JAMB UTME - Economics - 2004

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Maximum wage legislation is a policy that aims to set an upper limit to the wages that can be paid to employees. It seeks to ensure that individuals or groups do not receive extremely high salaries that are not justifiable by their contributions to the society or the economy. This policy can be implemented to promote income equality and to prevent exploitation of workers by employers who may try to pay low wages despite their ability to pay higher wages.

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When there is a change in demand for a normal good, it means that the entire demand curve for the good shifts either to the left or to the right. This shift can be caused by a variety of factors, such as changes in consumer preferences, income levels, or market conditions. The shift in the demand curve means that at each price level, the quantity demanded has changed. This is different from a movement along a given demand curve, which occurs when there is a change in the price of the good and results in a change in the quantity demanded, but not a shift in the entire demand curve.

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Fiscal policy is the use of government's revenue and expenditure decisions to influence the economy. In other words, it is the government's plan to control aggregate demand (total demand for goods and services in the economy) by manipulating its spending and taxation policies. By increasing or decreasing government spending and taxes, fiscal policy aims to stimulate or slow down economic growth, depending on the current state of the economy. Therefore, the correct option is "revenue and expenditure".

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A large standard deviation is an indication of a wide spread around the mean. In statistics, the standard deviation is a measure of the amount of variation or dispersion of a set of data points. It measures how far the values in the data set are from the mean value. A large standard deviation indicates that the data points are more spread out and less clustered around the mean value. Conversely, a small standard deviation indicates that the data points are tightly clustered around the mean value.

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The consumer will choose to consume at the point where the indifference curve is tangent to the budget line. At this point, the consumer will achieve the highest possible level of utility given their income and the prices of the goods. In the diagram, the point of tangency between indifference curve II and the budget line ST is point L. Therefore, a rational consumer will choose to consume at point L.

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The trade control means used when the importation of a commodity is limited to a definite quantity is called "quotas." This means that the government or regulatory body imposes a restriction on the amount of a particular product that can be imported into a country during a specified period. Quotas are used to regulate the flow of goods into a country's market and can be applied to both exports and imports. They are typically used when a government wants to protect domestic industries from foreign competition, or when it wants to limit the impact of a particular product on the environment or public health. For example, a country might impose a quota on the amount of foreign steel that can be imported, in order to protect its own steel industry from foreign competition. Or, a country might limit the amount of certain chemicals or food products that can be imported, in order to protect public health or the environment. Overall, quotas are a way for governments to manage trade flows in a controlled manner, while also protecting domestic industries and public interests.

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The final stage in the production process of any commodity involves its movement from the retailer to the consumer. This is the stage where the product is sold to the final user, who could be an individual or an organization. At this stage, the product has been manufactured, packaged, and distributed to the retailer, who then sells it to the end consumer. The retailer is the last stop in the distribution channel before the product reaches the consumer. The consumer is the ultimate target of the production process because they are the ones who use or consume the product. Therefore, the movement of the commodity from the retailer to the consumer is the final stage in the production process of any commodity.

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The labour force in Nigeria falls between the ages of 18 and 60. This means that individuals who are at least 18 years old and not more than 60 years old are considered part of the labour force. These individuals are typically capable of working and contributing to the country's economy. It is important to note that this age range may vary depending on the country and its specific policies and laws.

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The difference between payments and receipts for visible trade is called the balance of trade. Visible trade refers to the exchange of tangible goods, such as raw materials, finished products, and commodities, between countries. When a country exports more goods than it imports, it earns more revenue from those exports than it spends on imports, resulting in a surplus, or positive balance of trade. Conversely, when a country imports more goods than it exports, it spends more on imports than it earns from exports, resulting in a deficit, or negative balance of trade. The difference between the payments and receipts for visible trade is therefore called the balance of trade. The balance of trade is an important indicator of a country's economic performance, as it reflects the competitiveness of its industries and the demand for its goods in global markets. It can also impact the value of its currency and its ability to borrow from international lenders. Overall, the balance of trade plays a crucial role in a country's overall balance of payments, which is a record of all economic transactions between that country and the rest of the world.

