2019 JAMB ECONOMICS PAST QUESTIONS AND ANSWERS

Abnormal demand occurs when demand increases as price rises, contrary to typical demand behavior. This might happen for luxury or status goods.

For unrelated goods, the price change of one has no effect on the other’s demand, as their uses don’t overlap, unlike substitutes or complements.

Market supply and demand determine prices in a perfectly competitive market, where no single producer or consumer controls price.

Abnormal profit occurs in monopolies due to lack of competition, allowing firms to set prices above production costs in the short run.

The monopolist’s demand curve is typically inelastic in domestic markets but elastic abroad due to international competition.

Supply refers to a flow, the quantity of a product made available over time, contrasting with static inventories.

Increased supply lowers equilibrium price and raises quantity exchanged, balancing demand-supply.

The Income approach calculates GDP by summing wages, rent, interest, and profit, capturing income distribution.

A Frugal economy saves part of income, fostering capital formation and future investment.

Arithmetic mean is the average value, here (5 + 8 + 10 + 15 + 24 + 28) / 6 = 15.

Inductive reasoning develops general conclusions from specific data or observations, unlike deduction, which applies known principles.

Money market equilibrium exists when the supply and demand for money are balanced, stabilizing interest rates.

Stagflation is stagnant growth combined with high inflation, making it hard to counter without worsening either issue.

A credit ceiling limits banks’ loan amounts, controlling domestic credit expansion and inflation.

Restrictive monetary policy combats inflationary gap, controlling excessive demand by tightening money supply.

Economies of scale reduce costs as output increases, flattening cost curves in long-run production.

Marginal Cost (MC) guides pricing and output decisions, as it reflects cost per additional unit produced.

Right-angled indifference curves reflect perfect complements, as utility depends on specific combinations.

Consistency and transitivity are rational choice assumptions, not required in cardinal utility theory which emphasizes measurable satisfaction.

The Law of diminishing returns influences the curve’s concave shape, as opportunity costs increase with more production.

An isoquant depicts combinations of inputs yielding equal output, representing efficiency in production.

Good government planning helps reduce unemployment by fostering job creation and economic stability.

Derived demand depends on the demand for goods and services, unlike direct demand for consumables.

Fiscal policy uses taxes and spending to influence economic conditions, unlike monetary policy which adjusts money supply.

Digressive tax applies a mild progressive rate initially but becomes regressive as income increases, balancing fairness and revenue.

Industrialization transitions an economy from raw materials-based to manufacturing, often stimulating economic growth and employment.

Low productivity and inefficiency hinder industrialization, while policies like protecting industries and educational support encourage growth.

The tertiary sector includes services that support primary and secondary sectors, such as transportation and education, aiding economic stability.

An import quota limits the amount of foreign goods imported, regulating market competition and protecting local industries.

Communal land is shared among community members, often for common agricultural or residential use, fostering social cohesion.

A sole proprietor bears full liability, meaning personal assets may be used to cover debts if the business faces financial issues.

National Income reflects economic growth by showing total income earned within a country, unlike price indices which track inflation.

An oil spill releases petroleum into water or land, causing environmental damage, especially to aquatic ecosystems and shorelines.

ECOWAS aims to promote trade and investment within West Africa, improving economic integration and fostering mutual benefits among members.

New technologies generally increase production efficiency and output, fostering competitiveness in both local and global markets.

Primary, secondary, and tertiary activities encompass natural resource extraction, manufacturing, and services, respectively.

The U.S.A. generally has the highest per capita GDP among large economies, reflecting higher average income per person.

Trade blocs group countries based on economic agreements, such as the EU or NAFTA, facilitating regional trade and reducing tariffs.

Governments typically avoid decreasing taxes as an economic goal, aiming instead for employment, price stability, and growth.