All 50 questions from the Joint Admissions and Matriculation Board (JAMB) Economics 2009 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.
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Musa has a choice of buying a shirt, a book and a bag. What is the opportunity cost of buying a book?
If he bought only the book, the ones left unbought because of insufficient fund is the opportunity cost. If the scale of preference was given, it will be the next on the scale of preference after the book has been bought.
A typical feature of a market economy is that
Consumer sovereignty is the freedom of the consumer to buy what he likes without any interference. It is a major feature of market economy.
The privatization exercise in Nigeria is a move towards
Market economy is the one characterized with individual ownership of factors of production. Privatization is therefore a move towards a market economy.
Use the pie chart to answer questions 4 and 5 (Manufacturing 80 degrees, Transport 60 degrees, Oil 120 degrees, Agric 100 degrees). The percentage contribution of the transport sector is
The transport sector has 60 degrees out of 360 degrees; the percentage is (60/360) x 100 = 16.7%.
If the contribution of the oil sector is N3.6 million, what is the contribution of the other sectors?
If the contribution of oil sector (120 degrees) is N3.6m, then the total GDP is (3.6x360)/120 = N10.8m. Contribution of other sectors = 10.8 - 3.6 = N7.2 million.
A cumulative frequency graph is
Ogive is a graph drawn from a cumulative table.
A movement along the same demand curve is caused by the
Movement on a single demand curve is caused only by the change in price of the commodity.
The demand curve for a luxury good is
The demand curve for a luxury good is positively sloped but elastic. It cannot be negatively sloped because it is not a normal good; it is the article of ostentation that has positive slope.
Price elasticity of demand is expressed as
Price elasticity is expressed as %change in quantity demanded / %change in price.
A major assumption in cardinal utility theory is that
The major assumption of the cardinalists is that utility can be measured numerically.
A supply curve is positively sloped because
Price is an incentive to a producer; higher price induces him to sell more.
The short-run supply curve for medical doctors is more likely to be
The short run supply of medical doctors is more likely to be perfectly inelastic because of the time period required for the training. An increase in the wages or salaries of doctors might not lead to any change in supply in the short run.
If the price of an item changes by 8% and quantity supplied changes from 600 units to 660 units, the price elasticity of supply is
%change in quantity = (660-600)/600 x 100 = 10%. Elasticity = %change in quantity / %change in price = 10%/8% = 1.25.
In a regulated market, price is determined by
A regulated market is a market that is controlled by the government or its agencies. Prices of goods and services are regulated by the government.
A decrease in supply without a corresponding change in demand will lead to
There will be an increase in equilibrium price and a decrease in equilibrium quantity as supply shifts left (from S0 to S1), while quantity demanded decreases.
Production takes place when
When input is transformed into output, production has taken place. Generally, anytime utility is created, there is production.
Use the table below to answer questions 17 and 18 (Units of Capital 1-6, Total output (kg) 16,64,126,212,425,684, with AP and MP columns). The marginal product of the 5th unit of capital is
The marginal product of the 5th unit of capital is 425-212=213, i.e. the difference between the total product when the 5th capital was employed and when the 4th capital was employed.
Determine the average product of the 4th unit of capital
The average product of the 4th capital = TP/K = 212/4 = 53, i.e. the total output when 4 units were employed and the units of capital employed.
Which of the following can be deduced from law of variable proportions when total output is rising?
This has some ambiguity because any of the options can be the answer when there is diminishing return, but generally when total output is rising, MP is greater than AP.
As the level of output increases, the average fixed cost of a firm will
As output increases the Average Fixed Cost continues to decrease because the total fixed cost does not change.
The shape of the long-run average cost curve is best explained by the
The shape of the long-run cost curve is explained by the laws of returns to scale while that of the short run is explained by the law of diminishing return.
The supply curve of a perfectly competitive firm is identical to its
In a perfectly competitive firm, the marginal cost curve of the firm is also the supply curve. This is because the condition for equilibrium is MC=MR and MR=AR=P.
