JAMB UTME - Economics - 2022

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In the long-run, a firm should shut down if its average revenue is less than its average cost. This is because, in the long-run, all costs are considered variable, meaning the firm can adjust its production and input levels. If the firm continues to operate despite having average revenue less than average cost, it will continue to incur losses. To understand this concept, it's essential to know what the average revenue and average cost mean. Average revenue is the total revenue earned by a firm divided by the quantity of output produced. On the other hand, average cost is the total cost incurred by a firm divided by the quantity of output produced. The average cost can further be divided into two categories: average variable cost and average fixed cost. The average variable cost is the cost that varies with the level of output, such as labor and raw material costs. In contrast, the average fixed cost is the cost that remains constant regardless of the level of output, such as rent and salaries. So, in the long-run, a firm must shut down if its average revenue is less than its average cost because it means that the firm is not generating enough revenue to cover all its variable and fixed costs. By shutting down, the firm can avoid further losses and redirect its resources elsewhere. On the other hand, if the firm's average revenue is greater than its average cost, it can continue to operate and earn profits.

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The demand for labour is an example of derived demand. Derived demand refers to the demand for a good or service that arises from the demand for another good or service. In the case of labour, the demand for it is derived from the demand for the goods and services that labour produces. For example, a factory may demand more labour to increase production of a particular product to meet customer demand. The demand for labour is not a direct demand, but rather a demand that is derived from the demand for the final product.

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An iron rod cannot be classified as a natural resource. A natural resource is a material or substance that occurs naturally in the environment and can be used for economic gain. Natural resources can be classified into renewable and non-renewable resources. Renewable resources are those that can be replenished over time, such as solar energy, wildlife, and forests. Non-renewable resources are those that cannot be replenished, such as minerals and fossil fuels, including gold. An iron rod is not a natural resource because it is a manufactured item made from iron, which is a natural resource. The iron has been extracted from the earth and processed to make the rod, which is then used for various purposes. So, while the raw material (iron) may be a natural resource, the finished product (the iron rod) is not.

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The major role of multi-national companies in the petroleum industry in Nigeria is oil prospecting. These companies typically invest heavily in exploration, drilling, and production of crude oil in Nigeria, which is one of the largest oil-producing countries in Africa. The multi-national companies also play a significant role in the development of Nigeria's oil and gas infrastructure, including pipelines, storage facilities, and export terminals, which are necessary for getting the oil to international markets. While some of these companies are also involved in downstream activities such as oil marketing and refining, their primary role in Nigeria's petroleum industry is oil exploration and production.

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Under a floating exchange rate regime, the determinant of the exchange rate is "demand for and supply of foreign goods." In a floating exchange rate system, the exchange rate between two currencies is determined by the market forces of supply and demand. Factors such as interest rates, inflation rates, and trade flows can influence the demand for and supply of currencies, which in turn can affect the exchange rate. Unlike fixed exchange rate systems, where the exchange rate is determined by government policy, in a floating exchange rate system, the exchange rate can fluctuate based on market conditions.

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If inflation is anticipated, people may choose to spend less money. This is because inflation reduces the purchasing power of money, meaning that the same amount of money can buy fewer goods and services. In response, people may decide to be more frugal with their spending, save more money, or look for ways to reduce their expenses. By spending less, they can try to maintain their purchasing power and avoid the negative effects of inflation.

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If the government imposes a minimum price on a commodity, it means that sellers cannot sell the commodity for a price lower than the minimum price set by the government. This is done to ensure that the producers of the commodity are getting a fair price for their goods. When a minimum price is set, it may result in excess supply (market surplus) of the commodity, as producers may be incentivized to produce more of the commodity at the higher price. However, the surplus can be reduced if the government buys the excess supply or if producers reduce their production. In the short-run, the market may be cleared, which means that all of the available supply of the commodity is sold at the minimum price set by the government. However, in the long-run, excess demand may occur as the minimum price may discourage buyers from purchasing the commodity. Therefore, government regulation may still be needed to ensure that the market operates efficiently, even with the minimum price in place.

