JAMB Economics 2020 Objective Past Questions

All 50 questions from the Joint Admissions and Matriculation Board (JAMB) Economics 2020 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.

Economics 2020 Objective — Question 1

Which Question Paper Type of Economics is given to you?

• A. Type D
• B. Type I
• C. Type B
• D. Type UCorrect

Explanation

The question paper is explicitly labelled as Type U.

Economics 2020 Objective — Question 2

An economy in which both the public and private sectors contribute to economic growth is as a

• A. feudal economy
• B. capitalist economy
• C. socialist economy
• D. mixed economyCorrect

Explanation

A mixed economy is one where both the public and private sectors contribute to economic growth.

Economics 2020 Objective — Question 3

If the standard deviation of a given data is 53, what is the variance?

• A. 2082
• B. 2809Correct
• C. 2808
• D. 2209

Explanation

Variance = (Standard Deviation)² = 53² = 2809.

Economics 2020 Objective — Question 4

Which of the following set of statistical tools is used for further economic analysis?

• A. The median and standard deviation
• B. The mean and mode
• C. The mean and standard deviationCorrect
• D. The mode and median

Explanation

The mean and standard deviation together form the key statistical tools used for further (deeper) economic analysis.

Economics 2020 Objective — Question 5

An advantage of the range as a measure of dispersion is that it

• A. can be used to calculate open-ended distributionCorrect
• B. makes use of all values of observations in a distribution
• C. takes all values into consideration
• D. is useful for further statistical calculations

Explanation

The range can be calculated even for open-ended distributions, which is an advantage over other dispersion measures.

Economics 2020 Objective — Question 6

Find the median of the following set of data 35, 10, 14, 38,15, 18, 22, 30 and 28

• A. 22 (option matching closest to D)
• B. -
• C. -
• D. -Correct

Explanation

Arranged ascending: 10,14,15,18,22,28,30,35,38 - the middle (5th) value is the median, which is 22.

Economics 2020 Objective — Question 7

An increase in demand without a corresponding change in supply will lead to

• A. a decrease in equilibrium price and an increase in equilibrium quantity
• B. an increase in equilibrium quantityCorrect
• C. a decrease in equilibrium price and quantity
• D. an increase in equilibrium price and a decrease in equilibrium quantity

Explanation

An increase in demand, with supply unchanged, raises both the equilibrium price and the equilibrium quantity.

Economics 2020 Objective — Question 8

In line with the law of demand, an increase in the price of a commodity will result in a

• A. decrease in quantity demandedCorrect
• B. increase in quantity demanded
• C. decrease in demand
• D. increase in demand

Explanation

By the law of demand, a rise in price reduces the quantity demanded (not overall demand, which is a separate concept).

Economics 2020 Objective — Question 9

If the price of a bicycle changes from N120 to N80, and the quantity bought changes from 300 to 500 units, the elasticity of demand for bicycle is

• A. 66.7
• B. 0.5
• C. 1.5
• D. 2.0Correct

Explanation

Elasticity = % change in quantity / % change in price = 66.67% / 33.33% = 2.0.

Economics 2020 Objective — Question 10

As shown in the diagram below, the price elasticity of demand is

• A. unitarily elastic
• B. perfectly elastic
• C. perfectly inelasticCorrect
• D. fairly inelastic

Explanation

A vertical demand curve (quantity unchanged regardless of price) shows perfectly inelastic demand.

Economics 2020 Objective — Question 11

One of the assumptions of the cardinalist approach is

• A. diminishing marginal rate of substitution
• B. the consistence and transitivity of choice
• C. the total utility depends on the quantity of the commodities consumedCorrect
• D. constant marginal utility of money

Explanation

Cardinalists assume that total utility depends on the quantity of the commodity consumed and that utility can be measured.

Economics 2020 Objective — Question 12

Utility is the satisfaction derived from the

• A. distribution of goods and services
• B. use of goods and servicesCorrect
• C. demand of goods and services
• D. production of goods and services

Explanation

Utility is the satisfaction a consumer derives from actually using (consuming) goods and services.

