JAMB Economics 1978 past questions and answers

Suppose that the equilibrium price of an article is N5.00 but the government fixes the price by law at N4.00, the supply will be

1. A.the same as the equilibrium supply
2. B.greater than the equilibrium supply
3. C.less than the equilibrium supply
4. D.determined later by government
5. E.none of these.

A budget deficit means

1. A.that a country is buying more than it is selling
2. B.that a country is selling more than it is buying
3. C.a government is spending more than it takes in taxation
4. D.a government is spending less than it takes in taxation
5. E.a government is spending as much as it takes in taxation.

In the diagram below, equilibrium price is:

1. A.P₂
2. B.P_o
3. C.P₁
4. D.indeterminate
5. E.between P_o and P₁

When elasticity is zero, the demand curve is

1. A.perfectly elastic
2. B.perfectly inelastic
3. C.concave
4. D.downward sloping
5. E.circular.

The following is NOT a reason for the existence of small firms:

1. A.scale of production is limited by size of market
2. B.expansion brings diminishing returns
3. C.large firms can cater for wide markets
4. D.small firms can provide personal services
5. E.all of the above.

Inferior goods are defined in Economics as goods

1. A.whose quality is low
2. B.consumed by very poor people
3. C.whose consumption falls when consumer income rises
4. D.which satisfy only the basic needs
5. E.none of the above.

Malthus became famous through his theory which may be stated simply

1. A.the death rate may become so high that people may not be able to produce
2. B.population may outgrow the means of subsistence
3. C.people will eventually decide not to have children
4. D.migration of people from one place to another may leave some parts of the world barren
5. E.all of the above.

A commercial bank is unique in that it is the only institution that

1. A.makes loans to private people and businessmen
2. B.accepts deposits
3. C.can store people's valuables
4. D.can transfer money from one place to another for its customers
5. E.saves money through the granting of credits.

Which is an example of an invisible item in the Trade Account of Ghana?

1. A.Export of cocoa from Ghana
2. B.Import of oil from Nigeria
3. C.A gift of a Peugeot 504 by a firm in Nigeria to another firm in Ghana
4. D.Payment for shipping and insurance by a Ghanaian company to companies outside Ghana
5. E.None of the above.

Which is NOT a direct effort to increase agricultural production in Nigeria?

1. A.Operation Feed the Nation
2. B.Nigerian Youth Service Corps
3. C.Increased loans to farmers and cooperatives
4. D.Research in agriculture and extension services
5. E.Mechanization of agriculture.

If a company doubles all its inputs and discovers that its output more than doubles, we can say that the company is experiencing

1. A.increasing marginal utility
2. B.diseconomies of scale
3. C.increasing costs
4. D.constant returns to scale
5. E.increasing returns to scale.

Price control cannot work in Nigeria because

1. A.the population is too large
2. B.the policemen hate to arrest people
3. C.while it is fairly easy to control the producers and the importing firms, the small distributors are too many to be controlled
4. D.control cannot work under a military rule
5. E.too many things are produced in the country.

A country has a surplus in its balance of visible trade if

1. A.the value of imports exceeds the value of exports of goods
2. B.the value of exports exceeds the value of imports of goods
3. C.the value of goods exported is equal to the value of goods imported
4. D.it is able to spend a lot on capital programmes
5. E.commercial banks' assets increase.

The Foreign Exchange Market is a market where

1. A.graded commodities like wheat, coffee, etc. are sold and bought
2. B.currencies are sold and bought
3. C.treasury bills are sold and bought
4. D.government bonds are sold and bought
5. E.Treasury certificates are sold.

The effects on the demand for product A caused by a change in the price of product B is called

1. A.cross-elasticity of demand
2. B.elasticity of supply
3. C.competitive demand
4. D.composite demand
5. E.joint demand.

Which of the following can be regarded as a liability of a commercial bank?

