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JAMB Economics 2021 Objective Past Questions

All 40 questions from the Joint Admissions and Matriculation Board (JAMB) Economics 2021 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.

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Economics 2021 Objective — Question 1

1. One of the following is not a function of money a. It serves as store of value b. It encourages trade by barter c. It is a standard for deferred payment d. It serves as a unit of measurement

  • A. It serves as store of value
  • B. It encourages trade by barterCorrect
  • C. It is a standard for deferred payment
  • D. It serves as a unit of measurement

Explanation

Money was introduced to solve the problem of trade by barter, so money could not have encouraged the very practice it replaced.

Economics 2021 Objective — Question 2

2. A change in demand is a. Upward movement along the demand curve b. Downward movement along the demand curve c. A shift in demand curve d. None of the above

  • A. Upward movement along the demand curve
  • B. Downward movement along the demand curve
  • C. A shift in demand curveCorrect
  • D. None of the above

Explanation

A 'change in demand' refers to a shift of the whole demand curve (caused by non-price factors), unlike a 'change in quantity demanded' which is a movement along the curve.

Economics 2021 Objective — Question 3

3. Which of the following will increase government revenue a. Increasing tax on price elastic goods b. Increasing tax on perfectly elastic goods c. Increasing tax on unitary elastic goods d. Increasing tax on price inelastic goods

  • A. Increasing tax on price elastic goods
  • B. Increasing tax on perfectly elastic goods
  • C. Increasing tax on unitary elastic goods
  • D. Increasing tax on price inelastic goodsCorrect

Explanation

For inelastic goods, quantity demanded barely falls when price (tax) rises, so total revenue collected increases. Elastic goods would see demand fall sharply, reducing revenue.

Economics 2021 Objective — Question 4

4. Optimum population is a. Highest possible population b. Lowest possible population c. Best density population d. Equilibrium level of population

  • A. Highest possible population
  • B. Lowest possible population
  • C. Best density population
  • D. Equilibrium level of populationCorrect

Explanation

Optimum population is the population level that best matches (equates) available resources to the population, i.e. the equilibrium level of population.

Economics 2021 Objective — Question 5

5. Market demand schedule is a. Sum of individual demand schedule b. Individual demand schedule c. Market demand plan d. None of the above

  • A. Sum of individual demand scheduleCorrect
  • B. Individual demand schedule
  • C. Market demand plan
  • D. None of the above

Explanation

The market demand schedule is derived by adding together (horizontally summing) the individual demand schedules of all buyers in the market.

Economics 2021 Objective — Question 6

6. Use the following information to answer questions 6 and 7: Given C = 100 + 3Q. What is the fixed cost? a. Unavailable b. 100 c. 3 d. 3Q

  • A. Unavailable
  • B. 100Correct
  • C. 3
  • D. 3Q

Explanation

Fixed cost does not vary with quantity. Setting Q = 0 in C = 100 + 3Q gives C = 100, so the fixed cost is 100.

Economics 2021 Objective — Question 7

7. What is total variable cost at 100 level of output? a. 300 b. 400 c. 100 d. None of the above

  • A. 300Correct
  • B. 400
  • C. 100
  • D. None of the above

Explanation

Variable cost is the part of cost that changes with output, given by 3Q. At Q = 100, variable cost = 3(100) = 300.

Economics 2021 Objective — Question 8

8. Which of the following is not economic drive a. IMF b. AFDB c. WHO d. EU

  • A. IMF
  • B. AFDB
  • C. WHOCorrect
  • D. EU

Explanation

WHO (World Health Organisation) is a health-focused body, not an economic institution; its primary objective is global health, unlike IMF, AFDB and EU which have economic mandates.

Economics 2021 Objective — Question 9

9. Demand for SIM card is a. Competitive demand b. Composite demand c. Complementary demand d. Derived demand

  • A. Competitive demand
  • B. Composite demand
  • C. Complementary demand
  • D. Derived demandCorrect

Explanation

Derived demand arises from the demand for a related good. Demand for a SIM card is derived from demand for a phone, since a phone owner must buy a SIM to use the phone.

