JAMB UTME - Economics - 2019

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If the wage rate is less than the average revenue product (ARP), the firms would be earning a profit. The ARP is the amount of revenue generated by one unit of labor and is typically greater than the wage rate. If the firm is paying its workers less than the amount of revenue they generate, the firm will have extra revenue left over, which is a profit. So, in this situation, the firm would either be earning a normal profit or a super normal profit, depending on the size of the gap between the wage rate and the ARP. A normal profit is the minimum level of profit necessary for a firm to stay in business, while a super normal profit is a profit that is higher than the normal profit.

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An import quota is a permit that allows an importer to bring a certain quantity of foreign goods into a country. It is a government-imposed limit on the quantity of a certain good that can be imported into a country during a specific period of time. The purpose of an import quota is to protect domestic producers and limit the amount of foreign competition in the domestic market. The government sets the quota to regulate the flow of goods into the country and to ensure that domestic producers are not overwhelmed by foreign competition.

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An isoquant shows equal level of output. An isoquant is a curve that represents all the possible combinations of inputs (such as labor and capital) that can produce the same level of output for a particular product or service. In other words, it represents all the different ways to produce the same amount of output using different combinations of inputs. So, all points on an isoquant represent the same level of output, and this level of output gives us the same satisfaction or usefulness. As we move along the isoquant, we can produce the same output using different combinations of inputs, but the level of output remains constant. In simple terms, an isoquant is a line that shows the different combinations of inputs that can produce the same level of output.

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Adam Smith's theory of value stated that the value of a commodity depends on the amount of labour expended on its production. Smith believed that in a market economy, the value of a good or service is determined by the amount of work required to produce it. According to his theory, the more time and effort that goes into making a product, the more valuable it becomes. This idea is known as the "labour theory of value." In simple terms, the value of a product is determined by the effort and time put into making it. The more effort and time required, the more valuable the product is considered to be. This theory is considered to be one of the foundations of classical economics and is still widely studied and discussed today.

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Most of the national debt is "dead weight" in the sense that it is not covered by any real asset. This means that the debt is not backed up by any tangible property or valuable resource. Instead, it is simply a financial obligation that the government owes to its creditors, who have loaned the government money. The government must pay back this debt with interest, which can add up over time and become a burden on the economy. This type of debt is sometimes referred to as "dead weight" because it does not contribute to the growth or development of the economy, but instead represents a financial obligation that must be met.

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"Provision of employment" is not a problem of agriculture. It is actually a benefit of agriculture. Agriculture provides job opportunities for people, from farmers to food processing workers. The other three options listed are actual problems faced by the agriculture industry: - Lack of preservation and storage facilities can lead to food waste and loss of income for farmers. - Land tenure system refers to the rules and regulations governing who can use and own land. In many countries, the land tenure system is not favorable for small farmers and can limit their ability to produce food. - Poor transportation systems can make it difficult for farmers to get their products to market and for consumers to access fresh food.

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The last link in the channel of distribution is the Consumer. The channel of distribution refers to the path that a product takes from the producer to the final customer. The producer creates the product, and it is then sold to a wholesaler, who sells it to a retailer, and finally, the retailer sells it to the consumer. The consumer is the end user of the product and is the last link in the chain of distribution. In other words, the consumer is the person who ultimately buys the product and uses it for their own purposes. The channel of distribution is important because it helps to ensure that the product reaches the end user in a timely and efficient manner.

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The method of adding up all the rewards of the factors of production in national income is known as the "income approach." The income approach calculates national income by summing up all the income received by individuals and firms in the economy. This includes wages, salaries, interest, rent, and profits earned by the factors of production, such as labor, capital, and land. The idea behind this approach is that the total income generated in an economy is equal to the total amount spent on consumption and investment, and this spending creates the demand for goods and services produced in the economy. This method provides a comprehensive picture of the total income generated in the economy and is useful in understanding the distribution of income among different groups in the economy and the sources of economic growth.