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Demand-pull inflation occurs when the overall demand for goods and services in an economy exceeds the supply of those goods and services, leading to an increase in the general price level. This increase in demand may be caused by a number of factors, such as an increase in consumer confidence, an increase in government spending, or an increase in exports. Out of the given options, an increasingly large budget deficit is the most likely cause of demand-pull inflation. When the government spends more money than it collects in taxes, it may finance the deficit by borrowing from the central bank, other banks or the public. This increases the overall amount of money in circulation in the economy, which in turn leads to an increase in demand for goods and services. This increased demand can then lead to higher prices for those goods and services, resulting in demand-pull inflation. An increase in the cost of factor inputs, such as labor or raw materials, may also contribute to inflation, but this is known as cost-push inflation, which occurs when the cost of producing goods and services increases, leading to higher prices. An increase in the income tax rate and an increase in the bank lending rate can reduce the overall demand for goods and services and lead to a decrease in inflation.

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Transfer payments refer to payments made by the government or other institutions to individuals or other entities, without receiving any goods or services in return. These payments are typically made for social welfare purposes or to redistribute income. An example of a transfer payment in national income accounting is unemployment allowance paid to citizens who are unemployed. The government pays these allowances to support individuals who are currently out of work and seeking employment. This payment is considered a transfer payment because the government is not receiving any goods or services in return for the funds provided. Transfer payments are not included in the calculation of GDP because they do not represent the production of goods or services. However, they are important in measuring the overall economic well-being of a society, particularly in terms of income distribution and social welfare.

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The advantage which firms obtain directly from expanding their operations are referred to as "internal economies of scale." Internal economies of scale occur when a firm's average cost of production decreases as it increases the scale of its operations. This can be due to a variety of factors, such as increased specialization of labor, greater use of capital equipment, or better purchasing power for inputs. Internal economies of scale enable a firm to become more efficient and competitive as it grows, which can result in higher profits and a stronger market position. The opposite of internal economies of scale is internal diseconomies of scale, which occur when the average cost of production increases as a firm becomes too large or complex to manage efficiently.

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The main objective of marketing boards is to stabilize the incomes of cash crop farmers. Marketing boards help to regulate the supply and demand of cash crops, ensuring stable prices and incomes for farmers. They also provide support services to farmers, such as warehousing facilities and education on pricing, to help them sell their crops more effectively. While marketing boards may generate revenue for the government, their primary focus is on supporting and protecting the livelihoods of farmers.

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Statutory organizations usually established by Acts of parliament are called public corporations. A public corporation is a type of legal entity that is established by the government through legislation to perform a specific function or provide a particular service to the public. Public corporations can be formed at the national, state, or local level, and can take a variety of forms depending on their specific mandate. While public enterprises are also entities that are owned and controlled by the government, they may not necessarily be established by Acts of parliament. Cooperative societies are typically voluntary organizations formed by individuals or businesses to pool resources and share risks, while joint-stock companies are privately owned businesses that are established to generate profit for their shareholders.

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If W stands for wages/salaries, P for profits, R for interest, and Z for rent on land and real estate, then the national income is given by:

W + P + R + Z

This is because national income is the total amount of income earned by individuals and firms within a country's borders, and it includes all four components of W, P, R, and Z.

Wages and salaries are earned by employees, profits are earned by business owners, interest is earned by lenders, and rent is earned by landlords. When we add up all of these components, we get the total national income.

Therefore, "W+P+R+Z," is the correct answer.

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Unemployment of resources occurs when production is below the production possibility curve, which means that the economy is not using all of its available resources to produce goods and services. These unused resources can include labor, capital, land, and natural resources. When production is within the production possibility curve, it means that the economy is using all of its resources efficiently and producing as much as it can given its current level of resources. Along the production possibility curve, the economy is also producing efficiently, but it is not using all of its resources. If production is outside the production possibility curve, it means that the economy is not capable of producing that level of output given its current resources. Finally, if production is adequate to meet market demand, it means that the economy is producing enough goods and services to satisfy the needs and wants of consumers. In summary, unemployment of resources occurs when the economy is not using all of its available resources to produce goods and services, which results in an output level below the production possibility curve.

