JAMB UTME - Economics - 2023

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The monopolist can charge P2 price and still make profit as long as he covers his AVC. Any price below price P2, the monopoly will run at loss or shut down.

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The causes of overpopulation are: falling mortality rate, underutilized contraception, lack of female education etc.

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The Marginal Utility is the additional satisfaction a consumer gains from consuming one more unit of a good or service. It can be calculated by subtracting the total utility of the previous consumption from the total utility of the current consumption. In this case, the total utility of consuming 2 oranges is 16 and the total utility of consuming 1 orange is 9. Therefore, the marginal utility (X) of the second orange is 16 - 9 = 7.

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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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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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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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Labour is by far the most common of the factors used in measuring productivity. One reason for this is, of course, the relatively large share of labour costs in the value of most products.

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Part-time workers who desire full-time employment are classified as underemployed and contribute to the unemployment statistic.
Underemployment refers to a situation where individuals are working fewer hours than they would like or in jobs that do not utilize their skills and qualifications fully. In this case, part-time workers who desire full-time employment are considered underemployed because they are not able to secure the desired amount of work hours.
These underemployed workers contribute to the unemployment statistic because they are actively seeking additional work hours to meet their employment needs. They are considered part of the labor force because they are willing and available to work more hours, but they have not been able to find full-time employment.
It is important to note that not all underemployed workers contribute to the unemployment statistic. Some may choose to work part-time for personal reasons, such as family responsibilities or pursuing education. These individuals, although underemployed, are not actively seeking additional work hours and therefore do not contribute to the unemployment statistic.
However, in the case of individuals who are part-time workers and desire full-time employment, their underemployment status reflects the inadequacy of available job opportunities. They increase the count of unemployed individuals because they are willing and actively searching for additional work.
It is worth mentioning that cyclical unemployment is a different type of unemployment. It occurs when there is a downturn in the economy, causing a decrease in overall demand for goods and services, and subsequently, a decrease in the demand for labor. Cyclical unemployment is not directly related to the part-time workers' desire for full-time employment.

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When a generalization is made based on observed facts, it is called inductive reasoning. Inductive reasoning involves drawing conclusions from specific instances or examples to come up with a general statement or theory. This means that we observe a pattern or trend from the evidence we have and then make a generalization or inference based on that pattern. Inductive reasoning is different from deductive reasoning, which involves starting with a general statement or theory and then using it to predict or explain specific instances. In inductive reasoning, we start with specific observations and use them to make a broader generalization. It is important to note that while inductive reasoning can often lead to accurate conclusions, it is not always guaranteed to be correct. However, it is a common and useful method used in many fields such as science, sociology, and psychology.

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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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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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The quantity of a commodity that a consumer is willing and able to buy at a particular time is called demand.
Demand refers to the consumer's desire or willingness to purchase a specific product or service at a given price and at a given time. It represents the customer's intent to buy and the amount they are willing to buy at various price levels.
It is important to note that demand is not just about the desire for a particular item, but also the consumer's ability to pay for it. For example, someone may wish or desire to buy a luxury car, but if they do not have the financial means to afford it, their demand for that car is limited.
In summary, demand is the quantity of a commodity that a consumer is both willing and able to buy at a given time, reflecting their desire for the product and their ability to pay for it.

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The Gross Domestic Product is the total monetary or market value of all the goods and services produced within a country. It is used to measure the rate of growth in an economy.

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A persistence rise in the prices of inputs, such as raw materials or labor, can lead to **cost push inflation**. Cost push inflation occurs when the increased costs of production for firms are passed on to consumers in the form of higher prices for goods and services. This can happen when the prices of inputs used in production rise over a sustained period. When input costs increase, businesses often have two options: absorb the increased costs and accept lower profit margins, or pass on the higher costs to consumers by raising prices. If firms choose to raise prices, it can lead to a general increase in the overall price level in the economy. Here's a simple example to help illustrate this concept: Let's say there is a town where the main industry is manufacturing shoes. The cost of leather, which is a key input in shoe production, starts to rise due to factors like high demand or scarcity. In response, shoe manufacturers have to pay more for leather, and this increases their production costs. To maintain their profit margins, the manufacturers decide to increase the prices of shoes they sell to retailers. Now, if the retailers decide to pass on the higher costs to the consumers, the prices of shoes will increase. This can create a ripple effect throughout the economy because consumers will have to spend more money on shoes, reducing their purchasing power for other goods and services. As a result, the overall price level in the economy increases, and this is what we call cost push inflation. It is important to note that cost push inflation is different from demand pull inflation. Demand pull inflation occurs when there is an increase in aggregate demand, leading to an excess of demand over supply. In contrast, cost push inflation is driven by increased production costs. Hyperinflation, on the other hand, is an extreme form of inflation characterized by an uncontrollable increase in prices. It is typically caused by factors like rapid money supply growth or loss of confidence in the currency. Stagflation refers to a situation where there is a combination of high inflation and high unemployment, typically accompanied by low economic growth. This can occur when an economy experiences a supply-side shock, such as a significant increase in the prices of key inputs. In summary, a persistence rise in the prices of inputs can lead to cost push inflation, as firms pass on the increased costs to consumers by raising prices.

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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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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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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 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 principle that specifies that the amount, when, and how to pay tax should be made known to the taxpayer is known as the Principle of Certainty. This principle ensures that taxpayers have a clear understanding of their tax obligations, which includes knowing the amount of tax they owe, the deadline for payment, and the method of payment.
The Principle of Certainty is important because it promotes transparency and accountability in the tax system. By providing clear and specific information to taxpayers, it enables them to accurately calculate and plan for their tax obligations. This helps to avoid confusion or misunderstandings between the taxpayer and the tax authorities.
Furthermore, the Principle of Certainty also ensures fairness and consistency in the tax system. By clearly stating the rules and requirements, it ensures that all taxpayers are treated equally and that there is no ambiguity or room for arbitrary decisions in the tax assessment process.
Overall, the Principle of Certainty provides a solid foundation for the relationship between taxpayers and tax authorities. It establishes clear expectations, promotes compliance, and adds credibility to the tax system.

