2020 JAMB ECONOMICS PAST QUESTIONS AND ANSWERS

Scarcity refers to limited resources in relation to unlimited wants, the foundation of economic problem-solving, prompting choices on how to best allocate resources.

Economics uses scientific methods to analyze behaviors, predict events, and understand how people allocate resources, distinguishing it from pure sciences.

Invisible items are non-tangible trade components, such as shipping and aviation, which differ from visible items like goods.

Price level impacts the purchasing power of money; when prices rise, each unit of currency buys fewer goods and services.

This bank functions as a development bank, focusing on financing economic growth rather than regular commercial transactions.

Restrictive monetary policies help to curb inflation by reducing money supply and increasing interest rates to lower demand.

Open market operations involve the sale and purchase of securities by the central bank to influence interest rates and money supply.

An oligopsony has few buyers dominating many sellers, influencing pricing and output, unlike monopolies which have single sellers.

A budget surplus occurs when revenue surpasses expenditure, allowing for debt reduction or increased savings.

Goods with inelastic demand do not see significant decreases in demand when prices increase, making them ideal for higher taxes.

Average propensity to consume (APC) is calculated as consumption/income: N400/N500 = 0.80, reflecting spending habits relative to income.

Residual unemployment refers to unemployment among groups like the disabled who face unique barriers to employment.

Socialist economy manages resources and production collectively, prioritizing communal welfare over individual profit.

Production efficiency is achieved by producing a given output with the least-cost combination of inputs, maximizing productivity without waste.

Decisions hinge on scale of preference, guiding choices based on prioritized wants within income or resource limits.

Diminishing marginal utility states that additional consumption yields lower utility, though total utility can still rise with each unit.

Profit is the return for entrepreneurship, unlike rent for land or interest for capital. It compensates for risk and innovation.

Increased wages lead to higher costs for goods and services, fueling demand-pull inflation, unlike tax hikes which dampen spending.

Progressive tax means higher tax rates for higher income levels, displayed by curve Y.

Proportional tax has a constant rate regardless of income, represented by curve Y.

A fiduciary issue involves currency not backed by gold reserves, unlike metallic currency which is backed by tangible assets.

Preference stock offers fixed dividends, differing from common stock or debentures that have variable returns or interest.

Explicit costs are out-of-pocket expenses, unlike implicit costs which represent opportunity costs.

Agglomeration economies offer benefits like shared infrastructure and resources, reducing operational costs.

Dumping occurs when goods are sold below production cost in foreign markets to gain market share.

High rural-urban migration complicates data collection and accuracy in census efforts.

Labour is more mobile than land or capital, as workers can relocate and adapt to new roles.

Rural-urban drift sees workers move to cities, reducing agricultural productivity.

OPEC’s primary goal is to stabilize oil prices by controlling production, ensuring fair prices for producers and a steady supply for consumers.

Proximity to raw materials reduces transportation costs, making it economical for plywood industries to be near timber sources.

Under-populated countries experience increasing returns as available resources are utilized more effectively per capita.

General acceptance allows money to facilitate trade as a universally accepted medium of exchange.

Tax avoidance uses legal methods to minimize tax, unlike evasion which is illegal.

The United Nations Organization (UNO) established the Economic Commission for Africa to promote economic cooperation among African nations.

Selective credit control allows the central bank to restrict or encourage credit for certain economic activities, managing inflation.

Wasting asset as it depletes over time with extraction, unlike assets that can be replenished or reused.

A longer distribution chain typically increases retail prices due to added handling and storage costs at each stage.

Heavy reliance on foreign funds made the plan vulnerable to external economic conditions, limiting self-sufficiency.

Consumption provides utility, the enjoyment or benefit gained from goods and services, distinguishing it from production activities.

Opportunity cost highlights trade-offs in resource allocation, emphasizing that choosing one option means foregoing another.