JAMB UTME - Economics - 2020

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Efficiency in production refers to the idea of producing a given output with the lowest cost possible, using the optimal combination of factors of production such as labor, capital, and raw materials. It's about making the best use of available resources to produce goods and services. This can be achieved through a variety of means, such as the adoption of capital-intensive technology, improving the process and production techniques, or by finding ways to reduce waste and inefficiencies in the production process. The goal is to produce the desired output with the least amount of waste and at the lowest possible cost. Reducing the size of the workforce may be one way to achieve efficiency, but it is not the only way, and it may not always result in the best outcome.

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Scarcity in economics refers to the situation where resources are limited in relation to wants, meaning that there is not enough of everything to fulfill all the desires of individuals. This creates a situation where individuals must make choices about how to allocate resources, and in turn, this leads to trade-offs. For example, if someone wants to buy a new car and a new phone, they may have to choose between the two because they do not have enough money to buy both. This is an example of scarcity in action and highlights the idea that people cannot have everything they want because resources are limited.

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Foreign exchange control is the procedure by which a government intervenes in the foreign exchange market, banning or restricting sales and purchases of local currencies by non-residents as well as sales and purchases of foreign currencies by residents. This is one of the techniques used by the central bank for its monetary policies.

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A debenture is a long-term debt security issued by a company and secured against assets, to raise capital for a business. Debenture security yields a fixed rate of interest.

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A budget with a projected revenue that is greater than its expenditure is called a "surplus." This means that the amount of money coming in is more than the amount of money going out, creating an excess. This surplus can be used for saving, investment, or paying off debt. In simpler terms, a surplus budget means that you are earning more money than you are spending.

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A situation in which a commodity is sold abroad below its cost of production in the home country is known as "dumping." This occurs when a company exports a product to another country and sells it for less than it would cost to produce the same product in the home country. Dumping is considered to be an unfair trade practice, as it can harm domestic producers in the importing country by undercutting their prices and potentially putting them out of business. To address the issue of dumping, many countries have implemented anti-dumping policies and measures that aim to protect domestic producers from the negative effects of this practice.

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Tax relief is any government program or policy initiative that is designed to reduce the amount of taxes paid by individuals or businesses.

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Profits are the most commonly associated reward with entrepreneurship. This is because in entrepreneurship, individuals start their own business with the goal of creating a product or providing a service that they can sell for more money than it cost to produce. The difference between the cost of production and the revenue received is referred to as profit. If the business is successful, the entrepreneur can receive a significant amount of money in the form of profits.

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Economic Growth is the increase in the real output of the country in a particular span of time. It has to do with the expansion (growth) of the economy. Economic Development on the other hand has to do with the positive changes that result in the enrichment of living standards and the advancement of technology.

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The factor of production that has the highest degree of mobility is labor. This means that labor is the easiest to move from one place to another and can be relocated easily in response to changes in the market. For example, workers can move from one city to another in search of better job opportunities or to follow their employer. In contrast, land and capital are typically more difficult to move, as they are often tied to specific locations. Entrepreneurship is a combination of the other factors of production, including labor, and can be mobile to the extent that the individual entrepreneur is able to move with their skills and resources.

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Open market operation is used by the central bank to control the rate of interest. In simple terms, open market operations refer to the central bank buying or selling government securities, such as bonds, in the open market. When the central bank buys securities, it injects money into the banking system, increasing the overall supply of money and lowering interest rates. On the other hand, when the central bank sells securities, it removes money from the banking system, reducing the overall supply of money and raising interest rates. By using open market operations, the central bank can influence the interest rates and, in turn, control inflation and support economic growth.

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The average propensity to consume (APC) is a measure of how much of their income people are spending. It is calculated as the ratio of total consumption to total income. In this case, the APC is calculated as follows: APC = Aggregate Consumption / Aggregate Income APC = N400.00 / N500.00 APC = 0.80 So, the average propensity to consume is 0.80. This means that for every N1.00 of income, people are spending N0.80 on consumption.

