JAMB UTME - Economics - 2024

Awọn alaye Idahun

A producer who can influence the price of a product but cannot determine the quantity to be sold is best described as a monopolist.

Here's an explanation:

In a monopoly, there is only one producer or seller who dominates the entire market for a particular product or service. This producer has the power to influence the price because they are the sole supplier, and there are no close substitutes. However, while they can set the price based on their objectives, the actual quantity sold is determined by the market demand at that specific price.

The other terms are different:

• Duopoly refers to a market structure where there are two dominant producers. Here, each producer needs to consider the other's actions before setting prices or quantities.
• Monopsonist is a scenario where there is only one buyer, not one seller.
• Oligopoly refers to a market structure where a small number of firms have significant control. Firms in an oligopoly influence prices but must consider the reactions of other firms.

Awọn alaye Idahun

In this scenario, the price of rice has increased relative to the amount of money (N1,250) that could be used to purchase it. Initially, N1,250 could buy two bags of rice, but after two weeks, the same amount can only buy one bag.
This decrease in purchasing power demonstrates that the value of money has declined. In other words, the same amount of money can now buy fewer goods or services than before. This situation is often referred to as inflation, where the general price level of goods and services rises over time, reducing the purchasing power of money.

Awọn alaye Idahun

If the price of commodity X increases and consumers start purchasing commodity Y instead, then commodities X and Y are considered substitutes. Substitutes are goods that can be used in place of one another; when the price of one goes up, consumers naturally shift their demand to the other because it serves a similar function or purpose.
Consider an example: if the price of coffee goes up, people might start drinking tea instead if tea serves as a similar alternative for their morning beverage needs. In this scenario, coffee and tea are substitutes. Therefore, the relationship between these goods is defined by consumers' ability to consider one in place of the other based on price.
In summary, when consumers replace their consumption of one good with another due to price change, the goods in question are substitutes.

Awọn alaye Idahun

The correct order in the chain of distribution is: Producer → Wholesaler → Retailer → Consumer.

Let's take a closer look at each stage in this sequence:

Producer: This is the first stage where the initial product is manufactured or created. The producer could be a manufacturer or a farmer, or anyone who creates goods or services to be sold.

Wholesaler: After the producer creates the goods, they typically sell them in large quantities to a wholesaler. The wholesaler buys in bulk and often offers products at a lower price, allowing them to distribute to various retailers.

Retailer: The wholesaler then sells these products to retailers. Retailers have stores or online platforms where consumers can purchase products in smaller quantities. Retailers make these products accessible to the general public.

Consumer: Finally, the consumer is the person or entity that purchases and uses the product. This is the last step in the distribution chain, where the goods reach their intended end-users.

This sequence ensures that goods move efficiently from creation to the hands of consumers through different intermediaries, making the distribution process systematic and effective.

Awọn alaye Idahun

In the given equation Q = a - bp + e, we need to understand the roles of the variables Q and P.

In any equation where we are trying to establish a relationship between two variables, one of the variables is usually controlled or changed deliberately, while the other one is observed as it changes in response. In such equations:

• The **independent variable** is the one that you control or change to see how it affects another variable. It is like the **cause** or **input**.
• The **dependent variable** is the one that changes as a result of the changes in the independent variable. It is like the **effect** or **output**.

In the equation Q = a - bp + e, **Q** is the outcome or result that we observe, and it depends on the value of **P**. Thus, **Q is the dependent variable** because it changes depending on the values of **P**. Conversely, **P** is the one that we can change or manipulate in the context of this equation, so **P is the independent variable**.

Therefore, the correct description for **Q** and **P** is that Q is the **dependent** variable, and P is the **independent** variable.

Awọn alaye Idahun

Nigeria, like many developing countries, faces several challenges in its development planning. These include issues such as inadequate capital, which limits the ability to fund critical development projects and infrastructure, thus hindering economic growth. Another significant challenge is the inadequate statistical data, which affects the ability to make informed, evidence-based policy decisions. Without reliable data, it's difficult to plan effectively and measure progress.

Poor implementation of economic planning is also a notable problem, as even the best-laid plans cannot yield results if not properly executed. This might be due to bureaucratic inefficiencies, corruption, or lack of capacity.