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The marketing of agricultural commodities in Nigeria is hampered by several factors, but one major issue is the lack of adequate storage facilities. This means that farmers often have to sell their products immediately after harvest, leading to price fluctuations and low profits. Additionally, the lack of storage facilities makes it difficult to maintain the quality of the produce, leading to spoilage and waste. While the existence of farmers' associations can be helpful in some cases, it is not a major factor in hampering the marketing of agricultural commodities. Similarly, while the existence of commodity exchanges can provide a platform for farmers to sell their products, their absence is not a major issue in Nigeria. The abolition of marketing boards, which were responsible for regulating and coordinating the marketing of agricultural products in Nigeria, has also contributed to the challenges faced by farmers. Without these boards, there is a lack of oversight and coordination in the marketing process, leading to inefficiencies and difficulties for farmers to sell their products.

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A black market can occur when the consumption of a commodity is restricted or when the government sets prices either above or below the equilibrium. In these situations, there is a mismatch between the legal market price and the price that consumers are willing to pay, which creates an opportunity for a black market to emerge. In a black market, goods or services are bought and sold outside of the legal channels, often at higher prices due to the scarcity or illegality of the commodity.

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The capital market is a place where companies can obtain funds for their operations and growth. These funds can be used for different purposes such as buying capital equipment, obtaining long-term or short-term funds, or leasing capital equipment. Buying capital equipment refers to purchasing machinery or other assets that are used to produce goods or services. Long-term funds, on the other hand, are funds that are borrowed for a period of more than one year, while short-term funds are borrowed for a period of less than one year. The capital market provides businesses with the option to obtain both long-term and short-term funds through the issuance of stocks or bonds. Stocks represent ownership in a company, while bonds are a form of debt that the company issues to investors. By selling these securities in the capital market, companies can raise funds to finance their operations or expand their business. Additionally, companies can also lease capital equipment from leasing companies in the capital market. Leasing equipment allows companies to use the equipment without having to purchase it outright, which can help them conserve their cash and working capital. Overall, the capital market provides businesses with various options to obtain funds for their operations and growth, including buying capital equipment, obtaining long-term and short-term funds, and leasing capital equipment.

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When a firm is operating at full capacity, it is producing the maximum output possible with its current level of resources. If demand for the firm's product increases beyond this level of production, the firm will need to increase its inputs, such as labor and raw materials, to produce more output. This means the firm will experience rising short-run total costs, as it has to pay more for additional inputs, and the law of diminishing marginal returns will set in, meaning that the additional units of output will become more expensive to produce. Therefore, the correct answer is: prices of its variable inputs rise.

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The difference between birth and death rates of a given population is referred to as the "natural growth rate". This rate is the rate at which a population grows without any external influences such as immigration or emigration. The natural growth rate can be positive, indicating a population increase, or negative, indicating a population decrease. It is calculated by subtracting the death rate from the birth rate and expressing the result as a percentage. The natural growth rate is an important indicator of the health and wellbeing of a population and is closely monitored by governments and public health officials.

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A monopolistic competitive firm tries to shift its demand curve to the right by advertising. This is because advertising helps to create a differentiated brand image for the product, which makes consumers willing to pay a higher price for it. As a result, the demand for the product increases, and the firm can sell more of its product at a higher price, thereby increasing its profits. On the other hand, advertising does not directly affect the supply curve, which is determined by the firm's production costs and technology.

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The multiplier refers to the change in the overall level of output that results from a change in one of its components, such as consumption or investment. In this case, the equation Y = C + I tells us that output (Y) is determined by consumption (C) and investment (I). We also know that consumption is determined by the fraction b of output, or C = bY where b = 0.8. So if there is a change in investment spending (I), this will directly affect output (Y), but it will also indirectly affect consumption (C) since consumption is a function of output. The multiplier is the factor by which a change in investment spending is multiplied to find the resulting change in output. To calculate it, we can use the formula: Multiplier = 1 / (1 - b) In this case, b = 0.8, so the multiplier is: Multiplier = 1 / (1 - 0.8) = 5 Therefore, the answer is.

