JAMB UTME - Economics - 2023

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One of the major problem of West African state is the relation of West African states with the colonial masters.

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Economic profit = Total revenue(Output) - Opportunity cost of input
= 1,000,000 - 750,000
= 250,000

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The age group that belongs to the active labor force is the **18 - 64 years** category. This age range is generally considered to be the working-age population, as it encompasses individuals who are old enough to work and have not yet reached the age of retirement. People in this age group are typically in their prime working years, where they have the physical ability and the necessary skills and knowledge to actively participate in the labor market. They are often seeking employment, working in various industries or sectors, and contributing to the economic growth and development of their country. It is important to note that the specific age range considered as the working-age population may vary slightly across different countries or regions. However, in most cases, it generally falls within the **18 - 64 years** age bracket. On the other hand, the other age groups mentioned in the options are not typically considered as part of the active labor force: - The **0 - 17 years** age group consists of individuals who are below the legal working age and are typically attending school or dependent on others for their livelihood. - The **15 - 25 years** age group partially overlaps with the working-age population, but it includes individuals who may still be in school or pursuing higher education. While some individuals within this age range may be actively seeking employment or working part-time, they are generally not considered as the core active labor force. - The **65 years and above** age group represents individuals who have reached the retirement age or are eligible for retirement benefits. While some individuals in this age range may continue to work, either out of choice or due to financial circumstances, they are not considered as the primary active labor force. In summary, the **18 - 64 years** age group is the one that belongs to the active labor force, consisting of individuals who are in their prime working years and actively participating in the labor market.

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

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Q = 14, P = 4

Qd = 30 - 4p

∆q/∆p = - 4
 

Ed = ΔqΔp×pq $\frac{<br>}{}$

= - 4 x 4/14

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

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An example of expansionary monetary policy by the Central Bank of Nigeria is "buying Treasury securities from commercial banks." Expansionary monetary policy is a type of policy implemented by the central bank to stimulate economic growth and increase the supply of money in the economy. This policy is typically used during times of economic downturn or recession to encourage spending and investment. When the Central Bank of Nigeria buys Treasury securities from commercial banks, it injects money into the economy. This increases the amount of money available in the banking system, making it easier for banks to lend to businesses and individuals. By increasing the money supply, the central bank aims to lower interest rates, which in turn encourages borrowing and spending. Lower interest rates mean that businesses and individuals can access credit more easily, leading to increased investment, consumer spending, and economic growth. This expansionary policy can help support economic activity, boost employment, and stimulate overall economic recovery.

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Mono- product economy ( an economy that produces one product or commodity) is not a characteristics of developing country. The characteristics are: high level of illiteracy, dependence on agriculture, low savings and investment, low standard of living, population explosion, high death rate etc.

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The part of income after tax that is not consumed is defined as saving. Saving refers to the portion of income that is not spent on immediate consumption and is instead put aside for future use.
When we receive our income, we typically have various expenses to cover, such as bills, groceries, and entertainment. After deducting these expenses and taxes, we are left with a certain amount of money. If we choose not to spend this remaining amount and instead keep it for later, we are saving that money.
Saving is important because it allows us to build up financial security and prepare for unexpected expenses or future goals. It can also be used for long-term investments, such as buying a house or planning for retirement.
In summary, saving is the part of our income that we choose to set aside rather than using it immediately for consumption.

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Real cost is the cost of producing a good or service, including the cost of all resources used and the cost of not employing those resources in alternative uses.

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The law of supply states that, other things being constant, as price increases, the quantity supplied also increases. Basically, when the price of a good or service goes up, suppliers have an incentive to produce and sell more of that item. This is because they can earn more profit by selling at the higher price. So, as the price rises, suppliers are motivated to increase their production and offer more of the product to the market. On the other hand, when the price of a good or service decreases, suppliers have less motivation to produce and sell it. This is because they can earn less profit or even incur losses at the lower price. As a result, they will reduce the quantity supplied. In summary, the law of supply tells us that there is a direct relationship between price and quantity supplied. When the price increases, suppliers respond by increasing the quantity they are willing to supply to the market. Conversely, when the price decreases, the quantity supplied decreases.

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

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An industry is a group of firms producing similar products and under separate administration or management.

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The theory of absolute advantage was propounded by Adam Smith while the theory of comparative advantage was propounded by David Ricardo.

