JAMB UTME - Economics - 2000

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When market demand is elastic, it means that buyers are sensitive to changes in price. Therefore, if farmers increase their output, they will have to lower their prices to sell all their goods. As a result, their revenue will decrease because the decrease in price will not compensate for the increase in quantity. In contrast, when market demand is inelastic, buyers are less sensitive to price changes. In this case, if farmers increase their output, they can maintain or even increase their revenue by raising their prices, as the demand for their products remains relatively constant.

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Firms continue to employ workers until the wage rate equals the marginal revenue product of labor. The marginal revenue product of labor is the additional revenue generated by the firm from hiring one additional worker. The wage rate represents the cost of hiring that additional worker. In order to maximize profits, firms will continue to hire workers as long as the marginal revenue product of labor is greater than or equal to the wage rate. This is because each additional worker adds more revenue to the firm than their cost in wages. However, once the wage rate exceeds the marginal revenue product of labor, the cost of hiring an additional worker becomes greater than the revenue they generate, leading to a decrease in the firm's profits. Therefore, the firm will stop hiring workers at this point to avoid any further decrease in profits. In summary, the wage rate equals the marginal revenue product of labor when the firm hires the optimal number of workers that will maximize its profits.

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As a producer association, the OPEC (Organization of the Petroleum Exporting Countries) expects its members to maintain production where marginal cost is less than price. Marginal cost is the additional cost incurred by a company to produce one more unit of a product. In the case of OPEC, the marginal cost of producing one more barrel of oil is generally lower for its member countries due to their abundant oil reserves and favorable geological conditions. Therefore, OPEC expects its members to maintain production levels where the marginal cost of producing one more barrel of oil is less than the market price of oil. This allows member countries to maximize their profits while meeting the global demand for oil. If the marginal cost of producing one more barrel of oil is greater than the market price, it would not be profitable for OPEC members to continue production at that level. Conversely, if the marginal cost is equal to the market price, it would be at the break-even point and would not be profitable to continue production. Thus, the OPEC aims to maintain production levels where its member countries can maximize their profits while ensuring stability in the global oil market.

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To find the unit cost of the goods, we need to add the fixed cost and variable cost and divide by the number of units produced. Total cost = Fixed cost + Variable cost Total cost = N5,000 + N15,000 Total cost = N20,000 Unit cost = Total cost / Number of units produced Unit cost = N20,000 / 500 units Unit cost = N40.00 Therefore, the unit cost of the goods is N40.00.

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A persistent rise in the general level of prices, also known as inflation, implies a steady fall in the purchasing power of money. This means that as the general level of prices increases, the same amount of money can buy fewer goods and services than before, reducing the value of money. Therefore, inflation erodes the purchasing power of money over time.

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The major function of a wholesaler to his customers is "breaking of bulk." This means that the wholesaler purchases goods in large quantities from the manufacturer and then sells them in smaller quantities to retailers or other businesses. By doing so, the wholesaler helps the manufacturer by buying large quantities of goods at a time and distributing them to various retailers, thus saving the manufacturer the cost of distributing the goods themselves. At the same time, the wholesaler also helps the retailers by providing them with the goods they need in smaller quantities, which makes it easier and more affordable for them to purchase the products they need. In addition to breaking bulk, wholesalers may also provide additional services to their customers, such as transportation, storage, and credit.

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The combination of basic resource allocation questions in economic analysis involves the following: (i) What and how much will be produced? This question is related to the allocation of resources towards the production of goods and services. (ii) How will it be produced? This question pertains to the utilization of resources and technology to produce goods and services. (iii) For whom will it be produced? This question involves the allocation of the produced goods and services to consumers based on their needs and purchasing power. (iv) How much will be exported and consumed? This question relates to the allocation of goods and services towards exports or domestic consumption. Therefore, the combination of basic resource allocation questions in economic analysis is (i), (ii), and (iii), which involves the production of goods and services, the process of production, and the allocation of the produced goods and services to consumers. Option (iv) is also relevant but focuses specifically on the allocation of goods and services towards exports and domestic consumption, which is a subset of the broader resource allocation questions.

