JAMB UTME - Economics - 2022
Question 1 Report
Scale of preference shows
Answer Details
The scale of preference refers to a list of a consumer's wants or desires arranged in order of importance or priority. It shows the consumer's preferences or choices among different options. The scale of preference is subjective and varies from person to person. For instance, if a person is given the choice to buy a new smartphone, a new pair of shoes, or a ticket to a concert, they may rank these options in order of priority. If they value communication more than entertainment, they may choose the smartphone as their top priority. Conversely, if they value entertainment more than communication, they may choose the concert ticket. Thus, the scale of preference is a way to understand how consumers make choices based on their preferences and priorities, and it helps in predicting their behavior in the market.
Question 2 Report
Economics problems arise in all societies because
Answer Details
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.
Question 3 Report
Which of the following situations can give rise to economic problems
Answer Details
Question 4 Report
An important factor hindering the rapid development of the industrial sector in Nigeria.
Answer Details
An important factor hindering the rapid development of the industrial sector in Nigeria is inadequate infrastructure facilities. This includes factors such as inadequate transportation systems, unreliable electricity supply, poor communication networks, and insufficient access to water and sanitation facilities. These factors can increase the cost of production, reduce productivity and efficiency, and make it difficult for industries to compete with other countries. The dominance of the oil sector has also been a significant factor, as it has led to a neglect of other sectors, including manufacturing and industry. Excessive demand for finished products and rural-urban migration may have some impact on industrial development but are not as significant as inadequate infrastructure and the dominance of the oil sector.
Question 5 Report
If the cost of production for a firm continues to increase as its output rises, the firm is said to be experiencing
Answer Details
The firm is said to be experiencing diseconomies of scale if the cost of production continues to increase as its output rises. Diseconomies of scale occur when the firm becomes too large, and the increased complexity and coordination costs of managing a large organization outweigh the benefits of increased production. This can result in a decrease in efficiency, productivity, and profitability for the firm.
Question 6 Report
A disadvantage of a jont-stock company is
Answer Details
A disadvantage of a joint-stock company is limited control in management by shareholders. In a joint-stock company, shareholders own a portion of the company and can make money by selling their shares for a profit or receiving dividends. However, shareholders do not typically have direct control over the day-to-day management of the company. Instead, a board of directors and executive management team make decisions on behalf of the company. This lack of control in management can be seen as a disadvantage for shareholders who may have different ideas about how the company should be run or who may not agree with the decisions made by the board or executive management team. Additionally, shareholders may not be able to influence the direction of the company as much as they would like. Overall, while joint-stock companies offer benefits such as limited liability for shareholders, this disadvantage in control over management may be a concern for some investors.
Question 7 Report
Marginal cost is?
Answer Details
Marginal cost refers to the cost of producing one additional unit of a good or service. It is the cost of producing the last or extra unit of output. This cost includes the variable costs of producing the additional unit, such as the cost of materials and labor, but it does not include fixed costs like rent or salaries, which do not change with the level of production. The concept of marginal cost is important in economics because it helps businesses and policymakers make decisions about how much to produce, what price to set for their goods or services, and whether to enter or exit a market. By analyzing their marginal costs, businesses can determine whether producing an additional unit of a good will be profitable or not.
Question 8 Report
Which of the following is not emphasized in a product possibility curve?
Answer Details
The concept of unemployment of labor is not emphasized in a product possibility curve. A product possibility curve is a graphical representation of the trade-off between two goods that an economy can produce, given its limited resources and technology. The curve shows the maximum combinations of the two goods that can be produced with the available resources, taking into account that some resources are better suited for producing one good over the other. The emphasis is on the scarcity of resources and the efficiency with which they are being used, not on the employment of labor.
Question 9 Report
The advantage which firms obtain directly from expanding their operations are referred to as
Answer Details
The advantage which firms obtain directly from expanding their operations are referred to as "internal economies of scale." Internal economies of scale occur when a firm's average cost of production decreases as it increases the scale of its operations. This can be due to a variety of factors, such as increased specialization of labor, greater use of capital equipment, or better purchasing power for inputs. Internal economies of scale enable a firm to become more efficient and competitive as it grows, which can result in higher profits and a stronger market position. The opposite of internal economies of scale is internal diseconomies of scale, which occur when the average cost of production increases as a firm becomes too large or complex to manage efficiently.
