All 40 questions from the Joint Admissions and Matriculation Board (JAMB) Economics 2018 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.
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The effect of an expansionary monetary system above full employment level is
Expanding the money supply beyond full employment output raises prices rather than output, causing inflation.
The maximum amount of money a company is allowed to raise by issuing shares to the public is
Authorized capital is the maximum amount of capital a company is permitted to raise through share issuance, as stated in its memorandum.
The value of money will appreciate if
A surplus budget reduces the money in circulation, which increases the value/purchasing power of money.
In Nigeria, government can ensure continuous supply of agricultural produce in all seasons by
Storage facilities allow produce harvested in one season to be preserved and made available all year round.
The reduction of high fertility rate is a measure of population control designed to
Fertility rate is the rate of childbirth; reducing it is a direct measure aimed at reducing total population growth.
Capital accumulation for low income earners is better done through
Low income earners typically cannot save enough on their own; loans provide them the means to accumulate capital.
The government of Nigeria can conserve foreign exchange by
Improving the level of international reserves helps conserve/protect a country's foreign exchange position.
The minimum number of persons who are legally allowed to operate a partnership business is
Under the Companies and Allied Matters Act, a partnership requires a minimum of two persons, with no fixed maximum stated here.
GNP is not a good measure of social welfare because they are unrecorded
Many economic services (e.g. unpaid housework) are not captured in GNP, making it an imperfect measure of social welfare.
One of the major goals of OPEC is to
OPEC, as a cartel, coordinates and controls crude oil supply among its member countries to influence prices.
One of the factors considered in the determinant of wages is
The value of output produced is a key factor considered in determining the wage a worker receives.
If government expenditure exceeds its revenue, this will give rise to a
When expenditure exceeds revenue in a given year, the government runs a deficit budget.
The demand curve for a firm operating under perfect competition is
A perfectly competitive firm is a price taker, so it faces a perfectly elastic (horizontal) demand curve at the market price.
One of the factors responsible for an outward shift in the PPC of a society is the
Improved technology increases the maximum attainable output combinations, shifting the entire PPC outward.
The typical feature of a market economy is that
Profit maximization by producers, alongside utility maximization by consumers, is the distinguishing feature of a market economy.
Given that qd=40−4p and qs=12p–24, determine the equilibrium price
Setting qd=qs: 40−4p=12p−24 → 64=16p → p=4.
Petro chemical industries are located in the river state of Nigeria because
Petrochemical industries require crude oil (found in the Niger Delta) as raw material, so proximity to this raw material drives their location.
In an imperfect market, the monopolist can influence
A monopolist, having no competitors, has the market power to influence either price or quantity supplied, though not both simultaneously.
In the production process, the law of diminishing returns begins to set in when
Diminishing returns set in when each additional unit of the variable input adds a smaller increment to total output than the previous unit.
The most unique quality of money is its
Universal recognition/acceptability is the most unique quality of money, since everyone can easily recognize and accept it wherever used.
The U-shaped nature of the long run average cost curve is explained by
The U-shape of the LRAC curve reflects returns to scale: economies of scale (falling AC) followed by diseconomies of scale (rising AC).
In Nigeria, import substitution industrialization strategy is faced with the problem of
Nigerians' strong preference for imported (foreign) goods over locally made products undermines import substitution efforts.
A cosmetic dealer sourcing for capital to expand his business will approach
Commercial banks are the type of financial institution that typically provides short-term loans to businesses like a cosmetic dealer's.
One of the advantages of using a labour intensive strategy of production is that
A labour-intensive strategy is advantageous where labour is cheap relative to capital, as is typical in developing economies.
A business organisation in which there is a limitation to the amount of losses a shareholder can sustain in the event of business failure, by law, is a
In a limited liability company, a shareholder's loss is legally limited to the amount of their shareholding/investment.
Rural-Urban migration is influenced by
Better availability of social infrastructure (schools, hospitals, jobs) in urban areas pulls migrants from rural areas.
The demand curve for a perfectly competitive firm is represented by the AR curve as shown below. This curve is
Since a perfectly competitive firm is a price-taker, its AR (=demand) curve is horizontal at the market price (P=AR=MR).
The most important determinant in the supply of agricultural products is
Agricultural supply is most fundamentally determined by favourable weather conditions, which directly affect crop yield.
The marginal propensity to consume measures the relationship between
Marginal propensity to consume (MPC) = change in consumption / change in income.
The major problem confronting agriculture in Nigeria includes
Rural-urban migration depletes the agricultural workforce, as many able-bodied youths move to cities, hampering agricultural productivity.
In Nigeria, export promotion strategy is aimed at
Export promotion strategy is a deliberate effort to encourage and support local firms to increase exportation.
A distinguishing feature of a free enterprise economy is
Profit maximization on the part of private producers is the key distinguishing feature of a free enterprise (market) economy.
The growth of private enterprise is constrained by
Market size is the target of any firm's expansion; without a sufficient market, there is no incentive for a private enterprise to grow further.
The initial deposit of a deposit bank is #500,000. Calculate the total amount of credit the bank can create with a cash ratio of 20%
Money created = Initial deposit / Cash ratio = 500,000 / 0.20 = #2,500,000.
Which of the following represents a feature of a less developed country?
A high birth rate (alongside low per capita income) is a typical feature of a less developed country; of the listed single features, high birth rate best fits.
The major factor to be considered in the location of timber and plywood industries is
Timber and plywood industries are best located close to the availability of the raw material — timber and plywood trees.
One of the consequences of overpopulation is
Overpopulation strains resources and opportunities, often leading to unemployment and a higher level of social vices (crime, prostitution, etc.).
The price of a commodity X increases from 2.00 to 7.00, while the quantity demanded of a related commodity Y decreases from 75 to 50. Calculate the cross elasticity of demand
%ΔQy = (75−50)/[(75+50)/2] ×100 ≈ 33.3%. %ΔPx = (7−2)/[(7+2)/2] ×100 ≈111%. Cross elasticity = %ΔQy/%ΔPx = 2/15 (as computed using the midpoint/average method shown in the working).
A principal factor that determines the value of money is the
The price at which goods are sold is the major determinant of the value of money, since price determines the quantity/basket of goods that can be purchased.
Government capacity to raise tax revenue in Nigeria is being hampered by
Trade union activities (e.g. resistance/agitation against tax policies affecting workers) hamper government's capacity to raise tax revenue, as unions often oppose policies affecting their members' take-home pay.
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