JAMB UTME - Economics - 2022
Question 1 Report
The advantage which firms obtain directly from expanding their operations are referred to as
Answer Details
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.
Question 2 Report
Producers operating in a free market economy are more efficient as a result of
Answer Details
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.
Question 3 Report
A major characteristic of natural resources is they
Answer Details
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.
Question 4 Report
A major disadvantage of a capitalist economy is that it
Answer Details
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.
Question 5 Report
Privatization and commercialization of public enterprises in Nigeria is necessitated by
Answer Details
The privatization and commercialization of public enterprises in Nigeria is necessitated by their operational inefficiency. Public enterprises in Nigeria, like in many other countries, have often been criticized for poor management, corruption, and inefficiency, which have resulted in heavy financial losses for the government. Privatization and commercialization are seen as a way to introduce more competition, increase efficiency, and reduce the financial burden on the government. While the IMF and the World Bank have encouraged privatization in many countries as a condition for receiving loans, in Nigeria, the privatization and commercialization policies were largely driven by domestic factors, including the need to improve the performance of public enterprises.
Question 6 Report
A baker bought flour and other ingredients for S250.00, spent S52.00 on distribution, sold the bread for S320.00. The value added by the baker.
Answer Details
The value added by the baker is $90.00.
To calculate the value added by the baker, we need to subtract the cost of goods sold (COGS) from the revenue. The COGS in this case includes the cost of flour and other ingredients, which is not given, but we know that the baker spent a total of $250.00 on these items. We also need to include the cost of distribution, which is $52.00.
So the total COGS is $250.00 + $52.00 = $302.00.
The revenue from selling the bread is $320.00.
Therefore, the value added by the baker is $320.00 - $302.00 = $18.00.
In other words, the baker added $18.00 of value to the raw materials and distribution costs to produce and sell the bread. This value added represents the baker's contribution to the economy and is a measure of the wealth created by the baker's business.
Question 7 Report
A made obstacle to economic development is
Answer Details
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.
Question 8 Report
The demand for labour is an example of
Answer Details
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.
Question 9 Report
If workers at the school canteen cannot sell during the holidays, this is example of
Answer Details
If workers at the school canteen cannot sell during the holidays, this is an example of seasonal unemployment. This means that the workers are temporarily out of work due to changes in demand for their labor, in this case because the school is not in session. Seasonal unemployment is a common occurrence in industries that are heavily influenced by the time of year, such as agriculture, tourism, and retail. While the workers may have other employment options, they are currently without work due to the seasonality of the school canteen.
Question 10 Report
Occupational mobility as applied to factors of production means the case by which
Answer Details
Question 11 Report
In a free market economy, the rationing of scarce goods is done principally by?
Answer Details
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.
Question 12 Report
A consumer of a single commodity is in equilibrium when
Answer Details
A consumer of a single commodity is in equilibrium when they have reached a point where they are satisfied with the amount of the commodity they have purchased and consumed, and do not feel the need to buy any more or any less of it. This equilibrium can be achieved in different ways, but one common way is when the marginal utility, or the additional satisfaction gained from consuming one more unit of the commodity, is equal to the price paid for that unit. In other words, the consumer is willing to pay the price because they feel they are getting enough satisfaction from the additional unit. At this point, the consumer has no incentive to buy more of the commodity, because the marginal utility would be lower than the price, and they would feel like they are overpaying for the satisfaction gained. Conversely, if the price were to decrease, the marginal utility would be higher than the price, and the consumer may feel like they are getting a good deal and may want to purchase more of the commodity. Ultimately, the consumer is in equilibrium when they have found a balance between the satisfaction gained from the commodity and the price paid for it.
Question 13 Report
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?
Answer Details
Question 14 Report
An exceptional demand curve can result from
Answer Details
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.
Question 15 Report
An important factor hindering the rapid development of the industrial sector in Nigeria.
Answer Details
Question 16 Report
If a housewife has meat and wants tomatoes, she must find someone who has tomatoes to give and wants meat. This concept is described as
Answer Details
The concept described in the given scenario is called "double coincidence of wants." It refers to the situation where two parties have goods or services that the other party desires and are willing to exchange, and both parties are able to meet each other's wants at the same time.