Economics 2021 Objective — Question 10

10. The multiplier is a. 1/MPS b. 1/APS c. 1/MPC d. 1/APC

  • A. 1/MPSCorrect
  • B. 1/APS
  • C. 1/MPC
  • D. 1/APC

Explanation

The multiplier is computed as 1/MPS, where MPS is the marginal propensity to save.

Economics 2021 Objective — Question 11

11. OPEL is a/an a. Monopoly b. Monopolistic c. Oligopolistic d. Duopolistic

  • A. Monopoly
  • B. Monopolistic
  • C. OligopolisticCorrect
  • D. Duopolistic

Explanation

OPEC (referred to here as OPEL) is a cartel of oil-producing countries. Most cartels operate within an oligopolistic market structure.

Economics 2021 Objective — Question 12

12. A periodic head count is referred to as a. Censor b. Census c. Censure d. Sensor

  • A. Censor
  • B. CensusCorrect
  • C. Censure
  • D. Sensor

Explanation

A census is a periodic official head count of the population taken within a particular region.

Economics 2021 Objective — Question 13

13. A price set below the equilibrium is a. Price ceiling b. Price flooring c. Price shortage d. Excess price

  • A. Price ceilingCorrect
  • B. Price flooring
  • C. Price shortage
  • D. Excess price

Explanation

A price ceiling is a maximum price set by authorities below the market equilibrium price, often leading to shortages.

Economics 2021 Objective — Question 14

14. In the long run, all costs are a. Fixed b. Stable c. Variable d. Unstable

  • A. Fixed
  • B. Stable
  • C. VariableCorrect
  • D. Unstable

Explanation

In the long run there is no fixed cost because a firm can adjust all its inputs; therefore all costs become variable.

Economics 2021 Objective — Question 15

15. Given the following data, use it to answer questions 15 and 16: 2, 4, 2, 3, 1, 2, 4, 1, 2 and 3. What is the mode? a. 2 b. 4 c. 3 d. 1

  • A. 2Correct
  • B. 4
  • C. 3
  • D. 1

Explanation

The mode is the value that occurs most frequently in the data set. Here, 2 occurs most often (four times).

Economics 2021 Objective — Question 17

17. In comparing the standard of living, which of the following is most useful a. National income b. Return on Investment c. Rate of inflation d. Per capita

  • A. National income
  • B. Return on Investment
  • C. Rate of inflation
  • D. Per capitaCorrect

Explanation

Per capita income (income per head of population) is the standard measure for comparing living standards/economic performance across populations of different sizes.

Economics 2021 Objective — Question 18

18. Speculative demand for money depends on a. Income b. Return on investment c. Marginal propensity to consume d. None of the above

  • A. Income
  • B. Return on investmentCorrect
  • C. Marginal propensity to consume
  • D. None of the above

Explanation

Speculative demand for money is the demand for money held for investment opportunities; the return on investment is the key determinant of this demand.

Economics 2021 Objective — Question 19

19. SEC is charged with a. Regulating banks b. Regulating Insurance firms c. Regulating Stock market d. Regulating mortgage

  • A. Regulating banks
  • B. Regulating Insurance firms
  • C. Regulating Stock marketCorrect
  • D. Regulating mortgage

Explanation

SEC (Securities and Exchange Commission) is the body responsible for regulating the stock market.

Economics 2021 Objective — Question 20

20. If the fixed cost for a firm is 40 while the variable cost per unit is 2, which of the following equation can represent the cost function for the firm a. 42q b. 2q - 40 c. 2q + 40 d. 2q

  • A. 42q
  • B. 2q - 40
  • C. 2q + 40Correct
  • D. 2q

Explanation

Total cost = fixed cost + variable cost. Variable cost = 2 x q = 2q, so cost function = 2q + 40.

Economics 2021 Objective — Question 21

21. Which of the following is not fiscal policy a. Budgeting b. Tax c. Borrowing d. Interest rate

  • A. Budgeting
  • B. Tax
  • C. Borrowing
  • D. Interest rateCorrect

Explanation

Fiscal policy involves government spending, taxation and borrowing. Interest rate is a tool of monetary policy, not fiscal policy.