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To control inflation, the monetary authorities of a country can engage in restrictive monetary policies. This means they can take steps to reduce the amount of money in circulation, such as raising interest rates or selling government bonds. This makes it more expensive for people and businesses to borrow money, which can slow down the economy and reduce demand for goods and services. As a result, prices may rise more slowly, helping to keep inflation under control.

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Crude petroleum is an example of a wasting asset. A wasting asset is a resource that is depleted or used up over time. Crude petroleum is a finite resource that is extracted from the earth and used to produce various products, such as gasoline, diesel, and other fuels. As it is extracted and used, the amount of crude petroleum left in the ground decreases, making it a wasting asset.

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In order to raise more revenue for a certain period, the government should impose higher taxes on goods whose demand is inelastic. This means that the demand for the good does not change much even if its price increases. For example, if the government were to impose a higher tax on a necessary item such as medicine, people would still need to buy the medicine even if the price goes up. This means that the demand for the medicine would be inelastic, and the government would be able to raise more revenue from the tax. On the other hand, if the government were to impose a higher tax on a luxury item such as a high-end car, people might choose to buy a less expensive car instead if the price goes up. This means that the demand for the high-end car would be elastic, and the government would not be able to raise as much revenue from the tax. In simple terms, the government should impose higher taxes on goods whose demand is inelastic in order to raise more revenue because people will still buy the good even if its price goes up.

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The Nigerian Bank for Commerce and Industry (NBCI) is a development bank. Development banks are financial institutions that provide financing and support for the development of various sectors of the economy, such as agriculture, industry, and infrastructure. The NBCI was established with the goal of promoting the growth of Nigeria's industrial and commercial sectors. It provides financing and other support to businesses, with a focus on supporting small and medium-sized enterprises (SMEs) and promoting entrepreneurship and innovation. By providing these services, the NBCI plays a key role in helping to drive economic growth and development in Nigeria.

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In economic life, the choice among alternatives depends on the scale of preference of the decision-maker. This refers to the individual's personal values and desires, which dictate what they consider most important and valuable. For example, someone may place a high value on having a luxurious lifestyle and therefore be willing to pay more for goods and services that contribute to that lifestyle. Another person may place a higher value on saving money and living frugally, leading them to make different choices. Income, scarcity of resources, and status can all play a role in shaping a person's scale of preference, but ultimately the choices made will depend on their unique values and priorities.

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The law of diminishing marginal utility states that as a consumer consumes an item or a product, the satisfaction or utility that they derive from the product reduces as they consume more and more of that product.

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A company's expenditure on raw materials is regarded as an explicit cost. An explicit cost is a direct, out-of-pocket expense that a company incurs as a result of carrying out its operations. It is a cost that is easily quantifiable and directly related to the production of goods or services. Raw materials are a direct input into the production process, and their cost is directly reflected in the company's financial statements. In contrast, an implicit cost represents the opportunity cost of using resources for one purpose instead of their next best alternative use. These costs are not directly recorded in the financial statements, but they still have an impact on the company's financial performance. Prime cost refers to the total cost of the direct inputs into the production process, such as raw materials and direct labor. Average cost, on the other hand, is the total cost of production divided by the number of units produced. It provides an average measure of the cost per unit of production.

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The Economic Commission for Africa (ECA) was set up by the United Nations (UN). The ECA is a regional commission of the UN that focuses on promoting economic development and cooperation in Africa. It provides a platform for African countries to work together to address economic and social issues, such as poverty reduction, job creation, and sustainable development. The ECA also provides technical assistance and policy advice to African governments to help them achieve their development goals.

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Plywood industries are often located near the source of raw materials. The raw materials used to make plywood include timber, veneers, and adhesives. By being close to the source of these materials, the plywood industry can reduce transportation costs, ensure a steady supply of materials, and make the production process more efficient. This is why plywood industries are often located near forests or other sources of timber.

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Utility is the satisfaction or happiness that a person gets from consuming a good or service. It refers to the enjoyment, usefulness or benefit that someone derives from using a product or service. It is often related to consumption, as people consume goods and services to satisfy their wants and needs and derive utility from them. However, it is not limited to just consumption, as the production and distribution of goods and services also play a role in determining the overall utility that a person receives. In summary, utility is a measure of the satisfaction that a person gets from consuming a good or service, and can be influenced by factors such as production, distribution, and demand.