However, the statement under-population is not a commonly recognized problem in Nigeria. In fact, Nigeria is known for having a large and rapidly growing population, which sometimes poses its own challenges in terms of resource management and service provision. Therefore, the issue of under-population can be seen as an exception to the typical problems of development planning in Nigeria.

Awọn alaye Idahun

Factors of production are the inputs used to produce goods and services in an economy. The main factors of production include land, labor, capital, and entrepreneurship. Each of these factors receives a specific reward or return:

• Land: The reward for using land as a factor of production is rent. Rent is the payment made for the use of land or real estate resources.
• Labor: The reward for labor is typically in the form of wages or salaries. It represents the compensation paid to workers for their productive efforts.
• Capital: The reward for capital, which includes machinery, tools, or financial capital used in production, is interest. It is the return on investment for using capital resources.
• Entrepreneurship: The reward for entrepreneurship, which involves the risk-taking and organization of other factors of production, is profit. Profit is the financial gain realized by entrepreneurs for their ventures.

The term subsidy is generally not a reward for factors of production. A subsidy is a financial assistance granted by the government to individuals or businesses to support activities, promote economic growth, or reduce the cost of certain goods and services. It is not directly linked to any of the classical factors of production.

In conclusion, while profit, rent, and interest are returns directly associated with factors of production, a subsidy is not. It serves a different purpose in economic policy.

Awọn alaye Idahun

The United Nations Conference on Trade and Development (UNCTAD) is a UN body that focuses on trade and development issues, particularly those affecting developing countries. One of the functions of UNCTAD is to facilitate the transfer of technology from developed to less developed countries. This involves promoting the dissemination and adoption of technology in less developed countries to enhance their productive capacities, economic growth, and development.
UNCTAD recognizes that technology plays a crucial role in bridging the development gap between countries. By facilitating the transfer of technology, UNCTAD aims to enable developing countries to access and utilize advanced knowledge, skills, and technological innovations available in developed countries. This transfer of technology can occur through various means such as technical assistance, capacity building, knowledge sharing, and promoting partnerships between developed and developing countries.

Awọn alaye Idahun

The concept you are referring to is effective demand. Let me explain it to you in a straightforward way:

Demand: Generally, demand refers to the desire or willingness of a consumer to purchase goods or services. However, just having the desire is not enough. Demand becomes impactful only when it is supported with the capability to purchase.

Effective demand: This is more than just a simple desire or demand. It represents the situation where an individual not only wants to purchase a product or service but also has the actual purchasing power to do so. This means they have the money or resources to back up their desire at a given time.

Desire: This term simply denotes a wish or want, without any implication of capability to fulfill it. For instance, many people might desire a luxury car, but not everyone can afford it.

Utility: This is a different concept entirely, referring to the satisfaction or benefit a consumer receives from consuming a product or service. It does not necessarily align with the ability to purchase.

In summary, when discussing the willingness to buy something and having the funds ready at that moment, it's referred to as effective demand because it combines the desire with the actual capacity to fulfill that desire.

Awọn alaye Idahun

In Nigeria, marketing boards were established to regulate and promote agricultural products. Their primary functions include activities like grading farm produce to ensure quality standards and marketing farm produce by finding markets where these products can be sold. They are also responsible for fixing prices for farm produce to stabilize farmers' incomes and protect them from market fluctuations.

However, one activity that marketing boards do not typically perform is the importation of farm produce. Marketing boards are mainly concerned with the domestic production and distribution of local agricultural products, whereas the importation would fall under international trade domains and different regulatory agencies. Thus, the importation of farm produce is not a usual function of marketing boards in Nigeria.

Awọn alaye Idahun

The level of consumption generally refers to the amount of goods and services that households are willing and able to purchase. This can be influenced by several factors:

Level of Income: The more income people earn, the more they can spend on goods and services, which directly affects consumption levels. With higher income, households typically increase their consumption.

The Rate of Taxes Paid: Taxes directly impact disposable income, which is the income available after tax deductions. Higher taxes reduce disposable income and may lead to lower consumption, while lower taxes increase disposable income and can potentially boost consumption.

