JAMB UTME - Economics - 2022

Awọn alaye Idahun

The International Bank for Reconstruction and Development (IBRD) as an international monetary institution is concerned with the development of infrastructure in member nations. The IBRD, also known as the World Bank, was established to help finance the reconstruction and development of war-torn and developing countries after World War II. The bank provides loans, technical assistance, and other financial services to support projects in a variety of sectors, including infrastructure development, such as transportation, energy, and communication networks, among others. While the IBRD is concerned with the economic development of member nations, it is not primarily focused on financing private business or improving trade among member nations, although these may be outcomes of its operations. Additionally, the IBRD may also provide assistance to member nations facing balance of payments problems, but this is not its primary objective.

Awọn alaye Idahun

In the long run, all production factors are "variable." This means that in the long run, a firm can adjust all of its production inputs, including labor, capital, and technology, to change the scale of its operations. In the short run, some inputs may be fixed, such as the size of the factory, which can only be changed in the long run. But in the long run, all inputs can be varied to optimize production and increase efficiency. The ability to adjust all inputs in the long run is what distinguishes the long run from the short run in the theory of production.

Awọn alaye Idahun

When the central bank increases the bank rate, it becomes more expensive for banks to borrow money from the central bank. This, in turn, leads banks to charge higher interest rates on loans they give to their customers. As a result, borrowing becomes more expensive for customers, so they might choose to borrow less money or pay off existing loans. This discourages borrowing and slows down the overall spending in the economy. On the other hand, since banks have to pay a higher interest rate to the central bank, they might be able to increase the interest they charge on loans, which would increase their profits. The increase in the bank rate does not directly impact the money supply in the economy. The central bank can use other tools, such as open market operations, to influence the money supply.

Awọn alaye Idahun

Economic goods are termed scarce when they are "not available in sufficient quantities to satisfy all wants for them." Scarce resources are those that have a limited supply relative to the demand for them. This scarcity means that choices must be made about how the resources are allocated, and that not all wants or needs can be fully satisfied. The concept of scarcity is fundamental to the study of economics, as it is the basis for understanding the concepts of opportunity cost, trade-offs, and efficiency.

Awọn alaye Idahun

In developing countries, the largest component of national income is typically wages and salaries. This means that the majority of the income earned in these countries comes from the money that people make from their jobs or employment. Wages and salaries are paid to workers in exchange for their labor, and they are typically the main source of income for most people in developing countries. This income can come from a variety of sources, including working in factories, farming, providing services, or working in other industries. While profits and rent can also be important sources of income in some cases, they generally make up a smaller proportion of national income in developing countries. Profits are the earnings that businesses make after deducting their expenses, while rent is the income that comes from owning property or other assets. In summary, the largest component of national income in developing countries is typically wages and salaries, which are earned by workers in exchange for their labor.

Awọn alaye Idahun

Fiscal policy measures imply a change in government revenue and expenditure to regulate an economy. Fiscal policy is a tool used by governments to influence the economy by adjusting their spending levels and tax rates. This can be done by either increasing or decreasing government spending and taxes in order to achieve specific economic goals, such as controlling inflation, boosting employment, or promoting economic growth. For example, if the government wants to stimulate economic growth, it may increase its spending on infrastructure projects or offer tax incentives to businesses. Conversely, if the government wants to control inflation, it may decrease government spending and increase taxes to reduce the amount of money circulating in the economy. Therefore, fiscal policy measures involve making changes to both government revenue and expenditure in order to achieve specific economic objectives.

Awọn alaye Idahun

The concept described in the given scenario is called "double coincidence of wants." It refers to the situation where two parties have goods or services that the other party desires and are willing to exchange, and both parties are able to meet each other's wants at the same time. In the example, the housewife wants tomatoes, and she has meat that she can offer in exchange. However, she can only trade with someone who has tomatoes and also wants meat. The double coincidence of wants occurs when both parties have what the other wants, and both are willing and able to trade. This concept is important in understanding how bartering works, which is an exchange of goods and services without the use of money.

Awọn alaye Idahun

The theory of comparative advantage states that a commodity should be produced in that nation where the opportunity cost is least. Opportunity cost is the cost of choosing one option over another, and in the context of comparative advantage, it refers to the cost of producing a particular good or service in terms of what has to be given up to produce it. A country should specialize in producing and exporting the goods and services for which it has a comparative advantage, which means that it can produce them at a lower opportunity cost than other countries. While the absolute cost and absolute money cost of production can be important factors in determining the competitiveness of a particular commodity, the theory of comparative advantage emphasizes the importance of considering opportunity cost. Furthermore, the production possibility curve, which shows the maximum combination of two goods that can be produced with a given set of resources, is not directly related to the theory of comparative advantage, although it can help illustrate some of the concepts involved in the theory.