Question 10 Report
If the price of commodity X rises and consumers shift to commodity Y, then commodities X and Y are
Answer Details
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.
Question 11 Report
In perfectly elastic supply, the supply curve
Answer Details
In perfectly elastic supply, the supply curve is a horizontal line. This means that the quantity of a good that a supplier is willing to sell is not affected by changes in the price of the good. The supplier will sell any quantity of the good at the market price, no matter how high or low it is. In other words, the supply is perfectly responsive to changes in the price, so the supply curve is flat.
Question 12 Report
A country's budget allocation to various sectors of the economy is shown in the pie chart above...
Use it to answer this question
What is the ratio of expenditure on health to Agriculture if the yearly budget is 7200?
Answer Details
Question 13 Report
Under a floating exchange rate regime, the determinant of the exchange rate is
Answer Details
Under a floating exchange rate regime, the determinant of the exchange rate is "demand for and supply of foreign goods." In a floating exchange rate system, the exchange rate between two currencies is determined by the market forces of supply and demand. Factors such as interest rates, inflation rates, and trade flows can influence the demand for and supply of currencies, which in turn can affect the exchange rate. Unlike fixed exchange rate systems, where the exchange rate is determined by government policy, in a floating exchange rate system, the exchange rate can fluctuate based on market conditions.
Question 15 Report
An important factor hindering the rapid development of the industrial sector in Nigeria.
Answer Details
Question 16 Report
An example of commodity money is
Answer Details
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.
Question 17 Report
Fiscal policy measures imply a change in
Answer Details
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.
Question 18 Report
Gross National Product (GNP) less the provision for the wear and tear of assets is the
Answer Details
The term "Gross National Product (GNP) less the provision for the wear and tear of assets" refers to the Net National Product (NNP). The Net National Product (NNP) is a measure of the total economic output of a country, which takes into account the depreciation or wear and tear of the country's capital assets. Capital assets are things like buildings, machinery, and other long-term investments that contribute to a country's economic output. When we subtract the depreciation from the Gross National Product (GNP), which is the total value of goods and services produced by a country's residents, we arrive at the Net National Product (NNP). The reason we need to subtract depreciation from the GNP is that capital assets, such as buildings and machinery, wear out over time and lose value. If we didn't account for this loss of value, we would overestimate the country's economic output. For example, suppose the GNP of a country is $1 trillion, and the depreciation or wear and tear on its capital assets is $100 billion. In that case, the NNP of the country would be $900 billion ($1 trillion - $100 billion). In summary, the Net National Product (NNP) is the Gross National Product (GNP) minus the provision for the wear and tear of assets or depreciation. It gives us a more accurate measure of a country's economic output by accounting for the loss of value in capital assets over time.
Question 19 Report
Occupational mobility as applied to factors of production means the case by which
Answer Details
Question 20 Report
Demand-pull inflation is likely to be caused by
Answer Details
Demand-pull inflation occurs when the overall demand for goods and services in an economy exceeds the supply of those goods and services, leading to an increase in the general price level. This increase in demand may be caused by a number of factors, such as an increase in consumer confidence, an increase in government spending, or an increase in exports. Out of the given options, an increasingly large budget deficit is the most likely cause of demand-pull inflation. When the government spends more money than it collects in taxes, it may finance the deficit by borrowing from the central bank, other banks or the public. This increases the overall amount of money in circulation in the economy, which in turn leads to an increase in demand for goods and services. This increased demand can then lead to higher prices for those goods and services, resulting in demand-pull inflation. An increase in the cost of factor inputs, such as labor or raw materials, may also contribute to inflation, but this is known as cost-push inflation, which occurs when the cost of producing goods and services increases, leading to higher prices. An increase in the income tax rate and an increase in the bank lending rate can reduce the overall demand for goods and services and lead to a decrease in inflation.
