JAMB Economics 1980 past questions and answers

If the government is interested in raising the highest revenue from a tax system, then for any two commodities

1. A.it is better to tax one whose demand is more elastic
2. B.it is better to tax one whose demand is more inelastic
3. C.revenue will be the same from both commodities
4. D.it is not possible to say which will yield higher revenue
5. E.government cannot make much revenue from taxing commodities.

Production in Economics occurs when

1. A.a commodity or service is sold
2. B.utility is created or added
3. C.a commodity is manufactured
4. D.raw materials are produced or extracted from mines
5. E.all of these.

From an economic point of view, an activity does not have a cost when

1. A.someone else pays for it
2. B.the returns are greater than costs
3. C.the choice involves giving up nothing
4. D.the government pays for it
5. E.it is paid for from a gift.

Which would you NOT consider an agro-based industry in Nigeria?

1. A.A dairy enterprise producing milk
2. B.A yam flour mill
3. C.A poultry industry
4. D.A fertilizer plant
5. E.None of the above.

Price control indicates the following

1. A.price is fixed at equilibrium level
2. B.price is fixed above equilibrium level
3. C.price is not fixed but is determined by supply and demand
4. D.price is fixed below equilibrium level
5. E.none of the above.

The terms of trade are said to be favourable only if

1. A.value of total exports equals value of total imports
2. B.value of merchandise exports is greater than value of merchandise imports
3. C.there are no balance of payments problems
4. D.there is an increase in the value of a unit of export in terms of imports
5. E.foreign exchange reserves do not change.

Which is the dominant form of tax in Nigeria?

1. A.Direct tax
2. B.Indirect tax
3. C.Inheritance tax
4. D.Personal income tax
5. E.Value added tax.

Which is NOT a function of central banks in West Africa?

1. A.Dealing in foreign exchange
2. B.Issuing of currencies
3. C.Accepting deposits from private customers
4. D.Acting as government bank
5. E.Acting as bankers' bank.

Which is NOT a cause of high population growth in Nigeria?

1. A.Family Planning Unit of Nigeria
2. B.Improved medical facilities
3. C.Reduction in death rate
4. D.Improved hygiene
5. E.Increased birth rate.

In the figure, we can describe the demand as

1. A.perfectly elastic
2. B.having unit elasticity
3. C.perfectly inelastic
4. D.fairly elastic
5. E.all of the above.

Commercial banks can create money in the following ways

1. A.by issuing coins and paper money
2. B.by borrowing money from banks abroad
3. C.by receiving deposits from individuals
4. D.by printing money on the instructions of the Central Bank
5. E.none of the above.

Utility of a commodity means

1. A.its usefulness
2. B.power to satisfy a want
3. C.price of the commodity
4. D.satisfaction derived from the production of commodity
5. E.its adaptability.

International trade arises because

1. A.one country has more abundant resources than the other country
2. B.one country has the technology to produce the commodity whilst the other has not
3. C.one country has the maximum comparative advantage or minimum comparative disadvantage in the production of a commodity over the other country
4. D.one country has more manpower to produce the commodity than the other country
5. E.all of the above.

By balance of visible trade we mean

1. A.import and export of goods
2. B.import and export of services
3. C.balance of current account in the balance of payments
4. D.balance of capital account in the balance of payments
5. E.all of these.

Nigeria earns the major part of her foreign exchange from the export of

1. A.manpower to other countries
2. B.crude oil
3. C.petroleum products
4. D.groundnuts and cotton
5. E.palm oil and cocoa.

In the above diagram, supply and demand conditions of sugar in a Nigerian market are given. An indirect tax of 10 kobo per kg is imposed. It will be paid

1. A.wholly by the supplier
2. B.wholly by the consumer
3. C.partly by the supplier and partly by the consumer
4. D.wholly by the middlemen
5. E.partly by stockholder and partly by consumer.

Which would you NOT consider an advantage of a one-man business?

1. A.Freedom of action
2. B.Limited liability
3. C.Quick decision-making
4. D.Personal contact with customers
5. E.None of the above.

The budget of Nigeria will be in deficit if

1. A.revenue expenditure exceeds the revenue receipts
2. B.capital expenditure exceeds the capital receipts
3. C.revenue and capital expenditure exceeds revenue and capital receipts
4. D.the government is spending more than its income
5. E.all of the above.

An economic problem arises when

1. A.manufactured goods are in short supply
2. B.money is in short supply
3. C.buyers are many
4. D.sellers are few
5. E.scarcity and choice are involved.

By subsistence production we mean

1. A.goods and services are produced for consumption only
2. B.goods and services are sold to others
3. C.raw materials are produced in the country
4. D.goods and services are produced for the market
5. E.none of these.

Division of labour means that

1. A.the labour is divided into different sections
2. B.the work is divided into different parts to be completed by each labourer
3. C.production is completed by the different departments of a factory
4. D.commodities are produced at different times by a single labourer
5. E.the labour force in the country is not united.

A limited liability company is owned by

1. A.an individual
2. B.two or more partners
3. C.shareholders
4. D.government
5. E.a bank.

If the price of a commodity falls and the quantity purchased of it does not rise, the commodity can be described as

1. A.normal
2. B.abnormal
3. C.inferior
4. D.superior
5. E.scarce.

Mr. A earns N300 and pays N15 in tax. Mr. B earns N100 and pays N6 in tax. This tax system can be described as

1. A.proportional tax
2. B.progressive tax
3. C.competitive tax
4. D.excise tax
5. E.regressive tax.

Which sector can you say is growing the fastest in the Nigerian economy?

