JAMB UTME - Economics - 2019

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A supply curve that slopes upwards from left to right indicates a positive slope. This means that as the price of a good or service increases, the quantity supplied by suppliers also increases. In other words, producers are willing to supply more of a good or service at higher prices. To understand why this is the case, think about it from the perspective of a supplier. If the price of a good or service goes up, it becomes more profitable for suppliers to produce and sell that good or service. As a result, suppliers are incentivized to increase their production in order to take advantage of the higher prices and earn more profits. This is why the quantity supplied by suppliers tends to increase as the price of a good or service increases. It's important to note that this explanation applies to the long run. In the short run, supply may be relatively fixed and a supply curve may be upward sloping or even backward sloping, indicating that the quantity supplied doesn't change much in response to changes in price. However, over the long run, suppliers have more time to adjust their production levels and the supply curve typically slopes upward.

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If the wage rate is less than the average revenue product (ARP), the firms would be earning a profit. The ARP is the amount of revenue generated by one unit of labor and is typically greater than the wage rate. If the firm is paying its workers less than the amount of revenue they generate, the firm will have extra revenue left over, which is a profit. So, in this situation, the firm would either be earning a normal profit or a super normal profit, depending on the size of the gap between the wage rate and the ARP. A normal profit is the minimum level of profit necessary for a firm to stay in business, while a super normal profit is a profit that is higher than the normal profit.

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Capital formation (CF) is equal to P minus C, where P is production and C is consumption. Capital formation refers to the process of creating new capital goods, such as factories, machines, and infrastructure, which are used to produce goods and services. This process requires investment in new capital goods and is therefore reflected as a reduction in consumption. So, CF = P - C, where P is the total amount of goods and services produced and C is the amount consumed by households, businesses, and government. This equation shows that the amount of new capital being formed is equal to the difference between what is produced and what is consumed. In simpler terms, capital formation is the amount of investment made in the economy to increase its productive capacity and support future economic growth.

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External economies arise essentially from the localization of industry. External economies occur when an industry or group of firms in a specific geographical area experience benefits beyond what they could achieve individually. This can include access to specialized suppliers, a skilled labor force, and a larger market for their products or services. Localization of industry refers to the concentration of firms in a specific area. This can create a cluster of related industries and suppliers, allowing for easier collaboration, lower transportation costs, and increased efficiency. Government policies, such as subsidies or tax incentives, may encourage the localization of industries, but they do not create external economies themselves. Similarly, a firm's individual policies and the free transferability of shares do not create external economies as they are focused on the internal operations of the firm. Overall, external economies are a result of the benefits that arise from firms operating in close proximity to each other in a specific geographic location, which can lead to increased efficiency and productivity for all firms involved.

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The method of adding up all the rewards of the factors of production in national income is known as the "income approach." The income approach calculates national income by summing up all the income received by individuals and firms in the economy. This includes wages, salaries, interest, rent, and profits earned by the factors of production, such as labor, capital, and land. The idea behind this approach is that the total income generated in an economy is equal to the total amount spent on consumption and investment, and this spending creates the demand for goods and services produced in the economy. This method provides a comprehensive picture of the total income generated in the economy and is useful in understanding the distribution of income among different groups in the economy and the sources of economic growth.

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An isoquant shows equal level of output. An isoquant is a curve that represents all the possible combinations of inputs (such as labor and capital) that can produce the same level of output for a particular product or service. In other words, it represents all the different ways to produce the same amount of output using different combinations of inputs. So, all points on an isoquant represent the same level of output, and this level of output gives us the same satisfaction or usefulness. As we move along the isoquant, we can produce the same output using different combinations of inputs, but the level of output remains constant. In simple terms, an isoquant is a line that shows the different combinations of inputs that can produce the same level of output.

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"Good government planning" is not a cause of unemployment. Unemployment refers to the situation where individuals who are actively seeking employment are unable to find work. The causes of unemployment can be complex and multi-faceted, but typically include factors such as a lack of available jobs, poor education and lack of relevant skills, and corruption. "Good government planning" is not a direct cause of unemployment, but it can have an indirect effect by helping to create a favorable economic environment that supports job growth and job creation. For example, good government planning can help to attract businesses to an area, provide funding for education and training programs, and reduce corruption, all of which can help to reduce unemployment over time.

