JAMB UTME - Economics - 2023
Question 1 Report
An increase in money income with constant price results in
Answer Details
When there is an increase in money income but the prices of goods and services remain the same, it will result in an outward shift in the budget line. To understand this, let's imagine a simple scenario where a person has a fixed amount of money to spend on different goods and services. This fixed amount of money represents their income. Now, if their income increases but the prices of goods and services they want to buy stay the same, they will have more money to spend. This means they can afford to buy more of each item. As a result, the budget line, which shows the different combinations of goods and services that can be bought with a given income, will shift outward. This indicates that they can now afford to buy a greater quantity of goods and services than before. Therefore, the correct answer is an "outward shift in the budget line" when there is an increase in money income with constant prices.
Question 2 Report
A major factor contributing to productivity is
Answer Details
Labour is by far the most common of the factors used in measuring productivity. One reason for this is, of course, the relatively large share of labour costs in the value of most products.
Question 3 Report
The "velocity" of money is
Answer Details
Velocity of money is the total amount of money in circulation in an economy. It is calculated as Velocity of money = GDP/Money Supply
Question 4 Report
The short run can be defined as the period of time during which
Answer Details
The short run can be defined as the period of time during which at least one of the firm's inputs is fixed. In other words, it is a time frame in which the firm cannot easily or quickly adjust all of its inputs. This means that some resources, such as the size of a factory or the number of employees, cannot be changed in the short run.
During the short run, firms can only adjust their production levels by varying the amount of variable inputs, such as raw materials or utilities. The fixed input, which remains constant in this period, imposes limitations on the firm's ability to increase or decrease its output. This constraint on adjusting all inputs is what distinguishes the short run from the long run, where all inputs can be varied.
It is important to note that the length of the short run can vary depending on the industry and the specific circumstances of the firm. For some businesses, the short run may be a few months, while for others it could be several years. However, what remains consistent is that during the short run, the firm is restricted in its ability to modify certain inputs, which can impact its production and overall performance.
Question 5 Report
If a business' total economic cost of producing 10,000 units of a product is N750,000 and this output is sold to consumers for N1,000,000, then the firm would earn
Answer Details
Economic profit = Total revenue(Output) - Opportunity cost of input
= 1,000,000 - 750,000
= 250,000
Question 6 Report
The principle that specified that the amount, when and how to pay tax should be made known to tax payer is known as
Answer Details
The principle that specifies that the amount, when, and how to pay tax should be made known to the taxpayer is known as the Principle of Certainty. This principle ensures that taxpayers have a clear understanding of their tax obligations, which includes knowing the amount of tax they owe, the deadline for payment, and the method of payment.
The Principle of Certainty is important because it promotes transparency and accountability in the tax system. By providing clear and specific information to taxpayers, it enables them to accurately calculate and plan for their tax obligations. This helps to avoid confusion or misunderstandings between the taxpayer and the tax authorities.
Furthermore, the Principle of Certainty also ensures fairness and consistency in the tax system. By clearly stating the rules and requirements, it ensures that all taxpayers are treated equally and that there is no ambiguity or room for arbitrary decisions in the tax assessment process.
Overall, the Principle of Certainty provides a solid foundation for the relationship between taxpayers and tax authorities. It establishes clear expectations, promotes compliance, and adds credibility to the tax system.
Question 7 Report
The maximum price is
Answer Details
The maximum price is **P4**. To explain why, we need to understand that the prices are listed in ascending order. This means that **P1** is the lowest price and **P4** is the highest price. When we say "maximum price," we are referring to the highest possible price among the given options. In this case, **P4** is the highest price listed. Therefore, the maximum price is **P4**.
Question 8 Report
Agriculture accounts for about 60% of the
Answer Details
Agriculture accounts for about 60% of the active labour force in West Africa. This is because a large portion of the population in West Africa is engaged in farming and other agricultural activities for their livelihood. The other options are incorrect as agriculture does not account for 60% of the arable land, service sector activities, or the commodity market in West Africa.
