JAMB UTME - Economics - 2022

The supply curve of a locally-produced good may shift to the right if

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In a free market economy, the rationing of scarce goods is done principally by?

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In a free market economy, the rationing of scarce goods is principally done by the price mechanism. The price of a good is determined by the forces of supply and demand in the market. When the supply of a good is limited and demand for it is high, the price of that good will increase. This higher price will serve as an incentive for producers to increase their supply of the good, and for consumers to reduce their demand for it. As a result, the scarce good will be rationed among consumers based on their willingness to pay the higher price. This process occurs naturally without the need for government intervention or control, and is a key feature of a free market economy.

The demand for labour is an example of

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The demand for labour is an example of derived demand. Derived demand refers to the demand for a good or service that arises from the demand for another good or service. In the case of labour, the demand for it is derived from the demand for the goods and services that labour produces. For example, a factory may demand more labour to increase production of a particular product to meet customer demand. The demand for labour is not a direct demand, but rather a demand that is derived from the demand for the final product.

A positive effect of a rapid population increase is

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A positive effect of a rapid population increase is a wider market for goods and services. When there are more people in a country, there is a higher demand for goods and services, which can lead to economic growth and development. As more people are born and immigrate to a country, they will need housing, food, clothing, healthcare, and other goods and services, which can lead to an increase in jobs and businesses. This wider market for goods and services can stimulate economic growth, create job opportunities, and ultimately improve the standard of living for individuals in the country. However, it is important to note that rapid population growth can also bring challenges such as pressure on resources and infrastructure, which can lead to other negative effects.

Which of the following factors is not a cause of diminishing returns?

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The factor that is not a cause of diminishing returns is "Technological innovations". Diminishing returns refers to the decrease in marginal output or production as more units of a variable input (such as labor or capital) are added to a fixed amount of other inputs (such as land or machinery). This occurs because the fixed inputs become increasingly scarce relative to the variable inputs, which can lead to inefficiencies and reduced productivity. The other three factors listed - an increase in variable inputs, land fragmentation, and constant technology - can all contribute to diminishing returns. For example, adding more workers to a fixed amount of land may lead to overcrowding and reduced productivity (land fragmentation). Similarly, if technology remains constant while more inputs are added, the additional inputs may not be fully utilized and may even become redundant. In contrast, technological innovations can actually help to overcome diminishing returns by allowing for more efficient use of inputs and increasing productivity. New technologies can improve the efficiency of production processes, reduce waste, and create new products or services, all of which can lead to increased output and economic growth.

In the long run, all production factors are

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In the long run, all production factors are "variable." This means that in the long run, a firm can adjust all of its production inputs, including labor, capital, and technology, to change the scale of its operations. In the short run, some inputs may be fixed, such as the size of the factory, which can only be changed in the long run. But in the long run, all inputs can be varied to optimize production and increase efficiency. The ability to adjust all inputs in the long run is what distinguishes the long run from the short run in the theory of production.

The demand curve for goods of ostentation is usually

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If the price of commodity X rises and consumers shift to commodity Y, then commodities X and Y are

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Commodities X and Y are substitutes. Substitute goods are products that can be used in place of each other. When the price of commodity X rises, consumers shift to commodity Y because it is a cheaper alternative to X. An example of substitute goods is coffee and tea - if the price of coffee increases, some people may switch to drinking tea instead.

Commercial banks are different from development banks in that the latter

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Commercial banks and development banks serve different functions within the financial system. Commercial banks are focused on providing financial services to individuals and businesses, such as deposit accounts, loans, and credit cards. They generally lend on a short-term basis and deal in a variety of currencies, including foreign currencies. In contrast, development banks are focused on promoting economic development and supporting long-term projects that may not be attractive to commercial banks. They typically provide financing for large infrastructure projects, such as highways, railways, and power plants, as well as small and medium-sized enterprises. Development banks may be government-owned, private, or a combination of both, and their main goal is to support economic growth and development. Development banks may also offer technical assistance and advisory services to help businesses and governments develop the skills and expertise needed to manage large-scale projects effectively. Unlike commercial banks, development banks may not pay interest on current accounts and may have different lending terms and requirements based on the specific needs of the project or business being financed.