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The primary function of non-bank financial institutions is to mobilize savings for investment. In other words, they collect money from individuals and other sources and then use that money to invest in various financial instruments, such as stocks, bonds, and other securities. These institutions may also provide other financial services, such as insurance and investment management, but their main focus is on using the funds they collect to generate returns for their investors.

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GDP differs from GNP (Gross National Product) because GDP emphasizes the final goods and services produced within the country at a particular period, while GNP emphasizes the market value of all final goods and services produced by nationals of a country, regardless of their location. In other words, GDP measures the economic output of a country based on the goods and services produced within its borders, while GNP measures the economic output of a country based on the citizenship of the producers.

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The movement of goods and services from the people who make them (producers) to the people who use them (consumers) is called "the distribution chain." This includes all the steps involved in getting products from factories, farms, or other sources to stores or other places where people can buy them. The distribution chain includes things like transportation, storage, and marketing. Consumption, on the other hand, refers to the act of using or consuming goods and services. It is the final step in the distribution chain, where the end user buys and uses the product. External trade, also known as international trade, involves the exchange of goods and services between countries. It is a form of distribution chain that occurs on a global scale. The circular flow is a model that describes the flow of goods, services, and money in an economy. It shows how households and businesses interact in a market economy, and how they exchange goods, services, and money in a continuous cycle. It is not specific to the movement of goods and services from producers to consumers.

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The tax levied on goods and services at each stage of production is called Value Added Tax (VAT). This is a tax that is added to the price of a product or service at every stage of production or distribution, and is ultimately passed on to the final consumer. For example, when a manufacturer buys raw materials, they pay VAT on those materials. Then, when they sell their finished product to a wholesaler, they charge VAT on that sale. The wholesaler then charges VAT when they sell to a retailer, who in turn charges VAT when they sell to the end consumer. At each stage, the VAT paid on previous purchases is subtracted from the VAT charged on the sale, so that the tax is only paid on the value added at that stage. VAT is a type of ad valorem tax, which means that it is based on the value of the product or service being taxed. This is in contrast to a surtax, which is an additional tax added on top of an existing tax, or PAYE (Pay As You Earn), which is a system for collecting income tax from employees' salaries as they are paid.

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The major reason for having national development plans is to ensure efficient use of available resources. A national development plan provides a roadmap for a country to achieve its economic and social goals, outlining strategies and policies to be pursued to achieve these goals. By doing so, a national development plan helps to ensure that resources are allocated and utilized effectively and efficiently towards achieving these objectives. Additionally, national development plans can involve people in national programmes and ensure that more citizens are involved in planning, but these are secondary benefits rather than the primary reason for having a plan.

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The assumption of ordinal utility in consumer behavior is that utility can only be ranked, meaning that consumers can determine which option they prefer, but they cannot measure how much utility they get from each option or compare the magnitude of utility between different options. In other words, consumers can only say which option is more preferred than the other but cannot precisely quantify the extent of the preference. For example, a consumer may prefer a cup of coffee over a cup of tea, but they cannot precisely measure the difference in the level of satisfaction they derive from each option. This assumption is important because it forms the basis of the concept of indifference curves, which are used to represent consumer preferences in economic models.

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The correct answer is "two to fifty." This means that a private limited liability company can have a minimum of two shareholders and a maximum of fifty shareholders. A private limited liability company is a type of business entity that limits the liability of its owners or shareholders to the amount of their investment in the company. This means that if the company incurs debts or legal liabilities, the personal assets of the shareholders are generally not at risk. The number of shareholders allowed in a private limited liability company can vary depending on the country or jurisdiction where the company is registered. However, in general, the range of allowable shareholders is relatively small compared to other types of business entities like public limited companies or partnerships. Having a limited number of shareholders in a private limited liability company can offer certain advantages, such as greater control over the company's operations and a more personalized relationship between the shareholders. However, it can also limit the amount of capital that the company can raise from investors.

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The role of the Central Bank in the economic development of Nigeria is to maintain a stable price system. This means that the Central Bank takes measures to keep inflation under control and stabilize the value of the country's currency. In doing so, it promotes economic growth and development by creating a conducive environment for investment, trade, and business activities. The Central Bank achieves this by regulating the money supply, setting interest rates, and managing the exchange rate. Additionally, the Central Bank provides financial and technical advice to customers and facilitates business transactions through the use of cheques and bank drafts, but these are secondary roles to its primary mandate of maintaining a stable price system.