Question 9 Report
Economic problem occurs when
Answer Details
The economic problem occurs when there is scarcity relative to demand. Scarcity means that resources are limited, while demand refers to people's desires and needs for goods and services. In simple terms, the economic problem arises when there are not enough resources to satisfy everyone's wants and needs. This is because resources, such as land, labor, and capital, are finite, while people's desires are infinite. For example, imagine a small community with a limited amount of food available. If everyone in the community wants to eat, but there is not enough food for everyone, it creates an economic problem. This scarcity can lead to competition, as individuals and businesses try to obtain the limited resources. The economic problem is not caused by raw materials being imported or people being out of work. These factors can contribute to a country's economic challenges, but they are not the direct cause of the economic problem. Similarly, the absence of buyers for goods is a symptom of the economic problem, rather than the cause. If people cannot afford or do not want to buy goods, it indicates a mismatch between supply and demand. However, this does not explain why the economic problem exists in the first place. In summary, the economic problem occurs when there is scarcity relative to demand, meaning there are not enough resources to fulfill everyone's wants and needs. This scarcity leads to competition and the need for individuals and businesses to make choices regarding resource allocation.
Question 10 Report
Among all the determinants of economic growth, the most important one is
Answer Details
The Gross Domestic Product is the total monetary or market value of all the goods and services produced within a country. It is used to measure the rate of growth in an economy.
Question 11 Report
The type of unemployment that occurs when an individual cannot find job as a result of obsolete skill is
Answer Details
The type of unemployment that occurs when an individual cannot find a job as a result of obsolete skills is known as Structural unemployment.
Structural unemployment happens when there is a mismatch between the skills that job seekers possess and the skills required for available jobs in the market. In this case, individuals may no longer be qualified for the jobs that are available due to changes in technology, market conditions, or shifts in the economy.
For example, let's say there is a rapid advancement in technology that makes certain job skills obsolete. Workers who had those skills may struggle to find employment because companies are now looking for individuals with more up-to-date skills.
This type of unemployment is different from cyclical unemployment, which is caused by fluctuations in the business cycle, or seasonal unemployment, which occurs due to seasonal variations in demand for certain jobs. Frictional unemployment, on the other hand, refers to the temporary unemployment that occurs when individuals are transitioning between jobs or entering the workforce for the first time.
To sum up, structural unemployment is the type of unemployment that arises when an individual cannot find a job because their skills are no longer in demand.
Question 12 Report
Money could be defined as
Answer Details
Money can be defined as a medium of exchange that is universally accepted for buying goods and services. It enables people to easily trade with one another, without the need for bartering or trading directly with goods. In simpler terms, money is like a common language that everyone understands and uses to exchange things they want or need.
Money also serves as a settlement of debt because it allows individuals, businesses, and even governments to repay what they owe. When someone borrows money or takes a loan, they can later use money to pay back the lender. Similarly, if someone owes money to another person, they can use money to settle that debt.
Additionally, money is a medium of payment. It is used to complete transactions and make payments for goods and services. Whether you are buying groceries, paying for a movie ticket, or purchasing a new gadget, money is the common method of payment.
To summarize, money is a medium of exchange, settlement of debt, and medium of payment. It simplifies trade, enables the repayment of debts, and facilitates transactions in our daily lives.
Question 13 Report
Government uses all of the following ways to redistribute income, except
Answer Details
The government uses various methods to redistribute income in society. Three of these ways are market intervention, transfer earnings, and taxation. Market intervention involves the government stepping in and regulating certain aspects of the economy to ensure fairness and reduce income inequality. For example, the government may set a minimum wage so that workers are guaranteed a certain level of income. Transfer earnings refer to government programs that provide financial assistance to individuals or families who are in need. These programs include welfare, unemployment benefits, and social security. The goal is to provide support to those who may have lower incomes or are facing financial difficulties. Taxation is another method used by the government to redistribute income. Through taxes, the government collects money from individuals and businesses based on their income or profits. This revenue is then used to fund public services such as healthcare, education, infrastructure, and social programs. However, the answer to the question is that the government does not use limited liability as a way to redistribute income. Limited liability is a legal concept that protects individuals from being personally liable for the debts and liabilities of a company. It is not directly related to income redistribution. In summary, the government redistributes income through market intervention, transfer earnings, and taxation. These methods aim to promote fairness and provide support to those in need. However, limited liability is not a method used for income redistribution.