Savings: When households allocate a portion of their income to savings, this reduces the immediate level of consumption. Therefore, high levels of savings can indicate lower levels of consumption.

The Political Climate: Although the political climate can affect the economy in various ways, it is generally not a direct and immediate determinant of consumption levels. The political climate can influence factors like economic stability and government policies, but it is not a direct factor in determining how much households consume.

Based on these explanations, the factor that determines the level of consumption the least is the political climate, because its effects are indirect and less immediate compared to the direct effects of income, taxes, and savings on consumption.

Awọn alaye Idahun

The recent revolution of cassava from an ordinary food crop to an export crop is likely to lead to an increase in the price of cassava products.
When cassava transitions from being primarily used as a food crop to an export crop, its demand and value in the international market tend to increase. This increased demand can result in higher prices for cassava products such as cassava flour, starch, or other processed derivatives.

Awọn alaye Idahun

In any economy, the problem of "how to produce" is essentially about deciding the best way to combine resources to produce goods and services. This challenge can be effectively addressed by adopting the least cost method of production.

Here’s why:

• Objective: The key objective for any economy is to produce goods and services efficiently, using the least amount of resources possible, while maximizing output. This ensures that the resources, which are often limited, are utilized in the most productive way.


• Resource Allocation: By focusing on the least cost method, producers aim to determine the proportion of capital (like machines, tools, and buildings) and labor (human effort) that should be used to minimize costs and maximize profits. This can involve a mix of both capital and labor-intensive methods depending on which combination minimizes production costs.
• Flexibility: The least cost method is iterative and allows for adjustments based on changes in resource availability, technological advancements, and shifts in market conditions, ensuring the production process remains cost-effective and competitive.


• Consumer Benefits: When producers focus on minimizing costs, they can offer products at lower prices, making goods and services more affordable for consumers, which can increase demand and boost the overall economy.

In summary, while other methods and managerial skills are important, addressing how to produce in the most efficient and effective way often boils down to using the least cost method of production, thereby ensuring optimal resource use and economic stability.

Awọn alaye Idahun

Competitive demand refers to a situation where two or more goods are seen as substitutes for each other. When the pric of one commodity increases, consumers tend to shift their demand towards the substitute commodity, resulting in a decrease in the demand for the original commodity.
For example, if the price of coffee increases significantly, some consumers may choose to switch to tea as a substitute. A: a result, the demand for coffee decreases while the demand for tea increases.

Awọn alaye Idahun

A price floor is a **minimum price** set by the government for a particular good or service. It is designed to ensure that the price is not too low, often supporting producers by maintaining their income at a viable level.

For a price floor to be effective, it is usually fixed **above the equilibrium price.** Here's why:

• **Equilibrium Price** is where the supply of a product equals the demand for that product. It is the point at which the market is said to be in balance.
• When a price floor is set **above the equilibrium**, it means that the price consumers are willing to pay is less than the price producers are willing to accept. This leads to a decrease in quantity demanded by consumers since the price is too high for them.
• Thus, producers end up with **more goods available than what consumers are buying**, creating a **surplus**. This surplus occurs because the set price is prohibiting the market from reaching its natural balance or equilibrium.

Therefore, a price floor is usually fixed **above the equilibrium and causes surpluses.** This allows it to serve its purpose of protecting producer revenues while potentially benefiting certain industry stakeholders.

Awọn alaye Idahun

When analyzing the objectives of OPEC (Organization of the Petroleum Exporting Countries), it is important to look at the core goals that this organization typically aligns with:

1. To stabilize the price of oil in the world market: This is indeed one of the primary objectives of OPEC. By coordinating the oil production levels among its members, OPEC strives to maintain oil price stability in the global market.

2. To stabilize the revenue from oil to producing countries: Another key objective of OPEC includes ensuring consistent and fair revenue for its oil-producing member countries. By influencing oil prices and production levels, OPEC helps in maintaining stable revenues for these nations.

3. To make sure that oil flows to all the consuming countries: Ensuring the continuous supply of oil to consuming countries is a goal aligned with OPEC's efforts to balance supply and demand for economic and energy stability worldwide.

