JAMB Economics 1990 past questions and answers

If one orange costs 20k and one kilogram of beef costs N10.00, the opportunity cost of one kilogram of beef is

1. A.50 oranges
2. B.10 oranges
3. C.5 oranges
4. D.N9.80

In economic life, choice among alternatives depends on the

1. A.income of the decision maker
2. B.scarcity of resources
3. C.scale of preference of the decision maker
4. D.status of the decision maker

Use the circular flow diagram (a simple circular flow of income diagram). The flow labelled Y refers to

1. A.real income
2. B.factor payments
3. C.factor input
4. D.national income

Use the circular flow diagram (a simple circular flow of income diagram). The lower half of the diagram indicates

1. A.the flow of goods and services
2. B.payments for goods and services
3. C.the flow of income
4. D.government transactions

One of the major advantages of specialization is that

1. A.the worker becomes a tenderer of machines
2. B.it causes more employment of labour
3. C.less machinery is required for production
4. D.the worker wastes less time between operations

Which of the following rewards is associated with entrepreneurship as a factor of production?

1. A.Salaries
2. B.Profits
3. C.Interests
4. D.Rent

Economies of scale operate only when

1. A.marginal cost is falling with input
2. B.average cost is falling with output
3. C.fixed cost is variable
4. D.variable cost is less than fixed cost

At the point of profit maximization by a firm, marginal cost is

1. A.minimum
2. B.falling
3. C.constant
4. D.rising

A situation in which all inputs are doubled and output also doubles is known as

1. A.constant proportions
2. B.constant returns
3. C.increasing returns to scale
4. D.constant returns to scale

The demand curve would shift to the left when there is a rise in

1. A.the price of a substitute
2. B.the price of a complement
3. C.income
4. D.the supply of the commodity

The law of diminishing marginal utility indicates that if a consumer increases his consumption of a commodity continuously, his

1. A.total utility must fall
2. B.marginal utility must fall
3. C.marginal utility may rise even though his total utility is falling
4. D.marginal utility may fall even though his total utility may be rising

Technical progress that leads to reduction in costs results in

1. A.an increase in equilibrium price and quantity
2. B.a decrease in equilibrium price and quantity
3. C.an increase in equilibrium price and decrease in equilibrium quantity
4. D.a decrease in equilibrium price and increase in equilibrium quantity

If an increase in income induces a reduction in the demand for beans, beans can be referred to as

1. A.a normal good
2. B.an inferior good
3. C.a substitute good
4. D.a giffen good

The demand for a product is said to be price inelastic if

1. A.the price elasticity of demand is less than one
2. B.the price elasticity of demand is greater than one
3. C.a reduction in price results in an increase in the quantity demanded
4. D.an increase in price results in a decrease in the quantity demanded

In the diagram, RTX and STY are the marginal cost and the average cost curves respectively of a perfectly competitive firm. The supply curve of the firm is indicated by

1. A.TX
2. B.RT
3. C.ST
4. D.TY

An imperfect market in which there is only one buyer of a commodity is

1. A.monopsony
2. B.oligopoly
3. C.monopoly
4. D.duopoly

The tailoring service is competitive partly because it consists of a large number of

1. A.large-scale enterprises
2. B.medium scale enterprises
3. C.small scale enterprises
4. D.government-owned enterprises

Which of the following is applicable to a monopolistic firm operating at the output where marginal cost equals marginal revenue?

1. A.Cost of production is at a minimum
2. B.The plant is of optimum size
3. C.Price is above marginal revenue
4. D.Average variable cost is at a minimum

Which of the following is the major function of the wholesaler?

1. A.Bulk breaking
2. B.Provision of useful information to the manufacturer on products
3. C.Provision of after-sales services to consumers
4. D.Provision of warehousing facility

In the distribution channels for goods and services, the middleman's mark-up margin provides a rough measure for the

1. A.quantity discounts allowed final consumers
2. B.reward for business entrepreneurship
3. C.effectiveness of government control over the economy's marketing channels
4. D.extent of exploitation of the final consumer

Which of the following reasons could induce a manufacturer to bypass the wholesaler in the distribution chain?

1. A.To provide the quantity needed by retailers
2. B.To collect useful information on his product
3. C.To provide warehousing facilities
4. D.To violate government regulation on distribution

A major difference between a state-owned enterprise and a private enterprise is that the former

1. A.is not expected to cover its costs of production while the latter is
2. B.is not always expected to maximize profits while the latter is
3. C.has shareholders while the latter does not
4. D.has a board of directors while the latter does not

Divorce of ownership from control is a characteristic of

1. A.sole proprietorship
2. B.a limited liability company
3. C.partnership
4. D.a private limited company

Capital provided by individuals to the firm by purchasing stocks is called

1. A.debt capital
2. B.fixed capital
3. C.circulating capital
4. D.equity capital

Which of the following factors is the most important in siting a petro-chemical plant?

