JAMB Economics 1979 past questions and answers

Which of the following is not true of the occupational distribution of the labour force in West Africa?

1. A.A large percentage of the labour force is engaged in agriculture
2. B.Agriculture is the most important occupation in West Africa
3. C.The manufacturing sector employs a large percentage of the population
4. D.Agriculture does not constitute an important source of paid employment
5. E.The public sector forms an important source of paid employment.

Which of the following is not true of the theory of optimum population?

1. A.It is possible for a densely populated country to be underpopulated if it has insufficient labour to make the most effective use of its other factors
2. B.The quantity of labour, which combined with the other factors gives the minimum output, is known as optimum population
3. C.The quantity of labour, which combined with the other factors, gives the maximum output, is known as optimum population
4. D.The test of over-population is whether it exceeds the optimum
5. E.It is possible for a thinly populated country to be over-populated if it has a poor supply of other factors.

Production covers all but one of the following activities:

1. A.changing the position of a good in time as, for example, holding stocks of goods until they are required
2. B.the provision of some kind of service, e.g. retailing
3. C.changing the form of a good from the raw material to the finished product
4. D.changing the situation of a good as, for example, from a factory in Lagos to a retail shop in Port Harcourt
5. E.the use of goods and services to satisfy individual wants.

If two commodities are good substitutes for one another, e.g. butter and margarine, an increase in the demand for one will reduce the demand for the other. This type of demand is called

1. A.composite demand
2. B.elastic demand
3. C.derived demand
4. D.competitive demand
5. E.inelastic demand.

One of the reasons why the conditions of supply of a commodity may change is

1. A.a change in real income
2. B.changes in the technique of production
3. C.a change of fashion or taste
4. D.changes in the price of the commodity itself
5. E.changes in population.

When the demand curve shifts to the right, it indicates that a larger quantity is demanded at each price. This is caused by one of the following:

1. A.a fall in income
2. B.a rise in the price of a complement
3. C.a fall in the price of a substitute
4. D.a change in tastes against this commodity
5. E.none of the above.

When the price of a commodity is below the equilibrium price the quantity demanded will exceed the quantity supplied. Such a situation is referred to as

1. A.elastic supply
2. B.joint demand
3. C.excess supply
4. D.derived demand
5. E.none of the above.

The Central Bank controls the activities of other banks by all but one of the following. Which one?

1. A.The use of bank rate
2. B.The purchase or sale of government bonds on the open market
3. C.Special deposit
4. D.The use of directives
5. E.Taxation.

Which of these alternatives is wrong? Central banks are

1. A.bankers to the government
2. B.bankers to commercial banks
3. C.merchant banks
4. D.controllers and regulators of the money supply
5. E.issuers of bank notes.

The principle of comparative advantage or comparative cost is not based on one of the following assumptions:

1. A.there are restrictions in trade
2. B.there are no costs of transportation
3. C.there is perfect competition
4. D.there are no tariffs or import and export quota
5. E.there are only two countries and only two commodities entering into international trade.

Which of the following is not a direct tax?

1. A.Company income tax
2. B.Capital tax
3. C.Purchase tax
4. D.Personal income tax
5. E.Capital gains tax.

Division of labour means

1. A.dividing the labour into different categories
2. B.splitting the process of production into different parts to be completed by each person
3. C.dividing the goods and services into different sections
4. D.assigning different duties to labourers
5. E.group of labourers working in a factory or shop.

By utility we mean

1. A.usefulness
2. B.power of satisfying a want
3. C.beneficial
4. D.advantageous
5. E.consumable.

Which of the following is not an indirect tax?

1. A.Excise duty
2. B.Company tax
3. C.Import duty
4. D.Export duty
5. E.Sales tax.

Average Cost is

1. A.the total cost of production
2. B.the extra cost of producing one additional unit of output
3. C.the cost of producing a unit of output
4. D.variable cost
5. E.overhead cost.

