JAMB UTME - Economics - 2017
Question 1 Report
Which modal of the factor is inelastic?
Answer Details
The factor of production that is typically considered inelastic is land. In economics, the term "inelastic" refers to a situation where the quantity supplied or demanded of a good or service does not change much in response to changes in its price. In the case of land, the supply is generally considered to be fixed, meaning that the quantity of land available for use in a particular area is unlikely to change significantly in response to changes in its price. This means that if the price of land were to increase, the quantity of land supplied would not increase by a significant amount, as there is a limited amount of land available. Similarly, if the price of land were to decrease, the quantity of land supplied would not decrease by a significant amount, as landowners are unlikely to reduce the amount of land they own in response to a price change. In contrast, factors like labor, capital, and wages are generally considered to be more elastic, as changes in their price can often result in changes in the quantity supplied or demanded. For example, if the wage rate for a particular type of labor were to increase, workers might be more willing to work longer hours or take on additional jobs, which would increase the quantity of labor supplied. Overall, the concept of elasticity is an important one in economics, as it helps to explain how changes in price can affect the behavior of consumers and producers in a market.
Question 2 Report
One of the unique features that distinguishes the perfect and imperfect market condition is _________
Answer Details
The unique feature that distinguishes the perfect and imperfect market condition is the number of sellers and buyers. In a perfect market, there are many buyers and sellers, and each one has only a small impact on the market price. This means that no single buyer or seller can control the price, and the market determines the price based on supply and demand. On the other hand, in an imperfect market, there are either few sellers or few buyers, and one or a few of them can have a significant impact on the market price. This means that the price is not solely determined by supply and demand, but also by the actions of one or a few dominant players in the market. This distinction is important because it affects the efficiency of the market and the distribution of economic benefits between buyers and sellers. In a perfect market, the market price reflects the true cost of production and distribution, and everyone gets a fair return for their efforts. In an imperfect market, the market price may not reflect the true cost, and some participants may receive a higher or lower return than they would in a perfect market.
Question 3 Report
Given that ∑fx = 340 and N = 20, find the arithmetic mean.
Answer Details
To find the arithmetic mean, we need to divide the sum of all the values by the total number of values. In this case, we have the sum of the frequencies, denoted by ∑fx, which is 340 and the total number of values, denoted by N, which is 20. So, the formula for the arithmetic mean is: Mean = (sum of values) / (total number of values) In this case, the "values" are the frequencies multiplied by their corresponding values, i.e. f1x1 + f2x2 + ... + fnxn. So, we can write: Mean = (f1x1 + f2x2 + ... + fnxn) / N But we already know that ∑fx = f1x1 + f2x2 + ... + fnxn = 340, so we can substitute this into the formula and get: Mean = ∑fx / N = 340 / 20 = 17 Therefore, the arithmetic mean is 17.
Question 4 Report
Localization of industry is encouraged because of ________
Answer Details
This is one of the reasons government participates in the location of industries. When such industries are located, goods are made available and the people get employment and earn income hence, their standard of living will be improved
Question 5 Report
Opportunity cost helps the government to:
Answer Details
Opportunity cost refers to a benefit that a person could have received, but gave up, to take another course of action. Opportunity cost helps the government in the preparation of budget, since it assists in the effective allocation of scarce resources to certain sector of the economy. It helps in making certain decision e.g. the priority areas that may require immediate attention.
Question 6 Report
Which of the following is an indirect tax?
Answer Details
The option "excise duties" is an indirect tax. An indirect tax is a tax that is not directly paid to the government by the person on whom it is imposed. Instead, it is collected by an intermediary, such as a manufacturer or a retailer, who then passes the tax on to the consumer by including it in the price of the goods or services they sell. Excise duties are a form of indirect tax that is imposed on specific goods, such as alcohol, tobacco, gasoline, and luxury items. The duty is usually added to the price of the goods and paid by the manufacturers or importers of the products. The manufacturers or importers then pass the cost of the excise duty on to the consumer in the form of a higher price. On the other hand, a poll tax is a tax that is directly paid by every adult member of a community, regardless of their income or wealth. Personal income tax is a direct tax that is paid by individuals on their income. Company tax is a direct tax that is paid by businesses on their profits. In summary, an indirect tax is a tax that is collected by an intermediary and passed on to the consumer. Excise duties are a form of indirect tax imposed on specific goods, making it the correct answer in this case.