If the government imposes a minimum price on a commodity

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If the government imposes a minimum price on a commodity, it means that sellers cannot sell the commodity for a price lower than the minimum price set by the government. This is done to ensure that the producers of the commodity are getting a fair price for their goods. When a minimum price is set, it may result in excess supply (market surplus) of the commodity, as producers may be incentivized to produce more of the commodity at the higher price. However, the surplus can be reduced if the government buys the excess supply or if producers reduce their production. In the short-run, the market may be cleared, which means that all of the available supply of the commodity is sold at the minimum price set by the government. However, in the long-run, excess demand may occur as the minimum price may discourage buyers from purchasing the commodity. Therefore, government regulation may still be needed to ensure that the market operates efficiently, even with the minimum price in place.

Marginal cost is?

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Marginal cost refers to the cost of producing one additional unit of a good or service. It is the cost of producing the last or extra unit of output. This cost includes the variable costs of producing the additional unit, such as the cost of materials and labor, but it does not include fixed costs like rent or salaries, which do not change with the level of production. The concept of marginal cost is important in economics because it helps businesses and policymakers make decisions about how much to produce, what price to set for their goods or services, and whether to enter or exit a market. By analyzing their marginal costs, businesses can determine whether producing an additional unit of a good will be profitable or not.

The type of unemployment found among workers who leave their jobs in search of other jobs is termed

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The type of unemployment found among workers who leave their jobs in search of other jobs is called frictional unemployment. This occurs when individuals are between jobs and are actively searching for new employment opportunities. Frictional unemployment is typically short-term and is a natural part of the job search process. It can occur due to various reasons such as workers seeking better job opportunities, moving to a new location, or recently graduating from school. Although frictional unemployment may be a temporary situation for individuals, it can have an impact on the economy if the time taken to find a new job is prolonged. However, it is generally seen as a less problematic form of unemployment than other types, such as structural or cyclical unemployment, which can have more severe and long-lasting effects on the economy.

A country's budget allocation to various sectors of the economy is shown in the pie chart above...

Use it to answer this question.

If the budget of the country was $7,200, how much is allocated to Education?

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Based on the pie chart, the Education sector is represented by 1/3 of the total budget allocation. To find out how much is allocated to Education, we can calculate 1/3 of the total budget: 1/3 x $7,200 = $2,400 Therefore, the answer is $2,400.00.

The pie chart above represent the total population of a school of 1,200. The shaded area of 60∘ shows the population of the underaged pupils.

What is the population of the matured students?

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Since the entire pie chart represents the total population of the school, and the shaded area of 60∘ represents the underaged pupils, then the remaining unshaded area of the pie chart must represent the population of matured students. To find the measure of the unshaded area, we can subtract the measure of the shaded area from the total measure of the pie chart, which is 360∘ (since a circle has 360 degrees). So the unshaded area is: 360∘ - 60∘ = 300∘ The unshaded area of 300∘ represents the population of the matured students. To find the actual population of the matured students, we need to convert the 300∘ into a proportion of the total population. The proportion of the matured students is: 300∘ / 360∘ = 5/6 This means that the population of the matured students is 5/6 of the total population of the school, which is: (5/6) x 1200 = 1000 Therefore, the population of the matured students is 1000.

What happens when the central bank increases the bank rate in an economy

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When the central bank increases the bank rate, it becomes more expensive for banks to borrow money from the central bank. This, in turn, leads banks to charge higher interest rates on loans they give to their customers. As a result, borrowing becomes more expensive for customers, so they might choose to borrow less money or pay off existing loans. This discourages borrowing and slows down the overall spending in the economy. On the other hand, since banks have to pay a higher interest rate to the central bank, they might be able to increase the interest they charge on loans, which would increase their profits. The increase in the bank rate does not directly impact the money supply in the economy. The central bank can use other tools, such as open market operations, to influence the money supply.

Increasing national income without effective control of population size in a country can lead to

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Occupational mobility as applied to factors of production means the case by which

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There is unemployment of resources when production is

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Unemployment of resources occurs when production is below the production possibility curve, which means that the economy is not using all of its available resources to produce goods and services. These unused resources can include labor, capital, land, and natural resources. When production is within the production possibility curve, it means that the economy is using all of its resources efficiently and producing as much as it can given its current level of resources. Along the production possibility curve, the economy is also producing efficiently, but it is not using all of its resources. If production is outside the production possibility curve, it means that the economy is not capable of producing that level of output given its current resources. Finally, if production is adequate to meet market demand, it means that the economy is producing enough goods and services to satisfy the needs and wants of consumers. In summary, unemployment of resources occurs when the economy is not using all of its available resources to produce goods and services, which results in an output level below the production possibility curve.

