JAMB Economics 1995 past questions and answers

The ultimate objective of Economics is to

1. A.make effort to understand how the Economy works
2. B.make the best use of scarce resources
3. C.organize production at the lowest cost
4. D.decide under what circumstances the government should intervene in the economy.

A student in Obu'pu Secondary School discovers that he simultaneously needs a biro, an exercise book, an eraser and a ruler, but that he can purchase only one of these items. What is the first thing he is expected to do?

1. A.Check how much money he has
2. B.Find out which is the cheapest of the items
3. C.Draw up a scale of preference
4. D.Weigh the opportunity cost of each item against the others.

What to produce in any society is determined by the

1. A.expenditure of the people on different commodities
2. B.competition among the different producers
3. C.competition among the different consumers
4. D.supply and demand in the factor markets.

The active intervention of the central authorities in the management of a country's economy rests upon the

1. A.failure of the market forces to produce satisfactory results
2. B.superiority of the centrally planned economy over the private enterprise economy
3. C.result-oriented nature of the private enterprise economy
4. D.cost-minimization strategy of a mixed economy.

The problems of conducting census include

1. A.high rate of rural-urban migration
2. B.poor geographical distribution of population
3. C.high birth rate in the country
4. D.poor town planning in urban areas.

An ageing population is a population

1. A.with a high dependency ratio
2. B.with many young people
3. C.in which the number of old persons is increasing
4. D.that is dominated by very old people.

The population of Ohaha L.G.A. was 480 000 in December 1980, out of which 60% were females. If within one year no births were recorded, but 5% of the males died, what will be the population of the L.G.A. in December 1981?

1. A.96 000
2. B.192 000
3. C.288 000
4. D.470 400.

What is meant by labour supply?

1. A.Number of people in working population
2. B.Number of men and hours they work
3. C.Number of hours during which the middle aged persons work
4. D.Number of workforce multiplied by the hours they work.

The advantages which firms obtain directly from expanding their operations are referred to as

1. A.internal economies of scale
2. B.external economies of scale
3. C.economies of localization
4. D.economies of resource allocation.

The factor of production that has the highest degree of mobility is

1. A.land
2. B.labour
3. C.capital
4. D.entrepreneurship.

Any payment to a factor of production in excess of what is necessary to keep that factor in its present employment is known as

1. A.real income
2. B.profit
3. C.economic rent
4. D.real wage.

No. of workers | Total output (Units)
1 | 24
2 | 46
3 | 60
4 | 84
5 | 95
6 | 110
7 | 115
In the table above, the marginal product of the 2nd worker and the average product of the 5th worker respectively are

1. A.23 and 20
2. B.22 and 19
3. C.14 and 19
4. D.11 and 20.

Given that TC = TFC + TVC and TR = AR x Q, profit is equal to

1. A.(AR + Q) − TFC
2. B.(TFC + TVC)/Q
3. C.(AR x Q) − TC
4. D.(TC x Q)/AR

The opportunity cost of the use of productive resources which a producer owns and so does not pay for constitutes

1. A.a fixed cost
2. B.an implicit cost
3. C.a variable cost
4. D.a prime cost.

The effect of changes in the condition of demand on a demand schedule with the price constant is a

1. A.movement along the demand curve
2. B.deflation of the demand curve
3. C.hyperbola formation by the demand curve
4. D.shift of the demand curve.

Which of the following statements is TRUE of the effect of changes in demand and supply on price?

1. A.A decrease in supply will lead to a fall in price and a fall in the quantity bought and sold
2. B.An increase in demand will lead to a fall in price and in the quantity bought and sold
3. C.A decrease in demand will lead to a rise in price and in the quantity bought and sold
4. D.An increase in supply will lead to a fall in price and a rise in the quantity bought and sold.

In a free market economy, available resources are more efficiently allocated by complete reliance on

1. A.development planning
2. B.strategic planning
3. C.capital budgeting
4. D.price system.

In order to maximize his profit, a businessman who faces a very elastic demand for his products is advised to

1. A.slightly increase the price of his products
2. B.slightly reduce the price of his products
3. C.leave his prices unchanged
4. D.discriminate his prices.

What is the elasticity of demand for commodity X, if at a price of ₦25 the quantity demanded is 80 and when the price is reduced to ₦20 the quantity demanded is 100?

1. A.1.25
2. B.1.45
3. C.0.25
4. D.0.15

If y represents the income earned by workers in a factory, find the range of their income which satisfies the following inequality: 4Y − 300 > 500.

1. A.y > 300
2. B.y > 250
3. C.y > 200
4. D.y > 150.

Both in the short run and in the long run, a firm maximizes its profits when

1. A.MC = MR
2. B.AC = MC
3. C.AVC = AC
4. D.MC = AVC.

In the diagram above, the total revenue of the monopolist is given by the area

1. A.OQ₁MP₄
2. B.P₄MTP₁
3. C.OQ₁TP₁
4. D.OQ₂SP₂.

Stocking small quantities of a variety of goods is a function of the

1. A.manufacturer
2. B.wholesaler
3. C.retailer
4. D.consumer.

In a joint stock company, preference shareholders are those who receive

1. A.high dividends when profits are high and little or nothing when profits are low
2. B.a fixed rate of dividend and have the first claim on the net profits of the company
3. C.the remaining profits after all other shareholders have been paid
4. D.dividends quarterly when others receive annually.