Opportunity Cost is the

1. A.price of scarce goods
2. B.resources required for making a commodity
3. C.cost of luxury goods
4. D.accrual of financial losses by chance
5. E.alternative that is forgone in order to satisfy a want.

The quantity supplied of a commodity increases when

1. A.production increases
2. B.demand increases
3. C.price of the commodity increases
4. D.population of the country increases
5. E.more commodities are imported.

In the above diagram D_oD_o is the original demand curve. D₁D₁ is

1. A.a fall in the demand curve
2. B.a rise in the demand curve
3. C.an extension in the demand curve
4. D.a contraction in the demand curve
5. E.none of these curves.

The country will be over-populated when

1. A.the birth rate is high
2. B.the death rate is low
3. C.the growth rate is high
4. D.the population is increasing more than the resources of the country
5. E.unemployment is high in the country.

The value of money is generally measured by reference to

1. A.the interest rate charged on bank loans
2. B.the general price level
3. C.the size of a country's gold stock
4. D.the level of economic development in a country
5. E.the price of stocks and shares on the stock exchange.

If the quantity demanded of a commodity increases from 20 to 30 when there is an increase in price from N4 to N5, the elasticity of demand is

1. A.0
2. B.1
3. C.2
4. D.5
5. E.10.

The total value of goods and services sold and bought by a country across its border during a given period, usually a year, is known as

1. A.visible trade
2. B.invisible trade
3. C.balance of payments
4. D.balance of trade
5. E.terms of trade.

Which of the following types of capital is not rewarded by means of dividends?

1. A.Ordinary shares
2. B.Preference shares
3. C.Cumulative preference shares
4. D.Participating preference shares
5. E.Debentures.

Which of the following is not usually the function of a wholesaler?

1. A.Transport
2. B.Storage
3. C.Advertising
4. D.After-sales service
5. E.Branding.

Net national income is

1. A.gross national income minus depreciation
2. B.gross domestic product plus net income from abroad
3. C.nominal national income deflated by the price level
4. D.gross national income divided by the total population
5. E.gross national product plus subsidies minus indirect taxes.

If Mr. A earns N2,000 a year while Mr. B earns N8,000 a year but Mr. A pays N200 per annum in tax while Mr. B pays N400, such a tax is

1. A.progressive
2. B.indirect
3. C.regressive
4. D.proportional
5. E.none of the above.

Which of the following is not an asset of a commercial bank?

1. A.Cash
2. B.Money at call
3. C.Treasury bills
4. D.Reserve funds
5. E.Loans and overdrafts.

The lowering of the exchange rate between a country's currency and other currencies is known as

1. A.the foreign exchange rate
2. B.deflation
3. C.exchange control
4. D.the law of comparative advantage
5. E.none of the above.

When the average physical product curve is rising, the marginal physical product is

1. A.below it
2. B.above it
3. C.falling
4. D.zero
5. E.none of the above.

The proportion of currency in the money supply

1. A.is higher in developing countries than advanced countries
2. B.is lower in developing countries than advanced countries
3. C.is the same in both developing and advanced countries
4. D.grows as the economy develops
5. E.none of the above.

If a government is running a deficit, this means

1. A.terms of trade are unfavourable
2. B.more projects cannot be undertaken
3. C.tax inflow is greater than expenditure
4. D.aggregate demand is greater than aggregate supply
5. E.tax inflow is less than expenditure.

Pure monopoly describes a market where

1. A.there are many sellers and a few buyers
2. B.goods are sold at different prices
3. C.entry is not blocked, but no one cares to enter
4. D.a few sellers and one buyer exist
5. E.none of the above.

Which of the following assets of a commercial bank does not yield revenue?

1. A.Money in the tills of the bank
2. B.Money at call
3. C.Treasury certificates
4. D.Treasury bills
5. E.Bills of exchange.

Which of the following is not a component of National Income at factor cost?