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In the short-run, a monopoly can make abnormal profit. Abnormal profit is a profit that is higher than the normal profit a company would make in a competitive market. This is because a monopoly has market power, meaning it has control over the price of its product and can set it higher than the market price, leading to higher profits. However, it's important to note that this situation is only temporary and in the long-run, competition and other factors can drive down prices and eliminate the abnormal profit.

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"Provision of employment" is not a problem of agriculture. It is actually a benefit of agriculture. Agriculture provides job opportunities for people, from farmers to food processing workers. The other three options listed are actual problems faced by the agriculture industry: - Lack of preservation and storage facilities can lead to food waste and loss of income for farmers. - Land tenure system refers to the rules and regulations governing who can use and own land. In many countries, the land tenure system is not favorable for small farmers and can limit their ability to produce food. - Poor transportation systems can make it difficult for farmers to get their products to market and for consumers to access fresh food.

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If the demand for a commodity is perfectly elastic, it means that even a small change in price will cause a significant change in the quantity demanded. In other words, consumers are very sensitive to changes in price, and if the price increases, they will simply buy another substitute product that is cheaper. Now, if a tax is imposed on this commodity, it will cause the price of the commodity to increase. Since the demand is perfectly elastic, consumers will not be willing to pay the higher price and will switch to substitute products. As a result, the entire incidence of the tax falls on the seller or producer of the commodity. This is because the higher price caused by the tax will result in a decrease in the quantity demanded, and the producer will have to reduce the price in order to sell the product. Therefore, the producer bears the entire burden of the tax. In summary, if the demand for a commodity is perfectly elastic, the incidence of a tax on that commodity will be entirely on the seller or producer, as consumers are very sensitive to price changes and will switch to substitute products if the price increases.

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Adam Smith's theory of value stated that the value of a commodity depends on the amount of labour expended on its production. Smith believed that in a market economy, the value of a good or service is determined by the amount of work required to produce it. According to his theory, the more time and effort that goes into making a product, the more valuable it becomes. This idea is known as the "labour theory of value." In simple terms, the value of a product is determined by the effort and time put into making it. The more effort and time required, the more valuable the product is considered to be. This theory is considered to be one of the foundations of classical economics and is still widely studied and discussed today.

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The main disadvantage of a one-man business is that the proprietor is personally liable for the firm's debts. This means that if the business is unable to pay its debts, the proprietor's personal assets, such as their savings, property, or other valuables, can be used to settle the debt. This can put the proprietor's personal financial stability at risk and may discourage them from taking on certain business ventures or expanding the business.

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The determination of wages in a labor market depends on the interaction between the demand for and supply of labor. In simple terms, employers demand labor to produce goods and services, while workers supply their labor to earn wages. The wage rate is then determined by the equilibrium point where the demand for labor meets the supply of labor in the market. When there is a high demand for labor and a low supply, wages tend to increase because employers are competing for a limited number of workers. On the other hand, when there is a low demand for labor and a high supply, wages tend to decrease because there are more workers than jobs available. Other factors such as government policies, economic conditions, and the skills and qualifications of workers can also influence the wage rate, but the main determinant is the interaction between the demand for and supply of labor in the market.

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The use of government income and expenditure instrument to regulate the economy is called fiscal policy. Fiscal policy is a tool used by the government to influence the economy by changing the level and composition of government spending and taxation. The main aim of fiscal policy is to achieve macroeconomic objectives, such as controlling inflation, promoting economic growth and stability, and reducing unemployment. When the government increases its spending and/or reduces taxes, it injects more money into the economy, which can increase consumer spending and business investment. This can help to stimulate economic growth, create jobs, and increase aggregate demand. On the other hand, when the government reduces its spending and/or increases taxes, it takes money out of the economy, which can help to cool down an overheating economy and reduce inflation. In summary, fiscal policy involves using government income (taxation) and expenditure (spending) to influence the economy and achieve macroeconomic objectives.

