JAMB UTME - Economics - 2007

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In the circular flow of income model, the outflow variables represent the leakages from the economy. These are the ways in which money flows out of the economy and includes savings, taxes, and imports. When households save money, it is not spent in the economy and is considered a leakage. Taxes are also a leakage because they are paid to the government and are not spent in the economy. Finally, imports are considered a leakage because they represent money flowing out of the economy to purchase goods and services from other countries.

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The world market for crude oil refers to the total demand for and supply of crude oil globally. It is a market where producers and consumers of crude oil from different countries come together to buy and sell oil. The price of crude oil is determined by the interaction of global supply and demand. The Organization of the Petroleum Exporting Countries (OPEC) plays a significant role in influencing the world market for crude oil by controlling the supply of oil from its member countries. However, the market is also influenced by non-OPEC oil-producing countries and other factors such as geopolitical events and economic conditions.

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One advantage of electronic banking is that it enables a customer to operate their account from different locations. Electronic banking, also known as online banking or internet banking, allows customers to access and manage their bank accounts using electronic devices such as computers, smartphones or tablets, as long as there is internet access. This means that customers can check their account balance, make payments, transfer funds, and perform other banking transactions from wherever they are, without the need to visit a physical bank branch. This can save time and effort for customers who are unable to visit a bank branch during regular business hours or who are located far away from a bank branch.

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A firm operating at full capacity means that it is producing at the maximum level it can sustain in the short term. In this situation, the firm has no excess capacity to produce more output even if the price of its product increases. Hence, the supply curve of the firm will be perfectly inelastic. This means that any increase in the price of the product will not result in an increase in the quantity supplied by the firm, as it is already producing at its maximum level. Therefore, the correct answer is "perfectly inelastic supply curve."

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Double counting occurs when a single transaction is counted multiple times in the calculation of GDP. One way to solve this problem is by using the value-added method. This method adds up the value added at each stage of production rather than simply adding up the total sales. By adding up the value added at each stage, the final GDP figure does not include any intermediate goods or services that were used in the production process. This helps to avoid double counting and provides a more accurate measure of the economy's total output.

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The range is used to determine the spread of a set of data. It is a statistical measure that represents the difference between the largest and smallest value in a dataset. By calculating the range, one can get an idea about how widely dispersed the data is. A larger range indicates a greater spread of data, while a smaller range indicates a more narrow distribution. Thus, the range is a useful tool in summarizing and analyzing data, and it helps in making decisions based on the variability of the dataset.

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Foreign investment refers to the investment made by foreign entities in the economy of a country. To attract foreign investment in Nigeria, the government can review its tax policy to make it more favorable to foreign investors. By reducing taxes on businesses, foreign investors would be more likely to invest in Nigeria as it would make their investments more profitable. Additionally, the government can review interest rates to make borrowing easier and more attractive for foreign investors. Revaluation of the naira may also make Nigeria's goods and services more expensive for foreign investors, which may make them less likely to invest. Finally, the government can review its naturalization policy to allow foreign investors to become citizens more easily, which would provide them with greater security and stability in their investments.

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In economics, short-run costs are the costs incurred by a firm when some of its inputs are fixed, and cannot be varied. In other words, in the short-run, a firm cannot adjust its production to changes in demand, and must continue operating with the resources it has. As a result, if the firm wants to produce more output, it will have to increase the use of its fixed inputs, such as capital, and this will result in an increase in short-run costs. The other options listed are not necessarily true in all cases and do not provide an accurate explanation of short-run costs.

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In a command economy, the choice of what to produce is determined by the central government. This means that the government has complete control over what goods and services are produced, how they are produced, and for whom they are produced. The government decides what industries to support and invest in, and how resources should be allocated. This is in contrast to a market economy, where the choice of what to produce is determined by consumer demand and the decisions of private businesses.

