JAMB UTME - Economics - 2015

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A market will be at equilibrium when demand and supply are equal. In economics, the market equilibrium refers to a situation where the quantity of goods or services demanded by consumers is equal to the quantity of goods or services supplied by producers. In other words, the market is in balance, and there is no excess demand or supply. When demand is greater than supply, there will be a shortage of goods or services in the market, which will cause prices to rise. On the other hand, when supply is greater than demand, there will be a surplus of goods or services, which will lead to lower prices. However, when demand and supply are equal, the market is said to be at equilibrium. At this point, the price of goods or services will stabilize, and there will be no pressure for prices to rise or fall. This is because the quantity of goods or services supplied by producers exactly matches the quantity of goods or services that consumers want to buy. The market equilibrium is an important concept in economics because it provides a stable platform for market transactions to take place, and it ensures that prices are set at a level that is acceptable to both producers and consumers.

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A Budget Line is a line in commodity space that shows the constraints imposed by a person's budget, their money income, and the price of goods they purchase. The budget line represents all the combinations of two goods that a person can purchase with their given money income, assuming the prices of the goods remain constant. The slope of the budget line represents the price ratio of the two goods and its intercept represents the person's money income. In other words, a budget line helps to show how much of each good a person can buy, given their income and the prices of the goods.

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The cost of living and standard of living are related but in opposite ways. The cost of living refers to the average cost of basic necessities such as food, housing, and healthcare, while the standard of living refers to the level of wealth, comfort, and material goods available to individuals or a society. When the cost of living increases, it becomes more expensive to maintain a certain standard of living. For example, if the cost of food and housing goes up, people may have to spend more money on these basic necessities and may have less money left over to spend on other things like travel, entertainment, or luxury items. This can lead to a lower standard of living for some individuals or families. Conversely, a lower cost of living can provide an opportunity for individuals or families to improve their standard of living. If the cost of basic necessities is lower, people may be able to afford more material goods or services that can improve their quality of life. For example, they may be able to afford better healthcare, education, or housing. Therefore, the correct relationship between the cost of living and standard of living is that a lower cost of living can lead to a higher standard of living, while a higher cost of living can lead to a lower standard of living.

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Factory unemployment is not a type of unemployment. The three main types of unemployment are: - Structural unemployment: occurs when workers' skills become obsolete or are no longer in demand, and they are unable to find jobs in their field. - Frictional unemployment: occurs when workers are temporarily between jobs, such as when they are searching for new employment or moving from one job to another. - Mass unemployment: occurs when there are not enough jobs available in the economy to employ all workers who are seeking employment. These three types of unemployment are widely recognized and studied in the field of economics. Factory unemployment is not a commonly used term in the field of economics and is not considered one of the main types of unemployment.

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The option "provision of food for the teeming population" is not a problem identified with agriculture in West Africa. It is a challenge, but not a problem in the sense that it is not necessarily a failure or a flaw in the agricultural system. Rather, it is a demand that the agricultural sector must meet. The other options listed, such as the land tenure system, ignorance of the farmers, and the use of crude implements, are problems in that they limit the ability of the agricultural sector to meet the demand for food. The land tenure system, for example, may not provide clear ownership rights to farmers, making it difficult for them to access credit or make long-term investments in their land. Ignorance of farmers may limit their ability to make use of modern techniques or technologies that could improve yields. The use of crude implements may limit the efficiency and productivity of farming operations. These are all problems in the agricultural sector that need to be addressed to improve food production in West Africa.

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The income elasticity of demand of normal goods is positive. The income elasticity of demand measures the relationship between changes in income and changes in the demand for a good. A positive income elasticity of demand means that as income increases, the demand for the good also increases. In other words, as people become wealthier, they tend to buy more of the good. Normal goods are those goods for which demand increases as income increases. In contrast, a negative income elasticity of demand means that as income increases, demand for the good decreases. This is typically the case for inferior goods, which are goods for which demand decreases as income increases. A zero income elasticity of demand means that changes in income have no effect on demand for the good. This is rare, as most goods are either normal or inferior, and therefore have a positive or negative income elasticity of demand, respectively. A fixed income elasticity of demand is not a valid concept in economics. The income elasticity of demand is a continuous variable that can take on any positive or negative value, depending on the good in question and the specific circumstances of the market.

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A monopolist has the power to influence the prices of goods and services, therefore he is a price maker. In a market with a monopolist, there is only one seller, who has complete control over the supply of a particular good or service. This means that the monopolist has the ability to set the price for their product, as there is no competition to drive the price down. This is in contrast to a market with many sellers, where the price is determined by the interaction of supply and demand, and individual sellers have limited control over the price. In this case, the seller is considered a price taker, as they must accept the market price determined by supply and demand.