Awọn alaye Idahun

An effect of inflation is that it "favors debtors at the expense of creditors." Inflation reduces the real value of money over time, which means that the value of debt also decreases. This can be an advantage for debtors, who are able to repay their debts with money that is worth less than when they borrowed it. In contrast, creditors are disadvantaged by inflation, as the value of the money they receive in repayment is worth less than the money they loaned out. Inflation can also have other effects, such as reducing the purchasing power of consumers, increasing uncertainty, and distorting economic decision-making.

Awọn alaye Idahun

The elasticity of demand measures the responsiveness of the quantity demanded of a commodity to a change in its price. In this case, when the price of the commodity increased from $4.00 to $5.00, the quantity demanded increased from 20 units to 30 units. To calculate the elasticity of demand, we use the following formula: Elasticity of demand = (percent change in quantity demanded) / (percent change in price) First, let's find the percent change in quantity demanded: (30 units - 20 units) / 20 units = 0.50 or 50% Next, let's find the percent change in price: (5.00 - 4.00) / 4.00 = 0.25 or 25% Finally, let's plug in the values into the formula: Elasticity of demand = 0.50 / 0.25 = 2.00 So, the elasticity of demand in this case is 2.00. This means that a 1% increase in price leads to a 2% decrease in the quantity demanded.

Awọn alaye Idahun

Transfer payments refer to payments made by the government or other institutions to individuals or other entities, without receiving any goods or services in return. These payments are typically made for social welfare purposes or to redistribute income. An example of a transfer payment in national income accounting is unemployment allowance paid to citizens who are unemployed. The government pays these allowances to support individuals who are currently out of work and seeking employment. This payment is considered a transfer payment because the government is not receiving any goods or services in return for the funds provided. Transfer payments are not included in the calculation of GDP because they do not represent the production of goods or services. However, they are important in measuring the overall economic well-being of a society, particularly in terms of income distribution and social welfare.

Awọn alaye Idahun

The point x inside the PPC (Production Possibility Curve) indicates that some of the resources in the economy are currently idle or not being fully utilized. This means that the economy is not producing at its maximum potential, and there is room for further growth and development. The PPC represents the different combinations of goods and services that an economy can produce given its limited resources and technology. The curve shows the maximum output that can be produced with the available resources and technology at a given point in time. Any point inside the curve represents a level of production that is below the maximum potential output, indicating that some resources are not being used to their full capacity. Therefore, if the economy is currently operating at a point inside the PPC, it has the potential to increase its production of goods and services by putting its idle resources to work. This could be achieved through measures such as increasing investment, improving technology, or providing more education and training to the workforce.

Awọn alaye Idahun

Awọn alaye Idahun

A free trade area is a form of economic integration where member nations agree to eliminate tariffs and trade barriers on goods and services traded among themselves. However, each member nation is still free to impose duties against non-member nations. In other words, members have a free trade agreement with each other, but they can still have their own trade policies towards non-members. In contrast, a customs union is an advanced form of a free trade area where member nations not only eliminate tariffs among themselves, but they also agree to have a common external tariff towards non-member nations. This means that all goods entering the customs union must pay the same tariffs, regardless of which member nation they are entering. A common market is a further step towards integration, where not only goods, but also factors of production such as capital and labor can freely move among member nations. This allows for a more integrated and efficient market, but it also means that member nations have less control over their trade policies. An economic community is a broader form of integration, where member nations agree to coordinate and harmonize their economic policies in a wide range of areas, including trade, monetary policy, and fiscal policy. This is the most advanced form of integration, as it involves a high degree of cooperation and coordination among member nations.

Awọn alaye Idahun

If the marginal utility of a commodity is equal to its price, then the consumer is in equilibrium. This means that the consumer is getting the maximum satisfaction possible from the commodity, given its price. If the marginal utility was greater than the price, the consumer would be willing to pay more for an additional unit of the commodity, indicating that they are not yet at their maximum level of satisfaction. Conversely, if the marginal utility was less than the price, the consumer would not be willing to pay the price for an additional unit, indicating that they have already exceeded their maximum level of satisfaction. Therefore, when the marginal utility is equal to the price, the consumer is in a state of balance, and does not want to consume more or less of the commodity.

