JAMB Economics 1983 past questions and answers

Which of the following items is NOT included in measuring national income by the income approach?

1. A.Wages and salaries of public servants
2. B.Student grants and scholarships
3. C.Profits of companies
4. D.Income earned by self employed persons such as lawyers
5. E.Rents on property.

A downward sloping demand curve intersects a fixed supply curve. A shift of this demand curve to the right implies that

1. A.both price and quantity will increase
2. B.only price increases
3. C.only quantity increases
4. D.the price remains constant
5. E.the price falls.

Which of the following items is NOT an argument for locating industries in rural areas?

1. A.Rural areas supply agricultural raw material
2. B.The pace of development will be quickened in rural areas
3. C.Employment will be provided for rural inhabitants
4. D.Capital is easily available in rural areas
5. E.Suitable humid climate is sometimes found in rural areas.

The natural growth rate of a population is the

1. A.sum of the birth rate and the death rate
2. B.sum of the birth rate and the net migration rate
3. C.birth rate minus the death rate
4. D.birth rate divided by the net migration
5. E.death rate minus the net migration.

Which of the following sets fully represents factors of production?

1. A.Sunlight, machinery, man, land
2. B.Land, labour, capital, enterprise, technology
3. C.Capital, technology, ideas, market, land
4. D.Land, water, weather
5. E.Money, market, middlemen.

Production possibilities (alternatives)
Alternative: P | Q | R | S | T
Units of shelter: 5 | 4 | 3 | 2 | 0
Units of food: 0 | 5 | 9 | 12 | 15
Based on the above production possibilities table, the real cost of a unit of food when alternative R is selected is

1. A.one unit of shelter
2. B.three units of shelter
3. C.one third of a unit of shelter
4. D.six units of shelter
5. E.two units of shelter.

The concept of economic efficiency primarily refers to

1. A.obtaining the maximum output from available resources at the lowest possible cost
2. B.conservation of our petroleum resources
3. C.equity in the distribution of the nation's wealth
4. D.producing without waste
5. E.the limited wants-unlimited resources dilemma.

If successive units of labour are added to a piece of land while capital and technology remain constant, a point will be reached in the level of production when each added unit of labour will add less to the output than previous units of labour. This concept is known as

1. A.the productivity of labour
2. B.the law of diminishing marginal utility
3. C.the law of diminishing returns
4. D.the concept of factor intensity
5. E.labour intensive production.

In perfect competition a firm's price is equal to its marginal revenue which is again equal to average revenue. This form maximizes its profits when its marginal cost (MC) is equal to price (P). Which of the curves in the diagram below represents the firm's marginal cost (MC)?

1. A.Curve I
2. B.Curve II
3. C.Curve III
4. D.Curve IV
5. E.Curves I and III.

A Nigerian household's demand curve for semovita is downward sloping because

1. A.the demand for semovita is high
2. B.the local markets are flooded with semovita
3. C.it is produced in Nigeria
4. D.every household can afford to buy semovita
5. E.higher prices attract lower quantities while lower prices attract larger quantities.

The table below shows the market schedule for semovita.
Price per 5kg bag | Quantity demanded in bags | Quantity supplied in bags
N3.00 | 15,000 | 1,500
N4.00 | 13,000 | 3,000
N5.00 | 10,000 | 6,000
N6.00 | 7,000 | 7,000
N7.00 | 5,000 | 9,000
N8.00 | 4,000 | 12,000
N9.00 | 2,000 | 14,000
What is the market equilibrium price?

1. A.N5.00
2. B.N8.00
3. C.N9.00
4. D.N7.00
5. E.N6.00

Marginal cost curve intersects average cost curve

1. A.from above at its lowest point
2. B.from below before the lowest point
3. C.from below at its lowest point
4. D.from below after the lowest point
5. E.at zero point.

Palm oil industry is located in Bendel State because the State

1. A.imports raw material for palm oil industry
2. B.is a palm tree growing area
3. C.soil is unsuitable for other crops
4. D.government does not engage land for other crops
5. E.land is suitable for oil.