If a monopolist is incurring short-run losses, this means that his
What determines whether a firm is making loss or not is the position of the Average Cost. It is difficult to say P<MC leads to short-run loss. Since the MC must be equal to MR at equilibrium and the AR of the monopolist is always greater than MR.
In the long run, one of the characteristics of monopolistic competitive firms is that they
Because there is free entry and free exit in the monopolistic competitive market, they make only normal profits in the long run.
In developing countries, it is easier to obtain accurate national income estimates through the
GDP is easier to determine in developing countries than GNP because of the inaccuracy in the computation of net income from abroad which is required in computing GNP.
Double counting is a problem in computing national income when using the
When using the income approach, there is a tendency of including transfer payments which are not payments for production in the current period.
In the circular flow of income, an increase in savings causes
Saving is a withdrawal (leakage), and it causes a decrease in the income stream on the circular flow.
The ability of commercial banks to create money depends on the
The reserve ratio is the percentage of the customer's deposit that commercial banks are required to keep with the Central Bank. This ratio determines what will be left for the commercial bank to give out as loans because they create money only by giving out loans to customers.
The reform in the banking sector in Nigeria is principally motivated by the need to
The reform is mainly aimed at consolidating the banking sector by increasing their capital base.
A manufacturer who wants to build a new plant will source funds from
Manufacturer can source for funds from commercial banks if he has good credit rating.
Cost-push inflation occurs when
When production cost is high, there will be a pressure on the producer to increase prices of his products. This is called cost push inflation if it cuts across firms and its sustained.
If government expenditure exceeds revenue, this results a
Budget deficit is the type of budget in which the proposed expenditure exceeds the estimated revenue.
The Basic Needs Approach to development is directed at
The basic need approach is to alleviate poverty by providing basic materials for the poor.
The major reason why countries strive to achieve optimum growth is to
The major reason why countries strive to achieve optimum population is to raise standard of living. Increased production and self-reliance are means to the achievement of this objective.
According to the theory of comparative advantage, specialization will result in
Comparative advantage advocates that country should produce a good which it can produce with a lower opportunity cost. This will lead to efficient allocation of resources.
Dumping in international trade means selling a good at a
Dumping is the practice of selling goods at cheaper price abroad than the price in the local market.
Guided deregulation as currently practiced in Nigeria implies that
The use of both the market forces and the government regulation to determine the exchange rate and the interest rates is called guided deregulation.
An important function of the World Bank is to
World Bank, also known as the International Bank for Reconstruction and Development provides long-term loans to members.
The major problem confronting a sole proprietor is
The greatest challenge of a sole proprietor is the limitation he faces in raising funds.
A public liability company is run on a daily basis by
The day-to-day administration of the public limited liability company is done by the board of directors elected by the shareholders.
The marketing of agricultural products in Nigeria can be improved by
Re-establishment of the marketing boards with a high level of transparency can improve the marketing of agricultural products in Nigeria.
To enhance the competitiveness of domestic agricultural products there is need to
Improving the quality of agricultural products will make them command higher prices and become more competitive in the world market.
In Nigeria, the location of a steel industry at Ajaokuta is due to
Steel industry is a raw material oriented industry. Locating close to raw material is economical when it comes to transporting the product.
Industries for consumer goods are concentrated in urban centres as a result of
There is a large ready-made market for consumer goods in the urban centres because of the high population.
The current industrial development strategy in Nigeria is aimed at encouraging
The strategy is to encourage small and medium scale industry.
Activities in the oil and gas industry are classified into
Upstream and downstream is the classification of activities in the oil and gas industry.
High dependency ratio is influenced by
High birth rate increases the percentage of children which are part of the dependent population.
Occupational distribution of population determines the
The occupational distribution is the classification of the population, especially the working population, into primary, secondary and tertiary occupation. This is used to determine the size and categories of the labour force.
The mobility of labour is mainly determined by
Wage rate differential is a major incentive for worker to migrate from one job to another or even to move from one industry to another.
When workers have a union, the supply of labour is said to be
When workers have a union, they operate as one body which monopolizes the supply of labour.
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