A downward sloping demand curve means that

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A downward sloping demand curve means that as the price of a good decreases, the quantity demanded of that good increases. In other words, there is an inverse relationship between the price of a good and the quantity of that good demanded by consumers. This is the fundamental law of demand in economics.

As the price of a good decreases, consumers are more willing and able to purchase it, which leads to a higher quantity demanded. Conversely, as the price of a good increases, consumers are less willing and able to purchase it, which leads to a lower quantity demanded.

Therefore, the correct answer is - price must be lowered to sell more of the good. Total revenue may increase or decrease as the price changes depending on the magnitude of the change in price and quantity demanded.

Which of the following factors is not a reason for farmers' unstable incomes?

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If at 10K per kg, 1000kg of yam were purchased, the resultant point elasticity of demand is

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Nation engage in external trade because of difference in

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Nations engage in external trade because of the differences in comparative cost, also known as comparative advantage. Comparative advantage is the ability of a country to produce goods or services at a lower opportunity cost than another country. Opportunity cost is the cost of one choice in terms of the best alternative that must be given up. In other words, it's the cost of producing one product in terms of the number of other products that could have been produced instead. For example, let's say that Country A can produce both cars and computers, but it can only produce one of them at a time. If Country A devotes all its resources to producing cars, it can produce 100,000 cars per year. If it devotes all its resources to producing computers, it can produce 50,000 computers per year. Meanwhile, Country B can produce 60,000 cars per year or 30,000 computers per year. In this case, Country A has a comparative advantage in producing cars because it has a lower opportunity cost of producing cars compared to computers. As a result, Country A can produce cars at a lower cost and sell them to Country B, which can in turn produce computers at a lower cost and sell them to Country A. This allows both countries to benefit from trade and improve their overall welfare. In summary, nations engage in external trade because of the differences in comparative cost, which allow countries to specialize in producing goods and services that they can produce more efficiently and trade with other countries for goods and services that they cannot produce efficiently. This creates mutual benefits for all countries involved.

A major disadvantage of a capitalist economy is that it

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The major disadvantage of a capitalist economy is that it worsens income inequality among the citizens. In a capitalist system, the means of production and distribution of goods and services are privately owned and operated for profit, leading to a concentration of wealth and power in the hands of a small group of people who own the most productive resources. This results in a situation where the rich get richer, while the poor get poorer, and there is a growing gap between the incomes and living standards of the wealthy and the less well-off members of society. This can create social unrest and political instability, as well as limit opportunities for social mobility and economic growth.

A disadvantage of a joint-stock company is

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A disadvantage of a joint-stock company is the potential for loss of controlling interest. In a joint-stock company, ownership is divided into shares, which can be bought and sold by individual shareholders. If a large number of shares are sold to other individuals or entities, it can dilute the ownership and control of the original shareholders, making it more difficult for them to have a significant say in the decision-making process. Limited liability is actually an advantage of a joint-stock company, as it protects shareholders from personal financial liability beyond their investment in the company. Continuity is also an advantage of a joint-stock company, as it can continue to exist even if shareholders come and go or if one or more shareholders die. Unlimited liability, on the other hand, is a disadvantage of a sole proprietorship or partnership, where the owner or partners can be held personally liable for the debts and obligations of the business.

The production cost that varies inversely with output is the

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A major characteristic of natural resources is they

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A major characteristic of natural resources is that they are free gifts of nature. This means that they are not produced by humans, but are found naturally in the environment. Examples of natural resources include water, air, forests, minerals, and fossil fuels. However, although natural resources are free in the sense that they are not created by humans, their extraction, production, and transportation often involve costs. Additionally, some natural resources may become scarce over time due to overuse or depletion, leading to increased prices and a greater focus on sustainability and conservation efforts.

Wholesalers play an important in the distribution of goods and services because they

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Wholesalers play an important role in the distribution of goods and services because they act as intermediaries between producers and retailers. Wholesalers buy goods in large quantities from producers and then sell them in smaller quantities to retailers. This enables producers to focus on their production process without worrying about marketing and distribution. On the other hand, retailers can buy smaller quantities of goods from wholesalers, which allows them to stock a variety of products without having to buy in bulk. Wholesalers also provide other important services, such as financing and logistics. They may provide credit to both producers and retailers, allowing them to manage their cash flow and invest in their businesses. Additionally, wholesalers can handle the transportation and storage of goods, which can be a complex and expensive task for smaller businesses. Therefore, wholesalers play a crucial role in the distribution process, providing valuable services and enabling the smooth flow of goods and services from producers to retailers, and ultimately to consumers.

