JAMB UTME - Economics - 2022

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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.

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

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

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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

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A free trade area is a form of economic integration where member nations agree to eliminate tariffs and trade barriers on goods and services traded among themselves. However, each member nation is still free to impose duties against non-member nations. In other words, members have a free trade agreement with each other, but they can still have their own trade policies towards non-members. In contrast, a customs union is an advanced form of a free trade area where member nations not only eliminate tariffs among themselves, but they also agree to have a common external tariff towards non-member nations. This means that all goods entering the customs union must pay the same tariffs, regardless of which member nation they are entering. A common market is a further step towards integration, where not only goods, but also factors of production such as capital and labor can freely move among member nations. This allows for a more integrated and efficient market, but it also means that member nations have less control over their trade policies. An economic community is a broader form of integration, where member nations agree to coordinate and harmonize their economic policies in a wide range of areas, including trade, monetary policy, and fiscal policy. This is the most advanced form of integration, as it involves a high degree of cooperation and coordination among member nations.

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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.

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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.

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A major function of the retailer is to break bulk and sell products in small units to consumers. This means that retailers purchase goods in large quantities from wholesalers or manufacturers and then sell them in smaller quantities to individuals or households. By doing so, retailers make it easier for consumers to access a wide range of products, as they do not have to buy in bulk or directly from the manufacturer. Additionally, retailers often play a key role in generating demand for products through advertising and marketing efforts. By showcasing products in stores and online, and through various forms of advertising, retailers can help to build brand awareness and encourage consumers to purchase products. While some retailers may offer credit to wholesalers or consumers, this is not a primary function of retailing. Similarly, while retailers can help to reduce the cost of distribution by consolidating products and shipping them in bulk, this is a secondary function of retailing that supports the primary function of breaking bulk and selling products in small units.

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An important factor hindering the rapid development of the industrial sector in Nigeria is inadequate infrastructure facilities. This includes factors such as inadequate transportation systems, unreliable electricity supply, poor communication networks, and insufficient access to water and sanitation facilities. These factors can increase the cost of production, reduce productivity and efficiency, and make it difficult for industries to compete with other countries. The dominance of the oil sector has also been a significant factor, as it has led to a neglect of other sectors, including manufacturing and industry. Excessive demand for finished products and rural-urban migration may have some impact on industrial development but are not as significant as inadequate infrastructure and the dominance of the oil sector.

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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.

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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.

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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 causes interest rates on loans and mortgages offered by commercial banks to increase as well. As a result, people and businesses are less likely to take out loans, because they have to pay more in interest. So, borrowing is discouraged. On the other hand, banks are able to charge more for loans, so they can increase their profits. However, this increase in interest rates can also lead to a decrease in spending, which can slow down economic growth.

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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.

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The industry that adds more value to primary products is the processing industry. The processing industry takes raw materials, such as those produced by the mining industry, and turns them into finished products through various manufacturing processes. This added value comes from transforming the raw materials into something that is more useful and valuable to consumers. The service industry, on the other hand, provides services to individuals and businesses, such as consulting, financial advice, or customer support. While the service industry is important for the economy, it does not add value to primary products in the same way that the processing industry does. The construction industry involves the building of structures and infrastructure, such as buildings, roads, and bridges. While the construction industry uses materials produced by the mining industry, it does not add value to these materials in the same way that the processing industry does. In conclusion, the processing industry is the industry that adds the most value to primary products by transforming raw materials into finished goods that are more useful and valuable to consumers.

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The major role of multinational companies in the petroleum industry in Nigeria is oil prospecting. Multinational companies, also known as International Oil Companies (IOCs), play a significant role in the exploration and production of oil and gas in Nigeria. These companies invest heavily in the exploration of new oil fields, as well as the development and production of existing fields. While some IOCs are also involved in oil marketing and refining, their primary role in Nigeria is oil prospecting. The IOCs in Nigeria include major companies such as Shell, ExxonMobil, Chevron, and Total.

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

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

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The middlemen is responsible for "breaking the bulk". Middlemen are intermediaries between producers and consumers in the distribution process. They play a crucial role in getting products from the producers to the consumers, and they perform a variety of functions such as transportation, storage, and marketing. One important function of middlemen is to break the bulk of products. This means they take large quantities of goods from producers and break them down into smaller units that can be sold to consumers in the desired quantities. For example, a farmer may produce tons of wheat, but consumers may only want to buy it in small quantities. Middlemen can purchase the bulk quantity from the farmer, then break it down into smaller units that can be sold to individual consumers. Breaking the bulk is important for several reasons. It allows for greater efficiency in the distribution process, as products can be transported and stored more easily in smaller units. It also allows for greater flexibility in meeting consumer demand, as products can be sold in the quantities that consumers desire. Finally, it can help to reduce costs for both producers and consumers, as middlemen can aggregate products from multiple producers and sell them at a lower cost than individual producers could achieve on their own.

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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.

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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.

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

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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.

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One possible factor that limits the extent of growth of a firm is the unwillingness to share ownership and control. When a firm is controlled by a single owner or a small group of owners who are not willing to share ownership or decision-making power, it can limit the firm's ability to raise capital, make strategic partnerships, or expand into new markets. In contrast, allowing outside investors or partners to have a stake in the company can provide the firm with access to more resources, expertise, and new opportunities for growth.

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Economic goods are termed scarce when they are "not available in sufficient quantities to satisfy all wants for them." Scarce resources are those that have a limited supply relative to the demand for them. This scarcity means that choices must be made about how the resources are allocated, and that not all wants or needs can be fully satisfied. The concept of scarcity is fundamental to the study of economics, as it is the basis for understanding the concepts of opportunity cost, trade-offs, and efficiency.

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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.

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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.

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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.