JAMB UTME - Economics - 2016

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The study of economics is necessary mainly because of scarcity of resources. This means that there are not enough resources to satisfy all of our wants and needs. As a result, we have to make choices about how we use our limited resources, such as time, money, and natural resources. Economics provides a framework for understanding how individuals, businesses, and governments make these choices and allocate resources. It helps us to analyze the costs and benefits of different choices, and to make informed decisions about how to use our resources most effectively. Therefore, economics is essential for creating efficient and sustainable systems that meet the needs of individuals and societies despite limited resources.

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Most agricultural policies in Nigeria are aimed at achieving self-sufficiency in food production. This means that the government wants to make sure that the country can produce enough food to feed its own population, without having to import food from other countries. The goal is to make Nigeria less dependent on food imports and more self-reliant, which can help to improve food security and boost the local economy. This can be achieved through a variety of means, such as supporting local farmers, promoting new technologies and practices, and investing in infrastructure and other resources needed for agriculture.

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Establishing agricultural marketing boards is one of the ways to improve the marketing of agricultural produce. An agricultural marketing board is a government-run organization that helps farmers sell their products. It provides a centralized platform for farmers to sell their produce and ensures that they receive a fair price for their products. The board also helps to regulate the supply and demand of agricultural products in the market, reducing the chances of price fluctuations. This helps farmers to plan their production, and they can be sure of a steady income. In short, the agricultural marketing board provides farmers with a stable market for their produce and helps to improve their livelihoods.

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The important feature of perfect competition is "Adequate knowledge of existing prices." In perfect competition, all participants have access to the same information and are aware of the prices of goods and services being offered by other market participants. This means that each participant can make informed decisions based on the market price, rather than being influenced by a lack of information. This results in a more efficient market where prices are determined by supply and demand, rather than by the actions of a single dominant player or group.

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One of the characteristics of private enterprises is individual funding of business activities. This means that private enterprises are typically funded by individuals or private investors, rather than being publicly funded or owned by the government. This allows for greater flexibility in decision-making and operations, as private enterprises are able to operate without the constraints and bureaucracy of government ownership or control. However, it also means that private enterprises bear the financial risks of their business activities, rather than passing them on to taxpayers or other stakeholders.

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One of the problems facing the Nigerian oil and gas industry is shortage of indigenous manpower. This means that there is a lack of skilled and qualified local workers in the industry, which can lead to a dependence on foreign expertise and increase the cost of operations. This can also limit opportunities for economic growth and development within the country.

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All pairs of quantities from which a consumer derives equal satisfaction can be plotted on an indifference curve. An indifference curve is a graphical representation of all the different combinations of two goods that give a consumer the same level of satisfaction or utility. The slope of the indifference curve represents the trade-off between the two goods, meaning that the consumer is willing to give up some amount of one good to gain more of the other good while still remaining equally satisfied. For example, if a consumer derives equal satisfaction from consuming one apple and two oranges, and from consuming two apples and one orange, these two combinations can be plotted on an indifference curve. The curve will show all the different combinations of apples and oranges that give the same level of satisfaction to the consumer. Therefore, an indifference curve is the appropriate graph to represent equal satisfaction from different combinations of goods.

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In Nigeria, minimizing unemployment requires diversification of the economy. Nigeria's economy has historically relied heavily on oil exports, but this sector only employs a small portion of the population. Diversifying the economy would involve creating jobs in other sectors such as agriculture, manufacturing, and services. This could be achieved through policies that encourage investment and entrepreneurship in these sectors, as well as training and education programs to help workers develop the skills needed for these jobs. Strict immigration laws and restrictive fiscal policies may have some impact on unemployment, but they are not effective long-term solutions. Strict immigration laws may limit the number of foreign workers, but they may also limit access to the skills and expertise needed to grow the economy. Restrictive fiscal policies, such as cutting government spending, may reduce unemployment in the short term, but they may also lead to a decline in economic activity and job creation in the long term. Paying unemployment benefits can provide a temporary safety net for those who have lost their jobs, but it does not address the root causes of unemployment. To truly minimize unemployment in Nigeria, the country must focus on creating a diverse and robust economy that offers opportunities for all of its citizens.

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One major reason why development plans fail in Nigeria is corruption and political instability. Corruption refers to the misuse of public funds for personal gain, while political instability refers to a situation where there is a lack of consistent and stable policies due to frequent changes in government or other political factors. Corruption is a major problem in Nigeria, with public officials often siphoning funds meant for development projects into their personal accounts. This leads to a lack of funds for the intended project and results in a failure to achieve the objectives of the development plan. Political instability also plays a significant role in development plan failure. Frequent changes in government or political leadership can lead to a lack of continuity in policy implementation, resulting in the abandonment or alteration of development plans. This can make it difficult for projects to be completed and for Nigeria to achieve its development goals. Although the other factors mentioned, such as over-dependence on foreign aid, high cost of plan implementation, and shortage of personnel, can also contribute to development plan failure in Nigeria, corruption and political instability remain the primary culprits.

