JAMB UTME - Economics - 2022

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.

A supply curve parallel to the X-axis indicates

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The major role of multi-national companies in the petroleum industry in Nigeria is

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The major role of multi-national companies in the petroleum industry in Nigeria is oil prospecting. These companies typically invest heavily in exploration, drilling, and production of crude oil in Nigeria, which is one of the largest oil-producing countries in Africa. The multi-national companies also play a significant role in the development of Nigeria's oil and gas infrastructure, including pipelines, storage facilities, and export terminals, which are necessary for getting the oil to international markets. While some of these companies are also involved in downstream activities such as oil marketing and refining, their primary role in Nigeria's petroleum industry is oil exploration and production.

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 firm that closes down will still incur

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Even if a firm closes down, it will still incur some fixed costs. Fixed costs are expenses that must be paid regardless of the level of production or whether the business is operating or not. These costs include things like rent, insurance, salaries of employees on long-term contracts, and equipment leases. Variable costs, on the other hand, are expenses that vary depending on the level of production or business activity. For example, the cost of materials or labor directly related to producing goods or services. If the firm closes down, it will not incur variable costs because it will not be producing any goods or services. Total cost is the sum of fixed and variable costs, so if the firm is not producing anything, the total cost will be equal to the fixed cost. Marginal cost is the cost of producing one additional unit of a good or service. If the firm is closed down, there is no production, so there is no marginal cost.

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.

If the marginal utility of commodity is equal to its price, then

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If the marginal utility of a commodity is equal to its price, then the consumer is in equilibrium. This means that the consumer is getting the maximum satisfaction possible from the commodity, given its price. If the marginal utility was greater than the price, the consumer would be willing to pay more for an additional unit of the commodity, indicating that they are not yet at their maximum level of satisfaction. Conversely, if the marginal utility was less than the price, the consumer would not be willing to pay the price for an additional unit, indicating that they have already exceeded their maximum level of satisfaction. Therefore, when the marginal utility is equal to the price, the consumer is in a state of balance, and does not want to consume more or less of the commodity.

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 main objective of marketing boards is to

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The main objective of marketing boards is to stabilize the incomes of cash crop farmers. Marketing boards help to regulate the supply and demand of cash crops, ensuring stable prices and incomes for farmers. They also provide support services to farmers, such as warehousing facilities and education on pricing, to help them sell their crops more effectively. While marketing boards may generate revenue for the government, their primary focus is on supporting and protecting the livelihoods of farmers.

Under a floating exchange rate regime, the determinant of the exchange rate is

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Under a floating exchange rate regime, the determinant of the exchange rate is "demand for and supply of foreign goods." In a floating exchange rate system, the exchange rate between two currencies is determined by the market forces of supply and demand. Factors such as interest rates, inflation rates, and trade flows can influence the demand for and supply of currencies, which in turn can affect the exchange rate. Unlike fixed exchange rate systems, where the exchange rate is determined by government policy, in a floating exchange rate system, the exchange rate can fluctuate based on market conditions.

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.

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 reason for farmers' unstable incomes?

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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.

The effect of changes in the condition of demand on a demand schedule with the price constant is a

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The effect of changes in the condition of demand on a demand schedule with the price constant is a shift of the demand curve. When there is a change in any factor that affects the quantity demanded at each price level, such as income, tastes and preferences, prices of related goods, or population, the entire demand curve shifts to a new position. This means that at each price level, the quantity demanded changes, leading to a new demand schedule. A movement along the demand curve occurs when there is a change in price, leading to a change in quantity demanded, while the other factors remain constant. Deflation or hyperbola formation are not terms typically used to describe changes in demand.

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.

The International Bank for Reconstruction and Development(IBRD) performs the following functions except-------

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The International Bank for Reconstruction and Development (IBRD) is a specialized agency of the United Nations that provides loans, technical assistance, and other services to developing countries. Out of the options provided, the IBRD does not reduce tariffs among its members. Its main focus is on granting long-term loans to member countries for development projects, providing technical expertise to help those countries implement those projects successfully, and developing human resources in those countries. Tariff reduction is not one of its main functions.

Cooperative societies are formed mainly to

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Cooperative societies are primarily formed to promote and maintain the welfare of their members. This means that the members of a cooperative society come together to work towards achieving common goals that benefit everyone in the society. Cooperative societies are usually formed by a group of individuals who share a common interest, such as farming, housing, or credit. By working together, members can access resources that they may not have been able to on their own, such as bulk purchasing of materials, access to credit, or sharing of knowledge and skills. In a cooperative society, the focus is not on maximizing profits for individual members, but rather on achieving benefits that are shared by the entire group. By working together, members can create a sustainable and mutually beneficial organization that can help to address the needs of the community. Therefore, the main purpose of cooperative societies is to promote the welfare of members by providing a platform for collective action and collaboration.

