JAMB UTME - Economics - 2023

An increase in nominal income without increase in price will result to

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An increase in nominal income without an increase in prices will result in an **increased real income**. Nominal income refers to the amount of money a person earns or receives in a given period, without taking into account changes in prices. On the other hand, real income takes into consideration the effects of inflation by adjusting for changes in prices. When nominal income increases but prices remain constant, it means that the purchasing power of an individual's income has increased. In other words, they can afford to buy more goods and services with the same amount of money. This increase in purchasing power leads to an increase in real income. For example, let's say a person's nominal income is $1,000 per month, and the prices of goods and services they consume also remain constant. If their nominal income increases to $1,200 per month, without any increase in prices, they now have an additional $200 to spend on other things. This additional purchasing power translates to an increase in their real income. It is important to note that an increase in nominal income without an increase in prices does not necessarily lead to an **increased GDP** or a **decreased GNP**. GDP (Gross Domestic Product) measures the total value of goods and services produced within a country's borders, while GNP (Gross National Product) measures the total value of goods and services produced by a country's residents, including those produced abroad. The increase in real income of individuals does not automatically impact the overall production levels captured by GDP or GNP.

The diagram above represent

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The dotted line in the graph above represent the upturn and downturn of the econonmy. Therefore, the diagram is cyclical unemployment.

Which of the following shows why individual demand curve for a good usually slopes downward from left to right?

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A normal demand curve slopes downward from left to right indicating at higher price, less quantity will be demanded and vice versa.

An increase in total production (real GDP) causes the demand for money to ______and the interest rate to _________

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An increase in the real GDP will increase the demand for money and also the interest rate will also increase.

Part-time workers who desire full-time employment are:

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Part-time workers who desire full-time employment are classified as underemployed and contribute to the unemployment statistic.
Underemployment refers to a situation where individuals are working fewer hours than they would like or in jobs that do not utilize their skills and qualifications fully. In this case, part-time workers who desire full-time employment are considered underemployed because they are not able to secure the desired amount of work hours.
These underemployed workers contribute to the unemployment statistic because they are actively seeking additional work hours to meet their employment needs. They are considered part of the labor force because they are willing and available to work more hours, but they have not been able to find full-time employment.
It is important to note that not all underemployed workers contribute to the unemployment statistic. Some may choose to work part-time for personal reasons, such as family responsibilities or pursuing education. These individuals, although underemployed, are not actively seeking additional work hours and therefore do not contribute to the unemployment statistic.
However, in the case of individuals who are part-time workers and desire full-time employment, their underemployment status reflects the inadequacy of available job opportunities. They increase the count of unemployed individuals because they are willing and actively searching for additional work.
It is worth mentioning that cyclical unemployment is a different type of unemployment. It occurs when there is a downturn in the economy, causing a decrease in overall demand for goods and services, and subsequently, a decrease in the demand for labor. Cyclical unemployment is not directly related to the part-time workers' desire for full-time employment.

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To find the value of L when the supply (s) is equal to 20, we can use the given supply curve equation: S = 4L + 8.
The supply curve equation represents how much labor (L) will be supplied at a given wage rate (s). In this case, the equation tells us that the supply of labor is equal to 4 times the quantity of labor (L) plus 8.
To find L when s = 20, let's substitute s = 20 into the equation:
20 = 4L + 8
Next, let's isolate L by subtracting 8 from both sides of the equation:
20 - 8 = 4L
Simplifying further:
12 = 4L
Now, we need to solve for L. We can do this by dividing both sides of the equation by 4:
12/4 = 4L/4
Simplifying again:
3 = L
Therefore, when the supply (s) is equal to 20, the value of L is 3.
So the correct answer is 3.