Question 14 Report
Which of the following Age group belongs to active Labour force?
Answer Details
The age group that belongs to the active labor force is the **18 - 64 years** category. This age range is generally considered to be the working-age population, as it encompasses individuals who are old enough to work and have not yet reached the age of retirement. People in this age group are typically in their prime working years, where they have the physical ability and the necessary skills and knowledge to actively participate in the labor market. They are often seeking employment, working in various industries or sectors, and contributing to the economic growth and development of their country. It is important to note that the specific age range considered as the working-age population may vary slightly across different countries or regions. However, in most cases, it generally falls within the **18 - 64 years** age bracket. On the other hand, the other age groups mentioned in the options are not typically considered as part of the active labor force: - The **0 - 17 years** age group consists of individuals who are below the legal working age and are typically attending school or dependent on others for their livelihood. - The **15 - 25 years** age group partially overlaps with the working-age population, but it includes individuals who may still be in school or pursuing higher education. While some individuals within this age range may be actively seeking employment or working part-time, they are generally not considered as the core active labor force. - The **65 years and above** age group represents individuals who have reached the retirement age or are eligible for retirement benefits. While some individuals in this age range may continue to work, either out of choice or due to financial circumstances, they are not considered as the primary active labor force. In summary, the **18 - 64 years** age group is the one that belongs to the active labor force, consisting of individuals who are in their prime working years and actively participating in the labor market.
Question 15 Report
The part of income after tax that is not consumed is defined as
Answer Details
The part of income after tax that is not consumed is defined as saving. Saving refers to the portion of income that is not spent on immediate consumption and is instead put aside for future use.
When we receive our income, we typically have various expenses to cover, such as bills, groceries, and entertainment. After deducting these expenses and taxes, we are left with a certain amount of money. If we choose not to spend this remaining amount and instead keep it for later, we are saving that money.
Saving is important because it allows us to build up financial security and prepare for unexpected expenses or future goals. It can also be used for long-term investments, such as buying a house or planning for retirement.
In summary, saving is the part of our income that we choose to set aside rather than using it immediately for consumption.
Question 16 Report
40 men were employed in a farm, and they produced an average of 30 tonnes of cassava per person. Calculate the total product.
Answer Details
To calculate the total product of cassava, we need to multiply the average production per person by the number of people.
In this scenario, we know that there were 40 men employed in the farm, and each person produced an average of 30 tonnes of cassava.
So, to find the total product, we need to multiply 40 by 30.
40 x 30 = 1200
Therefore, the total product of cassava is 1,200 tonnes.
Question 17 Report
In a two by two model of international trade, it is assumed that
Answer Details
In a two by two model of international trade, it is assumed that **both countries could gain from trade at the same time, but the volume of the gains depends on terms of trade**. This means that both countries can benefit from engaging in trade with each other. Trade allows both countries to specialize in producing and exporting the goods in which they have a comparative advantage, while importing goods that they are less efficient at producing. This leads to increased efficiency and overall economic gains for both countries. However, the volume of the gains from trade depends on the terms of trade between the two countries. The terms of trade refer to the ratio at which the countries exchange their goods. If one country has a higher bargaining power or can produce goods at a lower cost, they may negotiate more favorable terms of trade, leading to a larger volume of gains for that country. On the other hand, if the terms of trade are less favorable, the volume of gains for both countries may be smaller. In summary, while both countries can benefit from trade, the extent of the gains will vary depending on the terms of trade negotiated between them.
Question 18 Report
The development of an economic hypothesis through intuition, insight, or logic is associated with
Answer Details
Normative economics is a perspective on economics that reflects normative, or ideologically prescriptive judgments toward economic development, investment projects, statements, and scenarios. It expresses ideological judgments about what may results in economic activity if public policy changes are made.