A price floor is usually fixed

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A price floor is typically set above the equilibrium price, and it creates a surplus of goods or services. When the price is set above the equilibrium level, it causes suppliers to offer more products than buyers are willing to purchase at that higher price. This leads to a surplus, where there are more goods available than there are buyers willing to buy them. Therefore, a price floor usually causes surpluses, and not shortages.

The largest component of national income in developing countries consist of

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In developing countries, the largest component of national income is typically wages and salaries. This means that the majority of the income earned in these countries comes from the money that people make from their jobs or employment. Wages and salaries are paid to workers in exchange for their labor, and they are typically the main source of income for most people in developing countries. This income can come from a variety of sources, including working in factories, farming, providing services, or working in other industries. While profits and rent can also be important sources of income in some cases, they generally make up a smaller proportion of national income in developing countries. Profits are the earnings that businesses make after deducting their expenses, while rent is the income that comes from owning property or other assets. In summary, the largest component of national income in developing countries is typically wages and salaries, which are earned by workers in exchange for their labor.

Developments outside a given firm that reduce the firm’s costs are called

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Developments outside a given firm that reduce the firm's costs are called "external economies." External economies refer to the benefits that firms receive from positive externalities generated by other firms or industries in the same geographic area. For example, if a new technology park is established nearby, the firms in the area may benefit from lower input costs, better transportation links, or access to skilled workers. These benefits can result in lower production costs, higher productivity, and improved competitiveness for the firms in the area. The opposite of external economies is external diseconomies, which occur when external factors increase the costs of production for firms in a particular area.

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

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Scale of preference shows

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The scale of preference refers to a list of a consumer's wants or desires arranged in order of importance or priority. It shows the consumer's preferences or choices among different options. The scale of preference is subjective and varies from person to person. For instance, if a person is given the choice to buy a new smartphone, a new pair of shoes, or a ticket to a concert, they may rank these options in order of priority. If they value communication more than entertainment, they may choose the smartphone as their top priority. Conversely, if they value entertainment more than communication, they may choose the concert ticket. Thus, the scale of preference is a way to understand how consumers make choices based on their preferences and priorities, and it helps in predicting their behavior in the market.

A greater burden of the taxes on essential goods is borne by the

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A greater burden of the taxes on essential goods is typically borne by the lower income group. This is because essential goods such as food, clothing, and shelter make up a larger proportion of the budget of low-income households than they do for high-income households. When taxes are applied to these goods, the cost of living increases proportionally for low-income households, putting a greater burden on their limited resources. In contrast, high-income households can more easily absorb the higher costs without significantly affecting their standard of living.

The sufficient condition for a firm to be in equilibrium is that the

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The advantage which firms obtain directly from expanding their operations are referred to as

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The advantage which firms obtain directly from expanding their operations are referred to as "internal economies of scale." Internal economies of scale occur when a firm's average cost of production decreases as it increases the scale of its operations. This can be due to a variety of factors, such as increased specialization of labor, greater use of capital equipment, or better purchasing power for inputs. Internal economies of scale enable a firm to become more efficient and competitive as it grows, which can result in higher profits and a stronger market position. The opposite of internal economies of scale is internal diseconomies of scale, which occur when the average cost of production increases as a firm becomes too large or complex to manage efficiently.

In perfectly elastic supply, the supply curve

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In perfectly elastic supply, the supply curve is a horizontal line. This means that the quantity of a good that a supplier is willing to sell is not affected by changes in the price of the good. The supplier will sell any quantity of the good at the market price, no matter how high or low it is. In other words, the supply is perfectly responsive to changes in the price, so the supply curve is flat.

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.

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.

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.

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.

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 ordinary partner in a partnership

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The ordinary partner in a partnership typically has unlimited liability in case of business failure. This means that they can be held personally liable for any debts or obligations of the business that are not satisfied by the assets of the partnership. This is a major disadvantage of a partnership, as it exposes the personal assets of the partners to the risk of loss in the event of business failure. While the extent of the involvement of the ordinary partner in the management of the business may vary, they are typically expected to take an active part in the management and decision-making of the partnership. As such, they cannot be said to take no active part in the management of the business. Furthermore, as a general rule, partners are jointly and severally liable for the actions of the partnership, which means that they can be sued personally on matters relating to the business. Limited liability, on the other hand, is a characteristic of some types of business entities such as limited liability companies (LLCs) and corporations.

