JAMB UTME - Economics - 2012
Question 1 Report
If quantity supplied is constant irrespective of price changes, the supply elasticity is
Answer Details
The supply elasticity is considered perfectly inelastic when the quantity supplied of a good or service remains constant regardless of changes in the price. This means that no matter how much the price changes, the quantity supplied will always stay the same. For example, if the price of a life-saving drug increases, the supplier will still produce the same quantity of the drug because the demand for the drug is constant and people will still need it no matter the price. In simple terms, the supply of a perfectly inelastic good or service does not change in response to price changes.
Question 3 Report
A policy aimed at enhancing globalization of the Nigerian economy is
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Question 4 Report
An ad valorem tax is imposed on
Answer Details
An ad valorem tax is imposed on the value of a commodity. This means that the tax is calculated as a percentage of the price of the commodity. For example, if a 10% ad valorem tax is imposed on a product that costs $100, the tax would be $10. Ad valorem taxes are commonly used by governments to raise revenue from the sale of goods and services. They are often applied to luxury items or goods that are considered non-essential, such as cigarettes, alcohol, and jewelry. One advantage of ad valorem taxes is that they can be adjusted based on changes in the market price of the commodity. For example, if the price of a product increases, the tax revenue will also increase, even if the tax rate remains the same. However, one disadvantage of ad valorem taxes is that they can be regressive, meaning that they have a greater impact on low-income individuals than on high-income individuals. This is because low-income individuals may spend a larger proportion of their income on goods and services that are subject to ad valorem taxes. In summary, an ad valorem tax is imposed on the value of a commodity and is calculated as a percentage of the price of the commodity. They are often used by governments to raise revenue from the sale of luxury items or non-essential goods and services.
Question 5 Report
In a village of 50 persons, 10 immigrated, 25 died and 5 emigrated in year. Determine the total population
Answer Details
To determine the total population, we need to add up all the people who were in the village at the beginning of the year, and subtract those who left or died during the year, and add those who immigrated during the year. At the beginning of the year, there were 50 people in the village. 10 people immigrated during the year, so we add 10 to the initial population: 50 + 10 = 60 25 people died during the year, so we subtract 25 from the population: 60 - 25 = 35 5 people emigrated during the year, so we subtract 5 from the population: 35 - 5 = 30 Therefore, the total population at the end of the year is 30. Hence, the answer is 30.
Question 6 Report
When the slope of the total utility curve is declining, the marginal utility of a consumer will be increasing if he
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Question 8 Report
The Malthusian theory was concerned about the relationship between
Answer Details
The Malthusian theory was concerned about the relationship between population growth rate and natural resources. The theory, proposed by Thomas Malthus, stated that population grows at a geometric rate (i.e. faster) while food production grows at an arithmetic rate (i.e. slower). This means that eventually, the population would outstrip the food supply and lead to famine, war, and other problems. Malthus believed that population control was necessary to avoid such problems, and he recommended practices such as late marriage and birth control to limit population growth.
Question 9 Report
The long-run average cost curve touches to the short-run average cost curves at the
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Question 11 Report
If the GDP is ₦60 billion, what is the difference between the contributions of oil and manufacturing sectors?
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Question 15 Report
A sugar industry is best located near the source of
Question 16 Report
The minimum amount which banks are required to deposit with the central bank is determined by the
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Question 17 Report
One of the functions of ECOWAS is to
Question 19 Report
A rise in income will, ceteris paribus, bring about
Question 20 Report
From the above, calculate the price elasticity of demand
Question 22 Report
If the price of an item increases by 8% while the quantity demanded falls from 1500 units to 1492 units, the demand is said to be
Answer Details
If the price of an item increases by 8% while the quantity demanded falls from 1500 units to 1492 units, the demand is said to be inelastic. Elasticity of demand is a measure of how much the quantity demanded of a good or service changes in response to a change in its price. When demand is inelastic, this means that changes in price have a relatively small effect on the quantity demanded. In this case, we can see that the price of the item increased by 8%, but the quantity demanded only fell by 0.5%. This suggests that the item is something that people still need or want, even at the higher price. If the item had been perfectly elastic, a small increase in price would cause a large decrease in quantity demanded. If the item had been elastic, a small increase in price would still cause a significant decrease in quantity demanded. If the item had been perfectly inelastic, changes in price would have no effect on the quantity demanded. In summary, if the price of an item increases by 8% while the quantity demanded falls from 1500 units to 1492 units, the demand is said to be inelastic. This means that changes in price have a relatively small effect on the quantity demanded.