1. A.Advances
2. B.Deposits
3. C.Treasury bills
4. D.Overdrafts
5. E.Cash.

Tax which takes a higher percentage from higher incomes is called

1. A.a regressive tax
2. B.a progressive tax
3. C.a proportional tax
4. D.an indirect tax
5. E.a direct tax.

Which one of the following statements is true?

1. A.A proportional tax is one which takes from high income people a larger fraction of their income than it takes from low income people
2. B.Taxes on commodities or services which can be shifted elsewhere are usually called direct taxes
3. C.The sole proprietor is a legal entity
4. D.The influence of demand on price will be smallest in the short-run
5. E.The cost of production is the most important determining factor of supply in the long-run.

The largest liability appearing on the books of a commercial bank is

1. A.cash
2. B.deposits
3. C.loans and advances
4. D.capital and reserves
5. E.Treasury bills.

The Lagos Clearing House is

1. A.a commodity market
2. B.an import licensing centre
3. C.another name for the Lagos Stock Exchange
4. D.an insurance and underwriting centre
5. E.a cheque sorting centre.

The biggest source of government revenue in Nigeria is

1. A.mining rents and royalties
2. B.company income tax
3. C.import duties
4. D.export duties
5. E.petroleum profit tax.

An increase in liquid reserve requirements by the Central Bank of Nigeria will result in

1. A.a reduction in commercial banks' excess reserves
2. B.more commercial bank loans to members of the public
3. C.an increase in commercial banks' excess reserves
4. D.no change in commercial banks' excess reserves
5. E.a reduction in Central Bank's gold reserves.

A distinguishing characteristic of a consumers' cooperative is the fact that

1. A.the customers are the owners
2. B.the customers are the workers
3. C.the customers are the managers
4. D.the customers are low income people
5. E.the customers are high income people.

Disposable income is the same thing as

1. A.personal income minus personal saving
2. B.personal income minus taxes
3. C.national income minus depreciation
4. D.exports minus imports
5. E.savings plus investment.

Marginal cost is

1. A.the lowest cost of producing goods
2. B.the cost of production of the most efficient firm in an industry
3. C.the cost of production of the most inefficient firm in an industry
4. D.the cost of production of the last or extra unit of goods produced by a firm
5. E.the cost of production at which the minimum profit is obtained by a firm.

Which of the following is not a form of business organization?

1. A.Sole proprietorship
2. B.Cartel
3. C.Partnership
4. D.Joint stock
5. E.Cooperative societies.

As consumption of beer increases, its marginal utility to a drinker will

1. A.increase
2. B.remain constant
3. C.fluctuate
4. D.decrease
5. E.change proportionately.

Which of the following sectors of the economy is estimated to be the largest employer of labour in the country?

1. A.Construction
2. B.Agriculture
3. C.Distribution
4. D.Mining and petroleum
5. E.Transport and communications.

The expression 'Terms of Trade' is used to describe

1. A.the quality of exports
2. B.the direction of foreign trade
3. C.terms of purchase on deferred payment basis
4. D.the rate at which exports exchange for imports
5. E.import licensing.

If the demand for a product with a perfectly elastic supply increases, there will be

1. A.an increase in price and quantity offered
2. B.an increase in quantity offered but price will remain the same
3. C.a reduction in price and quantity offered
4. D.an increase in price but a reduction in quantity offered for sale
5. E.an increase in quantity offered but a reduction in price.

Which of these would not be included in the fundamental principles of a free enterprise economy?

1. A.Private ownership of factors of production
2. B.The right to organize factors for productive purposes
3. C.The right to make private profit
4. D.Government's control of the mobility of factors of production
5. E.Government's efforts to encourage competitive capitalism within the laws of the country.

Economics is called a social science because it is

1. A.a branch of the social studies
2. B.a study of the ways man devises to satisfy his unlimited wants from limited resources
3. C.a dismal science in the Malthusian sense
4. D.governed by scientific laws
5. E.the study of human wants by means of scientific methods of observation.