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The correct term for the number of people who are qualified to work and who offer themselves for employment is the working population.
The working population refers to the subset of the total population that is actively engaged or seeking employment. It includes individuals who are qualified, available, and willing to work. This encompasses both employed individuals and those who are actively looking for work, such as job seekers.
The working population is an important measure for understanding the labor market. It helps policymakers, businesses, and economists in assessing the job market's health and determining factors such as employment rates, labor force participation, and unemployment rates.
Options like "mobility of labor" and "migrant labor" focus on the movement of workers between different locations, which is a related concept but not the same as the total number of qualified individuals available for employment. "Labor turnover" refers to the rate at which workers leave and join a particular company or industry, which is also not synonymous with the working population as a whole.
Therefore, the working population is the term that correctly describes the number of qualified individuals who are available for employment.

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

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

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

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Financial intermediaries serve as links between surplus and deficit units in an economy. These intermediaries include banks, credit unions, and other financial institutions. When there is surplus money in the economy, individuals and businesses deposit the excess funds with financial intermediaries. These intermediaries then pool these funds together and make them available to deficit units, such as individuals or businesses in need of loans or financing. Financial intermediaries play a crucial role in the economy by efficiently allocating funds from surplus units to deficit units. They match the needs of borrowers with the resources of savers, helping to facilitate economic growth and development. Tax officers and pension offices, on the other hand, do not serve as direct links between surplus and deficit units. Tax officers collect taxes for the government, while pension offices manage pension funds for retired individuals. Although these entities may indirectly impact the allocation of funds in the economy, their primary roles are different from that of financial intermediaries. Acceptance houses are also not direct links between surplus and deficit units. Acceptance houses provide short-term financing through the purchase of bills of exchange. While they play a role in facilitating trade between businesses, their function is more specific and limited compared to the broader role of financial intermediaries. In summary, financial intermediaries such as banks and credit unions serve as the primary links between surplus and deficit units in an economy. They gather surplus funds from savers and make them available to borrowers, thereby promoting the efficient allocation of resources.

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

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The economic problem occurs when there is scarcity relative to demand. Scarcity means that resources are limited, while demand refers to people's desires and needs for goods and services. In simple terms, the economic problem arises when there are not enough resources to satisfy everyone's wants and needs. This is because resources, such as land, labor, and capital, are finite, while people's desires are infinite. For example, imagine a small community with a limited amount of food available. If everyone in the community wants to eat, but there is not enough food for everyone, it creates an economic problem. This scarcity can lead to competition, as individuals and businesses try to obtain the limited resources. The economic problem is not caused by raw materials being imported or people being out of work. These factors can contribute to a country's economic challenges, but they are not the direct cause of the economic problem. Similarly, the absence of buyers for goods is a symptom of the economic problem, rather than the cause. If people cannot afford or do not want to buy goods, it indicates a mismatch between supply and demand. However, this does not explain why the economic problem exists in the first place. In summary, the economic problem occurs when there is scarcity relative to demand, meaning there are not enough resources to fulfill everyone's wants and needs. This scarcity leads to competition and the need for individuals and businesses to make choices regarding resource allocation.

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Money can be defined as a medium of exchange that is universally accepted for buying goods and services. It enables people to easily trade with one another, without the need for bartering or trading directly with goods. In simpler terms, money is like a common language that everyone understands and uses to exchange things they want or need.

Money also serves as a settlement of debt because it allows individuals, businesses, and even governments to repay what they owe. When someone borrows money or takes a loan, they can later use money to pay back the lender. Similarly, if someone owes money to another person, they can use money to settle that debt.

Additionally, money is a medium of payment. It is used to complete transactions and make payments for goods and services. Whether you are buying groceries, paying for a movie ticket, or purchasing a new gadget, money is the common method of payment.

To summarize, money is a medium of exchange, settlement of debt, and medium of payment. It simplifies trade, enables the repayment of debts, and facilitates transactions in our daily lives.

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

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A quota on imports is a restriction imposed by a government on the quantity of goods that can be imported into a country. It is typically done to protect domestic industries and promote economic growth.

Out of the given options, a government imposing a quota on imports would not be done to decrease tax revenue. In fact, the purpose of implementing import quotas is quite the opposite – to increase tax revenue by protecting domestic industries and promoting their growth.

Let's understand this further:

1. To support strategic industry: One of the main reasons governments impose import quotas is to protect and support domestic industries that are considered strategically important for the country's economy. By limiting imports, the government aims to give domestic industries an advantage by reducing competition from foreign firms.