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The multiplier refers to the amount by which a change in autonomous spending (such as investment, government spending, or exports) can affect the overall level of economic activity. It measures the total impact of that change on output, income, and employment in the economy. The formula for the multiplier is 1/(1-MPC), where MPC is the marginal propensity to consume. However, since the question asks for the multiplier based on the marginal propensity to save (MPS), we need to first convert the MPS to MPC by subtracting it from 1: MPC = 1 - MPS. Given that the marginal propensity to save is 0.8, the marginal propensity to consume is: MPC = 1 - MPS MPC = 1 - 0.8 MPC = 0.2 So, the multiplier is: Multiplier = 1/(1-MPC) Multiplier = 1/(1-0.2) Multiplier = 1/0.8 Multiplier = 1.25 Therefore, the correct answer is: 1.25.

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The factor limiting the effectiveness of division of labor in the production process is the level of technology. Division of labor means dividing the production process into smaller tasks, with each worker specializing in a particular task. This helps to increase efficiency and productivity. However, if the technology used in the production process is not advanced enough, it can limit the effectiveness of division of labor. For example, if workers are still using manual tools instead of automated machines, they may not be able to work as quickly or efficiently as they would with better technology. This can slow down the production process and reduce the benefits of division of labor.

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If Mr Wale took a loan for the purpose of investment, the demand for money is likely driven by the speculative motive. The speculative motive for holding money refers to the desire to hold money as a means of earning a profit by taking advantage of expected changes in asset prices. In this case, Mr Wale is taking a loan to invest in some asset, such as stocks or real estate, with the expectation that the value of the asset will increase over time, allowing him to make a profit. To do this, he needs to hold a certain amount of cash or liquid funds on hand to purchase the asset and cover any other related expenses. On the other hand, the transactionary motive for holding money refers to the desire to hold money to facilitate everyday transactions, such as paying bills and buying goods and services. The precautionary motive for holding money refers to the desire to hold money as a precaution against unexpected events, such as an emergency or loss of income. Therefore, since Mr Wale is taking out a loan specifically for investment purposes, it is likely that his demand for money is driven by the speculative motive. However, it is possible that his demand for money may also be influenced by the transactionary or precautionary motives, depending on his individual circumstances and financial goals.

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An over-populated country is one that has a larger population than the resources available to support it. This can lead to several problems, including: 1. Strain on Resources: With a large population, there is an increased demand for resources such as food, water, and energy. This can lead to shortages, which in turn can lead to food insecurity, water scarcity, and power outages. 2. Environmental Issues: Over-population can also lead to environmental problems, such as pollution and deforestation, as people are forced to use more resources and land to sustain themselves. 3. Unemployment: In an over-populated country, there may not be enough jobs to go around. This can lead to high levels of unemployment, which in turn can lead to poverty and social unrest. 4. Low Per Capita Income: When there are more people than resources, it can also lead to low per capita income. This means that each individual has less access to resources, which can lead to poverty and a lower standard of living. In summary, an over-populated country faces a range of problems including strain on resources, environmental issues, unemployment, and low per capita income.

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The graph is not visible, but assuming a standard supply and demand graph, if there is a price control in place, the term "P2" could refer to either the maximum price or the minimum price, depending on the type of price control. If the price control is a price ceiling, then P2 would refer to the maximum price that sellers are allowed to charge. This would be a price that is below the equilibrium price, causing a shortage of the product because quantity demanded exceeds quantity supplied. If the price control is a price floor, then P2 would refer to the minimum price that buyers are required to pay. This would be a price that is above the equilibrium price, causing a surplus of the product because quantity supplied exceeds quantity demanded. It's important to note that price controls can have unintended consequences and may not always achieve their desired outcomes. For example, a price ceiling may result in shortages and black markets, while a price floor may lead to surpluses and wasteful production.

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One major problem encountered by ECOWAS, the Economic Community of West African States, is conflict of interest among members. This means that the different countries in ECOWAS often have differing goals and priorities, which can lead to disagreements and tensions. For example, one country might prioritize economic growth, while another might prioritize environmental protection. When these conflicting interests aren't managed effectively, they can hinder the ability of ECOWAS to achieve its goals and benefit all members. This can result in a lack of cooperation, slow decision-making, and reduced effectiveness of ECOWAS as a regional organization.