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External economies arise essentially from the localization of industry. External economies occur when an industry or group of firms in a specific geographical area experience benefits beyond what they could achieve individually. This can include access to specialized suppliers, a skilled labor force, and a larger market for their products or services. Localization of industry refers to the concentration of firms in a specific area. This can create a cluster of related industries and suppliers, allowing for easier collaboration, lower transportation costs, and increased efficiency. Government policies, such as subsidies or tax incentives, may encourage the localization of industries, but they do not create external economies themselves. Similarly, a firm's individual policies and the free transferability of shares do not create external economies as they are focused on the internal operations of the firm. Overall, external economies are a result of the benefits that arise from firms operating in close proximity to each other in a specific geographic location, which can lead to increased efficiency and productivity for all firms involved.

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If two commodities are unrelated, a change in the price of one will have no effect on the quantity demanded of the other. This is because unrelated commodities are not substitutes for each other, so a change in the price of one will not affect the demand for the other. For example, if the price of apples increases, it will not affect the demand for bananas, since apples and bananas are not substitutes for each other. Similarly, if the price of bananas decreases, it will not affect the demand for apples. This is because the demand for each commodity is determined by its own factors, such as income, tastes, and preferences, and not by the price of other unrelated commodities.

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The main disadvantage of a one-man business is that the proprietor is personally liable for the firm's debts. This means that if the business is unable to pay its debts, the proprietor's personal assets, such as their savings, property, or other valuables, can be used to settle the debt. This can put the proprietor's personal financial stability at risk and may discourage them from taking on certain business ventures or expanding the business.

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The use of government income and expenditure instrument to regulate the economy is called fiscal policy. Fiscal policy is a tool used by the government to influence the economy by changing the level and composition of government spending and taxation. The main aim of fiscal policy is to achieve macroeconomic objectives, such as controlling inflation, promoting economic growth and stability, and reducing unemployment. When the government increases its spending and/or reduces taxes, it injects more money into the economy, which can increase consumer spending and business investment. This can help to stimulate economic growth, create jobs, and increase aggregate demand. On the other hand, when the government reduces its spending and/or increases taxes, it takes money out of the economy, which can help to cool down an overheating economy and reduce inflation. In summary, fiscal policy involves using government income (taxation) and expenditure (spending) to influence the economy and achieve macroeconomic objectives.

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The money market equilibrium is defined as when the demand and supply of money are equal. In other words, the amount of money people want to hold (demand) is equal to the amount of money available (supply). Think of the money market as a marketplace where people buy and sell money. Just like any other market, when there is high demand for a product, its price (in this case, the interest rate) will increase. When there is low demand, the price (interest rate) will decrease. In the money market, the interest rate is a measure of the cost of borrowing money. If there is a high demand for money, people are willing to pay a higher interest rate to borrow it. This results in an increase in the interest rate. On the other hand, if there is low demand for money, people are not willing to pay a high interest rate, and the interest rate decreases. When the demand and supply of money are equal, the interest rate will be at the level where the quantity of money that people want to hold is equal to the amount of money available. This is the money market equilibrium.

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Changes in demand can be influenced by various factors. Among them, changes in consumer preferences, real income, distribution of incomes, and levels of taxation can all affect the quantity of a good or service that consumers are willing and able to buy at a given price. I. Changes in consumer preferences refer to shifts in the tastes and preferences of consumers. For example, if people start to prefer healthier food options, the demand for fruits and vegetables may increase while the demand for processed foods may decrease. II. Changes in real income can also impact demand. If people's real income increases, they may be able to afford more goods and services, which can lead to an increase in demand for those products. Conversely, if real income decreases, consumers may cut back on their spending, leading to a decrease in demand. III. Changes in the distribution of incomes can also affect demand. If the distribution of incomes becomes more unequal, with some people becoming much richer and others becoming much poorer, this can impact the demand for certain products. For example, if the rich become richer, they may be more willing to purchase luxury goods, leading to an increase in demand for those products. On the other hand, if the poor become poorer, they may not be able to afford certain goods, leading to a decrease in demand. IV. Changes in levels of taxation can impact demand by affecting the disposable income of consumers. If taxes increase, consumers may have less disposable income, leading to a decrease in demand for certain goods and services. Conversely, if taxes decrease, consumers may have more disposable income, leading to an increase in demand for certain products. Therefore, the answer is: I, II, III, IV, since all four factors can account for changes in demand.