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An increase in wages is likely to be inflationary. Inflation is an increase in the overall price level of goods and services in an economy over a period of time. When workers receive higher wages, they typically have more money to spend, which can increase demand for goods and services. This increased demand can lead to higher prices, which is a hallmark of inflation. A taxes increase can also be inflationary as it decreases the amount of disposable income available to consumers and can lead to a decrease in demand for goods and services. An increase in unemployment can be deflationary as it decreases the amount of money in circulation and can lead to a decrease in demand and a decrease in prices. A budget surplus, where the government is spending less than it is collecting in revenue, can also be deflationary as it removes money from circulation.

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Collectivism refers to the management of state enterprises in a socialist economy. In this type of economy, the means of production are owned and controlled by the state or by the people collectively, rather than by individuals or corporations. This is done in an effort to reduce social and economic inequality, and to provide equal access to goods and services for everyone in society. In a collectivist economy, the state manages key industries, such as healthcare, education, and transportation, to ensure that everyone has access to these necessities.

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In recent times, agriculture in Nigeria tends to lose its vital labor force due to rural-urban drift. Rural-urban drift refers to the movement of people from rural areas to urban areas in search of better economic opportunities and improved living conditions. In Nigeria, as more people move to cities in search of jobs, the agricultural sector is losing its labor force, making it difficult for farmers to cultivate their land and produce crops. This shift in the population also contributes to a lack of investment in the agricultural sector and a decline in agricultural productivity.

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Economics is often described as a social science because it uses scientific methods to study human behavior and decision making related to the production, distribution, and consumption of goods and services. Unlike natural sciences such as physics and chemistry, economics does not typically rely on laboratory experiments or controlled experiments. Instead, it often makes use of fieldwork, data analysis, and other methods to understand complex economic phenomena. By using scientific methods and a systematic approach to studying economic behavior, economists can build models and theories that help to explain observed economic patterns and make predictions about future economic events.

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Fiduciary issue refers to the issue of notes or currency not backed by a tangible asset such as gold. It means that the currency's value is based on the trust or confidence people have in the issuing government or central bank. In other words, it is a type of currency that is not backed by a specific amount of physical assets and its value is based on the trust in the issuing authority.

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The most important attribute of money is "general Acceptance." This means that a currency is widely accepted as a medium of exchange for goods and services. This attribute is essential for money to effectively serve its purpose, which is to facilitate transactions between parties. If a currency is not widely accepted, it will not be able to perform this function, and thus will not be useful as money. General acceptance is what gives money its value and makes it a useful tool for economic exchange.

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An example of an invisible item on the balance of payments account is shipping and aviation. Invisible items refer to services that are traded between countries, such as transportation, tourism, and financial services. These services do not involve the physical transfer of goods and are referred to as "invisible" because they are not visible in the same way as merchandise trade. Exports and imports refer to the physical movement of goods across borders, while merchandise refers to the goods themselves. Bullion refers to gold and other precious metals that are traded as investments.

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A major factor affecting the value of money is the price level. This refers to the average prices of goods and services in an economy. When the price level increases, the value of money decreases, meaning that each unit of currency can buy fewer goods and services. On the other hand, when the price level decreases, the value of money increases, meaning that each unit of currency can buy more goods and services. The price level is an important factor in determining the value of money because it affects the purchasing power of consumers and the overall demand for goods and services in the economy.

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In an imperfect competition market where there are few buyers and many sellers, the market structure is known as an oligopsony. In an oligopsony, a small number of large buyers, also known as "buyer monopolies", have significant bargaining power over the many small sellers in the market. This means that the few buyers are able to dictate the prices they are willing to pay for the goods and services offered by the many sellers. For example, in a market where there are a few large supermarkets and many small farmers, the supermarkets have the power to set the prices they are willing to pay for the produce, as they are the main buyers in the market. The small farmers have limited bargaining power and have to sell their produce at the prices set by the supermarkets. Overall, an oligopsony is a market structure characterized by a small number of buyers and many sellers, where the buyers have significant bargaining power over the sellers.