1. A.Nearness to the source of raw materials
2. B.Nearness to the source of power
3. C.Availability of labour
4. D.Proximity to financial institutions

Which of the following will be the effect of allowing only economic factors to dictate the location of industries in Nigeria?

1. A.A more even development of the different parts of the country will be assured
2. B.There will be an unbalanced spread in the distribution of industries
3. C.The less developed parts of the country will be able to attract more industries
4. D.Only the government will be able to finance the establishment of industries

If the same basket of goods which cost N12.00 in 1985 cost N15.00 in 1987, the price index for 1987 is

1. A.25
2. B.80
3. C.100
4. D.125

Which of the following is likely to be inflationary?

1. A.Tax increase
2. B.Increase in unemployment
3. C.Budget surplus
4. D.Wages increase

The basic purpose of imposing legal reserve requirements on commercial banks is to

1. A.assure the profitability of commercial banks
2. B.provide a device through which credit creation by banks can be controlled
3. C.provide a proper ratio between earning and non-earning bank assets
4. D.provide the Central Bank with working capital

Which of the following is a liability of a commercial bank?

1. A.Deposits in the bank
2. B.Loans made by the bank to individuals
3. C.Loans made by the bank to other banks
4. D.Bonds purchased by the bank

A tax on a commodity whose supply is perfectly inelastic is

1. A.shifted completely on the consumer
2. B.completely borne by the supplier
3. C.divided in the ratio 60:40 between the consumer and the supplier
4. D.divided half-and-half between the producer and the consumer

Use the figure (tax rate against income, curves X, Y and Z). The relationship between tax rate and income which is relevant to a progressive tax is shown by

1. A.curve X
2. B.curve Y
3. C.curve Z
4. D.curves X and Z

Use the figure (tax rate against income, curves X, Y and Z). The relationship between tax rate and income which is relevant to proportional tax is depicted by

1. A.curves Z and Y
2. B.curve X
3. C.curve Z
4. D.curve Y

Under a system of freely floating exchange rates, an increase in the international value of a country's currency will cause

1. A.its exports to rise
2. B.its imports to rise
3. C.gold to flow into that country
4. D.its currency to be in surplus

Balance of trade is the difference between

1. A.exports and imports of goods and services
2. B.capital inflows and capital outflows
3. C.visible and invisible balances
4. D.exports and imports of goods

Which of the following is likely to reduce a surplus in the balance of payments of a country?

1. A.Devaluation
2. B.Increased tariff on imports
3. C.Export promotion
4. D.Currency appreciation

Which of the following is a tariff?

1. A.Limit on the amount of goods which can be imported
2. B.Interest rate on foreign loans
3. C.Government payment to domestic producers for exports
4. D.Tax on imported goods

Import duties will increase total expenditure on imports if the demand for imports is

1. A.elastic
2. B.inelastic
3. C.infinitely elastic
4. D.derived

Which of the following is likely to hinder labour mobility in Nigeria?

1. A.Higher wage elsewhere
2. B.Cultural similarities
3. C.Good accommodation elsewhere
4. D.Ignorance of job opportunities elsewhere

If birth rate is constant and death rate declines, population

1. A.falls
2. B.expands
3. C.stabilizes
4. D.oscillates

If the government invests the sum of N1,000 000.00 and the marginal propensity to consume is 0.75, what is the change in income?

1. A.N1,000 000.00
2. B.N4,000 000.00
3. C.N6,000 000.00
4. D.N14,000 000.00

The system of measurement of national income as the sum of all final demands is called

1. A.income approach
2. B.expenditure approach
3. C.value-added approach
4. D.final demands approach

Disposable income is an income which

1. A.is available for consumption and savings
2. B.pensioners receive from the government
3. C.is payable to the disabled members of the community
4. D.accrues to the environmental sanitation authorities for refuse disposal

In equilibrium, injections are equal to

1. A.withdrawals
2. B.surplus of imports over exports
3. C.government spending
4. D.wages

Social overhead capital refers to

1. A.balanced growth
2. B.gross investment
3. C.the building of infrastructures
4. D.capital formation

The most common index used for measuring development is

1. A.the level of literacy
2. B.per capita income
3. C.nutritional levels
4. D.population growth rate

Agriculture is central to Nigeria's economic development because

1. A.Nigeria's comparative advantage lies mainly in agro-allied industries
2. B.agriculture is the largest employer of labour
3. C.agriculture accounts for an insignificant domestic product
4. D.Nigeria earns limitless foreign exchange from agriculture