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The correct option is "Income, output and expenditure" and it is used for measuring national income. National income is the total amount of income earned by a country's citizens and companies in a given period of time, usually a year. To measure national income, economists use the income, output, and expenditure approach, also known as the GDP (Gross Domestic Product) approach. The income approach measures national income by adding up all the income earned by individuals and businesses in the country. This includes wages, salaries, profits, and rent. The output approach measures national income by adding up the total value of all goods and services produced in the country during a specific period of time, usually a year. The expenditure approach measures national income by adding up all the spending in the economy, including consumption, investment, government spending, and net exports. By combining these three approaches, economists can accurately measure the total national income of a country, which provides valuable information about the health of the economy and its growth over time.

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To calculate the exchange rate, we need to convert the cost of an ounce of gold in both currencies to a common currency. Let's choose the US dollar as our common currency. From the information given in the question, we know that: 1 ounce of gold = $60 (in the UK) 1 ounce of gold = ₦500 (in Nigeria) We need to convert the Nigerian Naira to US dollars to make a comparison. Let's assume that the exchange rate is X Naira per dollar. Therefore: 1 ounce of gold = $60 (in the UK) 1 ounce of gold = (₦500/X) dollars (in Nigeria) To find the exchange rate, we can equate the two expressions for the cost of 1 ounce of gold: $60 = ₦500/X Multiplying both sides by X, we get: $60 X = ₦500 Dividing both sides by ₦500, we get: X = $60 / ₦500 X = $0.12 per Naira Therefore, the exchange rate of the UK with Nigeria is $0.12 = ₦1.00

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In cooperative societies, voting power is based on the principle of "one member, one vote." This means that every member, regardless of the number of shares held or their status, has an equal say in the decision-making process. Therefore, the correct option is "equality of members."

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The Nigerian economy is mono-cultural because government revenue is derived mainly from crude oil. Crude oil is Nigeria's most important export and a major source of government revenue. Nigeria is one of the world's largest oil producers and exporter of crude oil, with the oil sector accounting for over 90% of the country's total export revenue and about 60% of government revenue. The high dependence on oil revenue has made the Nigerian economy vulnerable to fluctuations in oil prices and global demand. In times of low oil prices, the government struggles to generate sufficient revenue to fund its budget, which can lead to budget deficits, inflation, and a decline in the value of the national currency. Furthermore, the heavy reliance on oil revenue has also hindered the development of other sectors such as agriculture, manufacturing, and services. These sectors have not received adequate attention and investment from the government, resulting in limited growth and low productivity. In summary, the Nigerian economy is mono-cultural because of its over-dependence on crude oil as a major source of government revenue, which has made the economy vulnerable to external shocks and hindered the development of other sectors.

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Cardinal utility is a theory that argues that utility, which is a measure of satisfaction or pleasure that a consumer derives from consuming a good or service, is measurable and can be assigned numerical values. In other words, cardinal utility assumes that utility can be quantified in units or utils. This is in contrast to ordinal utility, which only ranks the preferences of consumers without assigning a specific numerical value to utility. Therefore, the answer to the question is that cardinal utility theory asserts that utility is measurable.

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One major problem in the marketing of agricultural products in Nigeria is the inadequate storage facilities. Due to the lack of proper storage facilities, a significant amount of crops produced by farmers are wasted and do not make it to the market. This results in a shortage of supply, leading to increased prices for consumers. In addition, the limited storage facilities also lead to a lack of price stability for the farmers, as they are forced to sell their products at lower prices when there is an oversupply and cannot store them for a later time when the price may be higher. This makes it difficult for farmers to plan and invest in their agricultural activities, and ultimately affects the entire agricultural value chain in Nigeria.

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Economics is the social science that studies how individuals, businesses, and governments make choices about the allocation of scarce resources. It involves analyzing how these different actors use their resources to produce goods and services, and how they distribute and consume these resources. Therefore, economics can be defined as the allocation of resources to alternative uses, as it focuses on the efficient use of limited resources to satisfy unlimited wants and needs. While it does consider the economic behavior of small units like households and firms, it also studies economic aggregates like inflation and national income. It is not related to the reduction in spending in the face of competing alternatives.