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An economic system in which the producer and the consumer are the same is referred to as a subsistence economy. In this type of economy, people produce goods and services for their own consumption without the involvement of a market or money exchange. This type of economy is common in rural areas and is often associated with farming, hunting, and fishing. The primary goal of a subsistence economy is to meet the basic needs of the community rather than to generate profit.

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A persistent rise in the prices of inputs will lead to cost-push inflation. When the cost of producing goods and services increases, producers will increase the prices of those goods and services to maintain their profit margins. This, in turn, can lead to an overall rise in the general price level of the economy, which is referred to as inflation. Cost-push inflation occurs when the increase in prices is caused by an increase in the cost of production, as opposed to an increase in demand for goods and services (demand-pull inflation).

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Economic development refers to a continuous increase in national income accompanied by the structural transformation of all indices. In other words, it is a sustained increase in economic growth that leads to significant improvements in living standards, reduction in poverty, and an increase in the general well-being of the population. It involves not just the growth of the economy, but also the improvement in social and economic indicators such as education, health, and infrastructure, among others. Economic development is a long-term process that requires the coordination of various policies and efforts to achieve sustained growth and improve the quality of life of the population.

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When the demand for a good increases owing to an increase in income, it means that there is an increase in demand. In this case, people have more money to spend and are willing to buy more of the good. This leads to an increase in the quantity demanded of the good at each price point, which is represented by a rightward shift of the demand curve. Therefore, an increase in income leads to an increase in demand and a higher equilibrium price and quantity.

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A commodity is considered inferior when the income effect is negative. In other words, as consumers' income increases, the demand for the inferior commodity decreases. This is because consumers switch to superior or better quality substitutes as their income increases. An example of an inferior good is low-quality rice, where as consumers' income increases, they prefer to buy higher-quality rice or switch to other substitutes like pasta.

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The price per unit of a commodity to a buyer is the same as the **average revenue of the seller**. Average revenue is the total revenue earned by the seller by selling all units of the commodity divided by the total number of units sold. In other words, it is the revenue earned per unit of the commodity. Since the price of the commodity is the revenue earned per unit by the seller, the price per unit is the same as the average revenue of the seller.

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The linear production function is a type of production function that has a constant rate of increase in output as inputs increase. This means that for every additional unit of input, the output increases by the same fixed amount. In other words, output and all inputs change by the same percentage. Therefore, the percentage change in output is always equal to the percentage change in inputs, making it a linear relationship. So, the correct answer is: "output and all inputs change by the same percentage."

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The given equation is P = 1/2(Qs + 15). Here, P represents the price, and Qs represents the quantity supplied. To find the quantity supplied when the price is N9.00, we need to substitute P = 9 in the equation and solve for Qs. So, 9 = 1/2(Qs + 15) Multiplying both sides by 2, we get: 18 = Qs + 15 Subtracting 15 from both sides, we get: Qs = 3 Therefore, the quantity supplied at a price of N9.00 is 3.0.

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The labour force of a country refers to the total number of people who are either employed or unemployed and are within the working age (usually defined as 15-64 years) and are actively seeking employment. This includes individuals who are currently employed, those who are unemployed and actively looking for work, and those who are available for work but not actively seeking it. It does not include people who are not within the working age, such as children and the elderly, or those who are not actively seeking employment, such as students or those who have retired.

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Upstream oil activities involve the exploration and production of crude oil. This includes activities such as locating oil reserves, drilling wells, extracting the oil from underground, and bringing it to the surface for further processing. Essentially, upstream activities involve the initial stages of the oil extraction process, before the oil is refined and marketed as finished products. The other options mentioned in the question, such as refining of crude oil, marketing of finished products, and management of pollution, fall under downstream oil activities.

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The Malthusian theory of population asserts that population growth will inevitably outpace food production, leading to a catastrophic collapse of human civilization. This theory has been rendered ineffective because of technical progress. Technological advancements, such as the Green Revolution, have led to a significant increase in food production and improved agricultural productivity, thereby increasing the world's carrying capacity. As a result, the Malthusian prediction of a population collapse due to food scarcity has not come to pass.