A made obstacle to economic development is

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A major obstacle to economic development is low farm productivity. Agriculture is a significant sector in many developing countries, and low farm productivity can have a significant impact on economic growth and development. Low productivity in agriculture can result from a range of factors, including inadequate access to credit, poor infrastructure, low-quality inputs, and limited knowledge of modern farming techniques. This can limit the production of food and raw materials for industrial processes, resulting in higher prices, reduced exports, and lower economic growth. Increasing farm productivity is often a key focus of development programs and policies aimed at promoting economic development in developing countries.

Positive check as envisaged by Thomas Malthus can be prevented if

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Thomas Malthus proposed the concept of a positive check, which refers to a population control mechanism in which natural disasters, disease, and famine limit the population growth. However, positive checks are not desirable as they lead to high levels of human suffering. To prevent positive checks, it is necessary to implement measures that help to control population growth while maintaining the well-being of individuals. One way to achieve this is by reducing the death rate through improved healthcare, better nutrition, and access to safe water and sanitation. Another approach is to promote moral restraint, which involves encouraging individuals to delay marriage and childbearing until they are economically stable and can provide for their children. Additionally, building more hospitals can help to improve access to healthcare, which can contribute to reducing the death rate and improving overall health outcomes. Natural calamities, on the other hand, can lead to positive checks, and as such, they are not a desirable solution for preventing population growth. Instead, efforts should focus on implementing sustainable population control measures that promote economic development, education, and access to healthcare, while also protecting the environment.

If the Central Bank increases its bank rate

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If the Central Bank increases its bank rate, it means that it has increased the interest rate at which commercial banks can borrow money from the Central Bank. This, in turn, makes it more expensive for commercial banks to borrow money, which can have several effects on the economy. Firstly, since it is more expensive for banks to borrow money, they may become more cautious about lending money to their customers. This means that customers may find it more difficult to obtain loans or credit from banks, and the amount of borrowing may decrease. So, is not correct. Secondly, if banks find it more expensive to borrow money, they may also try to increase the interest rates they charge on loans and mortgages to maintain their profits. This could make borrowing more expensive for customers, and the interest charges by banks may rise rather than fall. So, is not correct. Thirdly, if the cost of borrowing money for commercial banks increases, they may not want to borrow as much money, which could reduce the supply of money in the economy. So, is correct. Lastly, an increase in the Central Bank's bank rate may not cause many banks to shut down their operations. However, some smaller banks or financial institutions that heavily rely on borrowing may struggle to stay afloat. So, is not correct. In conclusion, an increase in the Central Bank's bank rate can reduce the supply of money in the economy and increase the cost of borrowing for banks, which could result in higher interest rates for customers.

Holding money to take care of contingencies is

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Holding money to take care of contingencies is a precautionary motive. This means that people keep money saved in case of unexpected events or emergencies, such as a sudden illness, job loss, or car repair. By having money set aside, they are better prepared to handle these situations and can avoid going into debt or facing financial hardship. In short, holding money for precautionary reasons is a way to protect one's financial security and peace of mind.

An example of transfer payments in national income accounting is

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Transfer payments refer to payments made by the government or other institutions to individuals or other entities, without receiving any goods or services in return. These payments are typically made for social welfare purposes or to redistribute income. An example of a transfer payment in national income accounting is unemployment allowance paid to citizens who are unemployed. The government pays these allowances to support individuals who are currently out of work and seeking employment. This payment is considered a transfer payment because the government is not receiving any goods or services in return for the funds provided. Transfer payments are not included in the calculation of GDP because they do not represent the production of goods or services. However, they are important in measuring the overall economic well-being of a society, particularly in terms of income distribution and social welfare.

The figure above shows change in demand for commodity x which is a normal good. Use it to answer the questions that follows

Which of the following caused the change in demand from D0 D0 to D2 D2?

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Which of the following is not emphasized in a product possibility curve?

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The concept of unemployment of labor is not emphasized in a product possibility curve. A product possibility curve is a graphical representation of the trade-off between two goods that an economy can produce, given its limited resources and technology. The curve shows the maximum combinations of the two goods that can be produced with the available resources, taking into account that some resources are better suited for producing one good over the other. The emphasis is on the scarcity of resources and the efficiency with which they are being used, not on the employment of labor.