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The determination of wages in a labor market depends on the interaction between the demand for and supply of labor. In simple terms, employers demand labor to produce goods and services, while workers supply their labor to earn wages. The wage rate is then determined by the equilibrium point where the demand for labor meets the supply of labor in the market. When there is a high demand for labor and a low supply, wages tend to increase because employers are competing for a limited number of workers. On the other hand, when there is a low demand for labor and a high supply, wages tend to decrease because there are more workers than jobs available. Other factors such as government policies, economic conditions, and the skills and qualifications of workers can also influence the wage rate, but the main determinant is the interaction between the demand for and supply of labor in the market.

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If the demand for a commodity is perfectly elastic, it means that even a small change in price will cause a significant change in the quantity demanded. In other words, consumers are very sensitive to changes in price, and if the price increases, they will simply buy another substitute product that is cheaper. Now, if a tax is imposed on this commodity, it will cause the price of the commodity to increase. Since the demand is perfectly elastic, consumers will not be willing to pay the higher price and will switch to substitute products. As a result, the entire incidence of the tax falls on the seller or producer of the commodity. This is because the higher price caused by the tax will result in a decrease in the quantity demanded, and the producer will have to reduce the price in order to sell the product. Therefore, the producer bears the entire burden of the tax. In summary, if the demand for a commodity is perfectly elastic, the incidence of a tax on that commodity will be entirely on the seller or producer, as consumers are very sensitive to price changes and will switch to substitute products if the price increases.

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To find the arithmetic mean of a set of numbers, you need to add up all the numbers and divide the sum by the total number of numbers. In this case, we have six numbers, so we need to add them up and divide by 6. Adding up the numbers, we get: 5 + 8 + 10 + 15 + 24 + 28 = 90 Then, we divide the sum by the total number of numbers: 90 / 6 = 15 Therefore, the arithmetic mean of 5, 8, 10, 15, 24 and 28 is 15.

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Economics is a social science concerned with the proper use and allocation of resources for growth. Economics is the study of how society uses its limited resources to satisfy its unlimited wants and needs. It is concerned with how individuals, businesses, and governments make choices about how to use resources to produce goods and services, and how these goods and services are distributed among the members of society. The proper use and allocation of resources are essential for economic growth, which is the increase in the production and consumption of goods and services over time. This growth is achieved through the efficient use of resources to create more goods and services, which can then be distributed to meet the needs of society. Economics helps us to understand how resources are allocated and used in different economies and how these decisions affect the overall well-being of individuals and societies.

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"Good government planning" is not a cause of unemployment. Unemployment refers to the situation where individuals who are actively seeking employment are unable to find work. The causes of unemployment can be complex and multi-faceted, but typically include factors such as a lack of available jobs, poor education and lack of relevant skills, and corruption. "Good government planning" is not a direct cause of unemployment, but it can have an indirect effect by helping to create a favorable economic environment that supports job growth and job creation. For example, good government planning can help to attract businesses to an area, provide funding for education and training programs, and reduce corruption, all of which can help to reduce unemployment over time.

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Capitalism is an economic system that uses the market mechanism. In a capitalist economy, individuals and businesses own and operate the means of production, and the prices of goods and services are determined by supply and demand in the marketplace. In simple terms, this means that people are free to produce and sell whatever they want, and consumers are free to buy whatever they want, at prices that are determined by the market. This creates an economy that is driven by competition and innovation, and is often associated with growth and prosperity. It is important to note that capitalism can take on different forms, ranging from a more laissez-faire approach with minimal government intervention, to a more regulated form with a larger role for the government in managing the economy.