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The factor that would not bring about a change in supply is the price of the commodity. The price of the commodity would affect the quantity supplied of that commodity, but it would not affect the overall supply of the commodity in the market. To understand this, it's important to know the difference between supply and quantity supplied. Supply refers to the total amount of a commodity that producers are willing and able to offer for sale in the market at different prices. Quantity supplied, on the other hand, refers to the specific amount of a commodity that a producer is willing to supply at a particular price. Therefore, a change in the price of a commodity would affect the quantity supplied, but it would not affect the overall supply in the market. For example, if the price of a commodity increases, producers would be willing to supply more of that commodity, which would result in an increase in the quantity supplied. However, the overall supply of the commodity would only change if there were changes in the level of technology, government policy or entry of new firms, which would affect the total amount of the commodity that producers are willing and able to offer for sale in the market at different prices.

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The frequent value that occurs most in a data is called the mode. To understand this concept, let's imagine you have a dataset of numbers that represent the number of pets owned by people in a neighborhood. The dataset may look like this: 3, 1, 2, 2, 3, 1, 4, 2, 2, 2 In this dataset, the mode is the value that appears most frequently. In this case, the number 2 appears 5 times, which is more than any other number. Therefore, the mode of this dataset is 2. The mode is useful in statistics because it can give insight into the most common value in a dataset. It can also be used to describe the shape of a dataset's distribution. For example, if a dataset has one mode, it is said to be unimodal, and if it has two modes, it is said to be bimodal.

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The law of diminishing returns, also known as the law of variable proportions, is an economic concept that describes the relationship between the quantity of inputs used in production and the resulting outputs. In simple terms, the law of diminishing returns states that as more and more units of a variable input (such as labor or capital) are added to a fixed input (such as land), the marginal output (the additional output gained from each additional unit of the variable input) will eventually decrease, holding all other inputs constant. In other words, there is a point at which adding more of a variable input will not result in a proportionate increase in output, and the production process becomes less efficient. This law has important implications for decision making in agriculture, manufacturing, and other industries, as it highlights the importance of finding the optimal balance between inputs to maximize output and efficiency.

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MP = Δ TP ÷ Δ L
= (TP2 – TP1) ÷ L2 – L1
= (55 – 48 ) ÷ (5 – 4) = 7 ÷ 1
= 7

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To calculate the average product of labor, we need to divide the total output by the number of units of labor employed. However, the question doesn't provide any information about the total output or the first labor unit. Therefore, we cannot accurately calculate the average product of labor when the second labor unit was employed at 12.5. In general, the average product of labor refers to the amount of output produced per unit of labor. If the total output is increasing at a decreasing rate as more labor is employed, then the average product of labor will eventually decrease. On the other hand, if the total output is increasing at an increasing rate as more labor is employed, then the average product of labor will eventually increase. Without additional information, it's not possible to determine the relationship between the total output and the number of labor units employed. Therefore, we cannot determine the average product of labor when the second labor unit was employed at 12.5.

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The national income of a country can be estimated as aggregate expenditure, consumption, investment, government expenditure, export less import. Import will be deducted because it is the money paid on importation of goods from other countries.

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Revenue can be expressed as the "total money realized from sales" of a company. It is the total amount of money that a company receives from its customers for the goods or services it provides during a specific period of time. Revenue is important because it is used to determine a company's financial performance, and is a key factor in calculating other financial metrics such as profit margins, net income, and earnings per share. Companies often aim to increase their revenue by selling more goods or services, expanding their customer base, or increasing their prices. Ultimately, revenue is a critical aspect of a company's success and growth, as it allows them to invest in research and development, expand their operations, and provide returns to their shareholders.

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In a capitalist economic system, the means of production and exchange are controlled by private individuals. Capitalism is an economic system in which the production and distribution of goods and services are mainly owned and operated by private individuals or corporations. These private individuals are motivated by profit and operate in a competitive market where supply and demand determine prices. The government's role in a capitalist system is generally limited, and the economy operates with minimal interference from the state. In a capitalist system, individuals are free to own and control private property and engage in economic activities such as buying and selling goods and services. The private sector is responsible for creating jobs and generating wealth, which contributes to economic growth. The market is largely self-regulating, and prices are determined by the forces of supply and demand. One of the main benefits of a capitalist system is that it provides individuals with the opportunity to create and accumulate wealth through their own efforts. However, it can also lead to income inequality and social stratification, as those who have more resources and capital are better able to succeed in the market.