.............is presently used in Nigeria to measure inflation

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The measure that is presently used in Nigeria to measure inflation is the Consumer Price Index (CPI). The CPI is a commonly used indicator worldwide to track changes in the cost of living over time.
The Consumer Price Index (CPI) measures the average price changes of a basket of goods and services typically purchased by households in a specific country or region. It reflects the price movements of essential items such as food, housing, transportation, healthcare, education, and many other goods and services that people consume regularly.
The CPI is calculated by collecting price data for various items in the basket and assigning them weights based on their relative importance in household spending. The prices are then compared to a base period, which is usually a specific year. The percentage change in the CPI from the base period indicates the rate of inflation or deflation.
In Nigeria, the CPI is used to monitor and analyze changes in the cost of goods and services, allowing policymakers and economists to assess the impact on consumers' purchasing power and make informed decisions. It helps in determining the effectiveness of government policies, evaluating the performance of the economy, and adjusting wages and prices.
By tracking the CPI, the government can identify if there is an increase in the general level of prices, indicating inflation, or a decrease, indicating deflation. This information helps in formulating monetary and fiscal policies to control inflation rates and maintain price stability.
Overall, the Consumer Price Index (CPI) is the measure currently used in Nigeria to gauge inflation and is crucial in understanding how the cost of living changes over time, impacting the economy and the daily lives of individuals and businesses.

Economists refer to private goods as

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Private goods are referred to as rivalrous and excludable by economists. Let me explain what this means in a simple and comprehensive way.
When a good is rivalrous, it means that one person's use or consumption of the good diminishes its availability for others. For example, if you eat an orange, there is now one less orange for someone else to consume. The consumption of the orange by one person reduces the availability of the orange for others.
On the other hand, when a good is excludable, it means that it is possible to prevent someone from using or consuming that good if they do not pay for it. For instance, if you go to a movie theater and buy a ticket, you are allowed entry to watch the movie. However, if you do not buy a ticket, you will be excluded from watching the movie.
Private goods possess both of these characteristics. They are rivalrous because one person's use or consumption of the good reduces its availability for others. For example, if you buy a car, only you can use it at any given time, and someone else cannot simultaneously use it. Private goods are also excludable because it is possible to prevent others from using or consuming the good if they do not pay for it. For instance, if you purchase a book, you have exclusive access to read it unless you choose to share it with someone.
In summary, private goods are referred to as rivalrous and excludable because their consumption diminishes their availability for others, and it is possible to exclude others from using or consuming them if they do not pay for them.

In a two by two model of international trade, it is assumed that

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In a two by two model of international trade, it is assumed that **both countries could gain from trade at the same time, but the volume of the gains depends on terms of trade**. This means that both countries can benefit from engaging in trade with each other. Trade allows both countries to specialize in producing and exporting the goods in which they have a comparative advantage, while importing goods that they are less efficient at producing. This leads to increased efficiency and overall economic gains for both countries. However, the volume of the gains from trade depends on the terms of trade between the two countries. The terms of trade refer to the ratio at which the countries exchange their goods. If one country has a higher bargaining power or can produce goods at a lower cost, they may negotiate more favorable terms of trade, leading to a larger volume of gains for that country. On the other hand, if the terms of trade are less favorable, the volume of gains for both countries may be smaller. In summary, while both countries can benefit from trade, the extent of the gains will vary depending on the terms of trade negotiated between them.

Business cycle is associated with

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Business cycle are intervals of expansion followed by recession in economic activity. It is characterized by general upswings and downturns in a span of macroeconomics variable.

Among all the determinants of economic growth, the most important one is

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The Gross Domestic Product is the total monetary or market value of all the goods and services produced within a country. It is used to measure the rate of growth in an economy.

Economics is often described as a science because it

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Economics is often described as a science because it uses scientific methods to explain observed phenomena. Just like other scientific fields, economics relies on gathering data, formulating hypotheses, and conducting experiments to test these hypotheses. However, unlike fields such as physics or chemistry, economics does not rely on laboratory experiments or controlled experiments. Instead, economists analyze real-world data to understand how individuals, businesses, and governments make choices and interact with each other. They use statistical methods to analyze this data and make predictions about how changes in various factors will affect economic outcomes. While it is difficult to accurately predict the behavior of individual human beings, economics aims to make accurate predictions on aggregate behavior, or how groups of people will respond to changes in factors such as prices, taxes, or policies. These predictions are based on the analysis of historical data and the use of economic models, which simplify complex economic interactions. In summary, economics is considered a science because it employs scientific methods to explain observed phenomena, although it does not rely on laboratory experiments or controlled experiments. It uses data analysis, hypothesis testing, and economic models to understand and predict how individuals and groups make economic decisions and interact with each other.

The following are economic agents in any economy EXCEPT

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Economic agents are entities that make economic decisions. They include households, firms, and the government. The Central Bank, while an important institution, is not considered an economic agent as it does not make decisions about what, how, and for whom to produce. It is responsible for monetary policy and regulating the financial system.