Economics 2021 Objective — Question 22

22. Nigerian economy system is a. Capitalism b. Mixed c. Socialism d. Communism

  • A. Capitalism
  • B. MixedCorrect
  • C. Socialism
  • D. Communism

Explanation

A mixed economy is one where both government and private individuals actively participate in economic activities; Nigeria operates a mixed economy.

Economics 2021 Objective — Question 23

23. A saving account is also known as a. Demand deposit b. Current account c. Fixed account d. Life deposit

  • A. Demand depositCorrect
  • B. Current account
  • C. Fixed account
  • D. Life deposit

Explanation

A savings account is also called a demand deposit account because the account holder can demand (withdraw) their deposit at any time.

Economics 2021 Objective — Question 24

24. For a free good, the marginal cost of one more user is always a. One b. Zero c. Positive d. Negative

  • A. One
  • B. ZeroCorrect
  • C. Positive
  • D. Negative

Explanation

A free good is unlimited in supply, so supplying it to one additional user costs nothing extra — its marginal cost is zero. (Note: the original source's answer key lists 'C', but its own explanation says 'no marginal cost,' which actually supports 'Zero'; B is the answer consistent with that explanation.)

Economics 2021 Objective — Question 25

25. In locating an industry, all of the following are considered except a. Money b. Availability of raw materials c. Labour abundance d. Infrastructural proximity

  • A. MoneyCorrect
  • B. Availability of raw materials
  • C. Labour abundance
  • D. Infrastructural proximity

Explanation

Money/capital is rarely the deciding factor in industrial location since industrialists can access funds from many sources; raw materials, labour and infrastructure are the key locational factors.

Economics 2021 Objective — Question 26

26. If input and output increase or decrease at the same rate then the firm is a. Increasing return to scale b. Decreasing return to scale c. Constant return to scale d. None of the above

  • A. Increasing return to scale
  • B. Decreasing return to scale
  • C. Constant return to scaleCorrect
  • D. None of the above

Explanation

When output changes in exact proportion to the change in inputs, the firm exhibits constant returns to scale.

Economics 2021 Objective — Question 27

27. David Ricardo postulated a Theory of a. Diminishing return b. Comparative cost advantage c. Population theory d. Theory of cost

  • A. Diminishing return
  • B. Comparative cost advantageCorrect
  • C. Population theory
  • D. Theory of cost

Explanation

David Ricardo is credited with developing the theory of comparative (cost) advantage, which he presented in his work on political economy.

Economics 2021 Objective — Question 28

28. Which of the following doesn't determine the wage/salary of a labour a. Age b. Year of education c. Work experience d. Nature of work

  • A. AgeCorrect
  • B. Year of education
  • C. Work experience
  • D. Nature of work

Explanation

A worker's age, on its own, is not a determinant of wages; education, experience and the nature of the job are the recognised determinants.

Economics 2021 Objective — Question 29

29. The major problem of barter system is a. Indivisibility b. Lack of store of value c. Double coincidence of wants d. Lack of standard measurement

  • A. Indivisibility
  • B. Lack of store of value
  • C. Double coincidence of wantsCorrect
  • D. Lack of standard measurement

Explanation

Barter requires each party to want exactly what the other is offering at the same time — the problem of double coincidence of wants — which is its major limitation.

Economics 2021 Objective — Question 30

30. Devaluation of currency is a. Import encouraging b. Import discouraging c. Import unaffected d. None of the above

  • A. Import encouraging
  • B. Import discouragingCorrect
  • C. Import unaffected
  • D. None of the above

Explanation

Devaluation makes foreign currency more expensive relative to the local currency, making imported goods costlier and therefore discouraging imports.

Economics 2021 Objective — Question 31

31. If demand is greater than supply then the market is a. At equilibrium b. Balanced c. At disequilibrium d. Imbalance

  • A. At equilibrium
  • B. Balanced
  • C. At disequilibriumCorrect
  • D. Imbalance

Explanation

The market is at equilibrium only when demand equals supply. Any other position, including demand exceeding supply, is disequilibrium.