Question 7 Report
Which of the following is an indicator of economic growth?
Answer Details
Economic growth is the process by which the productive capacity of an economy increase over a given period, leading to a rise in the level of the national income.
Gross domestic product is the total market value of all goods and services produced by a country in a specific time period typically a year. This includes earnings from foreign investments.
GDP = Consumption +Government +investment +Export − Imports
GDP is considered the broadest indicator of economic growth because GDP represent the market value of all goods and services produced by the economy during the given period including personal consumption, government purchase, private inventories, paid in construction cost and the foreign trade balance (export added, import are subtracted).
There are other indicators of economic growth such as; Consumer Price Index (CPI), Producer Price Index (PPI), Consumer Confidence Index (CCI), Money supply, Employment and others. However, High tax rate, Technology Development and High interest rate are not a part of the list.
Question 8 Report
Completely competitive market exist when each member is a —
Answer Details
A completely competitive market exists when each member is a price taker. In a competitive market, there are many buyers and sellers, none of whom can influence the market price on their own. In other words, each member of the market is a price taker, meaning they must accept the market price for the goods or services they are buying or selling. Because no single buyer or seller has enough market power to set the price, the market price is determined solely by the interaction of supply and demand. In a completely competitive market, the goods or services being bought and sold are identical, so there is perfect substitutability between suppliers, and buyers will choose the lowest price available. Overall, a completely competitive market is considered to be efficient, because it results in a fair and optimal allocation of resources, as each member is incentivized to produce and consume at the market-determined price.
Question 9 Report
The basic principle of cooperative societies is to ________
Answer Details
A cooperative society as a voluntary business organization in which a group of individual with common interest pool their resources together to promote the economic welfare of the members in production, distribution and consumption of goods and services.
Question 10 Report
The graph above represents
Answer Details
There is an increase in the quantity supplied if the quantity supplied increases as a result of an
increase in price of the commodity.
From the graph, an increase in the price of the commodity from p1 to p2 brought about a
corresponding increase in quantity supplied from q1 to q2.
Question 11 Report
The following are Methods of measuring National Income of a country EXCEPT; ?
Answer Details
Question 12 Report
From the table above, the average product of the 3rd unit of labour is
Answer Details
To find the average product of the 3rd unit of labor, we need to divide the total output produced by 3 workers by the number of workers, which is 3. Looking at the table provided, we can see that the total output produced by 3 workers is 150 units. Therefore, the average product of the 3rd unit of labor is 150/3 = 50. This means that on average, each of the 3 workers produced 50 units of output. So the answer is 50.
Question 13 Report
The basic aim of Economic Community of West African States is the
Answer Details
There are quite a number of aims of ECOWAS however, one of the major aim of ECOWAS treaty was for the establishment of a common market with the aim of liberalising trade within the region
Question 14 Report
One of the major causes of farmers' unstable income in Nigeria is _________
Answer Details
The most direct economic impact of a trans-boundary pest or disease is the loss or reduced
efficiency of agricultural production weather of reduced productivity on crops or animals can be
long lasting. Although the loss of output from a trans-boundary pest or diseases may appear easy
to identify, it can nevertheless be difficult to measure in precise economic terms.
Question 15 Report
The economic questions about what and how to produce in an economy is solely answered by the _______?
Answer Details
The economic questions about what and how to produce in an economy are answered by the system of economy practiced in that society. The economic system is the way a society organizes the production, distribution, and consumption of goods and services. The decisions about what goods and services to produce, how to produce them, and for whom to produce them are influenced by the economic system in place. For example, in a market economy, the decisions about what to produce, how to produce it, and for whom to produce it are mainly made by private enterprises in response to market demand. In a command economy, these decisions are made by the government. In a mixed economy, the decisions are made by both private enterprises and the government. Therefore, the economic system in place plays a crucial role in answering the economic questions about what and how to produce in an economy.
Question 16 Report
Which of the following institutions does not operate in the money market?
Answer Details
This question is a little bit tricky to answer because out of the 4 options provided only one is not a
participant in the (Nigeria) money market and that is the mortgage banks because mortgage loans
are usually not in short term of say 13months which makes it not fit into the money market
characterised by short term loans. The central bank, Money deposit bank and insurance companies
are all participant of the money market because they offer short term loans.