Economics 2020 Objective — Question 13

From the indifference curve above, a consumer will prefer combination

• A. F
• B. SCorrect
• C. M
• D. K

Explanation

A consumer prefers the indifference curve farthest from the origin, since it represents the highest attainable utility - point S.

Economics 2020 Objective — Question 14

One of the major factors that brings about changes in supply is

• A. market discrimination
• B. availability of storage facilitiesCorrect
• C. the cost of storage
• D. incentives granted to workers

Explanation

The availability of storage facilities affects producers' willingness/ability to supply more of a good.

Economics 2020 Objective — Question 15

If P = 1/4(Qs+10), what is the quantity supplied at N14?

• A. 14
• B. 60
• C. 46Correct
• D. 32

Explanation

P = 1/4(Qs+10); with P=14: 56 = Qs+10, so Qs = 46.

Economics 2020 Objective — Question 16

If the supply of a product is elastic, a small reduction in price will

• A. reduce the cost of production
• B. reduce the quantity suppliedCorrect
• C. increase the quantity supplied
• D. lead to no change in the quantity supplied

Explanation

With elastic supply, a small fall in price causes a proportionally larger fall in quantity supplied.

Economics 2020 Objective — Question 17

The supply of beverages by firms in a monopolistic market is an example of

• A. derived demand
• B. competitive supplyCorrect
• C. composite supply
• D. joint demand

Explanation

Several firms supplying similar but differentiated beverages in a monopolistic market reflects competitive supply.

Economics 2020 Objective — Question 18

If the price of a commodity is fixed below equilibrium, this will lead to

• A. excess demandCorrect
• B. a decrease in price
• C. an increase in price
• D. excess supply

Explanation

When price is fixed below equilibrium, quantity demanded exceeds quantity supplied, creating excess demand.

Economics 2020 Objective — Question 19

One of the criticisms of the price mechanism is that

• A. producers are sovereign
• B. it provides low degree of freedom
• C. it widens the inequitable gapCorrect
• D. consumers are sovereign

Explanation

The price mechanism tends to widen inequality, since wealthier consumers can outbid poorer ones for scarce goods.

Economics 2020 Objective — Question 20

In Nigeria, government can reduce the cost of accommodation by fixing rent

• A. at the prevailing rate
• B. at the equilibrium price
• C. above the equilibrium price
• D. below the equilibrium priceCorrect

Explanation

Fixing rent below the equilibrium price is a way government reduces the cost of accommodation for tenants.

Economics 2020 Objective — Question 21

If a refinery achieves a reduction in cost by purchasing and transporting crude oil in large quantities, it enjoys

• A. economies of scaleCorrect
• B. specialization
• C. division of labour
• D. diseconomies of scale

Explanation

Buying and transporting crude oil in bulk lowers the unit cost - a classic case of economies of scale.

Economics 2020 Objective — Question 22

An isoquant lying above and to the right of another represents

• A. a higher output levelCorrect
• B. constant returns to scale
• C. over-capacity utilization
• D. a lower output level

Explanation

An isoquant lying further from the origin (above and to the right) represents a higher attainable output level.

Economics 2020 Objective — Question 23

From the graph above, Represents

• A. marginal cost
• B. total costCorrect
• C. variable cost
• D. fixed cost

Explanation

The upward-curving line on the graph (rising steeply with output) represents total cost.

Economics 2020 Objective — Question 24

Use the graph below to answer questions 24 and 25. The optimum level of output of the firm is

• A. BCCorrect
• B. OB
• C. OS
• D. BS

Explanation

The optimum (profit-maximizing) output occurs where marginal cost equals marginal revenue, shown as point BC on the graph.

Economics 2020 Objective — Question 25

The total revenue of the firm is represented by

• A. GHEF
• B. GHJCCCorrect
• C. EFJC
• D. GHOB

Explanation

Total revenue is represented by the rectangular area (price x quantity) labelled GHJCC on the graph.