Producers operating in a free market economy are more efficient as a result of

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Producers operating in a free market economy are more efficient as a result of the existence of competition. In a free market, businesses compete with each other for customers by offering better quality products, lower prices, or both. This competition forces producers to be efficient and innovative in order to remain competitive and attract customers. As a result, businesses are motivated to increase productivity, reduce waste, and improve their products and services to meet customer needs. The competition also leads to more choices for consumers and lower prices, as businesses strive to provide the best value for money. In contrast, if there were no competition, businesses would have less incentive to improve their operations, resulting in lower efficiency and higher prices for consumers.

If the cost of production for a firm continues to increase as its output rises, the firm is said to be experiencing

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The firm is said to be experiencing diseconomies of scale if the cost of production continues to increase as its output rises. Diseconomies of scale occur when the firm becomes too large, and the increased complexity and coordination costs of managing a large organization outweigh the benefits of increased production. This can result in a decrease in efficiency, productivity, and profitability for the firm.

If a demand curve that intersects a perfectly inelastic supply shifts rightward, then

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If a demand curve that intersects a perfectly inelastic supply shifts rightward, the equilibrium price will increase, but the quantity supplied will remain the same. In this scenario, a shift in the demand curve to the right indicates that there is an increase in demand for the product at every price level, leading to a new equilibrium price and quantity. However, the supply is perfectly inelastic, meaning that the quantity supplied cannot increase to meet the new demand. Therefore, the equilibrium quantity remains the same, while the equilibrium price increases. So, only the price will increase in this scenario.

A minimum price legislation is also called

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A minimum price legislation is also called a price floor. A price floor is a type of price control set by the government that sets a minimum price that must be paid for a particular good or service. The government typically sets a price floor in order to help support the producers of the good or service by ensuring they receive a certain level of income. For example, if the government sets a minimum price for agricultural goods, such as wheat or milk, it can help support farmers by ensuring that they receive a fair price for their products. A price floor is usually set above the equilibrium price of the good or service in question, which means that it can create a surplus of supply. This surplus can result in a number of economic issues, such as a buildup of inventory or a decrease in demand, which can lead to further government intervention or market adjustments. Overall, price floors and other types of price controls can be controversial, as they can have both positive and negative effects on producers, consumers, and the overall economy.

The stock exchange is an example of the

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The stock exchange is an example of a capital market. A capital market is a market where individuals and institutions trade financial securities, such as stocks and bonds, with the goal of raising capital. In other words, the capital market is where businesses can go to raise money by selling ownership in the company (stocks) or borrowing money (bonds) from investors. The stock exchange is a specific type of capital market where publicly-traded companies can sell ownership in the form of stocks to the public. Investors can buy and sell these stocks on the exchange, and the value of the stocks can rise or fall based on various factors, such as the company's financial performance, overall market conditions, and investor sentiment. Overall, the stock exchange and other capital markets play an important role in facilitating the flow of capital and resources throughout the economy, helping businesses raise funds to invest in growth and development, and providing investors with opportunities to earn a return on their investment.

In order to increase revenue, government should tax commodities for which demand is

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When the demand for a commodity is perfectly price inelastic, it means that people will buy the same amount of the commodity no matter how much it costs. Therefore, if the government increases the tax on this commodity, people will still buy the same amount of it, and the tax revenue will increase. When the demand for a commodity is price inelastic, it means that people will buy a relatively small amount less of the commodity if the price increases. Therefore, if the government increases the tax on this commodity, people will still buy it, but they will pay more for it, and the tax revenue will increase. When the demand for a commodity is price elastic, it means that people will significantly reduce the amount they buy if the price increases. Therefore, if the government increases the tax on this commodity, people will buy less of it, and the tax revenue may not increase as much as expected. When the demand for a commodity is unitary elastic, it means that the change in quantity demanded is exactly proportional to the change in price. Therefore, if the government increases the tax on this commodity, the tax revenue will increase, but the increase in price may cause people to buy slightly less of it. Overall, if the demand for a commodity is relatively inelastic, the government may be able to increase revenue by increasing taxes on it. However, if the demand for a commodity is relatively elastic, the government may not be able to significantly increase revenue by increasing taxes on it, as people may switch to other alternatives or reduce their consumption of the commodity.