4. To establish petroleum refineries in all member states: This is NOT among the objectives of OPEC. OPEC does not focus specifically on establishing petroleum refineries in all its member states. The organization's primary focus is on coordinating and unifying the petroleum policies among its member countries, not on the physical establishment of refineries.

Awọn alaye Idahun

The stock exchange market primarily deals with the sales of second-hand securities. In this context, "second-hand securities" refer to financial instruments such as stocks and bonds that have already been issued by a company and are currently being traded among investors. When a company first issues stocks or bonds, it is done in the primary market. Once these securities are purchased and then resold by investors, they are traded in the secondary market, commonly known as the stock exchange.

Here's a simple rundown of how it works:

1. **Initial Offering:** A company looking to raise capital might issue stocks or bonds to investors. This takes place in the primary market through an Initial Public Offering (IPO) or similar mechanisms.

2. **Secondary Trading:** Once issued, these securities can be bought and sold on the stock exchange. Investors trade these securities based on supply and demand, trying to make a profit by buying low and selling high.

Therefore, the stock exchange acts as a platform where buyers and sellers meet to trade these second-hand securities. This buying and selling provide the liquidity required for the market to function efficiently and helps in price discovery of the securities based on market demand.

Awọn alaye Idahun

The combination of two goods which a consumer derives equal satisfaction from is plotted on a graph known as an indifference curve. This graph represents all the different combinations of two goods that provide the consumer with the same level of utility or satisfaction.

For instance, if a consumer is equally happy with either 3 bananas and 2 apples or 2 bananas and 3 apples, both points will lie on the same indifference curve.

The reason it's called an indifference curve is because the consumer is indifferent between any two points on this curve, meaning they have no preference for one combination over the other since both provide the same level of satisfaction.

Unlike a demand curve which shows the quantity of a good that consumers are willing and able to purchase at various prices, the indifference curve focuses solely on the level of satisfaction from different combinations of goods, without considering their prices directly. It is an essential concept in the study of consumer behavior and helps understand how consumers make choices between different goods.

Awọn alaye Idahun

When a joint-stock company goes bankrupt, the owners or shareholders of the company only lose the capital they invested in that company. This is because joint-stock companies have a feature known as **limited liability**.

Limited liability means that shareholders are only responsible for losses up to the amount of money they invested in purchasing shares of the company. Therefore, in a bankruptcy situation, they **lose only the capital invested**, and their personal or private assets (like cars, houses, or bank accounts) are protected and not at risk. They are not liable beyond their shareholding, hence they do not lose their private properties or any future dividends they were expecting.

This feature of limited liability is very important as it encourages people to invest in joint-stock companies without the fear of losing their personal wealth.

Awọn alaye Idahun

When the price of a product decreases, consumers are generally willing to buy more of it. As a result, the quantity demanded increases. However, since each unit is sold at a lower price, the decline in price outweighs the increase in quantity, leading to a decrease in total revenue (total revenue = price x quantity). This is why a downward sloping demand curve indicates that the total revenue declines as the price is lowered.

Awọn alaye Idahun

Economic planning is an important policy tool used by governments to coordinate their efforts in improving the nation's economy. Let's look at the objectives:

Equitable allocation of resources: This is indeed an objective of economic planning. It ensures that resources are distributed evenly across different sectors and regions to promote balanced development and reduce regional disparities.

Achieving economic growth: Another key objective of economic planning is to spur economic growth. This involves increasing the capacity of the economy to produce goods and services, enhancing the standard of living, and elevating the overall wealth of the nation.

Creating employment: Economic planning aims to create jobs for the population. By fostering industries and fostering investment, economic planning attempts to reduce unemployment rates and provide more job opportunities.

Widening the income gap: This is NOT an objective of economic planning. Economic plans generally aim to reduce, not widen, the income gap between different segments of society. A widening income gap can lead to increased poverty and social unrest, which are contrary to the goals of economic planning focused on promoting equality and social harmony.

Awọn alaye Idahun

The formula (N + 1)/2 is used to determine the median position in a dataset that is arranged in ascending or descending order. Understanding how to find the median is important because the median is a measure of central tendency that represents the middle value of a dataset. Here's a clear explanation of this concept:

When you have a set of numbers, the median is the number that falls in the middle when the numbers are arranged in either increasing or decreasing order. To find this middle value, you can use the formula (N + 1)/2, where N represents the total number of observations in the dataset.

