JAMB UTME - Economics - 1998

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The petroleum industry in Nigeria is the largest on the African continent. As of 2014, Nigeria's petroleum industry contributes about 14% to its economy. Therefore, though the petroleum sector is important, it remains in fact a small part of the country's overall diversified economy

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If an increase in the price of a commodity leads to an increase in total revenue, then the demand for this commodity is either inelastic or relatively inelastic. This is because inelastic demand refers to a situation where a change in price causes a relatively smaller change in quantity demanded. Therefore, when the price of such a commodity is increased, the increase in total revenue will be significant because the quantity demanded will not change significantly. On the other hand, if the demand for a commodity is elastic, it means that a change in price causes a relatively larger change in quantity demanded. Hence, an increase in the price of such a commodity will lead to a decrease in the quantity demanded, leading to a decrease in total revenue. Therefore, if an increase in price results in an increase in total revenue, the demand for the commodity is inelastic or relatively inelastic.

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The liquidation of a limited liability company implies that the debts of the company can only be paid from its own assets. Limited liability companies are businesses that provide a legal structure for the company, which separates its assets and liabilities from those of the owners or shareholders. In case the company is unable to continue its business, it can be liquidated or wound up. This means that the company's assets are sold to pay off its debts and liabilities. The process of liquidation involves selling off the assets of the company, paying off the company's creditors, and distributing the remaining assets to the shareholders. Since the company is a separate legal entity from its owners, the debts of the company can only be paid from its own assets, and not from the private funds of the owners. In a limited liability company, the owners' liability is limited to the amount of capital that they have invested in the company. Therefore, in case of liquidation, the owners or shareholders will not be personally liable for the debts of the company beyond their investment. Therefore, the liquidation of a limited liability company implies that the debts of the company can only be paid from its own assets.

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An increase in government expenditure will lead to an increase in the level of aggregate demand. When the government spends more, it injects more money into the economy, which leads to an increase in demand for goods and services. This, in turn, can lead to an increase in economic activity, such as production and employment. As a result, businesses may experience increased sales and profits, leading to increased economic growth. However, it may also lead to inflation if the increased demand leads to higher prices.

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In a perfectly competitive market, the producer faces a perfectly elastic demand curve. This means that the elasticity of the demand curve is infinite. Any increase in the price of the product will cause the quantity demanded to fall to zero, as consumers will switch to the products of other producers who charge lower prices. Similarly, any decrease in the price of the product will result in an increase in the quantity demanded by an infinite amount, as all consumers will purchase the product at the lower price. Therefore, the producer has no control over the price of the product in a perfectly competitive market and must accept the market price as given.

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Export-promotion policy is primarily concerned with encouraging the production of export commodities. This is achieved through various measures such as providing incentives to exporters, developing export infrastructure, and improving access to international markets. The policy aims to increase the volume and value of exports, thereby generating foreign exchange and boosting economic growth.

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Unlike the retailer, the wholesaler provides useful information about market trends and finance to the manufacturer. The wholesaler acts as a middleman between the manufacturer and the retailer, purchasing goods in large quantities from the manufacturer and selling them to the retailers in smaller quantities. The wholesaler has a better understanding of the market trends and can provide valuable information to the manufacturer on what products are in high demand and what prices are reasonable. They also have a good understanding of the financial side of the business and can provide important insights into pricing strategies and inventory management. While retailers are more focused on selling products directly to consumers and providing after-sales services, wholesalers focus more on the relationship between the manufacturer and the retailer.

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A co-operative society is a form of business organization that is not motivated solely by the profit objective. It is an association of persons who come together voluntarily to pool their resources for the promotion of their common economic interests. The members of a co-operative society jointly own and control the business and share the profits based on their level of participation. The primary objective of a co-operative society is to provide goods and services to its members at a reasonable price and to improve their economic status. In this sense, co-operative societies are more focused on providing benefits to their members rather than maximizing profits.

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If a country operates a freely floating exchange rate system and suffers a balance of payments deficit, it can be eliminated through a fall in the external value of its currency. A balance of payments deficit occurs when a country's imports exceed its exports, leading to a decrease in its foreign exchange reserves. In a freely floating exchange rate system, the value of a country's currency is determined by the forces of supply and demand in the foreign exchange market. If a country is facing a balance of payments deficit, the demand for its currency in the foreign exchange market is low, which leads to a fall in the external value of its currency. A fall in the external value of a currency makes the country's exports relatively cheaper for foreign buyers, which can increase demand for its exports and reduce the trade deficit. Furthermore, a fall in the external value of a country's currency can also make its imports more expensive, which can reduce the volume of imports and further help to correct the balance of payments deficit. Therefore, a fall in the external value of a country's currency can help to eliminate a balance of payments deficit in a freely floating exchange rate system.