2. To prevent dumping: Dumping refers to the practice of selling goods in another country at prices lower than their production costs or market value. This undermines domestic industries and poses a threat to their survival. By imposing import quotas, the government can control the influx of dumped products and protect domestic industries from unfair competition.

3. To decrease tax revenue: This option is incorrect because imposing import quotas does not aim to decrease tax revenue. When imports are restricted, domestic industries have less competition, which allows them to charge higher prices. As a result, the government can collect more tax revenue from these higher-priced goods, thus increasing its overall revenue.

4. Employment opportunity: Another reason governments may impose import quotas is to create employment opportunities. By limiting imports, domestic industries can expand their production and hire more workers to meet the local demand. This helps in reducing unemployment and improving the overall economic conditions of the country.

In conclusion, the correct answer is that a government would not impose a quota on imports to decrease tax revenue. Import quotas are intended to protect strategic industries, prevent dumping, and create employment opportunities, while also increasing tax revenue.

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

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

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The type of economy that exists in these countries is Mixed economy.

A mixed economy is an economic system that combines elements of both market and planned economies. It includes both private and public sectors, and the government plays a significant role in regulating and defining the structure of the economy.

In the given scenario, the fact that the countries have different levels of public expenditure as a percentage of GDP indicates that the government plays a role in the economy and is involved in spending a portion of the national income.

While the exact percentage of public expenditure varies between the countries, the presence of any public expenditure suggests government intervention and regulation in the economy. This means that these countries have a mixed economy, where both public and private sectors coexist and contribute to economic activities.

The government's involvement can take various forms, such as funding public goods and services, implementing social programs, and regulating industries. The level of government intervention may vary, but the presence of public expenditure indicates that the government has an active role in shaping the economy.

Therefore, based on the information provided, it can be concluded that the countries mentioned in the table have a mixed economy.

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Point 'E" inside the graph indicates it is technologically inefficient" , Underemployed" or wide spread unemployent" or resources are not fully utilized or production inefficient"

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

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To calculate the elasticity of demand, we need to compare the changes in price and quantity demanded.
First, let's calculate the percentage change in price:
% change in price = ((new price - old price) / old price) x 100
% change in price = ((6 - 8) / 8) x 100
% change in price = (-2 / 8) x 100
% change in price = -25%
Next, let's calculate the percentage change in quantity demanded:
% change in quantity demanded = ((new quantity demanded - old quantity demanded) / old quantity demanded) x 100
% change in quantity demanded = ((30 - 20) / 20) x 100
% change in quantity demanded = (10 / 20) x 100
% change in quantity demanded = 50%
Now, let's calculate the elasticity of demand:
Elasticity of demand = % change in quantity demanded / % change in price
Elasticity of demand = 50% / -25%
Elasticity of demand = -2
The elasticity of demand is -2.
Explanation:
The negative sign in the elasticity of demand (-2) indicates that the demand for carrots is price elastic. This means that a decrease in price by 1% will lead to a more than proportionate increase in quantity demanded by 2%. In simpler terms, when the price of carrots decreased by 25%, the quantity demanded increased by 50%.
Therefore, the elasticity of demand is -2, which means that the demand for carrots is price elastic.

But since price elasticity is always represented with a positive number, the answer is 2

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

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

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

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

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

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

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

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

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The diagram above represent a monopolist diagram.

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The correct answer is labour productivity.
Labour productivity refers to the rate at which output is produced by a worker or a group of workers in a given amount of time. It measures how efficiently and effectively workers are using their skills, time, and resources to produce goods or services.
To understand this concept, let's imagine a scenario where we have two workers producing bicycles. Worker A is able to produce 5 complete bicycles in one hour, while Worker B can only produce 3 complete bicycles in the same amount of time.
In this case, Worker A has a higher labour productivity because they are able to produce more output (bicycles) per unit of time (one hour) compared to Worker B.
Labour productivity is an essential measure for companies and economies because it directly impacts their profitability and competitiveness. Higher labour productivity means that more goods or services can be produced using the same amount of resources or in less time. This leads to lower costs per unit and can result in higher profits or the ability to lower prices for customers.
In summary, labour productivity is a measure of how efficiently workers are producing goods or services and is calculated by dividing the total output by the number of workers or the amount of time it took to produce that output.

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Investment multiplier (K) is a function of two factors; The MPS and MPC. If MPC is high, K will also be high but if MPC is low, K will also be low. on the other hand, If MPS is high, K will be low and if MPS is low, K will be high ( since there is an inverse relationship between MPS and K).

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

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

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

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

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

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