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ECOWAS, or the Economic Community of West African States, was formed for the purpose of promoting co-operation and integration among its member countries. This means that the organization was created to help the countries work together and coordinate their efforts in areas such as trade, politics, and development. The goal of ECOWAS is to promote economic and social progress in the region and improve the lives of the people living in West Africa.

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The term "Money at call and short notice" in a bank's assets represents the bank's loans to the money markets. Money at call and short notice refers to loans that the bank has made to other financial institutions or borrowers that can be quickly repaid upon request or on short notice, typically within 24 hours or less. These loans are typically used to finance short-term funding needs, such as meeting daily operational expenses or managing cash flows. The money markets are where short-term borrowing and lending takes place, typically for a period of less than a year. This includes activities such as interbank lending, commercial paper, and repurchase agreements. By providing loans to the money markets, banks are able to earn interest income while also helping to facilitate the flow of funds between borrowers and lenders. In summary, "Money at call and short notice" represents the bank's loans to the money markets, which are a key part of the financial system for short-term borrowing and lending.

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An oil spill is the release of a liquid petroleum hydrocarbon into the environment. This can occur in a variety of ways, such as from an oil tanker that leaks or a pipeline that ruptures. The oil can contaminate the water and harm wildlife, as well as damage the natural environment and disrupt human activities such as fishing and tourism. It is important to take measures to prevent and clean up oil spills to minimize their impact on the environment and local communities.

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A supply curve that slopes upwards from left to right indicates a positive slope. This means that as the price of a good or service increases, the quantity supplied by suppliers also increases. In other words, producers are willing to supply more of a good or service at higher prices. To understand why this is the case, think about it from the perspective of a supplier. If the price of a good or service goes up, it becomes more profitable for suppliers to produce and sell that good or service. As a result, suppliers are incentivized to increase their production in order to take advantage of the higher prices and earn more profits. This is why the quantity supplied by suppliers tends to increase as the price of a good or service increases. It's important to note that this explanation applies to the long run. In the short run, supply may be relatively fixed and a supply curve may be upward sloping or even backward sloping, indicating that the quantity supplied doesn't change much in response to changes in price. However, over the long run, suppliers have more time to adjust their production levels and the supply curve typically slopes upward.

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A contractionary monetary policy is used to control inflation. Inflation is a sustained increase in the general price level of goods and services in an economy over time. It occurs when there is too much money chasing too few goods, leading to an increase in demand and upward pressure on prices. A contractionary monetary policy is a type of economic policy used by central banks to reduce the money supply and increase the cost of borrowing, with the aim of slowing down the economy and reducing inflationary pressures. This can be achieved through several measures, such as raising interest rates, increasing reserve requirements for banks, and selling government securities in the open market. By reducing the supply of money and making it more expensive to borrow, the central bank aims to reduce spending and investment in the economy, which can help to lower inflation. A contractionary monetary policy is the opposite of an expansionary monetary policy, which is used to stimulate economic growth by increasing the money supply and lowering interest rates.

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In 1976, there were 8 live births for every 1,000 people in the population of the country. This means that for a population of 10 million people, there would be 8 x 10,000 = 80,000 live births in the country.

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The basic and essential economic problems in a community are related to choice and scarcity. Scarcity refers to the limited availability of resources in any given community. These resources can include natural resources, such as land, water, and minerals, as well as human-made resources, such as factories, machines, and tools. Because these resources are limited, there is never enough of them to satisfy everyone's wants and needs. This scarcity means that individuals, businesses, and governments must make choices about how to allocate these resources in the most efficient way possible. This requires making trade-offs and decisions about what goods and services to produce, how to produce them, and who should receive them. , Freedom, and Politics, are not directly related to the basic and essential economic problems of choice and scarcity. Social class, may be related to economic problems, but is not a fundamental concept in economics.

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