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A public limited liability company (PLC) is the only business unit that can issue shares. A PLC is a type of business structure that is owned by shareholders who share in the profits and losses of the company. The owners of a PLC can raise money for the company by issuing and selling shares, which are portions of ownership in the company. This allows the company to raise capital from a large number of individuals, rather than relying on a single source of funding. A partnership is a type of business structure that is owned by two or more individuals who share in the profits and losses of the business. However, partnerships do not issue shares and do not have shareholders. A sole proprietorship is a type of business structure that is owned and operated by a single individual. Sole proprietorships do not issue shares and do not have shareholders. A central bank is not a type of business structure, but rather a type of financial institution. Central banks do not issue shares and do not have shareholders.

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To find the range of a set of data, you need to subtract the smallest value from the largest value. In this case, the smallest value is 5, and the largest value is 24. So, the range of the data is: 24 - 5 = 19 Therefore, the answer is option "c) 19".

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The ordinalist approach of utility suggests that utility can be ranked or ordered, but it cannot be measured in absolute terms. In other words, we can say that one option provides greater utility than another, but we cannot assign a specific numerical value to the utility itself. For example, suppose you are choosing between two different types of ice cream: vanilla and chocolate. The ordinalist approach suggests that you might prefer one flavor over the other, but it doesn't try to measure how much you like each flavor. Instead, it simply assumes that you can rank your preferences: you might like vanilla better than chocolate, or vice versa. This is different from the cardinalist approach, which suggests that utility can be measured in numerical terms (such as "utils" or "happiness units"). The ordinalist approach is often considered more realistic, because it acknowledges that people's preferences and satisfaction are subjective and difficult to measure in absolute terms.

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Census can be classified as "de facto and de jure". De facto census refers to the actual count of the population residing in a particular area at the time of the census. This means that everyone present in the area, including visitors and tourists, is included in the count. De jure census, on the other hand, refers to the count of the population based on their legal place of residence, regardless of whether they are present in that area during the census or not. This means that people who are temporarily away from their legal place of residence, such as students or military personnel, are still included in the count for their legal place of residence. In summary, a census is a way to count the population, and it can be classified as de facto or de jure based on whether it counts all people present at the time of the census or just those who legally reside in the area being counted.

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A regressive tax falls as incomes increases while progressive tax rises as income increases. Proportional tax is a flat rate while value added tax is the tax imposed on goods and services at each stage of production.

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The market in which none of the operators can influence the price is called a "perfect market". In a perfect market, there are many buyers and sellers of a particular product or service, and no single buyer or seller has enough power to affect the market price. This means that the price is determined solely by the forces of supply and demand. In a perfect market, all buyers and sellers have perfect information about the product or service being sold, and there are no barriers to entry or exit. This means that new sellers can enter the market easily and existing sellers can exit the market without affecting the price. Examples of perfect markets include the market for agricultural products, such as wheat or corn, where there are many buyers and sellers, and the price is determined by the forces of supply and demand. The stock exchange market, on the other hand, is not a perfect market, as the actions of large institutional investors and market makers can affect the price of individual stocks.

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The headquarters of the Organization of the Petroleum Exporting Countries (OPEC) is located in Vienna, Austria. This is where the organization's meetings and activities are coordinated. OPEC is an intergovernmental organization made up of 13 oil-producing countries, and its main goal is to coordinate and unify the petroleum policies of its member countries to secure fair and stable prices for petroleum producers and ensure a regular supply for consumers. OPEC's decisions can have a significant impact on the global oil market, making it an important organization in the energy sector.

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The combination of two commodities each yielding the same level of satisfaction to the consumer is called an "indifference curve." An indifference curve is a graph that shows all the combinations of two goods that give a consumer the same level of satisfaction. The curve slopes downward, which means that as the amount of one good increases, the amount of the other good needed to maintain the same level of satisfaction decreases. In other words, if a consumer is indifferent between two combinations of goods, they would be just as satisfied with either combination.

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The concentration of industries in a particular geographical area is known as the localization of industries. This means that a certain region has a high number of similar or related industries located close together. This can happen for a variety of reasons, such as access to natural resources, a skilled workforce, favorable government policies, or efficient transportation systems. The result is a cluster of industry activity in a specific area, which can drive economic growth and create job opportunities.