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The European Union (EU) was formed to promote economic integration and cooperation among its member nations. This means that the EU was created to encourage countries to work together and remove barriers to trade and commerce between them. The EU was established to promote free trade within its member nations by creating a common market, which is an area where goods, services, capital, and people can move freely without restrictions. By doing this, the EU aims to increase trade, investment, and economic growth among its members. The EU does not primarily exist to promote economic integration in non-member countries, finance development projects in member nations, or assist countries to achieve their economic goals. While the EU may engage in these activities, its primary goal is to promote economic integration and cooperation among its member nations.

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The financial institution charged with the formulation of monetary policies in Nigeria is the Central Bank of Nigeria. The Central Bank of Nigeria is the apex bank in Nigeria, responsible for regulating and supervising the activities of financial institutions in the country. One of its major roles is to formulate and implement monetary policies aimed at achieving price stability, promoting economic growth, and maintaining a stable financial system in the country.

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The cost of cotton used in a textile factory is a typical example of a variable cost. This is because the cost of cotton used in the production process is directly proportional to the level of production. In other words, as the level of production increases, the cost of cotton used also increases. Therefore, the cost of cotton used is not a fixed cost, which remains constant regardless of the level of production, nor is it an average cost, which is calculated by dividing the total cost by the level of production. Instead, it is a variable cost, which varies with the level of production.

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Monopolistic competition is characterized by product differentiation, which means that firms sell products that are slightly different from one another in terms of quality, design, or features. This allows them to differentiate their products from competitors and create a degree of market power. In contrast, perfect competition is characterized by a large number of buyers and sellers in the market, where no single buyer or seller has enough market power to affect the market price. Additionally, products in perfect competition are homogeneous, meaning that they are identical or very similar to one another.

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Import duty concessions on industrial inputs directly benefit the manufacturers. When a country reduces or eliminates import duties on industrial inputs, it becomes cheaper for manufacturers to import the raw materials and other inputs they need to produce their goods. This reduces the cost of production, which can allow manufacturers to sell their products at a lower price, making them more competitive in the market. As a result, manufacturers can increase their output and generate more revenue, which can also create job opportunities.

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A country has an absolute advantage when it can produce more of a certain good using fewer resources than another country. This means that the country is more efficient in producing that good than other countries. It is not related to the ability to sell goods without buying from other countries or the opportunity cost of producing a good. Therefore, the correct answer is: "can produce more of any good with fewer resources."

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A major reason why industrialization in Nigeria has been slow is because of the lack of skilled labor. Skilled labor refers to workers who have specialized training and expertise in a particular field or industry. In order for industries to develop and grow, they need skilled workers who can operate and maintain machinery, design and develop new products, and manage business operations. Without enough skilled labor, it is difficult for industries to operate at full capacity and compete with other countries in the global market. Additionally, the lack of skilled labor often results in a reliance on foreign expertise, which can be costly and limit the country's economic growth. While raw materials and landmass are important factors for industrialization, they are not the main cause of the slow pace of industrialization in Nigeria. Communal labor, which refers to the practice of people working together as a community, is not directly related to industrialization and is not a significant factor in the slow pace of industrialization in Nigeria.

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To find the average cost at 20 units of output, we need to divide the total cost by the number of units produced. The total cost at 20 units of output can be found by substituting Q=20 into the given cost function C = 160 + 36Q: C = 160 + 36(20) = 160 + 720 = 880 So the total cost of producing 20 units of output is N880.00. To find the average cost, we divide the total cost by the number of units produced: Average cost = Total cost / Number of units produced = 880 / 20 = N44.00 Therefore, the average cost at 20 units of output is N44.00.

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The downstream activities of oil companies in Nigeria involve refining and distribution. This means that after oil has been extracted from the ground (which is part of the upstream activities), it is processed into various products like gasoline, diesel, kerosene, and others through refining. The refined products are then distributed to various locations where they are sold and used. These downstream activities are important to the Nigerian economy as they provide jobs and revenue for the country.

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