Question 21 Report
Nation engage in external trade because of difference in
Answer Details
Nations engage in external trade because of the differences in comparative cost, also known as comparative advantage. Comparative advantage is the ability of a country to produce goods or services at a lower opportunity cost than another country. Opportunity cost is the cost of one choice in terms of the best alternative that must be given up. In other words, it's the cost of producing one product in terms of the number of other products that could have been produced instead. For example, let's say that Country A can produce both cars and computers, but it can only produce one of them at a time. If Country A devotes all its resources to producing cars, it can produce 100,000 cars per year. If it devotes all its resources to producing computers, it can produce 50,000 computers per year. Meanwhile, Country B can produce 60,000 cars per year or 30,000 computers per year. In this case, Country A has a comparative advantage in producing cars because it has a lower opportunity cost of producing cars compared to computers. As a result, Country A can produce cars at a lower cost and sell them to Country B, which can in turn produce computers at a lower cost and sell them to Country A. This allows both countries to benefit from trade and improve their overall welfare. In summary, nations engage in external trade because of the differences in comparative cost, which allow countries to specialize in producing goods and services that they can produce more efficiently and trade with other countries for goods and services that they cannot produce efficiently. This creates mutual benefits for all countries involved.
Question 22 Report
If inflation is anticipated, people may
Answer Details
If inflation is anticipated, people may choose to spend less money. This is because inflation reduces the purchasing power of money, meaning that the same amount of money can buy fewer goods and services. In response, people may decide to be more frugal with their spending, save more money, or look for ways to reduce their expenses. By spending less, they can try to maintain their purchasing power and avoid the negative effects of inflation.
Question 26 Report
The major role of multi-national companies in the petroleum industry in Nigeria is
Answer Details
The major role of multinational companies in the petroleum industry in Nigeria is oil prospecting. Multinational companies, also known as International Oil Companies (IOCs), play a significant role in the exploration and production of oil and gas in Nigeria. These companies invest heavily in the exploration of new oil fields, as well as the development and production of existing fields. While some IOCs are also involved in oil marketing and refining, their primary role in Nigeria is oil prospecting. The IOCs in Nigeria include major companies such as Shell, ExxonMobil, Chevron, and Total.
Question 27 Report
Statutory organisations usually established by Acts of parliament are called
Answer Details
Statutory organizations usually established by Acts of parliament are called public corporations. A public corporation is a type of legal entity that is established by the government through legislation to perform a specific function or provide a particular service to the public. Public corporations can be formed at the national, state, or local level, and can take a variety of forms depending on their specific mandate. While public enterprises are also entities that are owned and controlled by the government, they may not necessarily be established by Acts of parliament. Cooperative societies are typically voluntary organizations formed by individuals or businesses to pool resources and share risks, while joint-stock companies are privately owned businesses that are established to generate profit for their shareholders.
Question 28 Report
The distinction between capital and recurrent expenditure lies in the
Answer Details
Question 29 Report
Palm oil and palm kernel are in
Answer Details
Palm oil and palm kernel are in joint supply. Joint supply refers to a situation in which two or more products are produced together as a result of a single production process. In the case of palm oil and palm kernel, both products are obtained from the same fruit of the oil palm tree. When the fruit is processed, it produces two distinct products: palm oil and palm kernel. Palm oil is obtained from the fleshy outer part of the fruit, while palm kernel is obtained from the inner seed or kernel. Since both products are obtained from the same production process, the quantity of one product that is produced is directly related to the quantity of the other product that is produced. As a result of being in joint supply, the prices of palm oil and palm kernel are interdependent. If the demand for one product increases, this will increase the supply of the other product, which can lower its price. For example, if the demand for palm oil increases, more oil palm fruit will be processed, leading to an increase in the supply of palm kernel and a potential decrease in its price. To summarize, palm oil and palm kernel are in joint supply because they are both obtained from the same production process and the quantity of one product produced is directly related to the quantity of the other product produced. The prices of both products are interdependent, and a change in demand for one product can affect the supply and price of the other product.
Question 30 Report
A country's budget allocation to various sectors of the economy is shown in the pie chart above...
Use it to answer this question.
If the budget of the country was $7,200, how much is allocated to Education?
Answer Details
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.
Question 31 Report
If the Central Bank increases its bank rate
Answer Details
If the Central Bank increases its bank rate, it means that it has increased the interest rate at which commercial banks can borrow money from the Central Bank. This, in turn, makes it more expensive for commercial banks to borrow money, which can have several effects on the economy. Firstly, since it is more expensive for banks to borrow money, they may become more cautious about lending money to their customers. This means that customers may find it more difficult to obtain loans or credit from banks, and the amount of borrowing may decrease. So, is not correct. Secondly, if banks find it more expensive to borrow money, they may also try to increase the interest rates they charge on loans and mortgages to maintain their profits. This could make borrowing more expensive for customers, and the interest charges by banks may rise rather than fall. So, is not correct. Thirdly, if the cost of borrowing money for commercial banks increases, they may not want to borrow as much money, which could reduce the supply of money in the economy. So, is correct. Lastly, an increase in the Central Bank's bank rate may not cause many banks to shut down their operations. However, some smaller banks or financial institutions that heavily rely on borrowing may struggle to stay afloat. So, is not correct. In conclusion, an increase in the Central Bank's bank rate can reduce the supply of money in the economy and increase the cost of borrowing for banks, which could result in higher interest rates for customers.