Question 17 Report
Which of the following budgets will increase government expenditure?
Answer Details
The budget that would increase government expenditure is a deficit budget. A deficit budget is a budget where government expenditure exceeds its revenue or income. This means that the government will have to borrow money or take out loans to finance its expenses. This budget can be used to finance important projects such as infrastructure development, social welfare programs, or to stimulate economic growth. On the other hand, a surplus budget is a budget where government revenue exceeds its expenditure. This type of budget is used to pay off debt, build up savings, or reduce taxes. A balanced budget policy is a budget where government expenditure is equal to its revenue, with no deficit or surplus. Finally, a zero-based budget is a budgeting method where all expenses must be justified for each new period, as if no budget existed before. It is a way of reducing spending, rather than increasing it. In summary, a deficit budget increases government expenditure, while a surplus budget reduces it.
Question 18 Report
The law of diminishing marginal utility states:
Answer Details
The correct answer is: Your utility grows at a slower and slower rate as you consume more and more units of a good. The law of diminishing marginal utility is a fundamental principle in economics that explains how the satisfaction or usefulness that a person gets from consuming additional units of a good or service decreases as they consume more of it. In other words, the more you have of something, the less you will enjoy or benefit from having more of it. For example, if you are hungry and you eat one slice of pizza, you will probably enjoy it very much. But if you keep eating more and more slices of pizza, your enjoyment will start to decrease as you become full. Eventually, you may not want any more pizza at all, even if there is still some left. This principle is important because it helps explain why people make certain choices about what to buy and consume. As the satisfaction from consuming each additional unit of a good decreases, people will be willing to pay less for each additional unit. This is why demand curves slope downward - people are willing to buy more of a good at lower prices.
Question 19 Report
One of the reasons why Nigeria is a mono-economy is because of her _______
Answer Details
A mono-economy is an economy relying on one major export or natural resources to bring most
of the currency into the country.
Nigeria is dependent on crude oil. Before now, agriculture and mining were the primary drivers of
Nigeria’s economy but these has been abandoned since the 70’s as a result of the discovery of oil.
Nigeria is now a mono-economic country that is, now relies solely on crude oil as her major source
of revenue.
Question 20 Report
Given that Qd = 10 - 2p whileQs = 5 + 3P, if P = N1, determine the equilibrium quantity.
Answer Details
To get equilibrium price and quantity:
i) Get function solved for Qs and Qd (quantity supplied) and Qd (quantity demanded)
ii) Set Qs equal to Qd
iii) Solve for P (equilibrium price)
iv) Plug your P back into your Qs and Qd function to get the quantity.
when, Qd = 10 − 2p and Qs = 5 + 3p
if Qd = Qs then,
10 − 2p = 5 + 3p
solving for p: 10 − 5 = 3p + 2p
5 = 5p
p = 1 (given in the equation)
Equilibrium Quantity will be gotten by plugging P into Qd and Qs respectively;
Qd = 10 − 2p Qs = 5 + 2p
= 10 − 2(1) = 5 + 3(1)
= 10 − 2 = 5 + 3
= 8
Question 21 Report
A partnership sourcing for funds to expand its business would approach _______
Answer Details
A partnership looking to raise funds to expand its business would approach a money market. A money market is a financial market where short-term loans, securities, and other financial instruments are traded. These markets are typically used by businesses and governments to borrow money for short periods, usually less than a year. Money market securities include certificates of deposit, treasury bills, commercial paper, and other short-term securities. When a partnership seeks to raise funds for its business expansion, it can issue short-term securities such as commercial paper to investors in the money market. These securities are typically low-risk and have low returns, but they are a reliable source of short-term financing. The partnership can also obtain a short-term loan from a money market fund or bank to finance its expansion. Therefore, approaching a money market would be a viable option for a partnership seeking to raise funds to expand its business.
Question 22 Report
Which of the following statement is TRUE about ECOWAS?