The meaning of 'wage-price spiral' is

1. A.demand pull and cost push inflation pulling each other in different directions
2. B.demand pull and cost push inflation intensifying each other
3. C.both of them bringing about a reduction in the price level
4. D.that demand pull and cost push inflation increases employment
5. E.that wages and prices are rising at a proportional rate.

In an inflationary period which of the following statements is NOT true?

1. A.Wages rise simultaneously with prices
2. B.The purchasing power of money diminishes
3. C.More money runs after a limited quantity of goods
4. D.Money supply increases
5. E.Aggregate real demand exceeds aggregate real supply.

Retailers in an economy perform the function of

1. A.production
2. B.exchange
3. C.distribution
4. D.hoarding
5. E.investment.

In a sole proprietorship, the decisions are made by the

1. A.government
2. B.board of directors
3. C.management
4. D.shareholders' conference
5. E.owner.

Which of the following enterprises does NOT pursue the sole objective of profit maximization?

1. A.Roads Nigeria Ltd.
2. B.Union Bank of Nigeria Ltd.
3. C.Nigerian Electric Power Authority
4. D.Volkswagen (VW) Nigeria Ltd.
5. E.Kingsway Nigeria Ltd.

The maintenance of general economic stability in the country necessarily relies heavily on

1. A.federal fiscal policy
2. B.coordinated federal, state and local fiscal policies
3. C.tax and revenue policies of state governments
4. D.federal grants to state and local governments
5. E.federal grants to local governments.

The supply of loanable funds is significantly influenced by

1. A.commercial banks
2. B.mortgage banks
3. C.financial intermediaries
4. D.the Central Bank
5. E.insurance companies.

Which of the following are direct taxes?

1. A.Sales taxes
2. B.Excise duties
3. C.Income and company taxes
4. D.Tariff duties
5. E.Commodity taxes.

Division of labour has many advantages. Notwithstanding, it is greatly limited by

1. A.monotony of work
2. B.decline of craftmanship
3. C.risk of unemployment
4. D.extent of market demand
5. E.boredom.

In the above diagram, P₁S is a supply curve for a manufactured good. It shows that

1. A.when price is OP₁, quantity is infinitely elastic
2. B.the higher the price the greater the quantity supplied
3. C.the higher the price the lower the quantity supplied
4. D.when price is zero quantity supplied becomes infinite
5. E.when price is infinite quantity supplied becomes zero.

In the event of a limited liability company going into liquidation each

1. A.shareholder may lose the maximum of the amount he has invested
2. B.shareholder loses nothing
3. C.shareholder loses everything including his house
4. D.shareholder's liability becomes unlimited
5. E.shareholder will lose the amount he has invested plus a proportion of his bank account.

A greater burden of the taxes on essential goods is borne by the

1. A.middle income group
2. B.higher income group
3. C.lower income group
4. D.people falling between the middle and higher income groups
5. E.top few richest people of the country.

Comparative cost doctrine of international trade means specialization in production

1. A.according to absolute cost advantage
2. B.according to absolute cost disadvantage
3. C.according to comparative cost disadvantage
4. D.according to comparative cost advantage
5. E.on the basis of the availability of labour.

The meaning of 'Dumping' is selling goods in a foreign market

1. A.at a price below that received in the home market
2. B.at a price higher than that received in the home market
3. C.at a price equal to the costs price in the home market
4. D.in order to encourage indigenous producers
5. E.at a price equal to the selling price in the home market.

Disequilibrium in the balance of payments means

1. A.imports of the country exceeding its exports
2. B.overall deficit or surplus in the current account and capital account of the balance of payments
3. C.capital flowing out of the country exceeds the capital flowing into the country
4. D.deficit in the trade balance
5. E.export earnings exceed cost of imports.

Petroleum 'glut' in international trade means

1. A.a fall in petroleum production
2. B.an over supply of petroleum
3. C.a higher petroleum price offered by the buyer
4. D.a higher petroleum price demanded by the seller
5. E.higher prices for the consumption of petroleum.