Economics 2020 Objective — Question 26

A measure of national income used as a comparison of standard of living among nations is

• A. net national product
• B. gross domestic product
• C. net national product
• D. per capita incomeCorrect

Explanation

Per capita income (national income divided by population) is the standard measure for comparing living standards across nations.

Economics 2020 Objective — Question 27

The speculative demand for money is inversely related to

• A. interest rateCorrect
• B. level of income
• C. exchange rate
• D. inflation rate

Explanation

As interest rates rise, the speculative demand for money falls - the two move in opposite directions.

Economics 2020 Objective — Question 28

If Mr. K obtains a N50,000 loan from a bank for the purpose of providing household needs, the demand for money is said to be

• A. transactionary and speculative
• B. transactionaryCorrect
• C. speculative
• D. precautionary and speculative

Explanation

A loan taken specifically to cover everyday household needs reflects the transactionary demand for money.

Economics 2020 Objective — Question 29

Which of the following is used by the Central Bank of Nigeria to control inflation?

• A. Tariffs on imports
• B. Tax rate
• C. Exchange rate
• D. Discount rateCorrect

Explanation

The Central Bank of Nigeria uses the discount rate as a tool to influence inflation.

Economics 2020 Objective — Question 30

If CBN reduces money supply, the interest rate will

• A. fluctuate
• B. riseCorrect
• C. fall
• D. remain unchanged

Explanation

Reducing the money supply makes loanable funds scarcer, which tends to push the interest rate up.

Economics 2020 Objective — Question 31

An example of an expansionary fiscal policy action is a

• A. decrease in the corporate profit tax ratesCorrect
• B. decrease in welfare payments
• C. purchase of government securities
• D. decrease in the bank rate

Explanation

Cutting corporate profit tax rates is an expansionary fiscal policy aimed at boosting investment/spending.

Economics 2020 Objective — Question 32

A tax on land will ultimately fall

• A. partly on agents and users
• B. entirely on users
• C. entirely on owners
• D. partly on users and ownersCorrect

Explanation

Because land has an inelastic supply, the tax burden on it ends up being shared by both users and owners.

Economics 2020 Objective — Question 33

One of the goals of development plans in Nigeria is to

• A. increase the profitability of multinational businesses
• B. improve the country's GDPC
• C. achieve higher standard of living for the citizensCorrect
• D. deregulate the economy

Explanation

Development plans in Nigeria are primarily aimed at raising the standard of living of citizens.

Economics 2020 Objective — Question 34

Life insurance companies contribute to economic development by

• A. holding a part of their assets in a long term financial instrumentsCorrect
• B. money market instruments
• C. cash
• D. short-term financial instruments

Explanation

Life insurance firms invest the premiums they collect in long-term financial instruments, supporting economic development.

Economics 2020 Objective — Question 35

In order to add value to Nigeria agricultural produce, there is need to

• A. cultivate high breed crops
• B. process them into finished goodsCorrect
• C. adopt modern storage method
• D. advertise them in European markets

Explanation

Processing raw agricultural produce into finished goods is key to adding value to Nigeria's agricultural exports.

Economics 2020 Objective — Question 36

The main reason for low agricultural produce in West Africa is

• A. the presence of large-scale agro-allies industries
• B. high dependency ratio
• C. over dependence on agriculture for subsistence
• D. the use of crude implements in farming processCorrect

Explanation

Heavy reliance on crude farming implements is a major reason for West Africa's low agricultural output.

Economics 2020 Objective — Question 37

The most important determinant for the location of a brick industry is the availability of

• A. market
• B. power supply
• C. water
• D. raw materialsCorrect

Explanation

Brick production relies on access to local clay and similar raw materials, so location follows where these materials are found.

Economics 2020 Objective — Question 38

In Nigeria, efficiency in public corporations can be achieved through

• A. public offer
• B. indigenization
• C. privatizationCorrect
• D. nationalization

Explanation

Privatization (transferring public corporations to private ownership) is a recognized way to improve their efficiency.

