JAMB UTME - Economics - 2022

Bayanin Amsa

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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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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The use of the bank rate, cash ratio, and open market operations are tools used in monetary policy. Monetary policy is a set of actions taken by a country's central bank to manage the supply of money and credit in the economy to achieve specific economic goals, such as controlling inflation, stabilizing prices, and promoting economic growth. The bank rate is the interest rate at which commercial banks can borrow money from the central bank. When the central bank increases the bank rate, it becomes more expensive for commercial banks to borrow money, which reduces the amount of money in circulation in the economy. Conversely, when the central bank lowers the bank rate, it becomes cheaper for commercial banks to borrow money, which increases the amount of money in circulation in the economy. The cash ratio is the percentage of deposits that commercial banks are required to hold in reserve with the central bank. When the central bank increases the cash ratio, it reduces the amount of money that commercial banks have available to lend, which reduces the amount of money in circulation in the economy. Conversely, when the central bank lowers the cash ratio, it increases the amount of money that commercial banks have available to lend, which increases the amount of money in circulation in the economy. Open market operations refer to the buying and selling of government securities by the central bank in the open market. When the central bank buys government securities, it injects money into the economy, which increases the amount of money in circulation. Conversely, when the central bank sells government securities, it withdraws money from the economy, which reduces the amount of money in circulation. So, the use of bank rate, cash ratio, and open market operations are all tools used in monetary policy to manage the amount of money in circulation in the economy, with the aim of achieving specific economic goals.

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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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A firm's average cost can decrease in the long-run due to increasing returns to scale. This means that as the firm increases its production, it experiences a decrease in its average cost. This can be due to various factors such as specialization, economies of scale, and better utilization of resources. For example, a firm that produces 100 units of a product might have an average cost of $10 per unit. However, if it increases its production to 200 units, it might be able to reduce its average cost to $8 per unit. This could be due to the fact that the firm can take advantage of bulk discounts on raw materials, use more efficient production methods, and spread its fixed costs over a larger number of units. Therefore, when a firm experiences increasing returns to scale, it can reduce its average cost in the long-run, which can lead to higher profits and a competitive advantage in the market.

Bayanin Amsa

Bayanin Amsa

The major disadvantage of a capitalist economy is that it worsens income inequality among the citizens. In a capitalist system, the means of production and distribution of goods and services are privately owned and operated for profit, leading to a concentration of wealth and power in the hands of a small group of people who own the most productive resources. This results in a situation where the rich get richer, while the poor get poorer, and there is a growing gap between the incomes and living standards of the wealthy and the less well-off members of society. This can create social unrest and political instability, as well as limit opportunities for social mobility and economic growth.

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In the event of bankruptcy, owners of joint-stock companies (also known as shareholders) typically only lose the capital they have invested in the company. They do not lose their private properties or personal assets. When an individual buys shares in a joint-stock company, they become a partial owner of the company. As a shareholder, they are entitled to receive a share of the company's profits in the form of dividends. However, if the company goes bankrupt and cannot meet its financial obligations, the shareholders may lose the value of their investment, meaning the shares they hold in the company become worthless. Therefore, shareholders may lose the capital they invested in the company, but they are not responsible for any additional debts or liabilities the company may have. Shareholders are only liable to lose the value of their shares and do not have to worry about losing their personal assets or private properties.

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Bayanin Amsa

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 ordinary partner in a partnership typically has unlimited liability in case of business failure. This means that they can be held personally liable for any debts or obligations of the business that are not satisfied by the assets of the partnership. This is a major disadvantage of a partnership, as it exposes the personal assets of the partners to the risk of loss in the event of business failure. While the extent of the involvement of the ordinary partner in the management of the business may vary, they are typically expected to take an active part in the management and decision-making of the partnership. As such, they cannot be said to take no active part in the management of the business. Furthermore, as a general rule, partners are jointly and severally liable for the actions of the partnership, which means that they can be sued personally on matters relating to the business. Limited liability, on the other hand, is a characteristic of some types of business entities such as limited liability companies (LLCs) and corporations.

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A greater burden of the taxes on essential goods is typically borne by the lower income group. This is because essential goods such as food, clothing, and shelter make up a larger proportion of the budget of low-income households than they do for high-income households. When taxes are applied to these goods, the cost of living increases proportionally for low-income households, putting a greater burden on their limited resources. In contrast, high-income households can more easily absorb the higher costs without significantly affecting their standard of living.