1. A.Agriculture
2. B.Industry
3. C.Education
4. D.Transport
5. E.Labour.

Which is NOT a method of raising capital funds in Nigeria?

1. A.Borrowing from abroad
2. B.Internal borrowing
3. C.Nigerianization of foreign companies
4. D.Gifts from abroad
5. E.Selling government bonds.

If a firm doubles its output and its costs increase by 60%, the firm is experiencing

1. A.increasing costs
2. B.economies of scale
3. C.decreasing returns
4. D.decreasing costs
5. E.none of the above.

The fundamental problem of Economics is

1. A.money
2. B.poverty
3. C.unemployment
4. D.the scarcity of resources relative to wants
5. E.inflation.

If you do not have to give up anything in order to get a particular thing, then its opportunity cost is

1. A.zero
2. B.not measurable
3. C.its price in money
4. D.infinite
5. E.equal to one.

Which of the following is the standard concept for measuring and analyzing population growth?

1. A.The rate of natural increase
2. B.The net migration rate
3. C.The rate of population increase
4. D.The fertility rate
5. E.All of the above.

When we draw a market demand curve, we

1. A.ignore tastes, incomes and other prices
2. B.assume that tastes, incomes and other prices do not matter
3. C.assume that tastes, incomes and all other prices change in the same direction as prices
4. D.assume that tastes, incomes and all other prices remain constant
5. E.both A and B above.

Capital earns income because

1. A.it is productive
2. B.it is expensive
3. C.it is always cheaper to substitute capital for labour
4. D.it is technically more efficient than labour
5. E.both A and B above.

In a free-market economy, the rationing of scarce goods is done principally by

1. A.the government
2. B.business organizations
3. C.the price mechanism
4. D.consumers
5. E.both A and B above.

A disadvantage of the corporate form of business is the

1. A.risk of the owners of loss of personal effects if the business should fail
2. B.ability of the corporation to raise financial resources
3. C.limited life span of the corporation
4. D.problems presented by separation of ownership from control
5. E.none of the above.

The value of money depends primarily on

1. A.the gold backing of the currency
2. B.the gold backing of both currency and deposits
3. C.the general price level
4. D.government decree that it is legal tender
5. E.none of the above.

A commercial bank is able to create money

1. A.by printing it
2. B.by maintaining reserves
3. C.by creating a demand deposit as it gives a new loan
4. D.by issuing cheques to depositors
5. E.by borrowing from the Central Bank.

Which one of the following is NOT one of the balance of payments entries?

1. A.The current account
2. B.Foreign reserves
3. C.Import and export duties
4. D.Short-term capital
5. E.Long-term capital.

Which of the following taxes appear generally progressive in nature?

1. A.Sales taxes
2. B.The personal income tax
3. C.Property taxes
4. D.Corporation taxes
5. E.None of the above.

In a subsistence economy

1. A.there is no shortage of goods and services
2. B.the State is the sole owner of resources
3. C.production is largely oriented towards consumption in the rural sector
4. D.there is no exchange of goods and services
5. E.women predominate in all economic activities.

Which of the following is a correct definition of equilibrium price?

1. A.A price which covers production cost
2. B.A price which maximizes entrepreneur's profits
3. C.A price at which the quantity demanded equals the quantity supplied
4. D.A price at which competitive firm is at equilibrium
5. E.A price which stabilizes farmers' income.

In a normal (typical) demand schedule, the quantity demanded is

1. A.directly related to price
2. B.inversely related to price
3. C.independent of price
4. D.proportionally related to supply
5. E.solely dependent on haggling skill.

Division of labour is limited by the

1. A.availability of raw materials
2. B.size of the labour force
3. C.size of the firm
4. D.absolute size of a country's population
5. E.per capita income and number of potential buyers.

In a limited liability company, the greatest risk is borne by

1. A.debenture holders
2. B.company executives
3. C.ordinary shareholders
4. D.preference shareholders
5. E.board of directors.

Which of the following is NOT a function of Nigerian commercial banks?

1. A.Acceptance of deposits
2. B.Lending of money
3. C.Investment in securities and businesses
4. D.Issue of currency
5. E.Selling and buying of travellers cheques.

In Nigeria, cheques are not money because

1. A.their use is confined to business houses
2. B.there are no banks in rural areas
3. C.they are no legal tender
4. D.they are not generally acceptable as a medium of exchange
5. E.most Nigerians cannot identify them.

Indicate which of the following are invisible trade items in a country's balance of payments

1. A.Oil exports and imports
2. B.Gold and foreign reserves
3. C.Foreign investments
4. D.Dividends and profits
5. E.Expenditure on shipping and tourism.

Which of the following is NOT a measure for controlling inflation?

1. A.Reduction in money supply
2. B.Wage restraint and wage freeze
3. C.Reduction in taxes and increase in government spending
4. D.Price control
5. E.Credit restriction.

Which of the following is NOT a determinant of changes in supply?

1. A.Changes in the cost of production
2. B.Technical progress
3. C.Weather
4. D.Changes in the number of producers
5. E.Changes in the number of buyers.

The marginal physical product of labour is

1. A.the output of labour unaided by machinery
2. B.the extra revenue from the output of one additional worker
3. C.the difference in the output of two workers
4. D.additional output achieved when one extra worker is added to fixed account of other factors
5. E.none of the above.

One of the disadvantages of division of labour is that

1. A.there is a saving of time
2. B.it results in workers acquiring greater skill at their jobs
3. C.there is a greater risk of unemployment
4. D.it makes possible the use of machinery
5. E.it makes the worker less fatigued by his work.