Question 19 Report
Which of the following is an example of free good?
Answer Details
An example of a free good is water in the ocean.
A free good is a good that is available in unlimited supply and does not require any payment or exchange to obtain it.
In the case of water in the ocean, it is freely available and accessible to anyone. It is not owned by anyone and does not require any payment to access or use it. Therefore, it can be considered a free good.
On the other hand, free education, dinner you did not pay for, and your rented apartment are not examples of free goods.
Free education typically refers to education that is provided without direct payment by the student. While it may be free for the student, someone is still paying for it, such as the government or private institutions.
A dinner that you did not pay for may seem free to you, but someone, such as a friend or a host, is still paying for it. The cost of that dinner is borne by someone else, even if it is not you.
Similarly, a rented apartment is not a free good because it involves a transaction where you pay for the use of the apartment. You enter into a contractual agreement with the landlord and pay rent in exchange for living in the apartment.
Question 20 Report
Multiplier can be described as
Answer Details
A multiplier is a factor of proportionality that measures how much an endogenous variable changes in response to a change in some exogenous variable such as investment, consumption, government expediture etc.
Question 21 Report
Real cost is
Answer Details
Real cost is the cost of producing a good or service, including the cost of all resources used and the cost of not employing those resources in alternative uses.
Question 22 Report
An industry is
Answer Details
An industry is a group of firms producing similar products and under separate administration or management.
Question 23 Report
The fundamental problem of economics is
Answer Details
The fundamental problem of Economics is Scarcity. Scarcity explains the basic economic problem that the world has limited or scarce resources to meet seemingly unlimited wants, and this reality forces people to make decisions about how to allocate resources in the most efficient way.
Question 24 Report
Public corporation is financed with
Answer Details
Public corporations are run by the government through the tax paid by the people. They are established by an act of parliament or decree and it is controlled by the board of directors, appointed by the government.
Question 25 Report
The decision to consume more of one product under normal circumstances will apply
Answer Details
The decision to consume more of one product under normal circumstances will **result in less consumption of another product**. When we have a limited amount of resources, we can only allocate them in certain ways. This is true for both individuals and businesses. If we choose to consume more of one product, it means we are using some of our resources to produce more of that product. As a result, we have less resources available to produce or consume other products. Let's take an example to understand this concept better. Suppose you have $10 to spend on food, and you can either choose to buy more fruits or more vegetables. If you decide to buy more fruits, it means you are allocating more of your budget towards fruits. As a result, you will have less money left to buy vegetables. On the other hand, if you decide to buy more vegetables, it means you are allocating more of your budget towards vegetables, and you will have less money left to buy fruits. Similarly, in a market economy, if consumers decide to buy more of one product (like smartphones), the demand for that product increases. This leads to an increase in production and consumption of smartphones. However, the resources used to produce smartphones are limited. Therefore, the production of other products (like laptops or tablets) may decrease because fewer resources are available to produce them. In conclusion, when the decision is made to consume more of one product, it generally means that less of another product will be consumed. This is because resources are limited and need to be allocated among different options.
Question 26 Report
The quantity of commodity a consumer is willing and able to buy at a particular time is called
Answer Details
The quantity of a commodity that a consumer is willing and able to buy at a particular time is called demand.
Demand refers to the consumer's desire or willingness to purchase a specific product or service at a given price and at a given time. It represents the customer's intent to buy and the amount they are willing to buy at various price levels.
It is important to note that demand is not just about the desire for a particular item, but also the consumer's ability to pay for it. For example, someone may wish or desire to buy a luxury car, but if they do not have the financial means to afford it, their demand for that car is limited.
In summary, demand is the quantity of a commodity that a consumer is both willing and able to buy at a given time, reflecting their desire for the product and their ability to pay for it.
