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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
The main disadvantages of deflationary policies is
Answer Details
Deflationary policies refer to economic strategies aimed at reducing inflation and stabilizing prices. However, these policies can also have several disadvantages that can negatively impact an economy.
One major disadvantage of deflationary policies is unemployment in the country. These policies often involve reducing the money supply or increasing interest rates. When the money supply is reduced, businesses may have less access to credit and may experience decreased consumer spending. This can lead to lower production and, consequently, job cuts, increasing unemployment.
Deflationary policies may also lead to a decrease in investments, as higher interest rates make borrowing more expensive. Companies might delay or reduce their investment plans, creating a ripple effect that dampens economic growth and job creation. As more people are unemployed, there is less consumer spending, which can further exacerbate economic stagnation.
On the other hand, while these policies could potentially lead to an improved standard of living in the long run by stabilizing prices, the immediate term is often marked by challenges. These policies are designed to control costs; however, the path to reaching that stability can be quite turbulent.
In summary, the main disadvantage of deflationary policies is their potential to increase unemployment and dampen economic growth, despite their goal of stabilizing the economy.
Question 3 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 4 Report
Which of the following is NOT a factor that brings about changes in demand?
Answer Details
In economics, a change in demand is influenced by several factors, but one of the options provided is NOT a factor that leads to a change in demand. This factor is the price of the good or service.
Here’s why:
The Price of the Good or Service: When we talk about demand, we focus on a demand curve that represents the relationship between the price of a good and the quantity demanded. A change in the price of the good itself does not shift the demand curve; instead, it results in a movement along the demand curve. Therefore, changes in the price of the good or service itself do not cause a change in demand but rather a change in the quantity demanded.
In contrast, the following factors do cause shifts in the demand curve (change in demand):
A Change in Real Income: When consumers have more or less income, their ability to purchase goods and services changes. If real income increases, consumers can afford to buy more, shifting the demand curve to the right. Conversely, a decrease in real income shifts the demand curve to the left.
Government Policy: Policies such as taxes, subsidies, regulations, or import restrictions can impact consumer purchasing power or the attractiveness of a product, influencing demand. For example, a subsidy on solar panels might increase their demand as they become more affordable.
Increase in Population: An increase in population typically increases demand for various goods and services as more people in the economy need these products, causing a rightward shift in the demand curve.
Question 5 Report
The use of tax and expenditure policy to regulate the economy is known as
Answer Details
The use of tax and expenditure policy to regulate the economy is known as fiscal policy.
Fiscal policy refers to the government's use of its spending levels and tax rates to influence a nation's economy. It is primarily the responsibility of the government to adjust its spending and tax rates to either promote economic growth or control inflation. By doing so, the government aims to achieve macroeconomic objectives such as controlling inflation, reducing unemployment, and achieving economic growth.
There are two main types of fiscal policy:
In summary, fiscal policy is crucial because it directly impacts the economy by influencing the level of aggregate demand through changes in government spending and taxation.
Question 6 Report
From the diagram below, the equilibrium wage rate is
Answer Details
The equilibrium wage rate is achieved when the demand for labour equals the supply of labour in a particular labour market. At this point, there is no excess demand or excess supply of labour, and the market is in balance.
From the diagram above, the equilibrium wage rate is W2.
Question 7 Report
The trade-off between two commodities along the Production Possibility Curve (PPC) shows
Answer Details
The Production Possibility Curve (PPC) is a graphical representation that shows the different combinations of two goods or services that an economy can produce, given certain assumptions like fixed resources and technology.
The trade-off between two commodities along the PPC primarily illustrates the opportunity cost principle. This principle refers to the idea that in order to produce more of one good, an economy must produce less of another good. The curve demonstrates this trade-off by showing that resources are limited, and choosing to allocate more resources to produce one commodity means reallocating those resources away from another commodity.
For example, if an economy is at a certain point on its PPC and decides to produce more of Commodity A, it will inevitably end up producing less of Commodity B. This reduction in the production of Commodity B is the opportunity cost of producing more of Commodity A. Hence, every point along the PPC illustrates the trade-off and opportunity cost of choosing different production levels of the two goods.
Question 8 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 9 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.
Question 10 Report
When an economy is having a balance of payment surplus the best alternative opened to it is to
Answer Details
When an economy is experiencing a balance of payments surplus, it means that the country is exporting more goods, services, and capital than it is importing. Essentially, there is more money flowing into the country than out of it. In such situations, one of the most viable actions to take is to increase its foreign reserves.
Here's why increasing foreign reserves is often the best option:
Promoting imports, while it can help reduce the surplus by encouraging money to flow out of the country, may not always be the best course of action and depends on the country's economic goals and import needs. Borrowing from abroad is generally not necessary when the country has a surplus. Devaluing the currency is certainly not favorable in the context of a surplus as it can create inflationary pressures and reduce purchasing power internationally.
Question 11 Report
The following will occur when maximum price is fixed below the free market price EXCEPT that
Answer Details
When a maximum price is fixed below the free market price, it can lead to several outcomes due to the restrictions placed on how high a price can go. Here's a breakdown of what typically happens:
1. **Encouragement of Black Market:** When the price ceiling is lower than what would naturally occur, some sellers may not be willing to sell at the lower price. This may encourage them to sell illegally at higher prices, leading to the emergence of a **black market**.