Question 23 Report
If the quantity of rice bought decreases from 250 tonnes to 200 tonnes owing to a 2% rise in price, it shows that there is a change in
Answer Details
The change described in the question shows a change in quantity demanded. Quantity demanded refers to the amount of a good or service that consumers are willing and able to purchase at a given price, while all other factors remain constant. In this case, we are told that the price of rice has increased by 2%, which would lead to a decrease in the quantity demanded of rice. This is because consumers may find rice to be relatively more expensive compared to other substitutes, and therefore may choose to buy less rice. We are also given information that the quantity of rice bought has decreased from 250 tonnes to 200 tonnes. This further confirms that there has been a change in the quantity demanded of rice. Therefore, we can conclude that the change described in the question shows a change in quantity demanded, and not consumers' income, demand, or consumers' tastes.
Question 24 Report
An important contribution of small-scale industries to the Nigerian economy is in the area of
Answer Details
Small-scale industries play a significant role in providing employment to the people in Nigeria. These industries create job opportunities for the locals and help in reducing the unemployment rate in the country. Additionally, small-scale industries also help in supporting the local economy by providing goods and services to the local market. This, in turn, boosts the economic growth of the country and contributes to the overall development of the nation.
Question 27 Report
The sign of the slope of a graph in economic analysis is important because it
Question 28 Report
A huge national debt is an indication that the gold reserves of a nation has
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Question 31 Report
A change in the pump price of petrol in Nigeria has a direct effect on the
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Question 32 Report
Net National Product is derived by deducting
Answer Details
Net National Product (NNP) is calculated by subtracting depreciation from Gross National Product (GNP). Depreciation is a measure of the wear and tear on a country's capital goods, such as buildings, machinery, and equipment, over a certain period of time. In other words, NNP takes into account the decrease in value of a country's capital goods, which are used to produce goods and services, over time. By subtracting depreciation, NNP gives a more accurate picture of a country's economic performance, as it reflects the actual production of goods and services, rather than just the value of the capital goods used to produce them.
Question 33 Report
Rapid economic development in Nigeria is realizable by
Answer Details
Rapid economic development in Nigeria is realizable by diversifying the economy. Nigeria has been heavily reliant on oil as the main source of revenue and foreign exchange earnings. However, this dependence on a single commodity has made the economy vulnerable to fluctuations in oil prices and reduced its ability to withstand external shocks. Diversifying the economy would involve expanding other sectors such as agriculture, manufacturing, services, and tourism. By doing so, Nigeria can increase its revenue base, create jobs, and reduce its reliance on oil. For instance, developing the agricultural sector would not only increase food production but also create employment opportunities for farmers, processors, and distributors, while tourism development would attract foreign exchange and increase Nigeria's GDP. Similarly, investing in manufacturing can lead to the production of goods for both domestic and export markets, leading to increased foreign exchange earnings. Therefore, diversifying the economy is a sustainable way of achieving rapid economic development in Nigeria. It will help to reduce the country's dependence on oil and build a more resilient and diversified economy that can withstand external shocks and support long-term economic growth.
