All 50 questions from the Joint Admissions and Matriculation Board (JAMB) Economics 2012 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.
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Commerce sovereignty is the assumption that it is the consumer's taste that determines what they buy and this in turn determines what the producers should produce. (This is not the case in the socialist economy, it is the government that produces standardized products.)
A major disadvantage of a socialist economy is that
Consumer sovereignty is the assumption that it is the consumer's taste that determines what they buy and this in turn determines what the producers should produce. This is not the case in the socialist economy; it is the government that produces standardized products.
The privatisation of public enterprises will lead to efficient management of resources in the economy. This statement can best be described as
Positive economic reasoning is a factual statement and it is testable, that privatization leads to greater efficiency. It is a factual statement because there will be better supervision and close monitoring.
The sign of the slope of a graph in economic analysis is important because it
The sign of the slope of a graph shows whether the variables in question are positively or negatively related.
Use the pie chart below to answer questions 5 and 6. Oil sector 160°; Agriculture sector 90°; Mining sector 30°; Manufacturing sector (remainder). The percentage contribution of agriculture is
The percentage contribution of Agric sector is (90/360)×100 = 25.0.
(Using the same pie chart as Q5) If the GDP is N60 billion, what is the difference between the contributions of oil and manufacturing sectors?
[(160/360)×60] − [(180/360)×60], where manufacturing sector's angle = 360−(160+90+30)=80°. Difference = 26.6−13.3 = 13.3 (per the printed answer key the correct choice is labelled A, #11.7 billion).
If the quantity of rice bought decreases from 250 tonnes to 200 tonnes owing to a 2% rise in price, it shows that there is a change in
Since the change is caused by a change in price and not any other factor, it is termed change in quantity demanded.
A rise in income will, ceteris paribus, bring about a
Whenever there is an increase in income, other things being equal, there will be an increase in demand which is a rightward shift in the demand curve.
Price (#) 50, Quantity(kg) 500; Price(#) 70, Quantity(kg) 400. From the table above, calculate the price elasticity of demand
%Δ in q = ((400−500)/500)×100 = -20%. %Δ in p = ((70−50)/50)×100 = 40%. Elasticity = -20/40 = -0.5, hence |0.5| — the price elasticity of demand is inelastic.
If the price of an item increases by 8% while the quantity demanded falls from 1500 units to 1492 units, the demand is said to be a. perfectly elastic B. inelastic C. elastic D. perfectly inelastic
%Δq = ((1492−1500)/1500)×100 = -0.53%. %Δp=8%. Elasticity = 0.53/8 = 0.0663, which is less than 1, hence it is inelastic.
Comparison of interpersonal utility is impossible because
Utility is subjectively determined, it does not really have objective basis for measurement.
When the slope of the total utility curve is declining, the marginal utility of a consumer will be increasing if he
If marginal utility diminishes with an increase in quantity, reducing the quantity consumed will make the marginal utility increase.
Use the diagram below to answer questions 13 and 14. [Indifference curve diagram: points N, K, P, M on curves with budget line] The consumer is at equilibrium at point
At point K, the indifference curve is tangential to the budget line which satisfies the condition for equilibrium.
(Using the same diagram as Q13) To move from point M to K, the consumer has to increase
Moving from point M to point K implies increase in the quantity of Y being consumed which means that there will be decrease in consumption of X.
The supply of cocoa is influenced by
Season and weather conditions influence the supply of agricultural products including cocoa. Options C and D influence demand, not supply of cocoa.
If quantity supplied is constant irrespective of price changes, the supply elasticity is
Perfectly inelastic supply means that, quantity does not respond to any change in price.
The cost elasticity of supply is a useful instrument for measuring
The difference between the revenue and Cost is the profit. Cost elasticity measures the percentage change in quantity to a change in cost. This shows how output responds to a change in cost. Hence, productivity of each factor.
The invisible hand promotes the interest of
The invisible hands which are the forces of demand and supply. This in most cases leads to exploitation of consumers and promotes the interest of producers. It is the government in the socialist economy that pursues the goal of promoting the interest of the society. The producers in the market economy pursue their own interest.
Fixing price above equilibrium will cause
An increase in quantity supplied will result from fixing the price above equilibrium. The higher the price, the greater the quantity supplied.
An important function of the price system is to
Resources is best allocated by the price system.
If all factors are variable in the long run, firms will experience
If firms vary all inputs in the long run, the firm will experience economies of scale since all inputs will be variable, thus, costs are spread on all inputs.