2. **Excess Demand:** A lower price means that more people can afford the product. Therefore, demand for the product increases, but because producers are not willing to supply more at that low price (since they make less profit), there isn't enough product to meet demand. This creates **excess demand**. People want more of the product than is available.
3. **Excess Supply:** This situation is not a consequence of setting a maximum price below the free market price. **Excess supply** happens when the price is too high, resulting in goods remaining unsold as consumers are not willing to buy at that price. But since in this scenario, the price is kept low, the opposite happens: a shortage, not a surplus.
4. **Rationing of Commodities:** To manage the excess demand and ensure fair distribution since there's a shortage, the government or sellers may need to introduce **rationing**. This means setting limits on how much each individual can purchase to prevent the faster depletion of available goods.
In summary, the statement about **excess supply** is the one that would not occur when a maximum price is fixed below the free market level. Instead, you'll have excess demand. This discrepancy is because the artificially low price discourages producers from supplying more of the good.
Question 12 Report
A downward sloping demand curve means that
Answer Details
When the price of a product decreases, consumers are generally willing to buy more of it. As a result, the quantity demanded increases. However, since each unit is sold at a lower price, the decline in price outweighs the increase in quantity, leading to a decrease in total revenue (total revenue = price x quantity). This is why a downward sloping demand curve indicates that the total revenue declines as the price is lowered.
Question 13 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 14 Report
The system of farming which involves the use of a large hectare of land planted with economic crops is known as
Answer Details
The system of farming that involves the use of a large hectare of land planted with economic crops is known as plantation farming.
Explanation: Plantation farming is an agricultural system where a single crop is grown extensively over a large area. This system is specifically designed for the cultivation of high-demand crops, often termed as "economic crops," because they are produced for their commercial value rather than for direct consumption by the farmers. Such crops include coffee, tea, rubber, sugarcane, cotton, and palm oil.
Key Characteristics of Plantation Farming:
In contrast, smaller or subsistence farmers often engage in diverse cropping systems with multiple types of plants cultivated for personal or local consumption. Plantation farming, on the other hand, is designed to produce large quantities of a specific, economically valuable crop to meet regional or global demands.
Question 15 Report
An industry engaged in the extraction of raw materials and its conversion into semi-finished goods is called industry.
Answer Details
Processing involves transforming raw materials or inputs into more refined or semi-finished products. This can include various stages of production, such as refining, manufacturing, assembly, or other forms of processing.
The processing industry plays a vital role in taking raw materials from their natural state and converting them into products that can be used for further processing or consumed by end-users. This industry typically adds value to the rav materials by applying different processes, technologies, and expertise.
NOTE: Although manufacturing is involved in the production of goods, it does not specifically address the extraction of raw materials. Manufacturing encompasses a broader range of industries involved in producing finished goods from raw materials, components, or parts.
Question 16 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 17 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 18 Report
Which of the following is NOT associated with minimum price legislation?
Answer Details
Minimum price legislation is a policy where the government sets a lower price limit for certain goods or services, meaning they cannot be sold below this set price. It is often intended to protect producers, ensuring they receive fair compensation and maintaining industry standards.
When a minimum price is set above the equilibrium price, it typically leads to several economic effects:
Excess demand is NOT associated with minimum price legislation. Excess demand occurs when the price is set too low, leading to a situation where the quantity demanded exceeds the quantity supplied. This situation is commonly related to maximum price controls, not minimum price legislation.
Question 19 Report
Answer Details
The concept we are discussing here is the Price Elasticity of Demand (PED). It measures how much the quantity demanded of a commodity changes with a change in its price. The formula for calculating the price elasticity of demand is:
PED = (% Change in Quantity Demanded) / (% Change in Price)
First, we calculate the percentage change in quantity demanded:
Percentage change in quantity demanded:
= (Change in quantity demanded / Initial quantity demanded) Ă— 100
= (-20 / 100) Ă— 100 = -20%
Next, calculate the percentage change in price:
Percentage change in price:
= (Change in price / Initial price) Ă— 100
= (2 / 8) Ă— 100 = 25%
Now, we can substitute these values into the formula for PED:
PED = (% Change in Quantity Demanded) / (% Change in Price)
= (-20%) / (25%)
= -0.8
The price elasticity of demand is -0.8. The negative sign indicates that there is an inverse relationship between price and quantity demanded, which is normal for most goods. This value rounded to the nearest value provided in your options is 0.8. This implies it is inelastic demand, meaning the quantity demanded is not very responsive to price changes.
Question 20 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 21 Report
The satisfaction derived from the consumption of a commodity is referred to as
Answer Details
The satisfaction derived from the consumption of a commodity is referred to as utility. To explain this concept further, let's break it down:
Utility is an economic term that describes the pleasure, happiness, or satisfaction a consumer gets from consuming goods and services.
Here’s why it is the correct term:
In summary, whenever we talk about the satisfaction from using or consuming goods, we are discussing the concept of utility.