Question 32 Report
The point x inside the ppc indicate?
Answer Details
The point x inside the PPC (Production Possibility Curve) indicates that some of the resources in the economy are currently idle or not being fully utilized. This means that the economy is not producing at its maximum potential, and there is room for further growth and development. The PPC represents the different combinations of goods and services that an economy can produce given its limited resources and technology. The curve shows the maximum output that can be produced with the available resources and technology at a given point in time. Any point inside the curve represents a level of production that is below the maximum potential output, indicating that some resources are not being used to their full capacity. Therefore, if the economy is currently operating at a point inside the PPC, it has the potential to increase its production of goods and services by putting its idle resources to work. This could be achieved through measures such as increasing investment, improving technology, or providing more education and training to the workforce.
Question 33 Report
The middlemen is responsible for
Answer Details
The middlemen is responsible for "breaking the bulk". Middlemen are intermediaries between producers and consumers in the distribution process. They play a crucial role in getting products from the producers to the consumers, and they perform a variety of functions such as transportation, storage, and marketing. One important function of middlemen is to break the bulk of products. This means they take large quantities of goods from producers and break them down into smaller units that can be sold to consumers in the desired quantities. For example, a farmer may produce tons of wheat, but consumers may only want to buy it in small quantities. Middlemen can purchase the bulk quantity from the farmer, then break it down into smaller units that can be sold to individual consumers. Breaking the bulk is important for several reasons. It allows for greater efficiency in the distribution process, as products can be transported and stored more easily in smaller units. It also allows for greater flexibility in meeting consumer demand, as products can be sold in the quantities that consumers desire. Finally, it can help to reduce costs for both producers and consumers, as middlemen can aggregate products from multiple producers and sell them at a lower cost than individual producers could achieve on their own.
Question 34 Report
Economic goods are termed scarce when they are?
Answer Details
Economic goods are termed scarce when they are "not available in sufficient quantities to satisfy all wants for them." Scarce resources are those that have a limited supply relative to the demand for them. This scarcity means that choices must be made about how the resources are allocated, and that not all wants or needs can be fully satisfied. The concept of scarcity is fundamental to the study of economics, as it is the basis for understanding the concepts of opportunity cost, trade-offs, and efficiency.
Question 35 Report
One benefit a country can derive from the extraction of crude oil is increase in
Question 36 Report
In a free market economy, the rationing of scarce goods is done principally by?
Answer Details
In a free market economy, the rationing of scarce goods is principally done by the price mechanism. The price of a good is determined by the forces of supply and demand in the market. When the supply of a good is limited and demand for it is high, the price of that good will increase. This higher price will serve as an incentive for producers to increase their supply of the good, and for consumers to reduce their demand for it. As a result, the scarce good will be rationed among consumers based on their willingness to pay the higher price. This process occurs naturally without the need for government intervention or control, and is a key feature of a free market economy.
Question 38 Report
An advantage of the sole proprietorship over the partnership form of business organization is that
Answer Details
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.
Question 39 Report
The stock exchange is an example of the
Answer Details
The stock exchange is an example of a capital market. A capital market is a market where individuals and institutions trade financial securities, such as stocks and bonds, with the goal of raising capital. In other words, the capital market is where businesses can go to raise money by selling ownership in the company (stocks) or borrowing money (bonds) from investors. The stock exchange is a specific type of capital market where publicly-traded companies can sell ownership in the form of stocks to the public. Investors can buy and sell these stocks on the exchange, and the value of the stocks can rise or fall based on various factors, such as the company's financial performance, overall market conditions, and investor sentiment. Overall, the stock exchange and other capital markets play an important role in facilitating the flow of capital and resources throughout the economy, helping businesses raise funds to invest in growth and development, and providing investors with opportunities to earn a return on their investment.
Question 40 Report
In the event of bankruptcy, owners of joint-stock companies lose
Answer Details
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.
