2022 JAMB ECONOMICS PAST QUESTIONS AND ANSWERS

A firm is at its optimum size when it achieves maximum output at the lowest cost, allowing it to be efficient and competitive. Marginal cost and revenue equality is an additional criterion in profit maximization, not necessarily optimal size.

ECOWAS permits visa-free travel among West African nations for a maximum of 90 days, supporting regional integration and economic cooperation. This arrangement enhances movement for business and tourism.

Oil deposits are abundant in Rivers State, making it ideal for petrochemical industries. This provides raw materials for refining and production, whereas coal and palm oil resources are suited to other industries.

The data shows diminishing marginal utility as each additional unit consumed yields less satisfaction. This reflects the principle that beyond a certain point, the benefit from extra consumption decreases.

Oligopoly markets consist of a few sellers, each affecting the pricing and output decisions of others due to their interdependent nature, unlike monopoly or perfect competition.

Full employment implies that all capable and willing adults are employed. This excludes those unfit or unwilling to work. Full employment does not mean zero unemployment but rather absence of cyclical joblessness.

Mono production focuses on a single commodity, often seen in economies relying on one major export, like oil, which risks economic instability if demand falls.

A glut in petroleum indicates an oversupply, driving prices down as demand fails to keep up. This contrasts with scarcity or increased consumption.

Retailers are crucial for distribution, linking producers with consumers. They facilitate access to goods but do not directly involve investment or production.

The owner in a sole proprietorship has full control over business decisions, contrasting with corporate models where boards or management might decide.

Old Bendel’s climate supports palm tree growth, making it ideal for the palm oil industry. Location advantages based on climate enhance production efficiency.

Land, labor, capital, enterprise, and technology are fundamental factors, driving production and economic growth, unlike middlemen or market-related factors which influence trade rather than production.

Sudan is located in East Africa and is not part of ECOWAS, which comprises West African nations including Nigeria, Gambia, and Togo.

An oligopoly features few sellers who control the market, each having influence over pricing. This structure differs from monopoly (one seller) and perfect competition (many sellers).

Opportunity cost compares production efficiency, with a ratio of 2:1.5 indicating Austria should focus on lace if it has lower opportunity cost.

Given the opportunity cost, Austria should produce lace while Nigeria focuses on cocoa, optimizing trade benefits through specialization.

Progressive tax increases with income, as seen in PAYE, which taxes higher earners more heavily to reduce income inequality.

Per capita income (PCI) is the standard metric, measuring average income per person, allowing comparison across countries. GDP and NNI provide broader economic data without per-person breakdown.

The proximity to raw materials makes Ajaokuta ideal for the iron and steel industry, reducing transportation costs and increasing efficiency. Access to labor and power are secondary.

PHCN is a public corporation, serving state functions like electricity provision, distinct from private companies aimed at profit.

Mixed economies feature both public and private sectors in decision-making, blending government control with market dynamics. Pure market or command economies lack this balance.

A developing country is working to improve its economy and living standards, contrasting with developed nations and those in recession.

Efficiency represents maximizing output with minimal waste or resources, crucial in achieving sustainable production. Productivity measures output rate, not resource optimization.

Increasing per capita income generally indicates higher living standards, as individuals have more disposable income, unlike population growth or inflation, which can strain resources.

Interest is the cost of borrowing, paid by the borrower as compensation to the lender. It differs from deposits or charges, which relate to savings or service fees.

Direct relationship defines the supply law; as prices increase, suppliers are more willing to provide goods, unlike demand which has an inverse relation to price.

The World Bank focuses on development assistance for projects like infrastructure, reducing poverty globally. It is not primarily involved in military or peacekeeping roles.

Balance of trade measures the net exports of goods only, not services, unlike the broader balance of payments. Positive balance indicates trade surplus.

Excise duty taxes specific goods, often luxuries or demerit goods, while direct or indirect taxes apply more broadly.

Low literacy levels hinder development, alongside issues like poverty and inadequate infrastructure, in contrast to developed nations with high education and capital.

National income reflects a nation’s total earnings from production, gauging economic health more broadly than fiscal or monetary policy alone.

Capital involves man-made assets aiding production, like machinery, separate from natural or financial resources. This is crucial in industrial economies.

Economic growth entails a sustained increase in real GDP, reflecting improved production and prosperity over time. It does not solely address employment or inflation rates.

Rational consumers aim to maximize utility within budget limits, balancing costs with satisfaction, not necessarily choosing the cheapest items.

Inflation is the rise in the general price level, leading to reduced purchasing power if wages do not keep pace. It is distinct from output increases.

Opportunity cost is the value of the best alternative foregone when choosing, highlighting trade-offs in decision-making.

Differentiated products are key in monopolistic competition, where firms offer unique goods, unlike homogeneous goods in perfect competition.

A cartel forms in oligopoly, where few firms collude to control prices and output, increasing collective profits but limiting competition.

The Central Bank regulates banks, controls inflation, and issues currency, but tax collection is a fiscal, not monetary, function handled by revenue agencies.

Market failures like monopolies or externalities require government intervention to ensure fair competition and efficient resource allocation.