Answer Details
The Economic Community of West African States (ECOWAS) is a regional organization of 15 West African countries established on 28 May 1975. Its main goal is the promotion of the economic integration among its members. Indeed, ECOWAS is one the five regional pillars of the African Economic Community (AEC). ECOWAS has three official languages: English, French, and Portuguese. Members producing the same or identical goods can form cartel or monopolies and obtain better bargaining or deals from other countries outside its membership
Question 23 Report
One of the functions of the price system is that it
Answer Details
The price system is a mechanism through which prices of goods and services are determined by the forces of supply and demand. One of its primary functions is to regulate production and consumption in the economy. As prices rise, it signals to producers that there is high demand for their products and they should produce more. This, in turn, encourages a higher volume of production, as producers aim to take advantage of the higher prices and generate greater profits. On the other hand, if prices fall, it signals to producers that there is low demand for their products, and they may scale back production. Similarly, the price system also regulates consumption. When prices of certain goods or services are high, consumers tend to reduce their consumption of those products, while they may increase their consumption of substitutes that are relatively cheaper. For example, if gasoline prices rise, consumers may reduce their driving or switch to more fuel-efficient cars. Therefore, the price system acts as a self-regulating mechanism that helps to allocate resources in the economy efficiently. It encourages the production of goods and services that are in high demand and discourages the production of goods and services that are in low demand, while also regulating consumption patterns.
Question 24 Report
The bowed shape of the Production possibilities curve illustrates _________
Answer Details
Production possibility curve (PPC) shows the possible combination of different commodities that can be produced in a given economy given the prevailing level of technology, if all the available productive resources are efficiently utilised.
The reason for the shape of the PPC is something called the law of increasing opportunity costs. Basically, what this means is that as an economy devotes more of its resources to one kind of product, it becomes less efficient because, not all resources are equally suitable for all the industries. If resources are transferred from good A to B, initially the resources to be transferred will be those which could be the least efficient for A. Later, as more of good B needs to be produced, the resources that may be very efficient for good B and not so efficient for good B may also be transferred. In this situation, the economy loses on both sides. That means, the economy is usually inefficient on both ends of the PPC curve while it is the most efficient when resources are appropriately allocated for both goods according to their suitability which make the PPC to be curved. This is why the PPC is flatter at its end point and more curved in the middle.
Question 25 Report
Which of the following is NOT illustrated by the production possibility curve
Answer Details
The production possibility curve illustrates the concept of opportunity cost and scarcity, but does not necessarily illustrate the concept of risk. The production possibility curve shows the trade-off between two goods and the maximum amount of one good that can be produced for every possible level of production of the other good. It demonstrates the idea of opportunity cost, which is the cost of one choice in terms of the best alternative choice. Scarcity is also shown through the production possibility curve, as the curve assumes that resources are limited and that choosing to produce more of one good means producing less of the other. Allocative efficiency is a point on the production possibility curve where the economy is producing at the most efficient level, meaning that the resources are being used in such a way as to produce the maximum amount of both goods. Risk, on the other hand, refers to uncertainty about the outcome of an action or decision and is not necessarily illustrated by the production possibility curve.
Question 26 Report
A firm owned and managed by a family is an example of ______?
Answer Details
partnership may be defined as a type of business organization in which two to twenty persons
agree legally to setup and manage a business outfit with the sole aim of making profit. The people
involved in partnership agreement are called partners and they share the profit, losses and risk of
the business.
A family owned business is any business in which two or more family members are involved and
the majority of ownership or control lies within a family.
Question 27 Report
Which of the following is not a function of the money market?
Answer Details
The option "creation of long term" is not a function of the money market. The money market is a financial market where short-term borrowing and lending of funds take place. It is a market for financial instruments with high liquidity and short maturities, generally less than a year. The primary function of the money market is to provide short-term finance to individuals, businesses, and governments. The three main functions of the money market are: 1. Provision of finance: The money market provides finance to individuals, businesses, and governments through the sale of short-term financial instruments like treasury bills, commercial papers, certificates of deposit, and repurchase agreements. 2. Enhance loan savings: The money market helps to channel savings into productive investments by providing a source of short-term funding for banks and other financial institutions. This, in turn, enables these institutions to offer loans and mortgages to customers. 3. Facilitation of trading and liquidity: The money market provides a platform for the buying and selling of short-term financial instruments. These instruments are highly liquid, which means they can be easily converted to cash when needed. This feature enhances the liquidity of the financial system, which is essential for the smooth functioning of the economy. In summary, the money market is a vital component of the financial system that provides short-term finance, enhances loan savings, and facilitates trading and liquidity. "Creation of long term" is not a function of the money market since it deals with long-term financing, which is the role of the capital market.