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The measure that represents the natural growth rate of a population is the **Birth rate minus the Death rate**, which is the second option. The natural growth rate of a population refers to the rate at which the population increases or decreases due to births and deaths, without taking into account migration. It solely focuses on the difference between the number of births and the number of deaths occurring within a population during a specific period of time. When the birth rate exceeds the death rate, it results in a positive natural growth rate, meaning the population is increasing. On the other hand, if the death rate is higher than the birth rate, it leads to a negative natural growth rate, indicating a decrease in the population. The first option, "Natural increase - Birth rate + Net migration," takes into account both the birth rate and the net migration (the difference between the number of people migrating into and out of a population in a specific period). This measure considers factors beyond just births and deaths, so it does not accurately represent the natural growth rate. The third option, "Birth rate/Death rate," is a ratio of the birth rate to the death rate. It does not give a measure of the natural growth rate itself, but rather shows the relationship between the number of births and the number of deaths. The fourth option, "Birth + Net migration = Death," suggests an equality between the sum of births and net migration and the number of deaths. This equation does not accurately represent the natural growth rate since it assumes that the number of births and net migration should exactly match the number of deaths, which is unlikely in most populations. Therefore, the most appropriate measure for the natural growth rate of a population is the **Birth rate minus the Death rate**.

If demand function for a product is Qd = 30 - 4P, and the price and quantity of products is 4 and 14 respectively. What is the price elasticity of demand for the product?

Détails de la réponse

Q = 14, P = 4

Qd = 30 - 4p

∆q/∆p = - 4
 

Ed = ΔqΔp×pq $\frac{<br>}{}$

= - 4 x 4/14

= Ed = -1.14
since price elasticity is positive, then Ed = 1.14

Calculate the equilibrium level of national income (Y) where Y = C + I + G; C = 100 + 0.75Y; I = 50; G = 200

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To calculate the equilibrium level of national income (Y), we start with the equation Y = C + I + G. In this equation, C represents consumption spending, I represents investment spending, and G represents government spending. Now, let's substitute the given values into the equation: C = 100 + 0.75Y I = 50 G = 200 Substituting these values, we get: Y = (100 + 0.75Y) + 50 + 200 To solve for Y, we need to simplify the equation: Y = 100 + 0.75Y + 50 + 200 Combining like terms, we have: Y = 350 + 0.75Y Next, we can solve for Y by isolating it on one side of the equation. To do this, we can subtract 0.75Y from both sides: Y - 0.75Y = 350 Simplifying further, we have: 0.25Y = 350 Finally, we can solve for Y by dividing both sides of the equation by 0.25: Y = 350 / 0.25 Calculating this, we find: Y = 1400 So, the equilibrium level of national income (Y) is 1400.

The demand for money will fall if

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If GDP falls, then people demand less money for transactions. As interest rate rise (fall), the demand for money will fall(rise).

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A tariff is a tax that is imposed on imported goods. It is a financial charge that a government puts on goods that are being brought into the country. The purpose of a tariff is to protect domestic industries and businesses from competition from imported goods. By placing a tax on imported goods, it becomes more expensive for consumers to buy those goods, making them less appealing compared to domestic alternatives. This gives domestic industries a competitive advantage and helps support local businesses and jobs. So, the correct answer is imported goods.

The development of an economic hypothesis through intuition, insight, or logic is associated with

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Normative economics is a perspective on economics that reflects normative, or ideologically prescriptive judgments toward economic development, investment projects, statements, and scenarios. It expresses ideological judgments about what may results in economic activity if public policy changes are made.

Agriculture accounts for about 60% of the

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Agriculture accounts for about 60% of the active labour force in West Africa. This is because a large portion of the population in West Africa is engaged in farming and other agricultural activities for their livelihood. The other options are incorrect as agriculture does not account for 60% of the arable land, service sector activities, or the commodity market in West Africa.