For example, let's say you have a dataset with an odd number of observations: 3, 5, 7. Here, N is 3, so you apply the formula:

Median position = (3 + 1)/2 = 2

This calculation indicates that the second number in this ordered list is the median, which is 5.

If you have an even number of observations, such as 2, 4, 6, 8, you would calculate the median position as follows:

Median position = (4 + 1)/2 = 2.5

In this case, because 2.5 isn't an integer, the median is the average of the second and third numbers, which are 4 and 6. Therefore, the median is (4 + 6)/2 = 5.

In summary, the formula (N + 1)/2 is used to identify the position of the median in a list of numbers that are ordered, allowing us to understand where the middle point of the data lies.

Awọn alaye Idahun

In a free market economy, multiple producers are allowed to enter the market and compete with each other. This competition creates incentives for producers to become more efficient in order to gain a competitive advantage. When producers compete, they strive to offer better quality products, lower prices, and improved customer service. To achieve these goals, they need to find ways to reduce costs, increase productivity, and innovate. The pressure of competition encourages producers to constantly improve their efficiency to attract customers and maximize profits

Awọn alaye Idahun

The system of farming that involves the use of a large hectare of land planted with economic crops is known as plantation farming.

Explanation: Plantation farming is an agricultural system where a single crop is grown extensively over a large area. This system is specifically designed for the cultivation of high-demand crops, often termed as "economic crops," because they are produced for their commercial value rather than for direct consumption by the farmers. Such crops include coffee, tea, rubber, sugarcane, cotton, and palm oil.

Key Characteristics of Plantation Farming:

• Large-scale production: Plantation farms occupy vast expanses of land to maximize the output of a single type of crop.
• Monoculture: Typically, a single crop is cultivated, allowing specialization and efficiency in farming practices.
• Commercial orientation: The primary goal is to produce crops for sale, often aiming at international markets.
• Use of advanced techniques: Plantation farming often employs modern agricultural techniques, such as mechanization, irrigation, and the use of fertilizers and pesticides, to enhance productivity.
• Capital intensive: There is a significant investment in both infrastructure and labor to manage the large scale of operations.

In contrast, smaller or subsistence farmers often engage in diverse cropping systems with multiple types of plants cultivated for personal or local consumption. Plantation farming, on the other hand, is designed to produce large quantities of a specific, economically valuable crop to meet regional or global demands.

Awọn alaye Idahun

Holding money to take care of contingencies is known as the precautionary motive.

Let me explain this further in a simple way:

• Imagine you keep aside some money for unexpected events, such as medical emergencies, car repairs, or other sudden expenses that might occur. This act of saving money for unforeseen needs is called the precautionary motive.
• The main purpose here is to have money on hand to tackle emergencies or any sudden need without having to struggle or sell other assets quickly.
• This behavior is different from having money for regular expenses, which is known as the transactions motive, where the money is kept for day-to-day spending like groceries and bills.
• It is also different from speculative motive, where money is held to take advantage of future investment opportunities.
• Lastly, expansionary motive typically relates to policy measures encouraging broader economic growth and isn't directly about individual money-holding behavior for emergencies.

Awọn alaye Idahun

The relationship shown in the diagram is most likely related to the **wage rate and unemployment.** Let me explain this relationship clearly:

The **wage rate** refers to the payment workers receive for their labor, typically expressed on an hourly, daily, or yearly basis. The **unemployment rate** is the percentage of the labor force that is jobless and actively looking for work.

When the **wage rate** offered in the market is above the equilibrium wage (where the supply of labor equals the demand for labor), firms may choose to hire fewer workers as it becomes more expensive to employ labor. This can lead to an **increase in unemployment**. Conversely, if the wage rate is lower, firms are more likely to hire additional workers, possibly decreasing unemployment.

Understanding this relationship is crucial in comprehending how wage policies can influence employment levels. Wage increases that are not aligned with productivity may result in higher costs for employers, potentially resulting in a reduction of jobs available, hence increasing unemployment. Therefore, there is a delicate balance between setting wage levels and maintaining employment levels in the economy.

