the cost of producing an extra unit exceeds the revenue it brings, and the firm should reduce production to avoid losses.
Therefore, to achieve maximum profit, a firm in a perfectly competitive market should continue adjusting its output until the cost of the last unit produced is exactly equal to the revenue it produces, which occurs at MC = MR.
Question 34 Report
If the price of commodity X rises and consumers shift to commodity Y, then commodities X and Y are
Answer Details
If the price of commodity X increases and consumers start purchasing commodity Y instead, then commodities X and Y are considered substitutes. Substitutes are goods that can be used in place of one another; when the price of one goes up, consumers naturally shift their demand to the other because it serves a similar function or purpose. 
Consider an example: if the price of coffee goes up, people might start drinking tea instead if tea serves as a similar alternative for their morning beverage needs. In this scenario, coffee and tea are substitutes. Therefore, the relationship between these goods is defined by consumers' ability to consider one in place of the other based on price. 
In summary, when consumers replace their consumption of one good with another due to price change, the goods in question are substitutes.
Question 35 Report
If the marginal utility of commodity is equal to its price, then
Answer Details
To understand the concept of marginal utility and price, let's delve into a simple explanation. Marginal utility refers to the additional satisfaction or utility that a consumer gains from consuming one more unit of a good or service. Meanwhile, the price of a commodity is what the consumer pays to acquire that good or service.
In economic terms, a consumer is said to be in equilibrium when they have allocated their resources in such a way that they get the most satisfaction or utility from their consumption. The consumer equilibrium condition is achieved when the marginal utility per unit of expenditure is the same for all commodities.
Therefore, when the marginal utility of a commodity is equal to its price, it means the consumer is maximizing their satisfaction with the resources available. The consumer has no incentive to change the consumption bundle because they are already getting the highest possible satisfaction. In other words, the consumer is getting just as much utility from the last unit of the good as it costs. Consequently, the consumer is in equilibrium.
Thus, the correct explanation is: The consumer is in equilibrium.
Question 36 Report
Under perfect competition, a profit maximizing firm will hire labour up to the point where the last unit of labor adds
Answer Details
Under perfect competition, a profit-maximizing firm will hire labor up to the point where the marginal revenue product of labor (MRP) is equal to the wage rate. MRP represents the additional revenue generated by adding one more unit of labor.
Since the firm aims to maximize profits, it will continue hiring labor until the MRP is greater than or equal to the wage rate. At this point, the last unit of labor hired contributes more to total revenue than to total cost, resulting in increased profits for the firm.
Question 37 Report
Which of the following is NOT a major role of OPEC in production, and marketing of petroleum?
Answer Details
Refining of petroleum products in member countries is NOT a major role of OPEC in the production and marketing of petroleum.
Let me explain why:
In summary, the main roles of OPEC include balancing oil production and prices and ensuring a steady supply, but they do not majorly focus on the refining of petroleum products.
Question 38 Report
Wholesalers play an important in the distribution of goods and services because they
Answer Details
Wholesalers play a significant role in the distribution of goods and services for several key reasons:
1. Bulk Purchasing and Distribution: Wholesalers buy large quantities of goods from producers and sell them in smaller lots to retailers, which allows them to benefit from economies of scale. This bulk buying helps keep costs low for retailers and ultimately consumers.
2. Bridging the Gap: By acting as an intermediary between producers and retailers, wholesalers play a crucial role in the supply chain. They enable manufacturers to focus on production while handling the complexities of distribution and logistics.
3. Financial Support: Wholesalers sometimes provide credit to retailers, allowing them to purchase goods and pay later. They also assist producers by buying inventory upfront, providing necessary funds for the producers to continue their business.
4. Information Exchange: Wholesalers gather market trends and feedback from retailers and share this information with producers. This helps producers adjust their products to meet consumer demands more effectively.
5. Inventory Management: Wholesalers manage storage and inventory, reducing the burden on manufacturers and retailers. They ensure a steady supply of products, minimizing the risk of stockouts or overproduction.
In summary, wholesalers are essential in the distribution network because they facilitate product flow, support financial operations, manage distribution logistics, and collect market intelligence.
Question 39 Report
Which of the following is NOT a feature of capitalism?
Answer Details
In a capitalist economic system, several features define its characteristics. To understand which of the given options is NOT a feature of capitalism, let's examine each one:
Free Enterprise: This is a fundamental aspect of capitalism. It refers to the freedom of businesses to operate competitively for profit with minimal government intervention. Under free enterprise, individuals and businesses have the right to sell goods and services, decide on investments, and set prices.
Private Ownership of Property: Another core feature of capitalism is the ownership of property by individuals or corporations rather than by the government. In this system, individuals have the right to own assets, resources, and production facilities. They can use, rent, or sell property as they see fit.
Competition: Competition is a driving force in capitalism. It encourages businesses to improve their products and services, enhance efficiency, lower prices, and innovate. Healthy competition is believed to lead to better choices and quality for consumers.
Detailed Economic Planning: This is NOT a feature of capitalism. Detailed economic planning is more characteristic of socialist or centrally planned economies where government agencies set production targets, control resources, and address distribution centrally. Capitalism relies more on market forces and price mechanisms to guide economic decisions rather than detailed and centralized planning.
Therefore, detailed economic planning is the correct answer as it is NOT a feature of capitalism.
Question 40 Report
Which of the following NOT among the objectives of OPEC?
Answer Details
When analyzing the objectives of OPEC (Organization of the Petroleum Exporting Countries), it is important to look at the core goals that this organization typically aligns with:
1. To stabilize the price of oil in the world market: This is indeed one of the primary objectives of OPEC. By coordinating the oil production levels among its members, OPEC strives to maintain oil price stability in the global market.
2. To stabilize the revenue from oil to producing countries: Another key objective of OPEC includes ensuring consistent and fair revenue for its oil-producing member countries. By influencing oil prices and production levels, OPEC helps in maintaining stable revenues for these nations.
3. To make sure that oil flows to all the consuming countries: Ensuring the continuous supply of oil to consuming countries is a goal aligned with OPEC's efforts to balance supply and demand for economic and energy stability worldwide.
4. To establish petroleum refineries in all member states: This is NOT among the objectives of OPEC. OPEC does not focus specifically on establishing petroleum refineries in all its member states. The organization's primary focus is on coordinating and unifying the petroleum policies among its member countries, not on the physical establishment of refineries.
 
                    
 
                    
                    
                    
                 
                    
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