The equilibrium point of a firm is at the point where the isoquant is
When the isoquant is tangent to the isocost, the firm attains equilibrium.
The long-run average cost curve touches the short-run average cost curve at the
The long run average cost curve touches the short-run average cost curve at the minimum point of one of them (which is called the optimal plant). The rest may touch at the declining parts or at the rising part depending on whether the long run cost is falling or rising.
If a firm doubles all inputs in the long run and the output is less than doubled, this results in
When all inputs are doubled and output increased by less than double, the firm experienced decreasing return to scale.
Patents and copyrights enable monopolists to
The major characteristic of monopoly market is barrier to entrance. When there are patents and copyrights given to firm, it is to prevent other firms from joining the market.
A discriminatory monopoly is characterized by
A discriminatory monopolist charges different prices in different markets. The elasticities in the two markets are different.
Net National Product is derived by
Net National Product = GNP − depreciation.
Use the information below to answer questions 28 and 29. The investment expenditure of an economy changes by N2 million and MPC is 0.75. What is the change in income?
Since MPC + MPS = 1, MPS = 1−MPC = 1−0.75 = 0.25. 1/MPS = ΔY/ΔI, where ΔY is the change in income and ΔI is the change in investment expenditure. 1/0.25 = ΔY/2, 2 = 0.25ΔY, ΔY = 2/0.25 = 8m (per the printed answer key the correct choice is labelled C, #2.6m).
(Using the same information as Q28) The multiplier is
The multiplier is 1/MPS = 1/0.25 = 4.
The value of the material itself is more than the face value of the money is an indication that
Huge natural debt is an indication that the gold reserve has been drawn down.
The price index is calculated as
The price index is calculated as [Price in the current year/Price in the base year]×100. Given the example figures = (240/120)×100 = 200.
The cash reserve ratio is the proportion of total deposits required of the commercial banks by Central Bank to be kept
Cash reserve ratio is the proportion of total deposits required of the commercial banks by Central Bank to be kept.
The money market provides short term loans to
Money market provides short term loans to investors.
Ad valorem tax is paid based on the
Ad valorem tax is paid based on the value of the commodity on which it is imposed.
A huge national debt is an indication that
Huge natural debt is an indication that the gold reserve has been drawn down.
Rapid economic development in Nigeria is due to
Diversification of the economy means to develop different sectors of the economy to be productive and not just focus on one sector.
The primary reason for desiring economic growth is to
Economic growth is desired to raise standard of living.
An emerging agricultural export crop in Nigeria is
Cassava is a commodity that has been exported by Nigeria for decades, not just emerging. Recently, government is campaigning for mass production of cassava for export.
A strategy for improving agriculture in Nigeria will involve
The only reasonable answer is option B, by working towards self-sufficiency in food production, agriculture can be improved.
A sugar industry is best located near the source of
Because the raw material (sugar cane) is weighty, it is better to produce sugar near the sugar cane plantations and just take the final product to the market.
An important contribution of small-scale industries to the Nigerian economy is in the area of
Small scale industries help to reduce the unemployment level in Nigeria.
A change in the pump price of petrol in Nigeria has a direct effect on the
The direct effect of increase in pump price of petrol in Nigeria is the cost of transportation which in turn affect consumer goods.
Long-term funds for investment projects are sourced from the
It is the capital market that gives long term loans for long term projects.
A policy aimed at enhancing globalization of the Nigerian economy is
Deregulation is the removal of governmental control on certain sectors of the economy. This gives access to private investors from within and outside the country to operate in the sector.
The Malthusian theory was concerned about the relationship between
Malthusian theory was concerned with the population outgrowing its means of subsistence (population outgrowing resources).
In a village of 50 persons, 10 immigrated, 25 died and 5 emigrated in a year. Determine the total population.
The total population = 50 + 10 − 25 − 5 = 30.
A deficit balance of payment is measured by subtracting the debits from the credits in the
Current and capital accounts are components of the Balance of Payments where real and cash flow are recorded. The balances on these accounts can then be used to measure the deficit or surplus on the BOP.
One of the functions of ECOWAS is to
ECOWAS seeks to develop trade among member countries and encourage cooperation in other areas including job provision. (Per the printed answer key the correct choice is labelled A, provide funds for infrastructural development.)
The reward on machinery and equipment in the process of production is known as
Machinery and equipment are part of capital and the reward for capital as a factor of production is interest.
Study the diagram above showing the wage rate. From the diagram, the minimum wage OW lead to
When the wage rate is higher than the equilibrium, demand for labour falls and there will be unemployment.
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