Awọn alaye Idahun

Economics problems arise in all societies primarily because resources are not in adequate supply. This is known as the fundamental economic problem of scarcity. In every society, there are limited resources but unlimited wants and needs. These resources include things like land, labor, and capital, which are necessary for producing goods and services. Since we do not have enough of these resources to satisfy everyone's desires, we face choices about how to allocate them efficiently.

The issue of scarcity leads to other economic problems such as deciding what to produce, how to produce it, and for whom it should be produced. These decisions are made by assessing opportunity costs and considering how to make the best possible use of the limited resources available.

While factors such as lack of proper planning or mismanagement by leaders can exacerbate economic problems, they are not the root cause. The core issue remains the limited availability of resources, compelling societies to prioritize and decide how best to meet the needs of their population.

Awọn alaye Idahun

The Production Possibility Curve (PPC) is a graphical representation that shows the different combinations of two goods or services that an economy can produce, given certain assumptions like fixed resources and technology.

The trade-off between two commodities along the PPC primarily illustrates the opportunity cost principle. This principle refers to the idea that in order to produce more of one good, an economy must produce less of another good. The curve demonstrates this trade-off by showing that resources are limited, and choosing to allocate more resources to produce one commodity means reallocating those resources away from another commodity.

For example, if an economy is at a certain point on its PPC and decides to produce more of Commodity A, it will inevitably end up producing less of Commodity B. This reduction in the production of Commodity B is the opportunity cost of producing more of Commodity A. Hence, every point along the PPC illustrates the trade-off and opportunity cost of choosing different production levels of the two goods.

Awọn alaye Idahun

To find the median of a set of numbers, the first step is to arrange the numbers in ascending order (from smallest to largest).

The given numbers are: 14, 13, 29, 15, 13, 17, 12.

Arrange them in ascending order: 12, 13, 13, 14, 15, 17, 29.

The median is the number that appears in the middle of this ordered list. Since there are 7 numbers in this list, the middle number is the fourth one.

In the ordered sequence 12, 13, 13, 14, 15, 17, 29, the median is 14.

Awọn alaye Idahun

The expenditure approach is a common method used to calculate the national income, specifically the Gross Domestic Product (GDP) of a country. This approach sums up all expenditures or spending in the economy.

The correct formula for the expenditure approach is: Y = C + I + G + (X - M), where:

• C stands for Consumption: This is the total value of all goods and services consumed by households within the economy. It includes expenditures on items such as food, clothing, housing, and other personal expenses.
• I stands for Investment: This includes spending on capital goods that will be used to produce other goods and services in the future, such as machinery, buildings, and inventory.
• G stands for Government Spending: This is the total expenditure by the government on goods and services, including public sector salaries, defense, education, and infrastructure projects.
• (X - M) stands for Net Exports: This is calculated as total exports (X) minus total imports (M). Exports are goods and services sold to other countries, while imports are those bought from other countries. By subtracting imports from exports, we determine the net trade effect on the economy.

Putting it all together, this formula helps to calculate the total economic activity within a country by summing up consumption, investment, government spending, and net exports, giving a comprehensive picture of the national income.

Awọn alaye Idahun

The concept we are discussing here is the Price Elasticity of Demand (PED). It measures how much the quantity demanded of a commodity changes with a change in its price. The formula for calculating the price elasticity of demand is:

PED = (% Change in Quantity Demanded) / (% Change in Price)

First, we calculate the percentage change in quantity demanded:

• Initial quantity demanded = 100 units
• New quantity demanded = 80 units
• Change in quantity demanded = New quantity demanded - Initial quantity demanded = 80 - 100 = -20 units

Percentage change in quantity demanded:

= (Change in quantity demanded / Initial quantity demanded) × 100

= (-20 / 100) × 100 = -20%

Next, calculate the percentage change in price:

• Initial price = N8.00
• New price = N10.00
• Change in price = New price - Initial price = N10.00 - N8.00 = N2.00

Percentage change in price:

= (Change in price / Initial price) × 100

= (2 / 8) × 100 = 25%

Now, we can substitute these values into the formula for PED:

PED = (% Change in Quantity Demanded) / (% Change in Price)

= (-20%) / (25%)

= -0.8

The price elasticity of demand is -0.8. The negative sign indicates that there is an inverse relationship between price and quantity demanded, which is normal for most goods. This value rounded to the nearest value provided in your options is 0.8. This implies it is inelastic demand, meaning the quantity demanded is not very responsive to price changes.