Awọn alaye Idahun

Awọn alaye Idahun

The type of unemployment found among workers who leave their jobs in search of other jobs is called frictional unemployment. This occurs when individuals are between jobs and are actively searching for new employment opportunities. Frictional unemployment is typically short-term and is a natural part of the job search process. It can occur due to various reasons such as workers seeking better job opportunities, moving to a new location, or recently graduating from school. Although frictional unemployment may be a temporary situation for individuals, it can have an impact on the economy if the time taken to find a new job is prolonged. However, it is generally seen as a less problematic form of unemployment than other types, such as structural or cyclical unemployment, which can have more severe and long-lasting effects on the economy.

Awọn alaye Idahun

An iron rod cannot be classified as a natural resource. A natural resource is a material or substance that occurs naturally in the environment and can be used for economic gain. Natural resources can be classified into renewable and non-renewable resources. Renewable resources are those that can be replenished over time, such as solar energy, wildlife, and forests. Non-renewable resources are those that cannot be replenished, such as minerals and fossil fuels, including gold. An iron rod is not a natural resource because it is a manufactured item made from iron, which is a natural resource. The iron has been extracted from the earth and processed to make the rod, which is then used for various purposes. So, while the raw material (iron) may be a natural resource, the finished product (the iron rod) is not.

Awọn alaye Idahun

Developments outside a given firm that reduce the firm's costs are called "external economies." External economies refer to the benefits that firms receive from positive externalities generated by other firms or industries in the same geographic area. For example, if a new technology park is established nearby, the firms in the area may benefit from lower input costs, better transportation links, or access to skilled workers. These benefits can result in lower production costs, higher productivity, and improved competitiveness for the firms in the area. The opposite of external economies is external diseconomies, which occur when external factors increase the costs of production for firms in a particular area.

Awọn alaye Idahun

The International Bank for Reconstruction and Development (IBRD) is a specialized agency of the United Nations that provides loans, technical assistance, and other services to developing countries. Out of the options provided, the IBRD does not reduce tariffs among its members. Its main focus is on granting long-term loans to member countries for development projects, providing technical expertise to help those countries implement those projects successfully, and developing human resources in those countries. Tariff reduction is not one of its main functions.

Awọn alaye Idahun

The stock exchange is an example of a capital market. A capital market is a market where individuals and institutions trade financial securities, such as stocks and bonds, with the goal of raising capital. In other words, the capital market is where businesses can go to raise money by selling ownership in the company (stocks) or borrowing money (bonds) from investors. The stock exchange is a specific type of capital market where publicly-traded companies can sell ownership in the form of stocks to the public. Investors can buy and sell these stocks on the exchange, and the value of the stocks can rise or fall based on various factors, such as the company's financial performance, overall market conditions, and investor sentiment. Overall, the stock exchange and other capital markets play an important role in facilitating the flow of capital and resources throughout the economy, helping businesses raise funds to invest in growth and development, and providing investors with opportunities to earn a return on their investment.

Awọn alaye Idahun

Producers operating in a free market economy are more efficient as a result of the existence of competition. In a free market, businesses compete with each other for customers by offering better quality products, lower prices, or both. This competition forces producers to be efficient and innovative in order to remain competitive and attract customers. As a result, businesses are motivated to increase productivity, reduce waste, and improve their products and services to meet customer needs. The competition also leads to more choices for consumers and lower prices, as businesses strive to provide the best value for money. In contrast, if there were no competition, businesses would have less incentive to improve their operations, resulting in lower efficiency and higher prices for consumers.

Awọn alaye Idahun

If a demand curve that intersects a perfectly inelastic supply shifts rightward, the equilibrium price will increase, but the quantity supplied will remain the same. In this scenario, a shift in the demand curve to the right indicates that there is an increase in demand for the product at every price level, leading to a new equilibrium price and quantity. However, the supply is perfectly inelastic, meaning that the quantity supplied cannot increase to meet the new demand. Therefore, the equilibrium quantity remains the same, while the equilibrium price increases. So, only the price will increase in this scenario.