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The privatization and commercialization of public enterprises in Nigeria is necessitated by their operational inefficiency. Public enterprises in Nigeria, like in many other countries, have often been criticized for poor management, corruption, and inefficiency, which have resulted in heavy financial losses for the government. Privatization and commercialization are seen as a way to introduce more competition, increase efficiency, and reduce the financial burden on the government. While the IMF and the World Bank have encouraged privatization in many countries as a condition for receiving loans, in Nigeria, the privatization and commercialization policies were largely driven by domestic factors, including the need to improve the performance of public enterprises.

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Developments outside a given firm that reduce the firm's costs are called "external economies." External economies refer to the benefits that firms receive from positive externalities generated by other firms or industries in the same geographic area. For example, if a new technology park is established nearby, the firms in the area may benefit from lower input costs, better transportation links, or access to skilled workers. These benefits can result in lower production costs, higher productivity, and improved competitiveness for the firms in the area. The opposite of external economies is external diseconomies, which occur when external factors increase the costs of production for firms in a particular area.

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A consumer of a single commodity is in equilibrium when they have reached a point where they are satisfied with the amount of the commodity they have purchased and consumed, and do not feel the need to buy any more or any less of it. This equilibrium can be achieved in different ways, but one common way is when the marginal utility, or the additional satisfaction gained from consuming one more unit of the commodity, is equal to the price paid for that unit. In other words, the consumer is willing to pay the price because they feel they are getting enough satisfaction from the additional unit. At this point, the consumer has no incentive to buy more of the commodity, because the marginal utility would be lower than the price, and they would feel like they are overpaying for the satisfaction gained. Conversely, if the price were to decrease, the marginal utility would be higher than the price, and the consumer may feel like they are getting a good deal and may want to purchase more of the commodity. Ultimately, the consumer is in equilibrium when they have found a balance between the satisfaction gained from the commodity and the price paid for it.

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If the mining sector contributes 60% to the Gross Domestic Product (GDP), then its contribution can be calculated by multiplying the GDP by 60% (or 0.60, which is the decimal equivalent of 60%).

So, the contribution of the mining sector to the GDP is:

Contribution of mining sector = GDP x 60%

= $540 x 0.60

= $324

Therefore, the contribution of the mining sector to the GDP is $324. 

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To solve this problem, we need to first understand what a pie chart is and how it works. A pie chart is a circular graph that is divided into sectors, with each sector representing a proportion of the whole. The size of each sector is proportional to the quantity it represents, so we can use it to determine the percentage or fraction of the whole that each quantity represents.

In this case, the city's population is represented by 45 degrees of the pie chart. If we assume that the pie chart represents the entire country's population, which is 10 million people, then the fraction of the country's population represented by the city is:

45 degrees / 360 degrees = 1/8

This means that the city's population is 1/8 of the entire country's population. To find out the actual population of the city, we can multiply the fraction by the total population:

(1/8) x 10 million = 1.25 million

Therefore, the correct answer is 1.25 million.

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One possible factor that limits the extent of growth of a firm is the unwillingness to share ownership and control. When a firm is controlled by a single owner or a small group of owners who are not willing to share ownership or decision-making power, it can limit the firm's ability to raise capital, make strategic partnerships, or expand into new markets. In contrast, allowing outside investors or partners to have a stake in the company can provide the firm with access to more resources, expertise, and new opportunities for growth.

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The major role of multinational companies in the petroleum industry in Nigeria is oil prospecting. Multinational companies, also known as International Oil Companies (IOCs), play a significant role in the exploration and production of oil and gas in Nigeria. These companies invest heavily in the exploration of new oil fields, as well as the development and production of existing fields. While some IOCs are also involved in oil marketing and refining, their primary role in Nigeria is oil prospecting. The IOCs in Nigeria include major companies such as Shell, ExxonMobil, Chevron, and Total.