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Development plans refer to the strategies and policies implemented by governments to promote economic growth and improve the well-being of their citizens. However, in some developing countries, these plans have not been successful due to a variety of reasons. One of the reasons is the shortage of skilled labor and experts. Developing countries may lack the necessary human capital to carry out the development plans effectively. For example, if a country needs to build infrastructure, such as roads or bridges, it requires skilled engineers and construction workers who may not be available locally. Without the necessary expertise and knowledge, the implementation of development plans may be hindered. Another reason is the scarcity of industrial raw materials. Developing countries may have limited access to raw materials, which are essential for industrial production. This can make it difficult for them to develop industries and create jobs, which are crucial for economic growth. Additionally, a very large working population may be a challenge for some developing countries. The sheer number of people seeking employment opportunities can strain the job market and make it difficult for governments to create jobs fast enough to meet demand. Finally, an increase in the level of consumption can also hinder development plans. If a developing country's population begins to consume more goods and services than the country can produce, it may lead to a trade deficit, which can negatively impact economic growth. In summary, the success of development plans in developing countries is dependent on various factors, including the availability of skilled labor, access to industrial raw materials, the size of the working population, and the level of consumption.

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In the diagram, profit is maximized at the output level "OL". This is the level of output where the marginal cost (MC) equals the marginal revenue (MR) and the difference between them is the greatest. At this level of output, the firm is producing the quantity where it can sell the product at the highest price while still covering all the costs of production, resulting in the highest profit possible. Any level of output beyond "OL" would result in diminishing marginal returns, which means that the cost of producing an additional unit would be greater than the revenue generated from selling that unit.

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Transfer payment refers to unrequited payment i.e. payment which an individual has not worked for so the correct answer here is A - Gift to a motherless babies' home.

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The shaded triangle in the diagram is known as the "consumer surplus." Consumer surplus refers to the difference between the maximum price that a consumer is willing to pay for a product or service and the actual price that they pay. It represents the benefit that consumers receive from being able to purchase a product or service at a price that is lower than what they are willing to pay. In the diagram, the demand curve represents the maximum price that consumers are willing to pay for a particular product or service. The supply curve represents the cost that producers incur to produce the product or service. The point where the two curves intersect is known as the equilibrium price. The area above the equilibrium price and below the demand curve represents the consumer surplus. This is because consumers are willing to pay more for the product than they actually have to pay at the equilibrium price. The shaded triangle in the diagram represents this consumer surplus. In summary, the consumer surplus is the benefit that consumers receive from being able to purchase a product or service at a price that is lower than what they are willing to pay. The shaded triangle in the diagram represents the consumer surplus.

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The reserve requirement is the percentage of deposits that a commercial bank is required to hold in reserve with the Central Bank of Nigeria. In this case, the reserve requirement is 30%, which means that the bank must hold 30% of the N3000 deposit in reserve, or N900. Therefore, the amount of funds that the bank has available to lend out is N3000 - N900 = N2100. So the correct answer is N2,100.

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In the diagram above, the price P2 in price control situation is referred to as the maximum price. Price control refers to the government's efforts to regulate the prices of goods and services in the market, usually to protect consumers from being charged excessively high prices by producers or sellers. When a maximum price is imposed, it means that the government sets a limit on how much a producer or seller can charge for a particular good or service. In the diagram, the maximum price P2 is set below the equilibrium price, which is the price at which the quantity demanded by consumers and the quantity supplied by producers are equal. When the government sets a maximum price below the equilibrium price, it creates a situation where the quantity demanded exceeds the quantity supplied, leading to a shortage of the good or service. In summary, the price P2 in the diagram above is referred to as the maximum price because it is the highest price that producers or sellers are allowed to charge for the good or service in the market, as set by the government through price control measures.

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The balance of visible trade is the difference between the values of goods that a country exports and the goods it imports. It only includes physical, tangible goods such as cars, machinery, and clothing, and not intangible services such as tourism, banking, or consulting. When a country exports more goods than it imports, it has a surplus in its balance of visible trade, and when it imports more than it exports, it has a deficit. This balance is an important measure of a country's economic performance and its position in the global market.

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The major objective of economic growth is to increase real per capita income. Economic growth refers to an increase in the production and consumption of goods and services in an economy over a period of time. The ultimate goal of economic growth is to improve the standard of living of people by increasing the availability of goods and services, and the purchasing power of individuals. When an economy grows, it produces more goods and services, which leads to an increase in the income of individuals. As the income of people increases, they are able to consume more goods and services, leading to a higher standard of living. Therefore, the main objective of economic growth is to increase real per capita income, which is the total income of an economy divided by the population. This is because a higher per capita income means that people have more money to spend on goods and services, which improves their standard of living.