International trade is necessary because

1. A.no country can live in economic isolation
2. B.different countries are differently endowed in natural and man-made resources
3. C.some countries have comparative costs advantage in the production of particular commodities over other countries
4. D.the world demand for and supply of various categories of commodities is expanding very fast.
5. E.countries want to build up their foreign exchange reserves.

Mono product economies are those that

1. A.have a rich cultural heritage
2. B.produce only raw materials
3. C.live from the export of their raw products
4. D.produce one main commodity
5. E.specialize in agricultural industries.

The quickest way of achieving an economic union on regional basis is to remove all

1. A.currency barriers
2. B.language barriers
3. C.political barriers
4. D.customs barriers
5. E.legal barriers.

If an economy is growing at an annual rate of 7% and 4% of it is known to be due to the improvements in labour and capital combined, the balance of 3% is usually due to

1. A.land and related factors
2. B.abundance of natural resources
3. C.level of human capital
4. D.technical progress or other factors
5. E.the discipline of political leadership.

When a government owns enterprises, a number of advantages arise. Which of the following is NOT one of such advantages?

1. A.More capital is provided
2. B.Pricing policy may be in the interest of consumers
3. C.Government workers may be indifferent towards the public
4. D.Infrastructures are rapidly developed
5. E.Income may be more evenly distributed.

Which of the following is NOT an advantage of localization of industries?

1. A.Reaping of external economies
2. B.Development of a pool of skilled labour for the industry
3. C.Development of subsidiary industries
4. D.Development of organized markets
5. E.Growth of conurbations.

The monetary system that requires double co-incidence of wants is known as

1. A.the gold standard
2. B.barter
3. C.the commodity system
4. D.the gold exchange standard
5. E.the cheque system.

The effect of emigration on a country's population, all other things remaining equal, is to

1. A.increase its size
2. B.cause overpopulation
3. C.increase its growth rate
4. D.reduce the proportion of children
5. E.reduce its size.

Money performs a number of functions. ONE of these functions makes it possible for any person to provide for old age. Because of that particular function money is regarded as a

1. A.medium of exchange
2. B.measure of value
3. C.unit of account
4. D.store of value
5. E.standard for deferred payments.

Agriculture plays a dominant role in West African economies because

1. A.the Green Revolution in Nigeria is agricultural
2. B.it supplies all the foodstuff consumed in West Africa
3. C.there are large plantations of cocoa, groundnut and palm oil in West Africa
4. D.it is the main source of revenue in Nigeria
5. E.it employes more than 50% of the total labour force in West Africa.

Which of the following defines Economics most comprehensively?

1. A.Buying and selling
2. B.Organization of industries
3. C.Study of human behaviour in the allocation of scarce resources
4. D.National development planning and budgeting
5. E.Banking and Insurance.

Age-structure in Nigeria is such that the working age-group is in the years

1. A.1-15
2. B.15-65
3. C.30-40
4. D.40-65
5. E.65 and above.

NEPA as a public corporation is

1. A.a power-generating industry in Nigeria
2. B.organized in a perfectly competitive market
3. C.a duopoly
4. D.a monopolistically competitive industry
5. E.a monopoly.

Full employment is a situation in which

1. A.every adult is employed
2. B.all adults who can work are employed
3. C.all persons who have attained the age of 15 years and above are employed
4. D.only the disabled are not employed
5. E.all those who are able and eligible to work can find employment.

When demand is elastic, it means that consumers

1. A.react more proportionately to price change
2. B.are not sensitive to price change
3. C.will stop buying when price increases
4. D.react less proportionately to price change
5. E.react equally to price change.

Demand for a factor of production is

1. A.a composite demand
2. B.a joint demand
3. C.a derived demand
4. D.an elasticity of demand
5. E.cross-elasticity of demand.

Differentiated product is the characteristic feature of

1. A.perfect competition
2. B.pure competition
3. C.monopolistic competition
4. D.monopoly
5. E.oligopoly.

Nigeria is currently implementing the

1. A.third development plan
2. B.second development plan
3. C.fourth development plan
4. D.fifth development plan
5. E.first development plan.