Opportunity cost is a term which describes

1. A.the initial cost of setting up a business venture
2. B.cost of one product in terms of foregone production of others
3. C.the monetary equivalent of the utility of a commodity
4. D.costs related to an optimum level of production
5. E.implicit costs.

If consumer demand for product X increases as the price of product Y decreases, we can be fairly certain that

1. A.X and Y are complementary goods
2. B.X and Y are substitute goods
3. C.X and Y are independent goods
4. D.X and Y are jointly supplied
5. E.X and Y are inferior commodities.

Which of the following items in the Balance of Payments Account is an invisible transaction?

1. A.Import of cars
2. B.Export of cocoa
3. C.Export of crude petroleum
4. D.Tourism
5. E.Import of building materials.

Which of the following is a term used to describe a payment representing a surplus in excess of transfer costs?

1. A.Interest rates
2. B.Opportunity costs
3. C.Economic rent
4. D.Indirect costs
5. E.Wages.

Less developed countries obtain foreign reserves mainly from the export of

1. A.manufactured goods
2. B.processed and semi-processed commodities
3. C.invisible items
4. D.primary products
5. E.all of the above.

By 'trade by barter', we mean

1. A.trade done by people in villages
2. B.exchange of goods for money
3. C.international trade
4. D.exchange of goods for goods
5. E.the trade of the Middle Ages.

In order to build up its capital stock, the typical less developed country should ideally

1. A.increase total savings
2. B.depend on handouts from foreigners
3. C.nationalize all foreign concerns
4. D.impose tariffs on imports
5. E.none of the above.

The advantage of the sole proprietorship is as follows:

1. A.it is always successful
2. B.continuity is no problem
3. C.control and supervision is under one man
4. D.funds are easy to obtain
5. E.inter-generational equity is assured.

Which of these should determine, in a planned economy, how the factors of production are to be allocated among different production activities?

1. A.Fairness
2. B.The distribution of income and wealth
3. C.Public need, which is determined by the government
4. D.Private needs determined by the market
5. E.The ability of an individual to make profit.

Which of the following activities of Government precludes the existence of a market economy?

1. A.The imposition of taxes
2. B.the control of the location of industry
3. C.The central planning of all production
4. D.The fixing of maximum prices for all necessities
5. E.The establishment of laws requiring the registration of business firms

Which of the following is NOT strictly included in the study of Economics?

1. A.The study of wants
2. B.The study of choice
3. C.Whether a particular want satisfies a good or bad purpose
4. D.The study of scarcity
5. E.the study of substitution.

The optimum population of a country is reached when

1. A.all factors of production have been fully employed
2. B.the productive effort per man is at its highest with a given volume of resources
3. C.the total population of a country increases
4. D.the natural resources of a country increases
5. E.the working population of a country increases.

In Economics, production is complete when

1. A.goods are produced in the factories
2. B.goods are sold to the wholesalers
3. C.goods and services are produced by the government
4. D.prices are fixed for goods and services
5. E.goods and services finally reach the consumers.

A rational consumer will adjust his spending pattern so that:

1. A.he buys only the one item that gives him the most total satisfaction
2. B.the marginal utility he gets from the last unit of each item is the same
3. C.the marginal utility he gets from the last naira spent on each item is the same
4. D.the total utility he gets from each item is the same
5. E.the total amount of money he spends on each item is the same.

Bondholders are treated more favourably than shareholders because

1. A.they are not liable for the company's losses
2. B.they have a greater voice in electing board of directors
3. C.they control the management
4. D.they have a prior claim on the company's assets
5. E.none of the above.

The numerical measure of elasticity is:

1. A.% change in Q / % change in P
2. B.change in Q / change in P
3. C.% change in P / % change in Q
4. D.change in P / change in Q
5. E.change in P plus change in Q / change in P