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The situation in which all inputs are doubled and the output also doubles is known as "constant returns to scale." This means that if a firm increases all of its inputs by a certain proportion, the output will also increase by the same proportion. In other words, the production function exhibits constant returns to scale if increasing all inputs by a constant factor results in an output increase by the same constant factor.

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A major function of the retailer is to break bulk and sell products in small units to consumers. This means that retailers purchase goods in large quantities from wholesalers or manufacturers and then sell them in smaller quantities to individuals or households. By doing so, retailers make it easier for consumers to access a wide range of products, as they do not have to buy in bulk or directly from the manufacturer. Additionally, retailers often play a key role in generating demand for products through advertising and marketing efforts. By showcasing products in stores and online, and through various forms of advertising, retailers can help to build brand awareness and encourage consumers to purchase products. While some retailers may offer credit to wholesalers or consumers, this is not a primary function of retailing. Similarly, while retailers can help to reduce the cost of distribution by consolidating products and shipping them in bulk, this is a secondary function of retailing that supports the primary function of breaking bulk and selling products in small units.

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In developing countries, the largest component of national income is typically wages and salaries. This means that the majority of the income earned in these countries comes from the money that people make from their jobs or employment. Wages and salaries are paid to workers in exchange for their labor, and they are typically the main source of income for most people in developing countries. This income can come from a variety of sources, including working in factories, farming, providing services, or working in other industries. While profits and rent can also be important sources of income in some cases, they generally make up a smaller proportion of national income in developing countries. Profits are the earnings that businesses make after deducting their expenses, while rent is the income that comes from owning property or other assets. In summary, the largest component of national income in developing countries is typically wages and salaries, which are earned by workers in exchange for their labor.

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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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Even if a firm closes down, it will still incur some fixed costs. Fixed costs are expenses that must be paid regardless of the level of production or whether the business is operating or not. These costs include things like rent, insurance, salaries of employees on long-term contracts, and equipment leases. Variable costs, on the other hand, are expenses that vary depending on the level of production or business activity. For example, the cost of materials or labor directly related to producing goods or services. If the firm closes down, it will not incur variable costs because it will not be producing any goods or services. Total cost is the sum of fixed and variable costs, so if the firm is not producing anything, the total cost will be equal to the fixed cost. Marginal cost is the cost of producing one additional unit of a good or service. If the firm is closed down, there is no production, so there is no marginal cost.

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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.

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The effect of an increase in the personal income tax is to reduce the disposable income of taxpayers. When personal income taxes are increased, taxpayers have less money to spend on goods and services, as more of their income is going towards taxes. This reduction in disposable income can lead to a decrease in consumer spending, which can have a negative impact on businesses and the economy as a whole. Increasing personal income taxes may also have a distorting effect on the economy, as it can create disincentives for individuals to work, save, and invest. However, it is not likely to raise the absolute price level, as this is determined by a variety of factors including supply and demand in the economy. Furthermore, an increase in personal income taxes is not directly linked to a reduction in unemployment, as this is influenced by a wide range of factors such as economic growth, labour market policies, and the overall state of the economy.

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A disadvantage of a joint-stock company is the potential for loss of controlling interest. In a joint-stock company, ownership is divided into shares, which can be bought and sold by individual shareholders. If a large number of shares are sold to other individuals or entities, it can dilute the ownership and control of the original shareholders, making it more difficult for them to have a significant say in the decision-making process. Limited liability is actually an advantage of a joint-stock company, as it protects shareholders from personal financial liability beyond their investment in the company. Continuity is also an advantage of a joint-stock company, as it can continue to exist even if shareholders come and go or if one or more shareholders die. Unlimited liability, on the other hand, is a disadvantage of a sole proprietorship or partnership, where the owner or partners can be held personally liable for the debts and obligations of the business.

Bayanin Amsa

Bayanin Amsa

Economics problems arise in all societies because of the fundamental concept of scarcity. Scarcity means that the resources available to society are limited, while the wants and needs of individuals are virtually unlimited. This leads to a situation where individuals, businesses, and governments have to make choices about how to allocate scarce resources in the most efficient and effective way possible. For example, a society may want to provide free healthcare to all its citizens, but it may not have the resources to do so. Alternatively, a business may want to produce more products, but it may not have the resources to expand its production line. These are just two examples of the countless economic choices that are made every day. Mismanagement of resources by leaders, lack of planning, inadequate supply of resources, and underutilization of economists are some of the factors that can exacerbate economic problems in a society. However, the underlying cause of economic problems is the scarcity of resources, which requires individuals and institutions to make difficult choices about how to allocate those resources.