Indicator of underdevelopment is

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An indicator of underdevelopment is low per capita income. Per capita income refers to the average income earned by individuals in a country. In underdeveloped countries, the per capita income is generally low, meaning that people have lower incomes on average compared to developed countries.
Low per capita income is a significant indicator of underdevelopment because it directly affects the standard of living of people within a country. With low income, individuals have limited purchasing power, making it difficult for them to afford basic necessities such as food, clothing, and shelter. This can lead to overall poor living conditions and a lack of access to essential services like healthcare and education.
Additionally, low per capita income also implies limited economic opportunities and a weak economy. It suggests that the country's productivity and industrial development are low, leading to low wages and limited job opportunities. This can result in high levels of poverty and unemployment, further hindering the country's development.
In summary, low per capita income is a crucial indicator of underdevelopment because it reflects the overall economic situation of a country and directly impacts the living conditions and opportunities available to its citizens.

The term 'investment' in macroeconomics means

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Investment is an activity of spending resources on creating assets that can generate income over a long period of time. It is flow of expenditures developed to projects producing goods which are intended for immediate consumption.

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An example of a free good is water in the ocean.

A free good is a good that is available in unlimited supply and does not require any payment or exchange to obtain it.

In the case of water in the ocean, it is freely available and accessible to anyone. It is not owned by anyone and does not require any payment to access or use it. Therefore, it can be considered a free good.

On the other hand, free education, dinner you did not pay for, and your rented apartment are not examples of free goods.

Free education typically refers to education that is provided without direct payment by the student. While it may be free for the student, someone is still paying for it, such as the government or private institutions.

A dinner that you did not pay for may seem free to you, but someone, such as a friend or a host, is still paying for it. The cost of that dinner is borne by someone else, even if it is not you.

Similarly, a rented apartment is not a free good because it involves a transaction where you pay for the use of the apartment. You enter into a contractual agreement with the landlord and pay rent in exchange for living in the apartment.

From the graph above, the consumer is at equilibrium at point

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Based on the graph, the consumer is at equilibrium at point k.

Equilibrium is when the quantity demanded by the consumer is equal to the quantity supplied by the market. At equilibrium, there is no shortage or surplus of the goods or services.

Point k on the graph represents the intersection of the demand curve (D) and the supply curve (S). At this point, the quantity demanded (Qd) and the quantity supplied (Qs) are equal.

If the consumer is at any other point on the graph, either to the left or to the right of point k, there would be either a shortage or a surplus of the goods or services. This would mean that the demand and supply are not in balance and the market is not at equilibrium.

Therefore, point k is the correct answer as it represents the position where the consumer is at equilibrium.

The fundamental problem of economics is

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The fundamental problem of Economics is Scarcity. Scarcity explains the basic economic problem that the world has limited or scarce resources to meet seemingly unlimited wants, and this reality forces people to make decisions about how to allocate resources in the most efficient way.

The "velocity" of money is

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Velocity of money is the total amount of money in circulation in an economy. It is calculated as Velocity of money = GDP/Money Supply

The type of unemployment that occurs when an individual cannot find job as a result of obsolete skill is

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The type of unemployment that occurs when an individual cannot find a job as a result of obsolete skills is known as Structural unemployment.

Structural unemployment happens when there is a mismatch between the skills that job seekers possess and the skills required for available jobs in the market. In this case, individuals may no longer be qualified for the jobs that are available due to changes in technology, market conditions, or shifts in the economy.

For example, let's say there is a rapid advancement in technology that makes certain job skills obsolete. Workers who had those skills may struggle to find employment because companies are now looking for individuals with more up-to-date skills.

This type of unemployment is different from cyclical unemployment, which is caused by fluctuations in the business cycle, or seasonal unemployment, which occurs due to seasonal variations in demand for certain jobs. Frictional unemployment, on the other hand, refers to the temporary unemployment that occurs when individuals are transitioning between jobs or entering the workforce for the first time.

To sum up, structural unemployment is the type of unemployment that arises when an individual cannot find a job because their skills are no longer in demand.

The diagram above represent

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The diagram above represents the production possibility curve.
The production possibility curve shows the different combinations of goods and services that can be produced given the available resources and technology.
On the curve, each point represents a specific combination of goods and services that can be produced. Points on the curve are considered efficient because all available resources are fully utilized. Points inside the curve represent inefficient production because resources are not fully utilized. Points outside the curve represent combinations that are currently unattainable given the available resources and technology.
In summary, the production possibility curve helps us understand the trade-offs and limitations in production based on available resources and technology. It is a visual representation of the production possibilities in an economy.