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The oil boom between 1970-1980 caused the oil sector to become the main source of government revenue. This is because during this time period, the demand for oil was high and the price of oil was high, which led to an increase in profits for oil companies and the countries that produced oil. As a result, the government received a significant portion of its revenue from the oil sector, which made it the main source of government funding. This allowed the government to fund various projects and initiatives, and also had a significant impact on the economy.

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In 1976, there were 8 live births for every 1,000 people in the population of the country. This means that for a population of 10 million people, there would be 8 x 10,000 = 80,000 live births in the country.

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A commodity is defined as normal when its demand changes in the same direction as income. This means that as income increases, demand for the commodity will also increase, and as income decreases, demand for the commodity will decrease. Normal goods are those goods for which demand increases as income increases, and decreases as income decreases. For example, as people's incomes increase, they may choose to buy more luxury items such as expensive cars, jewelry, or designer clothing, which would be considered normal goods. On the other hand, as people's incomes decrease, they may choose to cut back on these purchases and switch to more budget-friendly options, causing demand for normal goods to decrease.

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The lands that belong to the community as a whole, rather than to individuals, are referred to as "communal land." Communal land is a type of property that is owned and managed collectively by a community, rather than by individual landowners. In many cases, communal land is held by a community as a shared resource that is used for various purposes, such as farming, grazing, or hunting. Communal land can be found in various forms, including indigenous lands, public lands, and lands held in common by small communities. These lands are often governed by customary or traditional rules and practices that have been developed over time by the community members. The use and management of communal land can be beneficial for communities that depend on the land for their livelihoods, as it allows for collective decision-making and sharing of resources. However, it can also present challenges when there are disputes over land use or when outside interests seek to exploit the resources on communal land.

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When the supply of a commodity increases, it means that there is more of that commodity available in the market than before. This increase in supply causes the market to shift, leading to a change in the equilibrium price and quantity of that commodity. As the supply of the commodity increases, sellers will want to sell more of the commodity, but buyers may not want to buy as much at the higher price. This creates a surplus, where there is more supply than demand, causing the price to decrease. As the price decreases, buyers are more willing to buy the commodity, and sellers may reduce the amount they are willing to sell, until the market reaches a new equilibrium. This new equilibrium will have a lower price and a higher quantity bought and sold than before the increase in supply. Therefore, the correct answer is: a decrease in the equilibrium price and an increase in the equilibrium quantity bought and sold.

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The term "Money at call and short notice" in a bank's assets represents the bank's loans to the money markets. Money at call and short notice refers to loans that the bank has made to other financial institutions or borrowers that can be quickly repaid upon request or on short notice, typically within 24 hours or less. These loans are typically used to finance short-term funding needs, such as meeting daily operational expenses or managing cash flows. The money markets are where short-term borrowing and lending takes place, typically for a period of less than a year. This includes activities such as interbank lending, commercial paper, and repurchase agreements. By providing loans to the money markets, banks are able to earn interest income while also helping to facilitate the flow of funds between borrowers and lenders. In summary, "Money at call and short notice" represents the bank's loans to the money markets, which are a key part of the financial system for short-term borrowing and lending.

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Restrictive monetary policy is designed to overcome inflation. Inflation is when the overall price level in an economy is rising, and the value of money is decreasing. The central bank can use restrictive monetary policy to reduce the amount of money in circulation and decrease aggregate demand, which will in turn help to curb inflation. For example, the central bank may increase interest rates, which makes borrowing money more expensive and reduces consumer spending. It may also sell government bonds, which reduces the amount of money available in the banking system. This type of policy is called restrictive because it restricts or slows down the growth of the economy, which helps to control inflation.

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The money market equilibrium is defined as when the demand and supply of money are equal. In other words, the amount of money people want to hold (demand) is equal to the amount of money available (supply). Think of the money market as a marketplace where people buy and sell money. Just like any other market, when there is high demand for a product, its price (in this case, the interest rate) will increase. When there is low demand, the price (interest rate) will decrease. In the money market, the interest rate is a measure of the cost of borrowing money. If there is a high demand for money, people are willing to pay a higher interest rate to borrow it. This results in an increase in the interest rate. On the other hand, if there is low demand for money, people are not willing to pay a high interest rate, and the interest rate decreases. When the demand and supply of money are equal, the interest rate will be at the level where the quantity of money that people want to hold is equal to the amount of money available. This is the money market equilibrium.