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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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Wholesalers play an important role in the distribution of goods and services because they act as intermediaries between producers and retailers. Wholesalers buy goods in large quantities from producers and then sell them in smaller quantities to retailers. This enables producers to focus on their production process without worrying about marketing and distribution. On the other hand, retailers can buy smaller quantities of goods from wholesalers, which allows them to stock a variety of products without having to buy in bulk. Wholesalers also provide other important services, such as financing and logistics. They may provide credit to both producers and retailers, allowing them to manage their cash flow and invest in their businesses. Additionally, wholesalers can handle the transportation and storage of goods, which can be a complex and expensive task for smaller businesses. Therefore, wholesalers play a crucial role in the distribution process, providing valuable services and enabling the smooth flow of goods and services from producers to retailers, and ultimately to consumers.

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A minimum price legislation is also called a price floor. A price floor is a type of price control set by the government that sets a minimum price that must be paid for a particular good or service. The government typically sets a price floor in order to help support the producers of the good or service by ensuring they receive a certain level of income. For example, if the government sets a minimum price for agricultural goods, such as wheat or milk, it can help support farmers by ensuring that they receive a fair price for their products. A price floor is usually set above the equilibrium price of the good or service in question, which means that it can create a surplus of supply. This surplus can result in a number of economic issues, such as a buildup of inventory or a decrease in demand, which can lead to further government intervention or market adjustments. Overall, price floors and other types of price controls can be controversial, as they can have both positive and negative effects on producers, consumers, and the overall economy.

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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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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. 

Bayanin Amsa

Bayanin Amsa

Bayanin Amsa

An effect of inflation is that it "favors debtors at the expense of creditors." Inflation reduces the real value of money over time, which means that the value of debt also decreases. This can be an advantage for debtors, who are able to repay their debts with money that is worth less than when they borrowed it. In contrast, creditors are disadvantaged by inflation, as the value of the money they receive in repayment is worth less than the money they loaned out. Inflation can also have other effects, such as reducing the purchasing power of consumers, increasing uncertainty, and distorting economic decision-making.

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The industry that adds more value to primary products is the processing industry. The processing industry takes raw materials, such as those produced by the mining industry, and turns them into finished products through various manufacturing processes. This added value comes from transforming the raw materials into something that is more useful and valuable to consumers. The service industry, on the other hand, provides services to individuals and businesses, such as consulting, financial advice, or customer support. While the service industry is important for the economy, it does not add value to primary products in the same way that the processing industry does. The construction industry involves the building of structures and infrastructure, such as buildings, roads, and bridges. While the construction industry uses materials produced by the mining industry, it does not add value to these materials in the same way that the processing industry does. In conclusion, the processing industry is the industry that adds the most value to primary products by transforming raw materials into finished goods that are more useful and valuable to consumers.

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Commodities X and Y are substitutes. Substitute goods are products that can be used in place of each other. When the price of commodity X rises, consumers shift to commodity Y because it is a cheaper alternative to X. An example of substitute goods is coffee and tea - if the price of coffee increases, some people may switch to drinking tea instead.

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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.

Bayanin Amsa

Bayanin Amsa

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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The theory of comparative advantage states that a commodity should be produced in that nation where the opportunity cost is least. Opportunity cost is the cost of choosing one option over another, and in the context of comparative advantage, it refers to the cost of producing a particular good or service in terms of what has to be given up to produce it. A country should specialize in producing and exporting the goods and services for which it has a comparative advantage, which means that it can produce them at a lower opportunity cost than other countries. While the absolute cost and absolute money cost of production can be important factors in determining the competitiveness of a particular commodity, the theory of comparative advantage emphasizes the importance of considering opportunity cost. Furthermore, the production possibility curve, which shows the maximum combination of two goods that can be produced with a given set of resources, is not directly related to the theory of comparative advantage, although it can help illustrate some of the concepts involved in the theory.

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An advantage of the sole proprietorship over the partnership form of business organization is that it relies on the decision of one individual and does not require the consent or involvement of others. This can make decision-making more efficient and effective, and reduce the possibility of conflicts between partners. In contrast, partnerships require consensus and agreement among multiple individuals, which can be time-consuming and challenging, especially when there are disagreements. However, it is important to note that a sole proprietorship does not enjoy limited liability for debt in the event of failure, and its existence is limited by the individual owner's life span.

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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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