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When the demand for a commodity is perfectly price inelastic, it means that people will buy the same amount of the commodity no matter how much it costs. Therefore, if the government increases the tax on this commodity, people will still buy the same amount of it, and the tax revenue will increase. When the demand for a commodity is price inelastic, it means that people will buy a relatively small amount less of the commodity if the price increases. Therefore, if the government increases the tax on this commodity, people will still buy it, but they will pay more for it, and the tax revenue will increase. When the demand for a commodity is price elastic, it means that people will significantly reduce the amount they buy if the price increases. Therefore, if the government increases the tax on this commodity, people will buy less of it, and the tax revenue may not increase as much as expected. When the demand for a commodity is unitary elastic, it means that the change in quantity demanded is exactly proportional to the change in price. Therefore, if the government increases the tax on this commodity, the tax revenue will increase, but the increase in price may cause people to buy slightly less of it. Overall, if the demand for a commodity is relatively inelastic, the government may be able to increase revenue by increasing taxes on it. However, if the demand for a commodity is relatively elastic, the government may not be able to significantly increase revenue by increasing taxes on it, as people may switch to other alternatives or reduce their consumption of the commodity.

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The elasticity of demand measures the responsiveness of the quantity demanded of a commodity to a change in its price. In this case, when the price of the commodity increased from $4.00 to $5.00, the quantity demanded increased from 20 units to 30 units. To calculate the elasticity of demand, we use the following formula: Elasticity of demand = (percent change in quantity demanded) / (percent change in price) First, let's find the percent change in quantity demanded: (30 units - 20 units) / 20 units = 0.50 or 50% Next, let's find the percent change in price: (5.00 - 4.00) / 4.00 = 0.25 or 25% Finally, let's plug in the values into the formula: Elasticity of demand = 0.50 / 0.25 = 2.00 So, the elasticity of demand in this case is 2.00. This means that a 1% increase in price leads to a 2% decrease in the quantity demanded.

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The type of unemployment found among workers who leave their jobs in search of other jobs is called frictional unemployment. This occurs when individuals are between jobs and are actively searching for new employment opportunities. Frictional unemployment is typically short-term and is a natural part of the job search process. It can occur due to various reasons such as workers seeking better job opportunities, moving to a new location, or recently graduating from school. Although frictional unemployment may be a temporary situation for individuals, it can have an impact on the economy if the time taken to find a new job is prolonged. However, it is generally seen as a less problematic form of unemployment than other types, such as structural or cyclical unemployment, which can have more severe and long-lasting effects on the economy.

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The term "Gross National Product (GNP) less the provision for the wear and tear of assets" refers to the Net National Product (NNP). The Net National Product (NNP) is a measure of the total economic output of a country, which takes into account the depreciation or wear and tear of the country's capital assets. Capital assets are things like buildings, machinery, and other long-term investments that contribute to a country's economic output. When we subtract the depreciation from the Gross National Product (GNP), which is the total value of goods and services produced by a country's residents, we arrive at the Net National Product (NNP). The reason we need to subtract depreciation from the GNP is that capital assets, such as buildings and machinery, wear out over time and lose value. If we didn't account for this loss of value, we would overestimate the country's economic output. For example, suppose the GNP of a country is $1 trillion, and the depreciation or wear and tear on its capital assets is $100 billion. In that case, the NNP of the country would be $900 billion ($1 trillion - $100 billion). In summary, the Net National Product (NNP) is the Gross National Product (GNP) minus the provision for the wear and tear of assets or depreciation. It gives us a more accurate measure of a country's economic output by accounting for the loss of value in capital assets over time.

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The concept described in the given scenario is called "double coincidence of wants." It refers to the situation where two parties have goods or services that the other party desires and are willing to exchange, and both parties are able to meet each other's wants at the same time. In the example, the housewife wants tomatoes, and she has meat that she can offer in exchange. However, she can only trade with someone who has tomatoes and also wants meat. The double coincidence of wants occurs when both parties have what the other wants, and both are willing and able to trade. This concept is important in understanding how bartering works, which is an exchange of goods and services without the use of money.

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A major characteristic of natural resources is that they are free gifts of nature. This means that they are not produced by humans, but are found naturally in the environment. Examples of natural resources include water, air, forests, minerals, and fossil fuels. However, although natural resources are free in the sense that they are not created by humans, their extraction, production, and transportation often involve costs. Additionally, some natural resources may become scarce over time due to overuse or depletion, leading to increased prices and a greater focus on sustainability and conservation efforts.