Awọn alaye Idahun

In the context of production, the Total Product (TP) refers to the total quantity of output produced by a firm. The Marginal Product (MP) is the additional output obtained by employing one more unit of a specific input, while keeping all other inputs constant.

When the Total Product starts to fall, it indicates that each additional unit of input is contributing less and less to the total output, to the extent that the output is actually decreasing. This means that any added input is no longer producing additional output but instead reducing it. Therefore, the Marginal Product in this situation is actually negative.

Here is why:

• Consider the scenario where adding extra workers or resources does not increase output, and might even disrupt production.
• At this point, the contribution of added input becomes detrimental, causing a decline in the total output.
• Thus, the Marginal Product turns negative, because the next unit of input is not just unproductive, it makes the overall production lower than before.

Awọn alaye Idahun

The terms MPC and MPS are concepts from economics that describe how households make spending and saving decisions out of their income. Let's break these down for a better understanding:

• MPC (Marginal Propensity to Consume): This represents the portion of additional income that a household is likely to spend on consumption rather than saving. For example, if someone's income increases by $100 and they spend $80 of that increase, their MPC would be 0.8 (80/100).
• MPS (Marginal Propensity to Save): Conversely, this is the portion of additional income that a household is likely to save rather than spend. Continuing the previous example, if the household saves $20 out of the $100 increase in income, their MPS would be 0.2 (20/100).

The sum of MPC and MPS must equal 1 because the additional income can only be spent or saved, meaning there aren’t any other alternatives for allocating this extra income. Therefore, mathematically, we express it as:

MPC + MPS = 1

In a closed economy model, the whole of any extra income is divided into consumption and saving, thereby making 1 the correct answer. So, whenever income changes, whatever portion is not spent (MPC) is saved (MPS), summing it up to one.

Awọn alaye Idahun

In the long-run, a firm must shut down if its average revenue is less than its average variable cost. This is because the firm is unable to cover even its variable costs, which are the costs it incurs when it produces any output at all. Let me explain further:

• A firm's goal is to maximize profit. To do this, a firm must ensure that it can at least cover its variable costs in the short-term. Variable costs include things like labor and raw materials, which are necessary for production.
• If the firm cannot cover the variable costs, it indicates that producing a unit of output adds more cost than revenue. Therefore, producing any more output will increase losses, making it better for the firm to shut down operations.
• In the long-run, all costs become variable, and if the firm's revenue doesn't cover these costs, the firm will not be able to survive.

To put it simply, if average revenue is less than average variable cost, the firm can't sustain itself in the long-run, and shutting down is a rational decision.

Awọn alaye Idahun

Market trade unions are not typically associated with the problem of internal trade. Trade unions are typically formed b workers or employees to protect their rights, negotiate better working conditions, and advocate for their interests. While trade unions can have an impact on labor markets and industrial relations, they are not directly linked to the challenges or problems specifically related to internal trade.

Awọn alaye Idahun

The middle value of an array of figures arranged in descending order is referred to as the median.

To understand this concept, imagine you have a collection of numbers, and you want to find the one that sits right in the middle when all numbers are lined up from the largest to the smallest (or even from smallest to largest, as the median remains the same).

• If there is an odd number of values in your dataset, the median is the number that is directly in the middle. For example, in the dataset {9, 7, 5}, the median is 7, as it is the middle number.


• If there is an even number of values, the median is calculated by taking the average of the two middle numbers. For instance, in the dataset {10, 8, 6, 4}, the two middle numbers are 8 and 6, and their average is (8 + 6) / 2 = 7. Therefore, 7 is the median.

The median is very useful as a measure of central tendency because it is not affected by extremely large or small values in the dataset, which could skew other measurements like the mean. Thus, it provides a better representation of a typical value within the dataset, especially when dealing with outliers.