An exceptional demand curve can result from

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An exceptional demand curve can result from an expectation of future price increase. When people think that the price of a good or service is going to increase in the future, they may start buying more of it now in order to avoid paying the higher price later. This increase in demand can cause the price of the good or service to go up in the present, creating an exceptional demand curve that deviates from the typical downward-sloping demand curve. The other factors, such as an increase in the price of raw materials, increase in the size of the population, or change in taste of consumers, can also impact the demand for a good or service, but an expectation of future price increase is a unique factor that can result in an exceptional demand curve.

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.

The effect of an increase in the personal income tax is to

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The effect of an increase in the personal income tax is to reduce the disposable income of taxpayers. When personal income taxes are increased, taxpayers have less money to spend on goods and services, as more of their income is going towards taxes. This reduction in disposable income can lead to a decrease in consumer spending, which can have a negative impact on businesses and the economy as a whole. Increasing personal income taxes may also have a distorting effect on the economy, as it can create disincentives for individuals to work, save, and invest. However, it is not likely to raise the absolute price level, as this is determined by a variety of factors including supply and demand in the economy. Furthermore, an increase in personal income taxes is not directly linked to a reduction in unemployment, as this is influenced by a wide range of factors such as economic growth, labour market policies, and the overall state of the economy.

The point x inside the ppc indicate?

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The point x inside the PPC (Production Possibility Curve) indicates that some of the resources in the economy are currently idle or not being fully utilized. This means that the economy is not producing at its maximum potential, and there is room for further growth and development. The PPC represents the different combinations of goods and services that an economy can produce given its limited resources and technology. The curve shows the maximum output that can be produced with the available resources and technology at a given point in time. Any point inside the curve represents a level of production that is below the maximum potential output, indicating that some resources are not being used to their full capacity. Therefore, if the economy is currently operating at a point inside the PPC, it has the potential to increase its production of goods and services by putting its idle resources to work. This could be achieved through measures such as increasing investment, improving technology, or providing more education and training to the workforce.

Budget deficit is the amount by which

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Budget deficit is the amount by which total expenditure exceeds revenue. A budget deficit occurs when a government or organization spends more money than it takes in through revenue, such as taxes or other sources of income. This can result in the accumulation of debt over time, which can have long-term implications for the financial health of the government or organization. While recurrent expenditure and capital expenditure are both types of expenditures that can contribute to a budget deficit, neither of these terms captures the full picture of a budget deficit. Recurrent expenditure refers to ongoing or routine expenses such as salaries, utilities, and other operating costs, while capital expenditure refers to spending on assets such as buildings, equipment, and infrastructure. A budget deficit can result from either type of expenditure, as well as from other sources of spending such as debt servicing or unexpected events that require emergency spending.

The use of the bank rate, cash ratio and open market operations constitute

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The use of the bank rate, cash ratio, and open market operations are tools used in monetary policy. Monetary policy is a set of actions taken by a country's central bank to manage the supply of money and credit in the economy to achieve specific economic goals, such as controlling inflation, stabilizing prices, and promoting economic growth. The bank rate is the interest rate at which commercial banks can borrow money from the central bank. When the central bank increases the bank rate, it becomes more expensive for commercial banks to borrow money, which reduces the amount of money in circulation in the economy. Conversely, when the central bank lowers the bank rate, it becomes cheaper for commercial banks to borrow money, which increases the amount of money in circulation in the economy. The cash ratio is the percentage of deposits that commercial banks are required to hold in reserve with the central bank. When the central bank increases the cash ratio, it reduces the amount of money that commercial banks have available to lend, which reduces the amount of money in circulation in the economy. Conversely, when the central bank lowers the cash ratio, it increases the amount of money that commercial banks have available to lend, which increases the amount of money in circulation in the economy. Open market operations refer to the buying and selling of government securities by the central bank in the open market. When the central bank buys government securities, it injects money into the economy, which increases the amount of money in circulation. Conversely, when the central bank sells government securities, it withdraws money from the economy, which reduces the amount of money in circulation. So, the use of bank rate, cash ratio, and open market operations are all tools used in monetary policy to manage the amount of money in circulation in the economy, with the aim of achieving specific economic goals.

Economic goods are termed scarce goods when they are

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Economic goods are termed scarce goods when they are not available in sufficient quantity to satisfy all wants for them. In other words, when there is a limited supply of a good or resource, but a potentially unlimited demand for it, that good is considered to be scarce. This concept is fundamental to economics because it helps to explain why goods have value and why individuals and societies must make choices about how to allocate scarce resources.