In the example, the housewife wants tomatoes, and she has meat that she can offer in exchange. However, she can only trade with someone who has tomatoes and also wants meat. The double coincidence of wants occurs when both parties have what the other wants, and both are willing and able to trade. This concept is important in understanding how bartering works, which is an exchange of goods and services without the use of money.
Question 17 Report
The theory of comparative advantage states that a commodity should be produced in that nation where the
Answer Details
The theory of comparative advantage states that a commodity should be produced in that nation where the opportunity cost is least. Opportunity cost is the cost of choosing one option over another, and in the context of comparative advantage, it refers to the cost of producing a particular good or service in terms of what has to be given up to produce it. A country should specialize in producing and exporting the goods and services for which it has a comparative advantage, which means that it can produce them at a lower opportunity cost than other countries.
While the absolute cost and absolute money cost of production can be important factors in determining the competitiveness of a particular commodity, the theory of comparative advantage emphasizes the importance of considering opportunity cost. Furthermore, the production possibility curve, which shows the maximum combination of two goods that can be produced with a given set of resources, is not directly related to the theory of comparative advantage, although it can help illustrate some of the concepts involved in the theory.
Question 18 Report
In the event of bankruptcy, owners of joint-stock companies lose
Answer Details
In the event of bankruptcy, owners of joint-stock companies (also known as shareholders) typically only lose the capital they have invested in the company. They do not lose their private properties or personal assets.
When an individual buys shares in a joint-stock company, they become a partial owner of the company. As a shareholder, they are entitled to receive a share of the company's profits in the form of dividends. However, if the company goes bankrupt and cannot meet its financial obligations, the shareholders may lose the value of their investment, meaning the shares they hold in the company become worthless.
Therefore, shareholders may lose the capital they invested in the company, but they are not responsible for any additional debts or liabilities the company may have. Shareholders are only liable to lose the value of their shares and do not have to worry about losing their personal assets or private properties.
Question 19 Report
Cooperative societies are formed mainly to
Answer Details
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.
Question 20 Report
Budget deficit is the amount by which
Answer Details
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.
Question 21 Report
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?
Answer Details
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.
Question 22 Report
Which of the following activities will not lead to economic growth?
Answer Details
Massive importation of consumer goods will not lead to economic growth.
Economic growth refers to an increase in the capacity of an economy to produce goods and services over a period of time. It is measured by the growth in the gross domestic product (GDP) of a country.
Massive importation of consumer goods may lead to an increase in consumption, but it does not lead to an increase in the productive capacity of an economy. This is because consumer goods are used for immediate consumption and do not contribute to the production of other goods and services. On the other hand, capital goods like machinery, equipment, and infrastructure are used to produce other goods and services, and their importation can lead to economic growth by increasing the productive capacity of an economy. Intensive capital formation and the use of modern technology also contribute to economic growth by increasing the efficiency and productivity of an economy.
Question 23 Report
If at 10K per kg, 1000kg of yam were purchased, the resultant point elasticity of demand is
Answer Details
Question 24 Report
Demand-pull inflation is likely to be caused by
Answer Details
Demand-pull inflation occurs when the overall demand for goods and services in an economy exceeds the supply of those goods and services, leading to an increase in the general price level. This increase in demand may be caused by a number of factors, such as an increase in consumer confidence, an increase in government spending, or an increase in exports.
Out of the given options, an increasingly large budget deficit is the most likely cause of demand-pull inflation. When the government spends more money than it collects in taxes, it may finance the deficit by borrowing from the central bank, other banks or the public. This increases the overall amount of money in circulation in the economy, which in turn leads to an increase in demand for goods and services. This increased demand can then lead to higher prices for those goods and services, resulting in demand-pull inflation.
An increase in the cost of factor inputs, such as labor or raw materials, may also contribute to inflation, but this is known as cost-push inflation, which occurs when the cost of producing goods and services increases, leading to higher prices. An increase in the income tax rate and an increase in the bank lending rate can reduce the overall demand for goods and services and lead to a decrease in inflation.
Question 25 Report
Which of the following factors is not a reason for farmers' unstable incomes?
Answer Details
Question 26 Report
A firm that closes down will still incur
Answer Details
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.
Question 27 Report
The price mechanism
Answer Details
The price mechanism is a system in an economy where the prices of goods and services are determined by the forces of supply and demand. This mechanism is responsible for regulating the balance between what consumers want to buy and what producers want to sell.