1. A.Wages earned by doctors
2. B.Rent paid to landlords
3. C.Indirect taxes
4. D.Undistributed company profits
5. E.Interest on loans.

Which of the financial institutions cannot direct loans to individuals?

1. A.The Agricultural Bank
2. B.The Industrial Bank
3. C.The Central Bank
4. D.The Co-operative Bank
5. E.The Standard Bank.

An ad valorem tax means

1. A.total amount of an income tax
2. B.a certain percentage tax on the value of a commodity
3. C.a certain percentage tax on the volume of commodity
4. D.a tax on capital gains
5. E.a profit tax.

The foreign exchange rate of a country is

1. A.the interest rate fixed by the Central Bank
2. B.the price of one national currency in terms of another
3. C.the rate at which the Central Bank issues money
4. D.the rate of interest on government bonds
5. E.none of the above.

The 'terms of trade' means

1. A.the trade agreement between two countries
2. B.the difference in the volumes of exports of two countries
3. C.the value of a unit of export in relation to the value of a unit of import
4. D.the proportion of total value of exports to the value of total trade
5. E.none of the above.

Which is the most liquid of the following financial assets held by an individual?

1. A.Outstanding balance on the current account of a commercial bank
2. B.A credit balance on a savings account
3. C.A crossed postal order
4. D.An insurance policy
5. E.All of the above.

The price mechanism

1. A.regulates supply and demand
2. B.rations the consumers
3. C.rewards the producers
4. D.allocates scarce resources
5. E.does all of the above.

When marginal cost equals marginal revenue product

1. A.the firm is producing at a loss
2. B.the firm is at a break-even point
3. C.the firm is making the least profit
4. D.the supplementary cost of the firm is highest
5. E.the firm has maximum profit.

Study the table below:
Number of workers — Total product
1 — 10
2 — 28
3 — 48
4 — 72
5 — 80
What is the marginal product of the second worker?

1. A.10
2. B.20
3. C.15
4. D.18
5. E.43.

Disposable income equals

1. A.personal income less business profits
2. B.personal income less taxes and subsidies
3. C.national income less borrowing from abroad
4. D.national income plus transfer payments
5. E.personal income less taxes plus subsidies.

What do we call a market where there is a large number of buyers and sellers, such that no one has an appreciable influence on prices?

1. A.Free market
2. B.Perfectly competitive market
3. C.Controlled market
4. D.Stock exchange market
5. E.Open market.

A typical corporate form of business organization is owned by

1. A.presidents of the country
2. B.shareholders
3. C.the general manager and the executives of the business concern
4. D.a local government
5. E.foreigners and citizens of the country.

The burden of tax on a commodity whose demand is infinitely inelastic

1. A.is zero
2. B.will be borne by seller alone
3. C.will be borne by buyer alone
4. D.will be borne by both seller and buyer
5. E.is impossible to tell who bears it.

The predominance of non-working wives and housemaids in West Africa

1. A.will understate the National Income of the countries
2. B.will overstate the National Income of the countries
3. C.will lead to constant per capita income over the years
4. D.will lead to balance of payment deficits
5. E.will cause unfavourable terms of trade.

Inflation can be curbed by

1. A.increasing aggregate demand
2. B.paying higher wages
3. C.increasing government expenditure
4. D.reducing aggregate demand
5. E.a deficit budget.

In most cases, the marginal utility derived from a particular good

1. A.increases as additional units are consumed
2. B.increases at a decreasing rate as additional units are consumed
3. C.decreases at a constant rate as additional units are consumed
4. D.decreases as additional units are consumed
5. E.remains constant as additional units are consumed.

Infant industries are

1. A.baby clothing factories
2. B.those which are introducing new products
3. C.cases of arrested development
4. D.industries temporarily protected by tariff barriers until mature enough to compete on world markets
5. E.industries that are allowed to remain permanent cases of adolescence.