40 men were employed in a farm, and they produced an average of 30 tonnes of cassava per person. Calculate the total product.

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To calculate the total product of cassava, we need to multiply the average production per person by the number of people.
In this scenario, we know that there were 40 men employed in the farm, and each person produced an average of 30 tonnes of cassava.
So, to find the total product, we need to multiply 40 by 30.
40 x 30 = 1200
Therefore, the total product of cassava is 1,200 tonnes.

An increase in money income with constant price results in

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When there is an increase in money income but the prices of goods and services remain the same, it will result in an outward shift in the budget line. To understand this, let's imagine a simple scenario where a person has a fixed amount of money to spend on different goods and services. This fixed amount of money represents their income. Now, if their income increases but the prices of goods and services they want to buy stay the same, they will have more money to spend. This means they can afford to buy more of each item. As a result, the budget line, which shows the different combinations of goods and services that can be bought with a given income, will shift outward. This indicates that they can now afford to buy a greater quantity of goods and services than before. Therefore, the correct answer is an "outward shift in the budget line" when there is an increase in money income with constant prices.

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The marginal propensity to consume (MPC) is a measure of how much of an increase in income is typically spent on consumption. It is represented by the symbol c or ΔC/ΔY. To explain it simply, the MPC tells us the proportion of additional income that is used for consumption rather than saving or other purposes. For example, if the MPC is 0.8, it means that for every additional unit of income, 0.8 units are typically spent on consumption. The MPC can also be understood as the slope of the consumption function. The consumption function is a mathematical relationship between income and consumption. The MPC represents how much consumption changes for a given change in income. In the equation C = C + cYd, the coefficient c represents the MPC. This equation shows that consumption (C) is determined by autonomous consumption (C) plus the product of the MPC (c) and disposable income (Yd). In summary, the MPC is a measure of how much additional income is typically used for consumption. It can be represented as ΔC/ΔY, the slope of the consumption function, or the coefficient c in the consumption equation.

The economies of West African Countries depend majorly on

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The economies of West African countries primarily depend on primary products.
Primary products refer to raw materials or natural resources that are extracted directly from the earth or sea. These resources typically include agricultural products such as crops, livestock, and fisheries, as well as minerals and natural resources like oil, gas, and minerals.
West African countries, like many developing nations, tend to have economies that are heavily reliant on these primary products. This reliance is due to a combination of factors such as the abundance of natural resources in the region and historical patterns of economic development.
Agriculture plays a significant role in the economies of West African countries, with a large percentage of the population engaged in farming activities. These countries export a variety of agricultural products, including cocoa, coffee, palm oil, cotton, and timber. These exports generate significant revenue and contribute to the overall economic growth of these nations.
Additionally, West Africa is rich in mineral resources such as gold, diamonds, bauxite, and iron ore. The extraction and export of these minerals also contribute to the economic development of these countries.
While some West African countries have started to diversify their economies and develop secondary and tertiary sectors, the primary sector remains a vital component of their economies. However, it is important for these countries to also focus on diversification and value addition to their primary products to reduce their vulnerability to fluctuations in global commodity prices and achieve sustainable growth.

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- Monetary policy is implemented by reducing the interest rates in the economy in order to increase the supply of money to enhance growth.

- The fiscal policy is implemented by the reduction of taxes and increasing government spending in order to boost demand.

- Policymakers may choose to implement a stabilization policy to close the recessionary gap and increase real GDP.

Which of the following will cause an increase in cost of production?

Détails de la réponse

Cost push inflation occurs when overall prices increase(inflation) due to increases in the cost of wages and raw materials. It can also occur when higher costs of production decrease the aggregate supply in the economy.

Macroeconomics focuses on the following units in an aggregative manner

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Macroeconomics focuses on the units of an economy in an aggregative manner, meaning it looks at the economy as a whole rather than focusing on individual units. This helps us understand how different parts of the economy interact and influence each other.
The correct option is **household, firms, government, corporate sector, and external sector**. Macroeconomics analyzes the behavior and interactions of these units to understand the overall performance of the economy.
1. **Households**: These are the individual consumers who make up the economy. They play a vital role in determining the consumption and saving patterns that influence economic activities.
2. **Firms**: Firms are the businesses that produce goods and services in the economy. Macroeconomics looks at their investment decisions, production levels, and employment to understand the overall economic growth and productivity.
3. **Government**: The government plays a significant role in macroeconomics. It collects taxes, provides public goods and services, regulates the economy, and influences economic policies such as fiscal and monetary measures to stabilize the economy.