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Petroleum has contributed significantly to the Nigerian economy in various ways. It is a major source of government revenue, and it has created job opportunities for many people in the country. Also, the development of the petroleum industry has led to the establishment of various infrastructure such as roads, bridges, and hospitals, which have benefited the nation. However, one negative impact of the petroleum industry in Nigeria is that it has led to the development of a mono economy. This means that the economy of Nigeria has become highly dependent on petroleum, which can be risky in the long run as the demand for petroleum may decline or the oil reserves may eventually run out. This over-reliance on oil exports can leave Nigeria's economy vulnerable to external shocks and fluctuations in oil prices, which can have a devastating impact on the country's economic stability. Therefore, all of the options listed except for "development of mono economy" are positive contributions of the petroleum industry to the Nigerian economy.

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A firm that charges the maximum price without attracting competition from new entrants is a monopolistic firm. A monopolistic firm is a market structure in which there is only one seller of a product or service, and the firm has significant control over the price of the product or service. This means that the monopolistic firm can charge a high price without attracting competition from new entrants because there are no other firms selling the same product or service. It is important to note that a monopolistic firm is different from a perfectly competitive firm, in which there are many firms selling the same product or service, and each firm has limited control over the price. It is also different from a monopolistically competitive firm, in which there are many firms selling similar but differentiated products or services, and each firm has some control over the price.

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It shows that when total utility is at the maximum, marginal utility equals zero.

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Isocost and isoquant are concepts used in the theory of production, which deals with the relationship between inputs (e.g. labor, capital) and outputs (e.g. goods, services) in the production process. An isocost line represents all the combinations of inputs that a firm can purchase for a given total cost. The slope of the isocost line represents the relative prices of the inputs. An isoquant represents all the combinations of inputs that produce the same level of output. The slope of the isoquant represents the marginal rate of technical substitution, which measures the amount of one input that must be given up to produce one more unit of output while keeping the level of the other input constant. Together, isocost and isoquant lines are used to analyze the cost-minimizing behavior of a firm and the production efficiency of different input combinations.

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A commercial bank can create money by lending to borrowers. When a bank lends money to a borrower, it creates a new deposit in the borrower's account, which is essentially new money. This new deposit is backed by the bank's assets and the promise of the borrower to repay the loan with interest. This is possible because banks are only required to keep a fraction of their deposits as reserves, known as the reserve requirement. The reserve requirement is set by the central bank and varies by country. When a bank makes a loan, it only needs to keep a fraction of the loan amount as reserves, which allows it to create new money by issuing a loan. This process is known as the fractional reserve banking system, and it allows banks to create more money than they hold in reserves. However, it also means that banks are exposed to risks if a large number of borrowers default on their loans.

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Disposable income is total income less tax. Disposable income is the amount of income that an individual has available for spending or saving after taxes have been paid. It is calculated by subtracting taxes from an individual's total income. For example, if someone earns a total income of N100,000 per month and pays N20,000 in taxes, their disposable income would be N80,000 (N100,000 - N20,000). The concept of disposable income is important because it represents the amount of money that an individual has available to spend or save. It takes into account the impact of taxes on an individual's income, which can significantly reduce the amount of money that they have available for other purposes. In summary, disposable income is the amount of income that an individual has available for spending or saving after taxes have been paid, and it is calculated by subtracting taxes from an individual's total income.

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The technical relationship between the physical inputs and physical outputs of a firm is referred to as the production function. It describes how much output a firm can produce from a given set of inputs, such as labor, capital, and materials. The production function specifies the maximum amount of output that can be produced using a given combination of inputs. It shows how much output will be produced for every unit of input used, taking into account the efficiency of production processes. For example, suppose a firm produces shoes using labor, machines, and leather. The production function would describe how many pairs of shoes the firm can produce using different combinations of these inputs. The function might show that doubling the amount of labor and capital invested in production leads to a 50% increase in shoe output. By understanding the production function, firms can determine the most efficient way to produce a given amount of output, minimizing costs and maximizing profits. The production function also helps economists to understand the relationship between inputs and outputs in a given industry and to analyze trends in productivity over time.

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An increase in income will shift the demand curve for Bournvita to the right. When consumers have more income, they are likely to spend more on goods and services, including Bournvita. As a result, the demand for Bournvita will increase, and the demand curve will shift to the right. This shift means that at any given price, consumers will demand a higher quantity of Bournvita than before. Conversely, a decrease in income will lead to a decrease in demand for Bournvita, shifting the demand curve to the left. It's worth noting that the other options mentioned will not shift the demand curve for Bournvita to the right. A rise in the price of Bournvita, for example, will decrease demand, shifting the curve to the left. A tax on cocoa producers will increase the cost of production, which may lead to an increase in the price of Bournvita, also shifting the curve to the left. Finally, a fall in the price of Bournvita may lead to an increase in demand, but this would not shift the demand curve, as it represents a movement along the existing curve.