The major reason for the survival of small shops despite competition from large business enterprises is because of

1. A.the small capital outlay involved
2. B.regularity and constant supply of commodities by them
3. C.their local services and longer hours of operation
4. D.their level of managerial competence.

One of the major advantages of public enterprises is that

1. A.they are highly subsidized
2. B.they are the largest employers of labour
3. C.their operations are highly standardized
4. D.they take prompt decisions and actions.

When public enterprises become commercialized, it means that

1. A.the products of the enterprises are further subsidized
2. B.they are expected to operate with the primary aim of making profits
3. C.the government has decided to divest itself of such enterprises
4. D.the staff of the enterprises will be laid off.

Which of the following statements are TRUE of agriculture in Nigeria?
I. It provides food for the growing population
II. A large proportion of the population is engaged in agriculture
III. Agricultural products are used as raw materials by the local industries
IV. It serves as sources of heavy equipment to local industries.

1. A.I and II only
2. B.I, II and III only
3. C.I, III and IV only
4. D.II and III only.

In recent times, agriculture in Nigeria tends to lose its vital labour force as a result of

1. A.lack of an effective agricultural policy
2. B.employment opportunities in the oil sector
3. C.rural-urban drift
4. D.low prices of agricultural products.

The government can influence the prices of agricultural products by

1. A.fixing minimum prices when agricultural output is low
2. B.fixing maximum prices in years of bumper harvests
3. C.the use of buffer stock and stabilization funds
4. D.paying all farmers producing identical crops a uniform amount of money.

The crucial factors which determine the location of petroleum refineries in Nigeria are availability of raw materials and

1. A.capital
2. B.political consideration
3. C.nearness to source of power
4. D.labour.

Infant industries denote industries which

1. A.are introducing new products
2. B.are too young to compete in the world market
3. C.produce baby food and mother care products
4. D.are allowed time enough to mature for recognition.

When compared with a labour-intensive industry, a capital-intensive industry employs more

1. A.workers than capital
2. B.workers than machinery
3. C.raw materials than capital
4. D.machinery than workers.

The major source of Nigeria's foreign exchange is the export of

1. A.skilled manpower
2. B.palm kernel and cocoa
3. C.crude oil
4. D.groundnuts and cotton.

The most important goal of OPEC is to

1. A.present a united front for the purpose of raising prices of crude oil
2. B.bring unity among the petroleum exporting states
3. C.ensure political stability among member states
4. D.ensure that rules on quota production are strictly followed.

The Central Bank's expansionary monetary policy is justified at a period

1. A.when the inflation rate is high and the economy is experiencing a boom
2. B.of economic depression accompanied by low capacity utilization
3. C.when trade unions are clamouring for higher wages
4. D.when the price of crude petroleum is rising.

The sharp increases in the prices of most goods and services during the last quarter of 1994 in Nigeria were mainly due to

1. A.ban on importation of foreign goods
2. B.population upsurge
3. C.the introduction of value-added tax
4. D.increase in transport costs.

The best method to curb inflation in Nigeria is to

1. A.reduce importation of commodities
2. B.increase the general level of production
3. C.reduce the volume of money supply
4. D.set up price control boards.

A bank is said to be distressed when it

1. A.is unable to deal with the Central Bank
2. B.has a low capital base
3. C.has low level of deposits
4. D.experiences serious liquidity crisis.

One method through which the Central Bank can restrict the commercial banks' power of credit expansion is to

1. A.demand for increased special deposits
2. B.decrease the cash ratio
3. C.buy securities in the open market
4. D.reduce the rate of interests at which banks borrow from it.

Which of the following is cheapest for the government in improving the welfare of its citizens?

1. A.Subsidy
2. B.Income supplement
3. C.Donation to specific projects
4. D.Wages increase.

Which of the following is mostly used to determine the cost of living?

1. A.Marginal changes in prices
2. B.Consumer price index
3. C.Prices of imported and exported commodities
4. D.Producer price index.

A government imposes an indirect tax on a good characterized by zero price elasticity of demand. The tax imposed is borne

1. A.totally by the consumer
2. B.totally by the producer
3. C.equally by both the consumer and the producer
4. D.by the government.

Ajanka, a medical student entitled to an annual allowance of ₦6,000, decides to leave the university to take up a job where he earns ₦7,000 per annum. By this singular act, the national-income level will

1. A.increase by ₦1,000
2. B.decrease by ₦7,000
3. C.increase by ₦7,000
4. D.increase by ₦13,000.

An increasing population might be of economic benefit to a country if

1. A.the female population is greater than the male population
2. B.the dependency ratio is increasing as the total population increases
3. C.a continuously higher proportion falls into the working class category
4. D.the rural and urban proportion are balanced.

The demands made on each other by the agricultural and industrial sectors as the economy grows are reflected in

1. A.backward and forward linkages
2. B.horizontal and vertical linkages
3. C.vertical linkages
4. D.functional linkages.

Foreign exchange rate in a free market economy is determined by

1. A.the government
2. B.the Central Bank
3. C.demand and supply
4. D.commercial banks.

The primary objective of all international economic organizations is to

1. A.ensure that third world countries get a better share of the world's resources
2. B.promote international economic co-operation for the mutual benefit of all members
3. C.enforce structural adjustment programmes on less developed countries
4. D.encourage exports from the developed to the less developed countries.