4. **External sector**: The external sector represents international trade and the flow of goods, services, and capital across borders. Macroeconomics considers factors like exports, imports, exchange rates, and foreign investment to understand the impact of global interactions on the economy.
By examining these units in an aggregative manner, macroeconomics helps us understand how changes in one sector affect the others and ultimately impact the overall performance of the economy.

If commodities X and Y are substitute, their cross elasticity of demand will be

Détails de la réponse

If commodities X and Y are substitutes, the cross elasticity of demand between them will be positive.
Cross elasticity of demand measures how the quantity demanded of one commodity changes in response to a change in the price of another commodity. When two commodities are substitutes, they serve similar purposes and are considered as alternatives to each other. For example, if the price of commodity X increases, some consumers may switch to commodity Y as a substitute, causing an increase in the quantity demanded of commodity Y.
The positive cross elasticity of demand reflects this relationship. It means that an increase in the price of commodity X will lead to an increase in the demand for commodity Y, and vice versa. On the other hand, if the cross elasticity of demand were negative, it would indicate that the two commodities are complements, meaning that they are used together and a change in the price of one would result in an opposite change in the demand for the other.
Therefore, in the case of substitute commodities, the cross elasticity of demand will be positive.

Détails de la réponse

The demand for a good is price inelastic if the price elasticity is less than one. Price elasticity measures how responsive the quantity demanded of a good is to a change in its price. If the price elasticity is less than one, it means that the quantity demanded is not very responsive to changes in price. In other words, a change in price will have a relatively small impact on the quantity demanded. Even if the price increases or decreases, people will still buy a similar amount of the good. This can happen when the good is a necessity or when there are limited substitutes available. For example, if the price of water increases, people will still need to buy a similar amount because water is essential for survival. Similarly, if the price of a specific medication increases, people with no alternative options will still purchase it regardless of the price. Therefore, when the price elasticity is less than one, we say that the demand for the good is price inelastic.

Public corporation is financed with

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Public corporations are run by the government through the tax paid by the people. They are established by an act of parliament or decree and it is controlled by the board of directors, appointed by the government.

The decision to consume more of one product under normal circumstances will apply

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The decision to consume more of one product under normal circumstances will **result in less consumption of another product**. When we have a limited amount of resources, we can only allocate them in certain ways. This is true for both individuals and businesses. If we choose to consume more of one product, it means we are using some of our resources to produce more of that product. As a result, we have less resources available to produce or consume other products. Let's take an example to understand this concept better. Suppose you have $10 to spend on food, and you can either choose to buy more fruits or more vegetables. If you decide to buy more fruits, it means you are allocating more of your budget towards fruits. As a result, you will have less money left to buy vegetables. On the other hand, if you decide to buy more vegetables, it means you are allocating more of your budget towards vegetables, and you will have less money left to buy fruits. Similarly, in a market economy, if consumers decide to buy more of one product (like smartphones), the demand for that product increases. This leads to an increase in production and consumption of smartphones. However, the resources used to produce smartphones are limited. Therefore, the production of other products (like laptops or tablets) may decrease because fewer resources are available to produce them. In conclusion, when the decision is made to consume more of one product, it generally means that less of another product will be consumed. This is because resources are limited and need to be allocated among different options.

Détails de la réponse

The short run can be defined as the period of time during which at least one of the firm's inputs is fixed. In other words, it is a time frame in which the firm cannot easily or quickly adjust all of its inputs. This means that some resources, such as the size of a factory or the number of employees, cannot be changed in the short run.
During the short run, firms can only adjust their production levels by varying the amount of variable inputs, such as raw materials or utilities. The fixed input, which remains constant in this period, imposes limitations on the firm's ability to increase or decrease its output. This constraint on adjusting all inputs is what distinguishes the short run from the long run, where all inputs can be varied.
It is important to note that the length of the short run can vary depending on the industry and the specific circumstances of the firm. For some businesses, the short run may be a few months, while for others it could be several years. However, what remains consistent is that during the short run, the firm is restricted in its ability to modify certain inputs, which can impact its production and overall performance.