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The basic and essential economic problems in a community are related to choice and scarcity. Scarcity refers to the limited availability of resources in any given community. These resources can include natural resources, such as land, water, and minerals, as well as human-made resources, such as factories, machines, and tools. Because these resources are limited, there is never enough of them to satisfy everyone's wants and needs. This scarcity means that individuals, businesses, and governments must make choices about how to allocate these resources in the most efficient way possible. This requires making trade-offs and decisions about what goods and services to produce, how to produce them, and who should receive them. , Freedom, and Politics, are not directly related to the basic and essential economic problems of choice and scarcity. Social class, may be related to economic problems, but is not a fundamental concept in economics.

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In a perfect competition, the market price is determined by the market supply and demand junctions. This means that the price is set by the intersection of the supply of goods and services offered by producers and the demand for those goods and services by consumers. When there is a high demand for a good or service, the price will go up, and when there is a low demand, the price will go down. This is because producers will raise their prices when there is high demand in order to make more profit, and they will lower their prices when there is low demand to try to sell more goods. On the other hand, consumers will be willing to pay more for a good or service when there is high demand and they will be less willing to pay when there is low demand. The market price is a result of the negotiation between producers and consumers, and it reflects the balance between supply and demand in the market.

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Capitalism is an economic system that uses the market mechanism. In a capitalist economy, individuals and businesses own and operate the means of production, and the prices of goods and services are determined by supply and demand in the marketplace. In simple terms, this means that people are free to produce and sell whatever they want, and consumers are free to buy whatever they want, at prices that are determined by the market. This creates an economy that is driven by competition and innovation, and is often associated with growth and prosperity. It is important to note that capitalism can take on different forms, ranging from a more laissez-faire approach with minimal government intervention, to a more regulated form with a larger role for the government in managing the economy.

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Secondary production refers to the process of transforming raw materials into finished goods, typically in a factory setting. Out of the four options, only one involves transforming raw materials into finished goods in a factory setting, and that is option II, an automobile assembly-line worker. A bricklayer (option I) works in construction and is not involved in transforming raw materials into finished goods in a factory setting. An accountant (option III) works in the service sector and is not involved in producing goods. A cinema projectionist (option IV) is also not involved in producing goods but rather in providing a service. Therefore, the answer is option II, an automobile assembly-line worker.

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Inductive reasoning is a method of analysis that draws conclusions from data rather than general principles already known. In simple terms, inductive reasoning takes specific observations or pieces of evidence and uses them to form a general conclusion or pattern. For example, if you observe that every time it rains, the streets get wet, you can use inductive reasoning to conclude that rain causes the streets to get wet. In contrast, deductive reasoning starts with a general principle or premise and uses it to reach a specific conclusion. For example, if you know that all birds have feathers and you observe a creature with feathers, you can use deductive reasoning to conclude that it's a bird. Inductive reasoning is often used in scientific research, where data is collected and analyzed to form hypotheses or theories that can then be tested through further experimentation.

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The quantity demanded (Qd) of a commodity is related to its price (P) through the equation Qd = 80 - 2P. So, if we know the price of the commodity, we can use this equation to find the quantity demanded. In this case, the price is given as ₦3. So, we can plug in this value of price into the equation to find the quantity demanded: Qd = 80 - 2P Qd = 80 - 2 * 3 Qd = 80 - 6 Qd = 74 Therefore, the quantity demanded when the price is ₦3 is 74 units.

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An import quota is a permit that allows an importer to bring a certain quantity of foreign goods into a country. It is a government-imposed limit on the quantity of a certain good that can be imported into a country during a specific period of time. The purpose of an import quota is to protect domestic producers and limit the amount of foreign competition in the domestic market. The government sets the quota to regulate the flow of goods into the country and to ensure that domestic producers are not overwhelmed by foreign competition.