Question 27 Report
A tariff is a tax imposed on
Answer Details
A tariff is a tax that is imposed on imported goods. It is a financial charge that a government puts on goods that are being brought into the country. The purpose of a tariff is to protect domestic industries and businesses from competition from imported goods. By placing a tax on imported goods, it becomes more expensive for consumers to buy those goods, making them less appealing compared to domestic alternatives. This gives domestic industries a competitive advantage and helps support local businesses and jobs. So, the correct answer is imported goods.
Question 28 Report
------------- is NOT the cause of balance of payments (BOP) deficits in Nigeria
Answer Details
The causes of balance of payment deficit are: low level of agriculture, low level of technological development, inadequacies in export promotion strategy, political instability, poor social and economic infrastructure, servicing of huge external debts, existence of import dependent industries etc.
Question 29 Report
One major criticism of foreign aid to developing countries is that it
Answer Details
The loans help to create poverty, as capital that could have been invested instead was channeled into debt repayment.
Question 30 Report
One major problem facing West African countries is
Answer Details
One of the major problem of West African state is the relation of West African states with the colonial masters.
Question 31 Report
The diagram above represent
Answer Details
The diagram above represent a monopolist diagram.
Question 32 Report
Answer Details
The measure that represents the natural growth rate of a population is the **Birth rate minus the Death rate**, which is the second option. The natural growth rate of a population refers to the rate at which the population increases or decreases due to births and deaths, without taking into account migration. It solely focuses on the difference between the number of births and the number of deaths occurring within a population during a specific period of time. When the birth rate exceeds the death rate, it results in a positive natural growth rate, meaning the population is increasing. On the other hand, if the death rate is higher than the birth rate, it leads to a negative natural growth rate, indicating a decrease in the population. The first option, "Natural increase - Birth rate + Net migration," takes into account both the birth rate and the net migration (the difference between the number of people migrating into and out of a population in a specific period). This measure considers factors beyond just births and deaths, so it does not accurately represent the natural growth rate. The third option, "Birth rate/Death rate," is a ratio of the birth rate to the death rate. It does not give a measure of the natural growth rate itself, but rather shows the relationship between the number of births and the number of deaths. The fourth option, "Birth + Net migration = Death," suggests an equality between the sum of births and net migration and the number of deaths. This equation does not accurately represent the natural growth rate since it assumes that the number of births and net migration should exactly match the number of deaths, which is unlikely in most populations. Therefore, the most appropriate measure for the natural growth rate of a population is the **Birth rate minus the Death rate**.
Question 33 Report
The following are economic agents in any economy EXCEPT
Answer Details
Economic agents are entities that make economic decisions. They include households, firms, and the government. The Central Bank, while an important institution, is not considered an economic agent as it does not make decisions about what, how, and for whom to produce. It is responsible for monetary policy and regulating the financial system.
Question 34 Report
Given the table demonstrating the law of diminishing marginal utility below, what is the value of X?
No. of oranges Consumed |
Total Utility | Average Utility | Marginal Utility |
| 1 | 9 | 9 | - |
| 2 | 16 | 8 | x |
| 3 | 24 | 8 | 6 |
| 4 | 30 | 7.5 | 4 |
| 5 | 34 | 6.8 | y |
| 6 | 36 | 6 | 2 |
| 7 | 36 | 5.1 | 0 |
Answer Details
The Marginal Utility is the additional satisfaction a consumer gains from consuming one more unit of a good or service. It can be calculated by subtracting the total utility of the previous consumption from the total utility of the current consumption. In this case, the total utility of consuming 2 oranges is 16 and the total utility of consuming 1 orange is 9. Therefore, the marginal utility (X) of the second orange is 16 - 9 = 7.
Question 35 Report
From the graph below, Point "E" shows--------------
Answer Details
Point 'E" inside the graph indicates it is technologically inefficient" , Underemployed" or wide spread unemployent" or resources are not fully utilized or production inefficient"
Question 36 Report
The theory of ............... was propounded by ..................
Answer Details
The theory of absolute advantage was propounded by Adam Smith while the theory of comparative advantage was propounded by David Ricardo.