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Crude petroleum is a good example of a **wasting asset**. This is because it is a non-renewable resource that is finite in quantity and will eventually be depleted with time. As petroleum is extracted from oil wells and consumed, the amount of crude oil available for future use decreases. Once the oil reserves have been depleted, it cannot be replaced or regenerated, making it a wasting asset.

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The table above shows the total utility that an individual receives from consuming different quantities of commodity X. Total utility refers to the overall satisfaction or happiness that an individual derives from consuming a particular product or service. To find the total utility for the individual who consumes 3 units of commodity X, we simply look at the table and locate the row that corresponds to 3 units. From the table, we can see that the marginal utility of the first unit is 100, the marginal utility of the second unit is 80, and the marginal utility of the third unit is 50. To find the total utility of consuming all three units, we add the marginal utility of each unit together: Total utility = Marginal utility of the first unit + Marginal utility of the second unit + Marginal utility of the third unit Total utility = 100 + 80 + 50 Total utility = 230 units Therefore, the total utility for the individual who consumes 3 units of commodity X is 230 units. In summary, to find the total utility for a particular quantity of commodity X, we add up the marginal utility for each unit consumed up to that quantity. For the individual who consumes 3 units of commodity X, the total utility is 230 units.

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One of the major consequences of urban-biased development programs in Nigeria is that they led to rapid rural-urban migration. Urban-biased development programs refer to policies and strategies that prioritize the development of urban areas over rural areas. These policies tend to favor urban areas in terms of infrastructure development, job creation, and access to social amenities. As a result, people living in rural areas often move to urban areas in search of better opportunities, including employment, education, healthcare, and other social amenities. Rapid rural-urban migration can have both positive and negative consequences. On the positive side, it can lead to increased economic opportunities for migrants, who may be able to find jobs and access social amenities that were not available in their rural communities. However, it can also lead to overcrowding, urban poverty, and a strain on urban infrastructure and resources. In Nigeria, the consequences of urban-biased development programs have been particularly pronounced, as the country has experienced rapid urbanization in recent decades. While urbanization can be a positive force for economic growth and development, it must be accompanied by policies and strategies that also promote the development of rural areas and address the needs of rural communities.

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One of the economic problems of Nigeria today arises from the under-utilization of human and natural resources. This means that despite having a large population and abundant natural resources, Nigeria is not fully harnessing its potential to drive economic growth and development. Factors such as poor governance, corruption, inadequate infrastructure, and low levels of investment have all contributed to this problem. As a result, Nigeria continues to struggle with high unemployment, poverty, and inequality, despite its vast potential for economic progress.

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If a government wants to reduce the level of inflation, it will generally run a budget surplus. A budget surplus means that the government's revenue exceeds its spending. By doing so, the government will be able to reduce the amount of money in circulation, which can help reduce inflation. If the government runs a budget deficit or borrows more money, it may increase the amount of money in circulation, which can lead to inflation. Running a balanced budget means that the government's revenue and spending are equal, so it may not have an immediate impact on inflation.

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An issue of bank-notes not backed by gold but by government securities is known as a fiduciary issue. A fiduciary issue is a type of currency that is not backed by a commodity such as gold, but rather by the government's promise to pay. In this case, the government securities serve as collateral to ensure that the value of the currency remains stable. Fiduciary issues are common in modern economies, as most currencies today are not backed by gold or any other commodity. Instead, the value of the currency is based on the strength of the issuing government's economy and its ability to maintain stability and control inflation. In summary, a fiduciary issue is a type of currency that is not backed by gold, but by government securities, and is a common feature of modern economies.

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When a firm is experiencing economies of large-scale production, it means that the cost per unit of output is decreasing as the level of production increases. Therefore, the firm will experience a fall in its long-run average cost. This occurs because as production increases, the firm can spread its fixed costs over more units, which reduces the average cost per unit. In other words, the more the firm produces, the lower the cost per unit.

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Economically, underdeveloped countries are characterized by a high rate of population growth and a low rate of economic growth. Underdeveloped countries are those countries that are experiencing significant economic and social challenges, including poverty, inequality, and limited access to basic services such as education, healthcare, and infrastructure. A high rate of population growth means that the population of the country is increasing rapidly, which can put a strain on the country's resources and limit its ability to invest in economic development. A low rate of economic growth means that the country's economy is not expanding at a significant rate, which can lead to limited job opportunities, low incomes, and limited access to basic goods and services. These factors can contribute to a cycle of poverty and underdevelopment, as limited economic opportunities and resources can make it difficult for underdeveloped countries to invest in the education, infrastructure, and other resources needed to support economic growth and development. In summary, underdeveloped countries are characterized by a high rate of population growth and a low rate of economic growth, which can contribute to a cycle of poverty and underdevelopment.