Question 22 Report
The diagram belwo, shows the relationship between
Answer Details
The relationship shown in the diagram is most likely related to the **wage rate and unemployment.** Let me explain this relationship clearly:
The **wage rate** refers to the payment workers receive for their labor, typically expressed on an hourly, daily, or yearly basis. The **unemployment rate** is the percentage of the labor force that is jobless and actively looking for work.
When the **wage rate** offered in the market is above the equilibrium wage (where the supply of labor equals the demand for labor), firms may choose to hire fewer workers as it becomes more expensive to employ labor. This can lead to an **increase in unemployment**. Conversely, if the wage rate is lower, firms are more likely to hire additional workers, possibly decreasing unemployment.
Understanding this relationship is crucial in comprehending how wage policies can influence employment levels. Wage increases that are not aligned with productivity may result in higher costs for employers, potentially resulting in a reduction of jobs available, hence increasing unemployment. Therefore, there is a delicate balance between setting wage levels and maintaining employment levels in the economy.
Question 23 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 24 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 25 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 26 Report
The problem of "how to produce" in any economy is solved by
Answer Details
In any economy, the problem of "how to produce" is essentially about deciding the best way to combine resources to produce goods and services. This challenge can be effectively addressed by adopting the least cost method of production.
Here’s why:
In summary, while other methods and managerial skills are important, addressing how to produce in the most efficient and effective way often boils down to using the least cost method of production, thereby ensuring optimal resource use and economic stability.
Question 27 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 28 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 29 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 30 Report
Persistent fall In the general price level is known as
Answer Details
A persistent fall in the general price level is known as deflation.
To understand this better, let's break it down:
Hence, when we say "persistent fall in the general price level," we are accurately describing deflation.
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
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 33 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 34 Report
Stock exchange market deals with
Answer Details
The stock exchange market primarily deals with the sales of second-hand securities. In this context, "second-hand securities" refer to financial instruments such as stocks and bonds that have already been issued by a company and are currently being traded among investors. When a company first issues stocks or bonds, it is done in the primary market. Once these securities are purchased and then resold by investors, they are traded in the secondary market, commonly known as the stock exchange.
Here's a simple rundown of how it works:
1. **Initial Offering:** A company looking to raise capital might issue stocks or bonds to investors. This takes place in the primary market through an Initial Public Offering (IPO) or similar mechanisms.
2. **Secondary Trading:** Once issued, these securities can be bought and sold on the stock exchange. Investors trade these securities based on supply and demand, trying to make a profit by buying low and selling high.
Therefore, the stock exchange acts as a platform where buyers and sellers meet to trade these second-hand securities. This buying and selling provide the liquidity required for the market to function efficiently and helps in price discovery of the securities based on market demand.
Question 35 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 36 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 37 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 38 Report
Economic problem arises as a result of
Answer Details
The **economic problem** arises due to the fundamental concept of **scarcity**. In simple terms, scarcity means that the resources available to us are **limited**, while our desires and needs are **unlimited**. This situation forces us to make decisions about how best to allocate our resources efficiently.
Because of scarcity, every choice we make involves a **trade-off**. For instance, if you choose to spend your time studying economics instead of mathematics, you sacrifice the benefits you would have gained from studying mathematics. The concept associated with this scenario is called **opportunity cost**, which is essentially the value of the next best alternative forgone when making a decision.
Furthermore, scarcity leads to the necessity of **choice**. Individuals, businesses, and governments must decide what to produce, how to produce, and for whom to produce. These choices are influenced by the limited resources and the alternatives available.
While **money cost** is often considered in decisions, it is not the root cause of the economic problem. It is a **monetary representation of value** and is used as a tool to navigate scarcity and opportunity cost.
In essence, the **economic problem exists** because we have to make choices about how to use our scarce resources most effectively, and every choice involves an opportunity cost. This continual need to prioritize options is at the very heart of economics.
Question 39 Report
The act of cultivating land and rearing of animal for man's use is
Answer Details
The act of cultivating land and rearing of animals for man's use is known as agriculture.
Agriculture is an activity that involves growing crops and raising animals to provide food, fiber, medicinal plants, and other products used to sustain and enhance human life. It is a vital practice that has been developed over thousands of years, allowing civilizations to flourish by ensuring a stable supply of food and resources. This practice not only involves the cultivation of the land for crops but also includes various other activities such as animal husbandry, which is the breeding and care of farm animals.
Let me explain a bit about the other terms you mentioned:
Thus, the most comprehensive term that covers both the cultivation of land and rearing of animals is agriculture.
Question 40 Report
When an increase in the price of a commodity lead to a fall In the demand for another, the demand for the two commodities are said to be
Answer Details
Competitive demand refers to a situation where two or more goods are seen as substitutes for each other. When the pric of one commodity increases, consumers tend to shift their demand towards the substitute commodity, resulting in a decrease in the demand for the original commodity.
For example, if the price of coffee increases significantly, some consumers may choose to switch to tea as a substitute. A: a result, the demand for coffee decreases while the demand for tea increases.
Would you like to proceed with this action?