Question 37 Report
Indicator of underdevelopment is
Answer Details
An indicator of underdevelopment is low per capita income. Per capita income refers to the average income earned by individuals in a country. In underdeveloped countries, the per capita income is generally low, meaning that people have lower incomes on average compared to developed countries.
Low per capita income is a significant indicator of underdevelopment because it directly affects the standard of living of people within a country. With low income, individuals have limited purchasing power, making it difficult for them to afford basic necessities such as food, clothing, and shelter. This can lead to overall poor living conditions and a lack of access to essential services like healthcare and education.
Additionally, low per capita income also implies limited economic opportunities and a weak economy. It suggests that the country's productivity and industrial development are low, leading to low wages and limited job opportunities. This can result in high levels of poverty and unemployment, further hindering the country's development.
In summary, low per capita income is a crucial indicator of underdevelopment because it reflects the overall economic situation of a country and directly impacts the living conditions and opportunities available to its citizens.
Question 38 Report
..................... is the highest body in ECOWAS organogram
Answer Details
The highest body in the ECOWAS organogram is the Authority of Head of State and Government. This body consists of the presidents and heads of government of the member states in the Economic Community of West African States (ECOWAS).
The Authority of Head of State and Government is responsible for making major decisions and policies for the entire ECOWAS community. They meet regularly to discuss and address regional issues, such as political stability, economic cooperation, and security.
This body holds the highest level of political power in ECOWAS and has the authority to make decisions that affect the entire organization. It plays a crucial role in promoting regional integration and cooperation among member states.
To sum up, the Authority of Head of State and Government is the most important body in the ECOWAS organogram as it consists of the leaders of the member states and is responsible for making key decisions and policies for the organization.
Question 39 Report
Part-time workers who desire full-time employment are:
Answer Details
Part-time workers who desire full-time employment are classified as underemployed and contribute to the unemployment statistic.
Underemployment refers to a situation where individuals are working fewer hours than they would like or in jobs that do not utilize their skills and qualifications fully. In this case, part-time workers who desire full-time employment are considered underemployed because they are not able to secure the desired amount of work hours.
These underemployed workers contribute to the unemployment statistic because they are actively seeking additional work hours to meet their employment needs. They are considered part of the labor force because they are willing and available to work more hours, but they have not been able to find full-time employment.
It is important to note that not all underemployed workers contribute to the unemployment statistic. Some may choose to work part-time for personal reasons, such as family responsibilities or pursuing education. These individuals, although underemployed, are not actively seeking additional work hours and therefore do not contribute to the unemployment statistic.
However, in the case of individuals who are part-time workers and desire full-time employment, their underemployment status reflects the inadequacy of available job opportunities. They increase the count of unemployed individuals because they are willing and actively searching for additional work.
It is worth mentioning that cyclical unemployment is a different type of unemployment. It occurs when there is a downturn in the economy, causing a decrease in overall demand for goods and services, and subsequently, a decrease in the demand for labor. Cyclical unemployment is not directly related to the part-time workers' desire for full-time employment.
Question 40 Report
Which of the following is the resultant effect of a fall in the profit margin of producers in an economy?
Answer Details
A fall in the profit margin of producers in an economy will likely result in an increase in unemployment.
When the profit margin of producers decreases, it means that they are earning less profit from their business activities. As a result, they may struggle to cover their costs, sustain their operations, or expand their businesses. To manage their financial situation, producers may need to cut costs, reduce production, or even close down their business altogether.
Reduced production and business closures lead to a decrease in job opportunities and an increase in unemployment. When businesses are not making enough profit, they may need to lay off workers or reduce their workforce in order to cut costs. This means that fewer people will have jobs, resulting in higher unemployment rates.
Additionally, a fall in profit margins can also deter new businesses from entering the market or existing businesses from expanding. This further limits job creation and can exacerbate the unemployment problem.
In summary, a fall in the profit margin of producers in an economy leads to reduced production, business closures, job cuts, and a decrease in job opportunities. Therefore, the most likely resultant effect of such a decline in profit margin is an increase in unemployment.