Question 34 Report
The equilibrium point of a firm is attained at the point where the isoquant is
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Question 35 Report
Fixing price above equilibrium will cause
Answer Details
Fixing price above equilibrium will cause a decrease in quantity supplied. The equilibrium price and quantity are determined by the intersection of the demand curve and supply curve. At this point, the quantity supplied is equal to the quantity demanded, and the market is said to be in equilibrium. If the price is fixed above the equilibrium price, it creates a situation where the quantity supplied is greater than the quantity demanded. This is because at the higher price, consumers are less willing to buy the product, while producers are willing to supply more because of the higher profit margin. As a result, there will be a surplus of the product in the market, with producers unable to sell all of their output. This surplus will cause sellers to lower their prices to sell their excess products, eventually resulting in a new equilibrium price where the quantity supplied equals the quantity demanded. Therefore, fixing the price above equilibrium is not sustainable in the long run as it creates a surplus and reduces the profitability of the sellers. Instead, prices should be allowed to fluctuate according to market conditions to ensure that the market remains in equilibrium and that resources are allocated efficiently.
Question 36 Report
The cost elasticity of supply is a useful instrument for measuring
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Question 37 Report
To move from point M to K, the consumer has to increase the
Question 38 Report
The major function of money market is to
Answer Details
The major function of the money market is to provide funds for short-term financing. In other words, it is a financial market where short-term obligations such as government bonds, certificates of deposit, and commercial paper are bought and sold. The money market is designed to provide a safe and secure place for individuals, businesses, and governments to invest their money for a short period of time, typically one year or less. The primary goal of the money market is to ensure the availability of short-term funds for those who need them, and to provide a low-risk investment option for those who have short-term funds to invest.
Question 39 Report
The reward on machinery and equipment in the process of production is known as
Answer Details
'Capital' - investment in man-made aids to production including buildings, factories, computers. The reward for capital is interest.
Question 40 Report
The privatization of public enterprises will lead to efficient management of resources in the economy.
This statement can best be described as
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Question 42 Report
The investment expenditure of an economy changes by N 2 million and MPC is 0.75
The multiplier is
Answer Details
D right ans is option B. 4, where Multiplier = 1/ 1 - MPC. MPC is 0.75.
Question 43 Report
A deficit balance of payments is measured by subtracting the debits from the credits in the
Question 44 Report
If a firm doubles all inputs in the long run and the total output is less than doubled, this results in
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Question 45 Report
The investment expenditure of an economy changes by N 2 million and MPC is 0.75
What is the change in income?
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Question 46 Report
If a basket of commodities cost N120 in the base year and N240 in the current year, calculate the price index
Answer Details
To calculate the price index, we need to compare the cost of the basket of commodities in the base year and in the current year. The formula for the price index is: Price index = (Cost of basket in current year / Cost of basket in base year) * 100 Using this formula: Price index = (N240 / N120) * 100 = 200 So, the price index is 200. In simple terms, the price index measures how much the cost of a basket of goods has changed over time. A price index of 200 means that the cost of the basket of goods has increased by 100% from the base year to the current year.
Question 48 Report
The money that commands a higher market value than its face value is called
Answer Details
The money that commands a higher market value than its face value is called "fiat money." This type of money is not backed by a physical commodity, such as gold or silver, but is considered legal tender because a government says it is. People trust and accept it as a form of payment because it is widely used and accepted. The value of fiat money is determined by supply and demand, just like any other good or service in the market.
Question 49 Report
Long-term funds for investment projects are sourced from the
Answer Details
Long-term funds for investment projects are sourced from the capital market. The capital market is where long-term financial instruments, such as stocks, bonds, and other securities, are bought and sold. It is a marketplace where businesses and governments can raise funds for their long-term investment projects by issuing stocks and bonds to investors. Investors who buy stocks become part owners of the business, while investors who buy bonds lend money to the business or government that issued the bonds. Both stocks and bonds provide a way for businesses and governments to raise capital for their investment projects. One advantage of sourcing long-term funds from the capital market is that it allows businesses and governments to finance their projects without having to rely solely on their own internal funds or short-term loans from banks. This can provide greater financial flexibility and stability. Another advantage of the capital market is that it provides investors with the opportunity to earn higher returns than they might receive from other types of investments, such as savings accounts or money market funds. However, investing in the capital market can also involve greater risk than some other types of investments. In summary, the capital market is where long-term funds for investment projects are sourced from through the issuance of stocks and bonds to investors. This can provide businesses and governments with greater financial flexibility and stability, while also offering investors the opportunity to earn higher returns.