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Public debt is composed of internal and external debts. Internal debt refers to the amount of money that a government owes to individuals or organizations within its own country, while external debt refers to the amount of money that a government owes to individuals or organizations outside of its own country. Examples of internal debt include government bonds, treasury bills, and loans from local banks. Examples of external debt include loans from foreign governments, international financial institutions such as the World Bank and the IMF, and bonds sold to foreign investors. Money owed to local and foreign contractors or loans granted by IMF and ADB are specific types of external debt and are included in the overall composition of a country's public debt.

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Labor is an example of derived demand. Derived demand refers to the demand for a good or service that arises as a result of the demand for another good or service. In the case of labor, the demand for workers is derived from the demand for the goods or services that those workers help produce. For example, if a company sees an increase in demand for its products, it may need to hire more workers to meet that demand. Conversely, if demand for a company's products decreases, it may need to lay off workers. The demand for labor is therefore derived from the demand for the company's products. In contrast, tax relief, wage increase, and entertainment are not examples of derived demand. Tax relief is a form of government policy, wage increase is a labor market condition, and entertainment is a consumer good that is demanded directly by individuals.

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A primary industry is concerned with the extraction of natural resources from the earth in their raw state. This can include activities like mining, fishing, logging, and farming. The focus is on extracting resources directly from nature, rather than processing or manufacturing them into finished products. Primary producers are involved in these economic activities and may sell their products to secondary industries, which transform raw materials into finished goods. Clearing and cultivation of land may be a part of primary industry if it involves activities like farming or logging, but it is not the only focus.

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The terms of trade is the ratio of the index of a country's export prices to the index of its import prices. In this case, the index of export price is 70 and the index of import price is 50. To calculate the terms of trade, we divide the index of export price by the index of import price and multiply by 100 to get a percentage: Terms of trade = (Index of export price / Index of import price) x 100 Terms of trade = (70/50) x 100 Terms of trade = 1.4 x 100 Terms of trade = 140% Therefore, the terms of trade for this country is 140%. This means that the country's export prices have increased relative to its import prices. In other words, the country can now buy more imports with the same amount of exports.

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The concept of privatization refers to the transfer of ownership and control of public assets, such as companies or services, from the government to private individuals or companies. This transfer is usually done with the expectation that the private sector will manage the assets more efficiently and effectively than the government, resulting in cost savings and improved quality of service. Therefore, the concept of privatization presupposes efficiency, as it is based on the belief that the private sector can better manage resources and achieve better outcomes than the public sector. It is not related to marketing trade, indigenization or foreign trade.

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The age distribution of a country's population determines the ratio of the dependent to the working group. The age distribution of a population refers to the proportion of individuals in different age groups within a population. It is usually categorized into three groups: the young, the working-age, and the elderly. The young are generally considered to be under the age of 15, the working-age group is between 15 and 64 years old, and the elderly are those over 65 years old. The ratio of the dependent to the working group is determined by the age distribution of the population. The dependent group includes children under the age of 15 and elderly individuals over the age of 65 who are not in the workforce. The working-age group includes individuals between the ages of 15 and 64 who are in the labor force. If the age distribution of a population has a high proportion of individuals in the dependent group relative to the working-age group, then the ratio of dependents to workers will be high. This can put a strain on the economy as there are fewer workers available to support the dependent population through taxes and other forms of financial support. On the other hand, if the age distribution of a population has a low proportion of individuals in the dependent group relative to the working-age group, then the ratio of dependents to workers will be low. This can be beneficial to the economy as there are more workers available to support the dependent population. Therefore, the age distribution of a country's population is an important factor in determining the ratio of the dependent to the working group, which can have significant implications for the economy and society as a whole.

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If the supply of commodity II increases from S1S1 to S2S2, it will lead to a fall in price from OP1 to OP2. This is because when the supply of a commodity increases, there is more of it available in the market. As a result, buyers have more options and sellers may have to lower their prices to attract customers. This shift in supply causes the supply curve to shift to the right, intersecting the demand curve at a lower price point. This means that the equilibrium price of the commodity will decrease from OP1 to OP2, resulting in a decrease in the price of the commodity.

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