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The correct answer is "agricultural sector." The agricultural sector in Nigeria employs the largest proportion of the active labor force, accounting for about 36% of total employment. This sector is a major contributor to the country's Gross Domestic Product (GDP) and a major source of income for many families. The other options may also be important sectors, but they do not employ as many people as the agricultural sector in Nigeria.

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The sentence is saying that infrastructural problems in many developing countries are severe, and it is because of the lack of something. The options listed in the question are all possibilities, but the answer that best fits the sentence is "supporting services that encourage economic activities." In other words, the sentence is suggesting that developing countries struggle with infrastructure because they lack things like transportation, communication, and energy services that are necessary for businesses and industries to thrive. Without these supporting services, it becomes difficult for economic activities to take place, which can lead to problems with infrastructure.

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The correct answer is: "it varies inversely with the price level." Money is a means of exchange and its value is determined by its purchasing power, which is the amount of goods and services it can buy. The price level, on the other hand, is the average level of prices of goods and services in an economy. Inflation, which is an increase in the price level, reduces the value of money, because it reduces the amount of goods and services that can be purchased with a given amount of money. Conversely, deflation, which is a decrease in the price level, increases the value of money, because it increases the amount of goods and services that can be purchased with a given amount of money. Therefore, the value of money varies inversely with the price level.

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The short-run period in production is a period of time when some factors of production, such as capital or technology, are fixed and cannot be changed. This means that the amount of output produced during this period cannot be varied beyond a certain limit, even if more labor is added. In this period, firms need to cover all their production costs, including fixed costs, to stay in business. However, it is possible that the current output is not profitable, which means that the firm may be operating at a loss.

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The elasticity of demand measures the responsiveness of the quantity demanded to changes in price. If the elasticity of demand for a commodity is 2.5, it means that a 1% change in the price of the commodity will result in a 2.5% change in the quantity demanded. Therefore, a 10% change in the price of the commodity will result in a change in the quantity demanded of: 2.5% x 10 = 25% Hence, the percentage change in the quantity demanded as a result of a 10% change in price is 25%. Therefore, the answer is option D, 25.00.

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When an indirect tax is levied on the producer of a good, the burden on the consumer will depend largely on the elasticity of demand for the good. Elasticity of demand refers to how responsive the quantity demanded of a good is to a change in price. If the demand for a good is inelastic (i.e., consumers are not very sensitive to changes in price), then the producer will be able to pass on most of the tax to the consumer in the form of a higher price. On the other hand, if the demand for the good is elastic (i.e., consumers are very sensitive to changes in price), then the producer will not be able to pass on much of the tax to the consumer, as a higher price will result in a significant decrease in quantity demanded. In summary, the burden of an indirect tax on the producer of a good will depend largely on the elasticity of demand for the good. If demand is inelastic, the producer will be able to pass on most of the tax to the consumer in the form of a higher price. If demand is elastic, the producer will not be able to pass on much of the tax to the consumer.

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The Agricultural Development Programme (ADP) is an entirely domestic effort directed at improving agricultural production in Nigeria. The ADP was established in 1972 by the Nigerian government to promote and support agricultural development at the state and local government levels. The program's primary goal is to increase agricultural productivity and improve the livelihoods of rural farmers in Nigeria. The ADP provides extension services, training programs, and technical assistance to farmers to improve their agricultural practices and increase yields. The program also provides credit facilities, inputs, and implements to farmers to enhance their productivity. Overall, the Agricultural Development Programme is an important domestic effort in Nigeria aimed at improving agricultural production and increasing the income of rural farmers.

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A public limited liability company can have their shares quoted on the stock exchange. A public limited liability company is a type of business organization where ownership is divided into shares that can be bought and sold by the public. As the name implies, it has limited liability, which means that the shareholders are only liable for the amount of money they have invested in the company. One of the advantages of being a public limited liability company is the ability to raise capital by selling shares to the public. This means that the company can sell shares of ownership to interested individuals or entities in exchange for money, which can be used to finance the company's operations or expansion. To facilitate the buying and selling of shares of a public limited liability company, the company can have its shares listed on a stock exchange. A stock exchange is a marketplace where buyers and sellers of shares can come together to trade shares of publicly traded companies. Therefore, a public limited liability company can have their shares quoted on the stock exchange, which can provide them with access to a wider pool of potential investors and increase their ability to raise capital.

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