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The source of all economic problems arises from scarcity. Scarcity refers to the limited availability of resources in comparison to the unlimited wants and needs of individuals. This means that there are limited resources available to produce goods and services, so we have to make choices about how to allocate these resources in the most efficient way possible. This leads to the concept of opportunity cost, which is the cost of the next best alternative that must be given up in order to pursue a certain action or decision. The scale of preference refers to an individual's ranking of their wants and needs, and helps to determine how they allocate their limited resources. Ultimately, the root of all economic problems stems from the fact that resources are scarce and we must make choices about how to best use them to satisfy our unlimited wants and needs.

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The tax levied on locally produced goods is called "excise duty." This is a tax that is applied to the production or sale of certain goods within a country. It is often used to discourage the consumption of goods that are considered harmful or luxury items. For example, excise duty can be applied to tobacco products, alcohol, and luxury goods like jewelry or expensive cars. The tax is typically included in the price of the goods, and is paid by the manufacturer or seller of the product. The money collected from excise duty goes into the government's general revenue, which can be used for public services like healthcare, education, and infrastructure.

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There are four principles given by Adam Smith which include equality/ability to pay, economy, convenience and certainty. Objective is not a canon of taxation

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The types of specialization are product, process, geographical/territorial specialization and specialization by sex or gender. Manager specialization can be categorized under process specialization because it is a situation whereby worker are specialized on a particular production process.

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A building society is a type of financial institution that is focused on providing mortgage loans and savings accounts to individuals. Unlike commercial banks, which offer a wider range of financial products and services, building societies primarily focus on home ownership and saving for the future. Building societies are owned by their members, who are also customers, and aim to serve the needs of their local communities. They operate on a mutual basis, meaning that any profits made are returned to members in the form of better interest rates on savings or lower mortgage rates.

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The demand for labour would likely be inelastic in situations where the demand for the final product that the labour produces is relatively insensitive to changes in the wage rate. In other words, if the demand for the final product is not affected much by changes in the cost of labour, then the demand for labour would be relatively inelastic. This is because the demand for labour is derived from the demand for the final product. If the demand for the final product is not very responsive to changes in the cost of labour, then the demand for labour will also be less responsive. For example, in industries such as healthcare and education, the demand for labour is often relatively inelastic because the demand for these services is not very sensitive to changes in the cost of labour. People need healthcare and education regardless of the cost, and therefore the demand for labour in these sectors tends to be relatively stable. On the other hand, if the demand for the final product that the labour produces is elastic, meaning that the quantity demanded is highly sensitive to changes in the price, then the demand for labour would be relatively elastic as well. This is because if the cost of labour increases, the cost of the final product will also increase, which could lead to a decrease in demand for the product, and therefore a decrease in the demand for labour. Overall, the demand for labour is influenced by a variety of factors, including the cost of labour, the demand for the final product, and the availability of alternative inputs such as capital.

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Inflation is the general increase in the price level of goods and services in an economy over time. Several factors can cause inflation, but one likely cause is an increase in demand for goods and services. When there is an increase in demand for goods and services, it can lead to a rise in their prices. If the supply of goods and services does not increase at the same rate as the demand, this can create a shortage, which allows sellers to increase their prices. Reducing public spending and increasing direct tax can both have a deflationary effect, which means they can reduce inflation. However, controlling excessive import may not necessarily lead to a decrease in inflation, especially if there is still high demand for goods and services within the domestic economy. Overall, an increase in demand is a likely factor to cause inflation in an economy, while reducing public spending and increasing direct tax can help to control it.

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The tax system described is progressive. A progressive tax system is one in which the tax rate increases as income increases. This means that people with higher incomes pay a larger percentage of their income in taxes than people with lower incomes. In the example provided, Mr. Patrick earns less than Mr. Shodawe but pays a smaller amount of tax (N90 vs N130). This implies that the tax rate for Mr. Patrick is lower than that of Mr. Shodawe. The progressive tax system is designed to redistribute wealth by taking more from those who can afford to pay more and using the revenue to provide social services and support for those who are less fortunate. It is based on the principle of ability to pay, which means that those who have more should contribute more to support the needs of society. Overall, the progressive tax system is considered to be fairer than other tax systems because it places a greater burden on those who are better off. It helps to reduce income inequality and ensure that everyone contributes to the common good according to their means.