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The causes of balance of payment deficit are: low level of agriculture, low level of technological development, inadequacies in export promotion strategy, political instability, poor social and economic infrastructure, servicing of huge external debts, existence of import dependent industries etc.

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

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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.

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The type of price elasticity of demand for a commodity whose quantity demanded remains unchanged despite changes in the price is **perfectly inelastic**. When the demand for a commodity is perfectly inelastic, it means that the quantity demanded does not respond at all to changes in price. This usually occurs when there are no close substitutes for the commodity, or when the commodity is a necessity that people cannot easily do without. To understand it in a simple way, imagine a situation where the price of a life-saving medication for a critical illness increases significantly. In such a case, even if the price increases, the quantity demanded for the medication will remain the same because the individuals who need it have no other option but to purchase it at any cost. Therefore, the demand for such a medication is perfectly inelastic, as it does not change with variations in price. In summary, when the demand for a commodity is perfectly inelastic, it means that consumers are willing to pay any price for it, and the quantity demanded does not change despite fluctuations in price.

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A normal demand curve slopes downward from left to right indicating at higher price, less quantity will be demanded and vice versa.

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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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Cost push inflation occurs when overall prices increase(inflation) due to increases in the cost of wages and raw materials. It can also occur when higher costs of production decrease the aggregate supply in the economy.

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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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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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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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Public corporations are run by the government through the tax paid by the people. They are established by an act of parliament or decree and it is controlled by the board of directors, appointed by the government.

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A tariff is a tax that is imposed on imported goods. It is a financial charge that a government puts on goods that are being brought into the country. The purpose of a tariff is to protect domestic industries and businesses from competition from imported goods. By placing a tax on imported goods, it becomes more expensive for consumers to buy those goods, making them less appealing compared to domestic alternatives. This gives domestic industries a competitive advantage and helps support local businesses and jobs. So, the correct answer is imported goods.

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Investment is an activity of spending resources on creating assets that can generate income over a long period of time. It is flow of expenditures developed to projects producing goods which are intended for immediate consumption.

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The decision to consume more of one product under normal circumstances will **result in less consumption of another product**. When we have a limited amount of resources, we can only allocate them in certain ways. This is true for both individuals and businesses. If we choose to consume more of one product, it means we are using some of our resources to produce more of that product. As a result, we have less resources available to produce or consume other products. Let's take an example to understand this concept better. Suppose you have $10 to spend on food, and you can either choose to buy more fruits or more vegetables. If you decide to buy more fruits, it means you are allocating more of your budget towards fruits. As a result, you will have less money left to buy vegetables. On the other hand, if you decide to buy more vegetables, it means you are allocating more of your budget towards vegetables, and you will have less money left to buy fruits. Similarly, in a market economy, if consumers decide to buy more of one product (like smartphones), the demand for that product increases. This leads to an increase in production and consumption of smartphones. However, the resources used to produce smartphones are limited. Therefore, the production of other products (like laptops or tablets) may decrease because fewer resources are available to produce them. In conclusion, when the decision is made to consume more of one product, it generally means that less of another product will be consumed. This is because resources are limited and need to be allocated among different options.

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The measure that is presently used in Nigeria to measure inflation is the Consumer Price Index (CPI). The CPI is a commonly used indicator worldwide to track changes in the cost of living over time.
The Consumer Price Index (CPI) measures the average price changes of a basket of goods and services typically purchased by households in a specific country or region. It reflects the price movements of essential items such as food, housing, transportation, healthcare, education, and many other goods and services that people consume regularly.
The CPI is calculated by collecting price data for various items in the basket and assigning them weights based on their relative importance in household spending. The prices are then compared to a base period, which is usually a specific year. The percentage change in the CPI from the base period indicates the rate of inflation or deflation.
In Nigeria, the CPI is used to monitor and analyze changes in the cost of goods and services, allowing policymakers and economists to assess the impact on consumers' purchasing power and make informed decisions. It helps in determining the effectiveness of government policies, evaluating the performance of the economy, and adjusting wages and prices.
By tracking the CPI, the government can identify if there is an increase in the general level of prices, indicating inflation, or a decrease, indicating deflation. This information helps in formulating monetary and fiscal policies to control inflation rates and maintain price stability.
Overall, the Consumer Price Index (CPI) is the measure currently used in Nigeria to gauge inflation and is crucial in understanding how the cost of living changes over time, impacting the economy and the daily lives of individuals and businesses.

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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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Based on the graph, the consumer is at equilibrium at point k.

Equilibrium is when the quantity demanded by the consumer is equal to the quantity supplied by the market. At equilibrium, there is no shortage or surplus of the goods or services.

Point k on the graph represents the intersection of the demand curve (D) and the supply curve (S). At this point, the quantity demanded (Qd) and the quantity supplied (Qs) are equal.

If the consumer is at any other point on the graph, either to the left or to the right of point k, there would be either a shortage or a surplus of the goods or services. This would mean that the demand and supply are not in balance and the market is not at equilibrium.

Therefore, point k is the correct answer as it represents the position where the consumer is at equilibrium.

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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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Business cycle are intervals of expansion followed by recession in economic activity. It is characterized by general upswings and downturns in a span of macroeconomics variable.