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The curve W represents the average revenue of the firm. In a monopolistically competitive market, a firm faces a downward sloping demand curve and is able to set its price above the marginal cost due to product differentiation. The average revenue curve shows the relationship between the price of the product and the quantity sold, indicating the revenue per unit of output. The marginal revenue curve, on the other hand, shows the additional revenue generated by selling one additional unit of output. Therefore, the correct answer is average revenue.

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The coefficient of price elasticity of supply measures the responsiveness of quantity supplied to a change in the price of a commodity. It can be calculated by dividing the percentage change in quantity supplied by the percentage change in price. Since price and quantity supplied have a direct relationship, an increase in price will result in an increase in quantity supplied and vice versa. Therefore, the coefficient of price elasticity of supply is always positive.

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The major determinant of cross elasticity of demand is the "closeness of the substitutes." Cross elasticity of demand is a measure of how the quantity demanded of a particular good changes in response to a change in the price of a related good. If there are close substitutes available, then the cross elasticity of demand will be high, indicating that consumers are likely to switch to the substitute good if the price of the original good increases. On the other hand, if there are no close substitutes, then the cross elasticity of demand will be low, indicating that consumers have few alternatives and are likely to continue buying the original good even if the price increases.

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If the total fixed cost is the same regardless of output, then the average fixed cost will decrease as output increases. This is because the same amount of fixed cost is being spread out over a larger quantity of output, resulting in a lower cost per unit of output. Therefore, the correct answer is "decreasing".

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The survival of a partnership depends on the managerial ability of the partners. This is because a partnership is a type of business organization where two or more individuals come together to carry on a business with a view of making a profit. The partners pool their resources together, share in the profits or losses, and also share the risks involved. For the partnership to succeed and survive, the partners must possess the necessary managerial skills and knowledge to manage the business effectively. They need to be able to make sound business decisions, allocate resources properly, manage finances, and develop effective marketing strategies. Without the necessary managerial ability, the partnership may fail to make profits, run into debt, and eventually collapse. Therefore, the survival of a partnership depends on the ability of the partners to manage the business effectively.

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Environmental degradation is more associated with the location of industries. When industries are located near sensitive ecosystems or areas with a high concentration of people, they can cause pollution, waste disposal problems, and other forms of environmental degradation. Industrial activities such as mining, manufacturing, and energy production can contribute to air and water pollution, deforestation, soil degradation, and other negative impacts on the environment. Therefore, the location of industries is an important factor to consider in reducing environmental degradation.

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The movement of people from rural to urban areas affects the **geographical distribution of population**. When people move from rural areas to urban areas, the population becomes more concentrated in urban areas, leading to a decrease in the population of rural areas and an increase in the population of urban areas. This movement can have significant effects on the geographical distribution of population, including changes in population density, urbanization, and development patterns.

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Corrections in the GNP figures for price changes require the use of a price deflator. A price deflator is a measure of the level of prices of all new, domestically produced, final goods and services in an economy. It is used to adjust the nominal value of GDP or GNP to obtain the real value of GDP or GNP. The price deflator takes into account the changes in the price level of goods and services over time, allowing for more accurate comparisons of the economic performance of a country between two different periods.

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Industrialization is a prerequisite for balanced economic growth because it stimulates the development of all sectors. When an economy is industrialized, there is an increase in the production of goods and services. This increase in production leads to the development of other sectors like transportation, communication, and energy, which are essential for the growth of the economy. Industrialization also leads to an increase in productivity in the manufacturing sector which creates more job opportunities, and increased income for workers. This increased income then leads to an increase in consumer spending, which further stimulates economic growth.

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An increase in the marginal cost of production causes an upward movement along the supply curve. Marginal cost is the additional cost incurred in producing an additional unit of a good or service. When marginal cost increases, it becomes more expensive for producers to produce each additional unit. As a result, producers will supply fewer units at any given price, and the supply curve shifts upward. This means that the quantity supplied at any given price will decrease, resulting in a decrease in the overall supply.

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