Economics 2021 Objective — Question 32

32. A list of an individual wants in order of priority is called a. Priority list b. List of wants c. Demand schedule d. Scale of preference

  • A. Priority list
  • B. List of wants
  • C. Demand schedule
  • D. Scale of preferenceCorrect

Explanation

When a consumer arranges their wants in order of importance, this ranked list is called a scale of preference.

Economics 2021 Objective — Question 33

33. Price mechanism is most effective in which of the following a. Capitalist economy b. Communist economy c. Socialist economy d. Mixed economy

  • A. Capitalist economyCorrect
  • B. Communist economy
  • C. Socialist economy
  • D. Mixed economy

Explanation

The price mechanism (the 'invisible hand') regulates demand and supply without government interference, making it most effective in a capitalist (free market) economy.

Economics 2021 Objective — Question 34

34. Given D = -5 + 0.7P, use the information to answer questions 34 and 35. What type of goods has that demand function a. Elastic b. Inelastic c. Fairly inelastic d. Perfectly inelastic

  • A. Elastic
  • B. Inelastic
  • C. Fairly inelasticCorrect
  • D. Perfectly inelastic

Explanation

Since the price coefficient (0.7) is less than one, the quantity demanded responds less than proportionately to price changes, meaning the good is fairly price inelastic.

Economics 2021 Objective — Question 35

35. What is the price when quantity demanded is 16? a. 30 b. 40 c. 3.0 d. 10

  • A. 30Correct
  • B. 40
  • C. 3.0
  • D. 10

Explanation

If D = 16, then 16 = -5 + 0.7P, so 0.7P = 21, giving P = 21/0.7 = 30.

Economics 2021 Objective — Question 36

36. One of the following is not among the aims of ECOWAS a. Promotion of free trade among member countries b. Amonisation of currencies c. Prevention of smuggling within members' territories d. Expansion of markets for member countries

  • A. Promotion of free trade among member countries
  • B. Amonisation of currencies
  • C. Prevention of smuggling within members' territoriesCorrect
  • D. Expansion of markets for member countries

Explanation

ECOWAS aims to promote free trade, harmonise currencies and expand markets among member states; preventing smuggling within member territories is not one of its stated aims.

Economics 2021 Objective — Question 37

37. Labour force comprises a. Gainfully employed youth b. Working age bracket c. Dependent population d. All of the above

  • A. Gainfully employed youth
  • B. Working age bracketCorrect
  • C. Dependent population
  • D. All of the above

Explanation

The labour force is defined as the number of people who are willing and able to work — i.e. those within the working age bracket.

Economics 2021 Objective — Question 38

38. Which of the following is not among the items in the current account a. Export of crude oil b. Payment for insurance c. Medical fees d. Debt servicing

  • A. Export of crude oilCorrect
  • B. Payment for insurance
  • C. Medical fees
  • D. Debt servicing

Explanation

Export of crude oil is a tangible (visible) trade item recorded in the trade balance, whereas the current account otherwise records invisible items such as insurance, medical fees, and debt servicing.

Economics 2021 Objective — Question 39

39. Which of the following is not a component in the computation of GNP using expenditure approach a. Government expenditure b. Investment c. Export d. Consumers' income

  • A. Government expenditure
  • B. Investment
  • C. Export
  • D. Consumers' incomeCorrect

Explanation

The expenditure approach to GNP uses consumers' expenditure (consumption), not consumers' income, alongside government expenditure, investment and exports.

Economics 2021 Objective — Question 40

40. Which of the following is not a fundamental economic question a. How much capital is required to produce b. What to produce c. For whom to produce d. How to produce

  • A. How much capital is required to produceCorrect
  • B. What to produce
  • C. For whom to produce
  • D. How to produce

Explanation

The three fundamental economic questions every economy must answer are: what to produce, how to produce, and for whom to produce. 'How much capital is required' is not one of them.

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