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The range of a set of numbers is the difference between the largest and smallest values in the set. In this set of numbers: 0.25, 1.25, 1.80, 1.110, 10.20, 10.15 and 1.55, the smallest value is 0.25 and the largest value is 10.20. So, the range is 10.20 - 0.25 = 9.95.

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If Nigeria has a comparative advantage over Ghana in producing cocoa, it means that Nigeria can produce cocoa at a lower opportunity cost than Ghana. In other words, Nigeria can produce cocoa more efficiently than Ghana, and it has a lower cost of producing cocoa. Comparative advantage is an economic concept that explains how different countries can benefit from specializing in the production of goods and services that they can produce more efficiently than others. This allows them to trade with other countries and increase their overall economic welfare. In this case, if Nigeria has a comparative advantage over Ghana in producing cocoa, it means that Nigeria can produce cocoa at a lower cost than Ghana. This could be because Nigeria has better technology, more skilled labor, or better access to raw materials needed for cocoa production. As a result, Nigeria could produce cocoa at a lower cost than Ghana, making it more competitive in the global market. Therefore, the correct answer to the question is: Nigeria produces cocoa more efficiently than Ghana and has a lower cost of producing cocoa, giving it a comparative advantage over Ghana.

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The concept of marginal utility indicates the relationship between utility and satisfaction. Utility refers to the satisfaction or happiness that a person derives from consuming a certain good or service. Marginal utility, on the other hand, refers to the change in utility that a person experiences from consuming one additional unit of a good or service. In simple terms, marginal utility tells us how much more or less satisfaction a person gets from consuming an extra unit of a good or service. It helps us understand the law of diminishing marginal utility, which states that as a person consumes more and more units of a good or service, the amount of satisfaction they derive from each additional unit decreases. For example, imagine that you are hungry and you eat a slice of pizza. The first slice of pizza provides you with a high level of satisfaction. However, as you continue to eat more slices, the satisfaction you get from each additional slice decreases. This is because your hunger is being satisfied and you are reaching a point of satiety. In this example, the marginal utility of each slice of pizza decreases as you consume more of it.

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In other to improve a long term trade in a country, there must be an embedded law guiding importation or goods.

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Public limited liability companies (PLCs) are owned by private and individual organizations. PLCs are a type of company that has been incorporated under the law and is authorized to issue shares to the public, allowing anyone to become a shareholder in the company by purchasing shares on a stock exchange. PLCs are therefore not owned by the government, but rather by private individuals and organizations who have bought shares in the company. Shareholders of a PLC have limited liability, meaning that their liability for the company's debts and obligations is limited to the amount of their investment in the company. This makes investing in a PLC an attractive option for individuals and organizations looking to invest in a business venture while limiting their personal risk. In summary, PLCs are owned by private individuals and organizations who have bought shares in the company, and not by the government.

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The additional cost incurred by producing an additional unit of output is known as the marginal cost. In other words, it is the cost of producing one more unit of a product or service. Marginal cost includes the cost of any additional resources required to produce the next unit, such as materials, labor, and energy. For example, if a bakery produces 10 loaves of bread and the total cost is $50, and then produces 11 loaves of bread and the total cost becomes $55, then the marginal cost of producing the 11th loaf of bread is $5. This means that the cost of producing each additional unit of output is the marginal cost. Understanding marginal cost is important for businesses as it helps them make decisions about how much to produce and sell. By comparing the marginal cost with the price at which the product is sold, businesses can determine whether it is profitable to produce additional units of output or not. If the marginal cost is less than the selling price, it may be profitable to produce more. Conversely, if the marginal cost is higher than the selling price, it may be more profitable to produce fewer units or to not produce any more at all.

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The interest charged on loans is primarily determined by the risk associated with the loan. When a lender offers a loan, they take on a certain amount of risk that the borrower may not repay the loan as agreed. To compensate for this risk, lenders charge interest on loans. The interest rate is the cost of borrowing money, expressed as a percentage of the total loan amount. The higher the perceived risk associated with a loan, the higher the interest rate will be. Lenders will consider various factors when assessing the risk of a loan, such as the borrower's credit history, income level, and the purpose of the loan. If a borrower has a poor credit history, for example, they may be perceived as a higher risk to the lender, and as a result, they may be charged a higher interest rate. Conversely, a borrower with a strong credit history and income level may be seen as a lower risk and charged a lower interest rate. In addition to the risk associated with the loan, other factors such as market conditions, inflation, and the lender's own costs of borrowing can also affect the interest rate. However, the risk associated with the loan is generally the most significant factor in determining the interest rate charged on loans.