As the demand for a particular item increases, the price of the item will rise, causing producers to increase supply to meet the demand. On the other hand, if the demand decreases, the price will fall, and producers will decrease their supply. In this way, the price mechanism helps allocate scarce resources by ensuring that the goods and services that are in high demand are produced and distributed more, while those that are not in high demand are produced and distributed less.
In conclusion, the price mechanism does all of the above - regulates supply and demand, rations the consumers, rewards the producers, and allocates scarce resources - to ensure an efficient and effective allocation of resources in an economy.
Question 28 Report
Marginal cost is?
Answer Details
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.
Question 29 Report
A downward sloping demand curve means that
Answer Details
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.
Question 30 Report
Positive check as envisaged by Thomas Malthus can be prevented if
Answer Details
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.
Question 31 Report
The mining sector of an economy contributes 60% to the Gross Domestic Product(GDP). If the GDP is $540, what is the contribution of the mining sector?
Answer Details
If the mining sector contributes 60% to the Gross Domestic Product (GDP), then its contribution can be calculated by multiplying the GDP by 60% (or 0.60, which is the decimal equivalent of 60%).
So, the contribution of the mining sector to the GDP is:
Contribution of mining sector = GDP x 60%
= $540 x 0.60
= $324
Therefore, the contribution of the mining sector to the GDP is $324.
Question 32 Report
If a demand curve that intersects a perfectly inelastic supply shifts rightward, then
Answer Details
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.
Question 33 Report
The demand for labour is an example of
Answer Details
The demand for labor is an example of "derived demand."
Derived demand refers to the demand for a factor of production or a good that arises as a result of the demand for another good or service. In the case of labor, it is not demanded for its own sake but rather because it is needed to produce goods and services that consumers demand. The demand for labor is therefore derived from the demand for the goods and services that labor helps to produce.
Question 35 Report
A firm's average cost decreases in the long-run because of
Answer Details
A firm's average cost can decrease in the long-run due to increasing returns to scale. This means that as the firm increases its production, it experiences a decrease in its average cost. This can be due to various factors such as specialization, economies of scale, and better utilization of resources.
For example, a firm that produces 100 units of a product might have an average cost of $10 per unit. However, if it increases its production to 200 units, it might be able to reduce its average cost to $8 per unit. This could be due to the fact that the firm can take advantage of bulk discounts on raw materials, use more efficient production methods, and spread its fixed costs over a larger number of units.
Therefore, when a firm experiences increasing returns to scale, it can reduce its average cost in the long-run, which can lead to higher profits and a competitive advantage in the market.
Question 36 Report
The distinction between capital and recurrent expenditure lies in the
Answer Details
Question 37 Report
An example of transfer payments in national income accounting is
Answer Details
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.
Question 38 Report
Palm oil and palm kernel are in
Answer Details
Palm oil and palm kernel are in joint supply.
Joint supply refers to a situation in which two or more products are produced together as a result of a single production process. In the case of palm oil and palm kernel, both products are obtained from the same fruit of the oil palm tree.
When the fruit is processed, it produces two distinct products: palm oil and palm kernel. Palm oil is obtained from the fleshy outer part of the fruit, while palm kernel is obtained from the inner seed or kernel. Since both products are obtained from the same production process, the quantity of one product that is produced is directly related to the quantity of the other product that is produced.
As a result of being in joint supply, the prices of palm oil and palm kernel are interdependent. If the demand for one product increases, this will increase the supply of the other product, which can lower its price. For example, if the demand for palm oil increases, more oil palm fruit will be processed, leading to an increase in the supply of palm kernel and a potential decrease in its price.
To summarize, palm oil and palm kernel are in joint supply because they are both obtained from the same production process and the quantity of one product produced is directly related to the quantity of the other product produced. The prices of both products are interdependent, and a change in demand for one product can affect the supply and price of the other product.
Question 39 Report
If inflation is anticipated, people may
Answer Details
If inflation is anticipated, people may choose to spend less money. This is because inflation reduces the purchasing power of money, meaning that the same amount of money can buy fewer goods and services. In response, people may decide to be more frugal with their spending, save more money, or look for ways to reduce their expenses. By spending less, they can try to maintain their purchasing power and avoid the negative effects of inflation.
Question 40 Report
Which of the following situations can give rise to economic problems
Answer Details
