2012 JAMB ECONOMICS PAST QUESTIONS AND ANSWERS

This question refers to the type of question paper you received. Different types can be coded by colors, each color corresponding to a different paper.

A socialist economy limits the role of consumer sovereignty because the government controls production and distribution, leaving consumers with little say. This could lead to inefficiencies and dissatisfaction.

Privatization is an example of positive reasoning, as it involves a factual statement that can be empirically tested or observed.

The slope of a graph shows how two variables are related. A positive slope indicates a direct relationship, while a negative slope indicates an inverse relationship between variables.

This is a factual question asking for a specific contribution percentage. The manufacturing sector plays a vital role in economic development and industrialization.

The answer to this question involves calculating the difference between two sectors, requiring knowledge of sectoral contributions.

The change in quantity purchased due to price increase is known as a change in quantity demanded, as opposed to a shift in demand.

A rise in income leads to an increase in demand for most goods, causing the demand curve to shift to the right.

The price elasticity of demand is calculated using the percentage change in quantity divided by the percentage change in price.

A small decrease in quantity demanded with a price increase suggests that demand is inelastic.

Utility is subjective and cannot be measured or compared between individuals as people value goods differently.

As total utility increases, marginal utility tends to decrease, but if a consumer stops consuming more of a commodity, the marginal utility can rise.

Equilibrium occurs when the consumer maximizes their utility. The point of equilibrium is where the marginal utility equals the price ratio.

Moving from point M to K represents an increase in the consumption of X while reducing the consumption of Y.

Cocoa production is significantly impacted by environmental factors such as seasonal conditions, which affect its yield.

Perfectly inelastic supply occurs when the quantity supplied does not change in response to price changes, meaning the supply curve is vertical.

Cost elasticity of supply measures how the cost of production responds to changes in supply, which can affect profitability.

The concept of the invisible hand, coined by Adam Smith, refers to the self-regulating nature of a free market, benefiting society as a whole.

If the price is set above the equilibrium, excess supply will occur as suppliers produce more than consumers demand.

The price system allocates resources efficiently by signaling where resources are most needed.

In the long run, when all factors of production are variable, firms can experience increasing returns to scale, where output increases more than input.

The equilibrium occurs where the isoquant curve is tangent to the isocost curve, representing the least-cost combination of inputs.

The long-run average cost curve is tangent to the short-run average cost curves at their minimum points, reflecting the lowest cost for each level of output.

When output increases less than proportionally to the increase in inputs, the firm is experiencing decreasing returns to scale.

Patents and copyrights grant exclusive rights to firms, preventing others from producing the same product and restricting market entry.

A discriminatory monopoly charges different prices in different markets based on varying demand elasticities.

Net National Product (NNP) is calculated by subtracting depreciation from Gross National Product (GNP).

The change in income is determined by the multiplier, which is calculated as 1 / (1 – MPC).

The multiplier is calculated based on the marginal propensity to consume (MPC) and shows the effect of an increase in investment on the overall economy.

Commodity money, like gold, has intrinsic value greater than its face value, whereas fiat money does not.

The price index is calculated by dividing the current price by the base price, multiplied by 100.

The cash reserve ratio determines the percentage of deposits that banks must hold with the central bank to ensure liquidity.

The money market provides short-term funds to firms and the government, helping to manage liquidity.

Ad valorem taxes are taxes imposed based on the value of a commodity, such as value-added tax (VAT).

A huge national debt may signal that a country’s gold reserves have decreased due to borrowing or deficit financing.

Diversifying the economy away from oil reliance allows for more sustainable growth and development in sectors like agriculture and technology.

Economic growth is essential for improving the standard of living, reducing poverty, and creating jobs.

Soya beans are becoming a significant agricultural export in Nigeria due to their high demand in the international market.

Ensuring food security and self-sufficiency through investment in agriculture will reduce reliance on imports.

The sugar industry thrives best near raw materials like sugar cane to reduce transportation costs.

Small-scale industries contribute to job creation and labor employment, which is critical in a developing economy like Nigeria.

An increase in petrol prices raises transportation costs, which in turn increases the cost of goods and services.

The capital market is the primary source of long-term funding for businesses and government projects.

Privatization is an example of a policy that encourages foreign investment and improves Nigeria’s global economic standing.

The Malthusian theory suggests that population growth outpaces food production, leading to shortages and famine.

To determine the population, subtract emigrants and deaths from the total number, then add immigrants.

A deficit in the balance of payments occurs when a country spends more on imports and foreign services than it earns from exports.

ECOWAS works to foster economic cooperation and integration among West African countries, ensuring development and peace.

The return on machinery and equipment used in production is classified as interest, as it represents the payment for capital used in the production process.

A minimum wage set above equilibrium leads to unemployment because employers may not be able to afford the higher wage for all workers.