Awọn alaye Idahun

If the Central Bank increases its bank rate, it means that it has increased the interest rate at which commercial banks can borrow money from the Central Bank. This, in turn, makes it more expensive for commercial banks to borrow money, which can have several effects on the economy. Firstly, since it is more expensive for banks to borrow money, they may become more cautious about lending money to their customers. This means that customers may find it more difficult to obtain loans or credit from banks, and the amount of borrowing may decrease. So, is not correct. Secondly, if banks find it more expensive to borrow money, they may also try to increase the interest rates they charge on loans and mortgages to maintain their profits. This could make borrowing more expensive for customers, and the interest charges by banks may rise rather than fall. So, is not correct. Thirdly, if the cost of borrowing money for commercial banks increases, they may not want to borrow as much money, which could reduce the supply of money in the economy. So, is correct. Lastly, an increase in the Central Bank's bank rate may not cause many banks to shut down their operations. However, some smaller banks or financial institutions that heavily rely on borrowing may struggle to stay afloat. So, is not correct. In conclusion, an increase in the Central Bank's bank rate can reduce the supply of money in the economy and increase the cost of borrowing for banks, which could result in higher interest rates for customers.

Awọn alaye Idahun

The effect of changes in the condition of demand on a demand schedule with the price constant is a shift of the demand curve. When there is a change in any factor that affects the quantity demanded at each price level, such as income, tastes and preferences, prices of related goods, or population, the entire demand curve shifts to a new position. This means that at each price level, the quantity demanded changes, leading to a new demand schedule. A movement along the demand curve occurs when there is a change in price, leading to a change in quantity demanded, while the other factors remain constant. Deflation or hyperbola formation are not terms typically used to describe changes in demand.

Awọn alaye Idahun

The scale of preference refers to a list of a consumer's wants or desires arranged in order of importance or priority. It shows the consumer's preferences or choices among different options. The scale of preference is subjective and varies from person to person. For instance, if a person is given the choice to buy a new smartphone, a new pair of shoes, or a ticket to a concert, they may rank these options in order of priority. If they value communication more than entertainment, they may choose the smartphone as their top priority. Conversely, if they value entertainment more than communication, they may choose the concert ticket. Thus, the scale of preference is a way to understand how consumers make choices based on their preferences and priorities, and it helps in predicting their behavior in the market.

Awọn alaye Idahun

Under flexible exchange rates, a deficit could be corrected by the appreciation of other currencies. Flexible exchange rates are determined by market forces of supply and demand, without any government intervention. This means that the value of a country's currency can fluctuate based on changes in economic conditions and market expectations. In the case of a deficit, the demand for a country's currency will decrease, causing its value to fall relative to other currencies. This depreciation can make the country's exports cheaper and more competitive, while making imports more expensive, which can help correct the deficit. On the other hand, the appreciation of other currencies can make a country's exports more expensive and reduce demand for them, which can worsen the deficit.

Awọn alaye Idahun

Awọn alaye Idahun

An important factor hindering the rapid development of the industrial sector in Nigeria is inadequate infrastructure facilities. This includes factors such as inadequate transportation systems, unreliable electricity supply, poor communication networks, and insufficient access to water and sanitation facilities. These factors can increase the cost of production, reduce productivity and efficiency, and make it difficult for industries to compete with other countries. The dominance of the oil sector has also been a significant factor, as it has led to a neglect of other sectors, including manufacturing and industry. Excessive demand for finished products and rural-urban migration may have some impact on industrial development but are not as significant as inadequate infrastructure and the dominance of the oil sector.

Awọn alaye Idahun

The main objective of marketing boards is to stabilize the incomes of cash crop farmers. Marketing boards help to regulate the supply and demand of cash crops, ensuring stable prices and incomes for farmers. They also provide support services to farmers, such as warehousing facilities and education on pricing, to help them sell their crops more effectively. While marketing boards may generate revenue for the government, their primary focus is on supporting and protecting the livelihoods of farmers.

Awọn alaye Idahun

Awọn alaye Idahun

A downward sloping demand curve means that as the price of a good decreases, the quantity demanded of that good increases. In other words, there is an inverse relationship between the price of a good and the quantity of that good demanded by consumers. This is the fundamental law of demand in economics.

As the price of a good decreases, consumers are more willing and able to purchase it, which leads to a higher quantity demanded. Conversely, as the price of a good increases, consumers are less willing and able to purchase it, which leads to a lower quantity demanded.

Therefore, the correct answer is - price must be lowered to sell more of the good. Total revenue may increase or decrease as the price changes depending on the magnitude of the change in price and quantity demanded.

Awọn alaye Idahun

Holding money to take care of contingencies is a precautionary motive. This means that people keep money saved in case of unexpected events or emergencies, such as a sudden illness, job loss, or car repair. By having money set aside, they are better prepared to handle these situations and can avoid going into debt or facing financial hardship. In short, holding money for precautionary reasons is a way to protect one's financial security and peace of mind.