Question 28 Report
Excess supply over demand will place a price advantage on _____
Answer Details
This is because, according to the concept of equilibrium, if supply increases while demand remains constant, there will be an excess of supply over demand. This will bring about a decrease in the equilibrium price of the commodity and an increase in the equilibrium quantity. This gave rise to the fifth law of demand and supply which states that: “an increase in the supply of a commodity will cause the equilibrium price to fall and the quantity demanded to increase, while a decrease in supply will cause the equilibrium price to rise but the quantity demanded will fall”.
Question 29 Report
Which of the following is NOT an instrument in the money market?
Answer Details
Stocks and shares are NOT instruments in the money market. The money market refers to the financial market where short-term financial instruments are traded. These instruments are typically very liquid, which means they can be easily bought and sold for cash without significantly impacting their market value. The money market is used by businesses, governments, and other organizations to borrow or lend money for short periods of time. Treasury bills and bills of exchange are both examples of short-term financial instruments that are traded in the money market. A treasury bill is a type of government bond that matures in less than one year, while a bill of exchange is a written agreement between two parties that allows one party to pay a specific amount of money to the other party at a later date. Call money funds are mutual funds that invest in short-term debt instruments, such as commercial paper and certificates of deposit. These funds allow investors to pool their money together and invest in a diversified portfolio of short-term securities. In contrast, stocks and shares are not typically considered short-term financial instruments, as they represent ownership in a company rather than a debt obligation. Stocks are bought and sold on the stock market, which is a separate financial market from the money market. While stocks can be bought and sold quickly, their prices are much more volatile than the prices of short-term financial instruments in the money market.
Question 30 Report
Which of the following source of income is spectacular only to Government ?
Answer Details
The source of income that is spectacular only to the government is taxes. Taxes are a mandatory payment that individuals and businesses must make to the government based on their income, profits, or other financial activities. These payments are typically used by the government to fund public goods and services such as infrastructure, education, and healthcare. While businesses may benefit from the transfer of ownership, and individuals may receive bonuses and wages for their work, taxes are unique in that they are only collected by the government and are used exclusively for public purposes. The government has the authority to enforce the collection of taxes through various methods, including fines and penalties for non-compliance, which makes it a powerful source of revenue that is only available to the government. Therefore, taxes are a spectacular source of income only to the government.
Question 31 Report
Given that the total production of Bandako farmers with one worker is 10kg. When the workers increased to 2, 3, and 4, the total production increases to 20, 36 and 60kg respectively. Calculate the average product (AP) of the 4th unit of labour.
Answer Details
The average product (AP) of the 4th unit of labor is 15kg. The average product is calculated by dividing the total output by the number of workers. In this case, the total output is 60kg and the number of workers is 4, so the average product is 60/4 = 15kg. This means that, on average, each additional worker contributes 15kg to the total production.
Question 32 Report
The production within the domestic territory of a country is called the
Answer Details
The production within the domestic territory of a country is called the "gross domestic product" or "GDP." Gross domestic product (GDP) is a measure of the total value of all goods and services produced within the geographical boundaries of a country during a given period, typically a year. This includes all production by businesses, households, and the government. GDP is an important indicator of a country's economic performance and is often used as a proxy for measuring its standard of living. It reflects the size of a country's economy and provides a broad measure of its economic activity. In contrast to gross domestic product, "gross national product" (GNP) measures the total value of all goods and services produced by a country's citizens, both domestically and abroad, during a given period. However, since it includes production by citizens abroad, it can be influenced by factors such as international trade and investment, making it less reflective of the economic activity within a country's borders.
Question 33 Report
A country's terms of trade can be improved by ____?
Answer Details
Tariffs are taxes or duties imposed on imports and exports by the government of a country. The idea behind tariffs is to restrict the volume of trade or improve the international terms of trade.
Question 34 Report
Petro-chemical industries are located in the Rivers State of Nigeria because of ________?
Answer Details
Many Nigerians perceive the Niger Delta as synonymous with the oil producing areas of Nigeria.