Awọn alaye Idahun

The concept of the circular flow of income represents how money moves within an economy among consumers, businesses, and various markets. In this circular flow, three key elements can either add to or reduce the flow of funds: **leakages** and **injections**.

Leakages are the flows of money that exit the circular flow. They reduce the amount of money that circulates within the economy. Common leakages include savings, taxes, and imports. For instance, when individuals save money instead of spending it, that money is not used to purchase goods or services, thus exiting the circular flow.

Injections, on the other hand, are the activities or financial inflows that add funds to the circular flow of income, ensuring continued economic activity. They increase the total amount of money circulating in the economy. These include investment, government spending, and exports.

• Investment: When businesses invest in capital goods, they increase the production capability, leading to more employment and income.
• Government Spending: When the government spends on infrastructure, social services, or other public projects, it injects money directly into the economy.
• Exports: When a country sells goods and services to other countries, new money flows into the country's economy from foreign buyers.

The expenditure approach is a method for calculating a nation's Gross Domestic Product (GDP) by considering the total expenditure on the nation's final output of goods and services in a year. While this approach helps to measure the size of the economy, it is not directly responsible for adding funds to the circular flow. Instead, it relies on the activities of consumption, investment, government spending, and net exports.

In conclusion, it is the concept of injection that directly adds funds to the circular flow, stimulating economic activities and growth by multiplying the effects of initial spending through the economy.

Awọn alaye Idahun

A persistent fall in the general price level is known as deflation.

To understand this better, let's break it down:

• General Price Level: This refers to the average of current prices across the entire spectrum of goods and services produced in the economy. It is like taking a snapshot of what prices look like overall in the economy.


• Deflation: This is the term used when the general price level is consistently decreasing over time. In simpler terms, it means that prices of goods and services are falling, making them cheaper for consumers. This might sound beneficial to consumers initially, but prolonged deflation can lead to reduced consumer spending, as people may delay purchases in anticipation of even lower prices. This can subsequently slow down economic growth and potentially lead to an economic recession.

Hence, when we say "persistent fall in the general price level," we are accurately describing deflation.

Awọn alaye Idahun

To understand the concept of marginal utility and price, let's delve into a simple explanation. Marginal utility refers to the additional satisfaction or utility that a consumer gains from consuming one more unit of a good or service. Meanwhile, the price of a commodity is what the consumer pays to acquire that good or service.

In economic terms, a consumer is said to be in equilibrium when they have allocated their resources in such a way that they get the most satisfaction or utility from their consumption. The consumer equilibrium condition is achieved when the marginal utility per unit of expenditure is the same for all commodities.

Therefore, when the marginal utility of a commodity is equal to its price, it means the consumer is maximizing their satisfaction with the resources available. The consumer has no incentive to change the consumption bundle because they are already getting the highest possible satisfaction. In other words, the consumer is getting just as much utility from the last unit of the good as it costs. Consequently, the consumer is in equilibrium.

Thus, the correct explanation is: The consumer is in equilibrium.

Awọn alaye Idahun

Wholesalers play a significant role in the distribution of goods and services for several key reasons:

1. Bulk Purchasing and Distribution: Wholesalers buy large quantities of goods from producers and sell them in smaller lots to retailers, which allows them to benefit from economies of scale. This bulk buying helps keep costs low for retailers and ultimately consumers.

2. Bridging the Gap: By acting as an intermediary between producers and retailers, wholesalers play a crucial role in the supply chain. They enable manufacturers to focus on production while handling the complexities of distribution and logistics.

3. Financial Support: Wholesalers sometimes provide credit to retailers, allowing them to purchase goods and pay later. They also assist producers by buying inventory upfront, providing necessary funds for the producers to continue their business.

4. Information Exchange: Wholesalers gather market trends and feedback from retailers and share this information with producers. This helps producers adjust their products to meet consumer demands more effectively.

5. Inventory Management: Wholesalers manage storage and inventory, reducing the burden on manufacturers and retailers. They ensure a steady supply of products, minimizing the risk of stockouts or overproduction.

In summary, wholesalers are essential in the distribution network because they facilitate product flow, support financial operations, manage distribution logistics, and collect market intelligence.