Economics 2020 Objective — Question 39

Government participation in the oil industry was necessitated by the

• A. annual increase in production
• B. formation of OPECC
• C. high demand for crude oil
• D. huge investment outlayCorrect

Explanation

The oil industry requires very large capital investment, which is why government participation became necessary.

Economics 2020 Objective — Question 40

The deregulation of the petroleum sector in pricing and distribution of the products will bring about

• A. efficiencyCorrect
• B. an end to the importation of fuel
• C. an end to foreign firms' dominance
• D. fixing appropriate production quotas

Explanation

Deregulating petroleum pricing and distribution introduces competition, which tends to improve efficiency.

Economics 2020 Objective — Question 41

A distinguishing characteristic of consumer co-operative society is that, the

• A. maximum number of shareholders is 20
• B. members are the ownersCorrect
• C. workers are the directors
• D. minimum number of shareholders is 5

Explanation

In a consumer cooperative society, the members themselves are the owners of the organization.

Economics 2020 Objective — Question 42

A major disadvantage of partnership business is

• A. difficulty in the transfer of shares
• B. distrust among membersCorrect
• C. limited liability
• D. large capital outlay

Explanation

Distrust among partners is a commonly cited disadvantage of running a partnership business.

Economics 2020 Objective — Question 43

The quality of labour force in Nigeria can be improved by

• A. establishing more tertiary institutionsCorrect
• B. creating sufficient job opportunities
• C. -
• D. -

Explanation

Establishing more tertiary institutions is a key way to improve the quality of Nigeria's labour force.

Economics 2020 Objective — Question 44

The effect of emigration on a country's population is a

• A. decrease in the populationCorrect
• B. decrease in job opportunities
• C. increase in population
• D. increase in dependency ratio

Explanation

Emigration directly reduces a country's population as people move abroad.

Economics 2020 Objective — Question 45

A measure for preventing the external value of the naira from falling is for the government to

• A. increase its spending with foreign reserve
• B. sell its own currency
• C. reduce interest rate
• D. buy its own currency with foreign reserveCorrect

Explanation

Using foreign reserves to buy back its own currency is how government can defend the naira from falling in value.

Economics 2020 Objective — Question 46

A fiscal policy instrument that can influence the demand pattern in an economy is a

• A. government spendingCorrect
• B. interest rate
• C. income tax
• D. tariff

Explanation

Government spending is a fiscal policy tool that can directly shift the demand pattern in an economy.

Economics 2020 Objective — Question 47

One of the main achievements of the Economic Commission for West Africa State is

• A. eliminating trade restrictions among statesCorrect
• B. encouraging transport and communication development
• C. guaranteeing a steady flow of foreign investment into Africa
• D. providing the machinery for collaboration on monetary issues

Explanation

Eliminating trade restrictions among member states is one of ECOWAS' key achievements.

Economics 2020 Objective — Question 48

The rate of interest change on loans depends largely on

• A. the prevailing exchange rate
• B. marginal efficiency of capital
• C. the risk associated with the loanCorrect
• D. the prevailing tax rate

Explanation

The interest rate charged on a loan largely reflects the level of risk associated with that loan.

Economics 2020 Objective — Question 49

A valid explanation for real wage growth is

• A. an increase in the rate of productivityCorrect
• B. the rising cost of capital
• C. a contraction of employment in service industries
• D. an increase in the quantity of labour

Explanation

Real wage growth is most validly explained by an increase in the rate of worker productivity.

Economics 2020 Objective — Question 50

If Mr. X lost his clerical job at a store and searched for a similar job for ten months before finding one, this implies that Mr. X was

• A. structurally unemployed
• B. frictionally unemployedCorrect
• C. seasonally unemployed
• D. cyclically unemployed

Explanation

Spending months searching for a similar job after losing one is a classic case of frictional (search) unemployment.