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Fiscal policy measures imply a change in government revenue and expenditure to regulate an economy. Fiscal policy is a tool used by governments to influence the economy by adjusting their spending levels and tax rates. This can be done by either increasing or decreasing government spending and taxes in order to achieve specific economic goals, such as controlling inflation, boosting employment, or promoting economic growth. For example, if the government wants to stimulate economic growth, it may increase its spending on infrastructure projects or offer tax incentives to businesses. Conversely, if the government wants to control inflation, it may decrease government spending and increase taxes to reduce the amount of money circulating in the economy. Therefore, fiscal policy measures involve making changes to both government revenue and expenditure in order to achieve specific economic objectives.

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The production process described in the question, where the marginal physical product of the variable factor increases as more units of it are added to a fixed factor, is referred to as increasing returns to the variable factor. In this case, the variable factor is becoming increasingly productive as more units of it are added, which results in an increase in the marginal physical product. Increasing returns to scale, on the other hand, refer to the situation where an increase in all factors of production leads to a more than proportionate increase in output. Constant returns to the variable factor occur when increasing the variable factor by a certain percentage leads to a proportional increase in output. Finally, external economies of scale refer to the cost advantages that a firm experiences as a result of factors outside of its control, such as the growth of an industry or the development of infrastructure.

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Thomas Malthus proposed the concept of a positive check, which refers to a population control mechanism in which natural disasters, disease, and famine limit the population growth. However, positive checks are not desirable as they lead to high levels of human suffering. To prevent positive checks, it is necessary to implement measures that help to control population growth while maintaining the well-being of individuals. One way to achieve this is by reducing the death rate through improved healthcare, better nutrition, and access to safe water and sanitation. Another approach is to promote moral restraint, which involves encouraging individuals to delay marriage and childbearing until they are economically stable and can provide for their children. Additionally, building more hospitals can help to improve access to healthcare, which can contribute to reducing the death rate and improving overall health outcomes. Natural calamities, on the other hand, can lead to positive checks, and as such, they are not a desirable solution for preventing population growth. Instead, efforts should focus on implementing sustainable population control measures that promote economic development, education, and access to healthcare, while also protecting the environment.

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In a free market economy, the rationing of scarce goods is principally done by the price mechanism. The price of a good is determined by the forces of supply and demand in the market. When the supply of a good is limited and demand for it is high, the price of that good will increase. This higher price will serve as an incentive for producers to increase their supply of the good, and for consumers to reduce their demand for it. As a result, the scarce good will be rationed among consumers based on their willingness to pay the higher price. This process occurs naturally without the need for government intervention or control, and is a key feature of a free market economy.

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Cooperative societies are primarily formed to promote and maintain the welfare of their members. This means that the members of a cooperative society come together to work towards achieving common goals that benefit everyone in the society. Cooperative societies are usually formed by a group of individuals who share a common interest, such as farming, housing, or credit. By working together, members can access resources that they may not have been able to on their own, such as bulk purchasing of materials, access to credit, or sharing of knowledge and skills. In a cooperative society, the focus is not on maximizing profits for individual members, but rather on achieving benefits that are shared by the entire group. By working together, members can create a sustainable and mutually beneficial organization that can help to address the needs of the community. Therefore, the main purpose of cooperative societies is to promote the welfare of members by providing a platform for collective action and collaboration.

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Based on the pie chart, the Education sector is represented by 1/3 of the total budget allocation. To find out how much is allocated to Education, we can calculate 1/3 of the total budget: 1/3 x $7,200 = $2,400 Therefore, the answer is $2,400.00.

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An example of commodity money is silver. Commodity money is a physical object that has intrinsic value in addition to its value as a medium of exchange. Historically, commodities such as gold and silver have been used as a form of money because they are scarce and have inherent value. For example, silver is used not only as money, but also for jewelry, silverware, and other industrial applications. In this way, its value is based on its usefulness in addition to its value as a medium of exchange. In contrast, modern forms of money, such as currency notes, mobile money, and cheques, are not commodities in and of themselves but represent a claim on goods and services.