Awọn alaye Idahun

If the government imposes a minimum price on a commodity, it means that sellers cannot sell the commodity for a price lower than the minimum price set by the government. This is done to ensure that the producers of the commodity are getting a fair price for their goods. When a minimum price is set, it may result in excess supply (market surplus) of the commodity, as producers may be incentivized to produce more of the commodity at the higher price. However, the surplus can be reduced if the government buys the excess supply or if producers reduce their production. In the short-run, the market may be cleared, which means that all of the available supply of the commodity is sold at the minimum price set by the government. However, in the long-run, excess demand may occur as the minimum price may discourage buyers from purchasing the commodity. Therefore, government regulation may still be needed to ensure that the market operates efficiently, even with the minimum price in place.

Awọn alaye Idahun

Statutory organizations usually established by Acts of parliament are called public corporations. A public corporation is a type of legal entity that is established by the government through legislation to perform a specific function or provide a particular service to the public. Public corporations can be formed at the national, state, or local level, and can take a variety of forms depending on their specific mandate. While public enterprises are also entities that are owned and controlled by the government, they may not necessarily be established by Acts of parliament. Cooperative societies are typically voluntary organizations formed by individuals or businesses to pool resources and share risks, while joint-stock companies are privately owned businesses that are established to generate profit for their shareholders.

Awọn alaye Idahun

Marginal cost refers to the cost of producing one additional unit of a good or service. It is the cost of producing the last or extra unit of output. This cost includes the variable costs of producing the additional unit, such as the cost of materials and labor, but it does not include fixed costs like rent or salaries, which do not change with the level of production. The concept of marginal cost is important in economics because it helps businesses and policymakers make decisions about how much to produce, what price to set for their goods or services, and whether to enter or exit a market. By analyzing their marginal costs, businesses can determine whether producing an additional unit of a good will be profitable or not.

Awọn alaye Idahun

The increase in the demand for a commodity may lead to a decrease in the demand for another if both are in competitive demand. When two goods are in competitive demand, they are seen as substitutes for each other, meaning that they can be used for the same purpose. For example, coffee and tea can be seen as substitutes for each other, since both are beverages that can be used to satisfy the same desire for a hot drink. So, if the demand for coffee increases, people may buy more coffee and less tea, because they see coffee as a substitute for tea. Similarly, if the demand for tea increases, people may buy more tea and less coffee, because they see tea as a substitute for coffee. On the other hand, if two goods are in complementary demand, they are often used together. For example, if the demand for cars increases, the demand for gasoline will also increase, since cars require gasoline to run. Similarly, if the demand for smartphones increases, the demand for phone cases may also increase, since people may want to protect their phones. In composite demand, a good has multiple uses, so an increase in demand for one use may not necessarily lead to a decrease in demand for another use. And in the case of goods of the same quality, an increase in demand for one good does not necessarily affect the demand for the other good, since they are not substitutes or complements.

Awọn alaye Idahun

Awọn alaye Idahun

Massive importation of consumer goods will not lead to economic growth. Economic growth refers to an increase in the capacity of an economy to produce goods and services over a period of time. It is measured by the growth in the gross domestic product (GDP) of a country. Massive importation of consumer goods may lead to an increase in consumption, but it does not lead to an increase in the productive capacity of an economy. This is because consumer goods are used for immediate consumption and do not contribute to the production of other goods and services. On the other hand, capital goods like machinery, equipment, and infrastructure are used to produce other goods and services, and their importation can lead to economic growth by increasing the productive capacity of an economy. Intensive capital formation and the use of modern technology also contribute to economic growth by increasing the efficiency and productivity of an economy.

Awọn alaye Idahun

A firm's average cost can decrease in the long-run due to increasing returns to scale. This means that as the firm increases its production, it experiences a decrease in its average cost. This can be due to various factors such as specialization, economies of scale, and better utilization of resources. For example, a firm that produces 100 units of a product might have an average cost of $10 per unit. However, if it increases its production to 200 units, it might be able to reduce its average cost to $8 per unit. This could be due to the fact that the firm can take advantage of bulk discounts on raw materials, use more efficient production methods, and spread its fixed costs over a larger number of units. Therefore, when a firm experiences increasing returns to scale, it can reduce its average cost in the long-run, which can lead to higher profits and a competitive advantage in the market.