In other words, the Niger Delta includes the states of Abia, Akwa Ibom, Bayelsa, Cross River,
Delta, Edo, Imo, Ondo and Rivers.
The region is blessed with abundance of human and physical resources, including the majority of
Nigeria's oil and gas deposits, good agricultural lands, extensive forests, excellent fisheries, as well
as with a well-developed industrial base.
The Niger Delta region of Nigeria is richly endowed with natural resources with oil and gas accounting for over 85% of the Nation's gross domestic product (GDP); over 95% of the National budget; and over 80% of the national wealth.
Question 35 Report
In economics, the “how” or input question refers to:
Answer Details
The economic question of "how to produce" refers to, which techniques are to be adopted? This question is important because the choice of technique depends on the prices of the factors of production.
That is, if labour is cheap and capital is expensive, a labor-intensive technique would be considered and vice-versa. The prices of labour and capital are determined by the demand for and supply of labour and capital respectively.
Question 36 Report
Which of these is a type of partnership in business?
Answer Details
The type of partnership in business is called a "limited partnership". A limited partnership is a type of partnership where there are two types of partners: general partners and limited partners. The general partners are responsible for managing the business and are personally liable for the business's debts and obligations. The limited partners, on the other hand, are passive investors who contribute capital to the business but do not take part in its management. They are not personally liable for the business's debts and obligations beyond the amount of their investment. This type of partnership is often used when one or more investors want to invest in a business but do not want to take an active role in its management. The limited partnership structure allows them to do so while also limiting their personal liability for the business's debts and obligations.
Question 37 Report
When the government fix the price of essential commodities, this is referred to as:
Answer Details
When the government fixes the price of essential commodities, this is referred to as Price Control. This means that the government sets a specific price for certain goods, usually ones that are considered essential for everyday life such as food and medicine, and that price cannot be changed by market forces such as supply and demand. The government does this in order to ensure that these essential goods are affordable for everyone, especially those with low incomes. The goal of price control is to prevent prices from becoming too high, but it can also lead to shortages of the controlled goods if the fixed price is not high enough to cover the cost of producing them. In simple terms, price control is when the government sets the price for certain goods instead of letting the market determine the price.
Question 38 Report
is a formula used to calculate ____________
Answer Details
where;
N = number of items in the distribution
X = is variable
x̄ = Arithmetic mean
∑ = sum of
Question 39 Report
Changing the structure of a commodity in order to increase its utility is called?
Answer Details
The correct answer is: Form utility. Form utility is the process of changing the form, shape, or structure of a commodity or product in order to increase its usefulness or utility to consumers. This can involve converting raw materials into finished goods, assembling various components into a final product, or changing the physical characteristics of a product to better suit consumer needs. For example, a clothing manufacturer may take raw materials like cotton or silk and transform them into finished garments like shirts, pants, and dresses. By doing so, the manufacturer is adding form utility to the raw materials, which increases their value to consumers. Another example is the process of packaging food items. By putting food into a can, box, or other type of container, the food becomes more convenient to store, transport, and consume. This additional form utility increases the value of the food to consumers and allows producers to charge a higher price. Form utility is an important concept in economics because it helps explain how value is created in the production and distribution of goods and services. By adding form utility to a product, producers are able to differentiate their offerings from those of competitors, increase consumer demand, and ultimately earn a profit.
Question 40 Report
Which of the following is not an indicator of economic growth?
Answer Details
The indicator of economic growth that is not in the list is "High Level of Unemployment." CPI (Consumer Price Index) and PPI (Producer Price Index) are measures of inflation, which is the rate at which the general level of prices for goods and services is increasing over time. Inflation is an important consideration for economic growth because if it is too high, it can negatively impact economic activity. GDP (Gross Domestic Product) is a measure of the total value of all goods and services produced within a country's borders in a specific time period. GDP is one of the most commonly used indicators of economic growth because it reflects the overall level of economic activity in a country. On the other hand, a high level of unemployment is not an indicator of economic growth. In fact, high unemployment is often a sign of a struggling economy. Unemployment means that there are fewer people working and contributing to the production of goods and services, which can lead to a decrease in economic activity. When people are unemployed, they may also have less money to spend, which can further reduce economic growth. Therefore, a high level of unemployment is not a positive indicator of economic growth.