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Public ownership of productive factors is a feature of socialism. In socialism, the means of production, such as factories, land, and natural resources, are owned and controlled by the state or the public. This means that the profits and benefits of production are distributed equally among the members of society rather than being controlled by private individuals or corporations. Socialism is based on the belief that the economy should be organized to serve the needs of the people rather than the profits of private individuals or corporations. The public ownership of the means of production is seen as a way to ensure that the benefits of production are shared equally among all members of society, and that resources are used in a way that benefits everyone. In contrast, capitalism is based on private ownership of the means of production, where individuals or corporations own and control the factors of production and operate in a competitive market to generate profits. Feudalism is a system where land and labor were controlled by nobility or landlords, and a mixed economy is a blend of both public and private ownership of the means of production.

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Localization of industry is encouraged because of improvements in infrastructure. When an area has good infrastructure, such as reliable transportation, communication networks, and access to utilities like water and electricity, it becomes more attractive to businesses looking to set up operations. This is because good infrastructure can lower the costs of doing business, make it easier to transport goods and services, and increase the speed and efficiency of communication. Additionally, a well-developed local infrastructure can also improve the quality of life for workers in the area, making it easier for businesses to attract and retain skilled labor. As a result, governments and other organizations often invest in infrastructure improvements as a way to encourage the localization of industry in a particular region.

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If the maximum price of garri is fixed below the equilibrium price at P1, it means that buyers cannot legally offer to purchase garri above that price, while sellers cannot legally sell it above that price. This situation creates a price ceiling. In this case, the maximum price of garri is below the equilibrium price, so the price ceiling will have the effect of reducing the price that consumers pay for garri. This lower price will increase the quantity of garri demanded by consumers, as they can buy more garri for less money. At the same time, the lower price will reduce the quantity of garri supplied by producers, since they will receive less revenue for each unit of garri they sell. This will create an excess demand for garri, as buyers will want to purchase more garri than producers are willing to sell at the maximum price set by the price ceiling. In summary, fixing the maximum price of garri below the equilibrium price at P1 will increase the quantity of garri demanded by consumers and decrease the quantity of garri supplied by producers, resulting in an excess demand for garri.

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The type of inflation that arises when there is too much demand for goods and services compared to their supply is called "Demand-pull inflation." This occurs when consumers want to buy more goods and services than what the economy can produce, leading to an increase in the general price level. For example, if everyone suddenly wants to buy new cars, but there aren't enough cars being produced, the car manufacturers can raise their prices since they know that there is a high demand for their product. As a result, the overall price level in the economy will increase. This is demand-pull inflation. Demand-pull inflation is generally caused by factors such as an increase in government spending, a surge in consumer confidence, or an expansionary monetary policy. When these factors cause people to spend more money, it leads to an increase in the demand for goods and services, and prices begin to rise.

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Excess supply over demand can cause an oil glut in the international market. This happens when oil-producing countries or companies produce more oil than the market can absorb or consume. This can be caused by a variety of factors such as overproduction, decreased demand due to a slow economy, or increased use of alternative energy sources. When there is an excess supply of oil, it can lead to a surplus of inventory, which causes the price of oil to fall. Lower prices can make it difficult for oil-producing countries or companies to sustain their operations, as their profits are reduced. This can also have a ripple effect on the global economy, as lower oil prices can lead to decreased inflation, reduced transportation costs, and lower energy prices. In summary, an oil glut occurs when there is too much oil in the market, causing prices to fall due to oversupply. This can happen due to a variety of factors, including overproduction, decreased demand, or increased use of alternative energy sources.

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Price of the commodity is one of the factors affecting change in demand for a commodity. This means that when the price of a commodity increases, the demand for it may decrease, and when the price decreases, the demand for it may increase. People are more likely to buy a product if it is cheaper and less likely to buy it if it is more expensive. In other words, the amount of a commodity that consumers are willing and able to purchase is largely influenced by its price.

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The demand curve faced by a monopolist is negatively sloped. In a monopoly, the firm has control over the entire market for its product or service, which means that it can influence the price of the product by adjusting the quantity supplied. The monopolist faces the entire market demand curve for its product, which shows the relationship between the price of the product and the quantity that consumers are willing to buy at that price. The demand curve for a monopolist is negatively sloped because as the monopolist increases the price of its product, consumers are willing to buy less of it. This is because the monopolist is the only supplier of the product, so consumers do not have the option to buy a substitute product at a lower price. Therefore, the monopolist has some pricing power, but it is limited by the demand curve for its product. In contrast, a perfectly competitive firm faces a horizontal demand curve because it is a price taker - it must accept the market price for its product and cannot influence the price by adjusting the quantity supplied.

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For the past decades and years, in the democratic setting in Nigeria, a lot of concentration has been mounted on the side of the oil sector, more than the agricultural sector. However, now too much dependence on the oil sector has resulted in a slow pace of industrial growth in other important sectors.