2014 JAMB ECONOMICS PAST QUESTIONS AND ANSWERS

The type of question paper provided is identified by specific color codes, each type corresponding to a particular exam version.

In a command economy, the government controls all aspects of production, including the methods and outputs, rather than the private sector.

In capitalist economies, the production of goods is decided based on market demands and profit incentives, determined by firms.

The range is best for determining the extreme values, like the tallest tree, as it only looks at the highest and lowest values.

Services make up a significant part of the national income, especially in developed economies, where industries focus on service-based activities.

The contribution of any sector is calculated as a percentage of national income, requiring specific data on each sector’s output.

A shift in demand could be caused by changes in consumer income, population size, or other economic factors that affect demand.

To find equilibrium price, set demand equal to supply and solve for P, finding where the two curves intersect.

A shift in demand for a normal good occurs when factors like income or preferences change, leading to a right or left shift in the demand curve.

Price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price.

Equilibrium is achieved when the marginal utility equals the price ratio, and no net gain from changing the quantity consumed is possible.

A price below equilibrium creates excess demand, as more consumers want to purchase than firms are willing to supply.

The price mechanism relies on market forces, where supply and demand determine the prices of goods and services.

A rightward shift in the budget line occurs when income rises or when prices of goods fall, allowing consumers to afford more.

Substituting P = N10 into the supply function and solving for Qs gives the quantity supplied.

Price elasticity of supply is calculated by the percentage change in quantity supplied divided by the percentage change in price.

The values of E and F are found by using the relationships between marginal, total, and average products in the production process.

A large firm’s higher production due to efficiencies is an example of internal economies of scale, where increased output reduces per-unit costs.

Division of labor improves efficiency by having workers specialize in specific tasks, thus increasing productivity.

Average cost is calculated as the total cost (fixed + variable) divided by the number of units produced.

Rent and administrative expenses are fixed costs, as they do not vary with the level of output.

A perfect competitor expands output until marginal cost equals marginal revenue, ensuring efficient resource allocation.

A monopolist controls both price and output in the market, unlike firms in perfect competition.

A monopolist can increase revenue by adjusting both the price and output, typically by reducing output to increase prices.

The GNP in an open economy is calculated using the formula C+I+G+(X+M), which includes exports and imports.

The level of national income can be calculated using the multiplier formula, which is 1 / (1 – MPC), and then multiplying by investment.

The precautionary demand for money is influenced by factors like income level and the general price level, which drive savings behavior.

Stagflation occurs when inflation and unemployment rise together, creating a challenging economic environment.

The banking industry faces challenges like providing loans for investment due to issues with liquidity and risk management.

The money market is where short-term loans for investment are typically raised, providing liquidity for businesses.

A price index of 175% means the cost of living has increased by 75% from the base year, indicating inflation.

Wage freeze is often implemented as a means of curbing inflation by controlling wage-price spirals.

Nigeria’s economic development is hampered by over-dependence on oil, limiting growth in other sectors.

Underdeveloped economies are characterized by low standards of living, poor infrastructure, and high unemployment.

Agriculture plays a key role in providing employment, food, and raw materials for industries, contributing to economic stability.

Large-scale farming benefits from economies of scale, providing higher output and better efficiency than small-scale farming.

Localized industries can suffer from over-utilization of resources or under-utilization if demand fluctuates or resources are limited.

Proximity to the market reduces transportation costs and ensures that goods can be quickly delivered, making it a key factor in industry location.

OPEC plays a crucial role in stabilizing global oil prices, which directly affects Nigeria’s oil revenue.

Loading crude oil at terminals is part of the upstream sector, which involves exploration, extraction, and transportation of oil.

Short-run variable costs rise due to factors like increased labor or material costs, which affect production efficiency.

Vertical integration allows firms to control all aspects of production, reduce costs, and improve market power by owning supply chains.

In co-operatives, voting power is typically distributed equally among members, ensuring that all members have a say.

An accurate census is crucial for planning as it helps allocate resources effectively and plan for infrastructure needs.

A population census helps estimate per capita income, which is essential for economic planning and resource allocation.

The floating exchange rate is determined by supply and demand for currencies in the international market.

A quota limits the amount of a commodity that can be imported, helping control the flow of goods into a country.

The World Trade Organization’s primary role is to promote free trade by reducing tariffs and other trade barriers.

The size of the labor force is a crucial determinant of total output, as it reflects the available workforce for production.

The labor force is determined by the number of people who are willing and able to work, typically measured by the age and employment status.