JAMB Economics 2004 past questions and answers

By advertising, a monopolistic competitive firm tries to shift its

1. A.supply curve to the right
2. B.demand curve to the right
3. C.supply curve to the left
4. D.demand curve to the left

Given that Y = C + I and C = bY where b = 0.8, what is the multiplier?

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

The role of the Central Bank in the economic development of Nigeria is to

1. A.give short-and medium-term loans to the public
2. B.give financial and technical advice to customers
3. C.use cheques and bankdrafts to facilitate business transactions
4. D.maintain a stable price system

The primary function of non-bank financial institutions is to

1. A.manage investment portfolios for government
2. B.mobilize savings for investment
3. C.grant loans to banks
4. D.receive deposits from banks

At the maximum point of the total product curve of a firm, marginal revenue is

1. A.decreasing
2. B.increasing
3. C.constant
4. D.zero

In an open economy, the GNP is measured as

1. A.C + I + G + X
2. B.C + I + G + (X – M)
3. C.C + I + G + M
4. D.C + I + G

The diagram above represents the short-run position of a monopolist. The profit-maximizing output is

1. A.Q₃
2. B.Q₄
3. C.Q₁
4. D.Q₂

The capital market provides business firms with the avenue to

1. A.lease capital equipment
2. B.obtain long-term funds
3. C.obtain short-term funds
4. D.purchase capital equipment

Which financial institution is charged with the formulation of monetary policies in Nigeria?

1. A.The Central Bank of Nigeria.
2. B.The Nigerian Deposit Insurance Corporation.
3. C.The Abuja Commodity Exchange.
4. D.The Lagos Stock Exchange.

GDP differs from GNP because GDP

1. A.is inclusive of depreciation
2. B.emphasizes the final goods and services produced within the country at a particular period
3. C.emphasizes the goods and services produced within the country
4. D.emphasizes the market value of all final goods and services produced by nationals

The distinction between perfect competition and monopolistic competition is that the latter is characterized by

1. A.a single market price
2. B.many buyers and sellers
3. C.product differentiation
4. D.homogeneity of product

The downstream activities of oil companies in Nigeria involve

1. A.refining and distribution
2. B.prospecting and exploration
3. C.off-shore drilling
4. D.management of spillage and pollution

The movement of goods and services from the producers to the consumers is referred to as

1. A.external trade
2. B.the distribution chain
3. C.the circular flow
4. D.consumption

The purpose of conducting a census is to enable a country to

1. A.plan her capital inflow and outflow
2. B.determine the growth rate of population
3. C.determine the optimum level of population
4. D.plan her growth and development

A major cause of the slow pace of industrialization in Nigeria is inadequate

1. A.raw materials
2. B.landmass
3. C.skilled labour
4. D.communal labour

Maximum wage legislation seeks to

1. A.fix wages above the equilibrium wage rate
2. B.set wages below the equilibrium wage rate
3. C.deter employers from exploiting their employees
4. D.ensure an upper limit to the wages payable

The marketing of agricultural commodities in Nigeria is hampered by

1. A.lack of adequate storage facilities
2. B.the existence of farmers' associations
3. C.the existence of commodity exchange
4. D.the abolition of marketing boards

Import duty concessions on the industrial inputs directly benefit the

1. A.consumers
2. B.external sector
3. C.commercial sector
4. D.manufacturers

The labour force in Nigeria falls between the ages of

1. A.18 and 45
2. B.18 and 55
3. C.18 and 60
4. D.18 and 30

Government's involvement in agricultural business in Nigeria is most manifested in the

1. A.establishment of farm settlements in each state of the federation
2. B.establishment of credit guarantee schemes for small-scale farmers
3. C.formation of farmers' cooperative societies
4. D.procurement and distribution of fertilizers

The difference between birth and death rates of a given population is referred to as the

1. A.mortality rate
2. B.fertility rate
3. C.natural growth rate
4. D.linear growth rate

Fiscal policy is the government's plan to control aggregate demand by manipulating

1. A.the demand and supply of money
2. B.revenue and expenditure
3. C.tastes and preferences of consumers
4. D.the structure of production and employment

A country is said to have absolute advantage when she

1. A.has a higher opportunity cost in the production of a good
2. B.can sell to other countries without buying from them
3. C.can produce more of any good with fewer resources
4. D.has a lower opportunity cost in the production of good

The European Union was formed to

1. A.promote free trade within member nations
2. B.promote economic integration in non-member countries
3. C.assist countries to achieve their economic goals
4. D.finance development projects in member nations

If budget deficits are financed by borrowing, the crowding-out effect can be offset by an increase in

1. A.government expenditure
2. B.savings
3. C.interest rates
4. D.exchange rates

When the importation of a commodity is limited to a definite quantity, the trade control means used is known as

1. A.exchange control
2. B.tax relief
3. C.devaluation
4. D.quotas

The excess of aggregate expenditure over full employment level of output is referred to as

1. A.GNP gap
2. B.deflationary gap
3. C.inflationary gap
4. D.recessionary gap

The tax levied on goods and services at each stage of production is

1. A.surtax
2. B.VAT
3. C.ad valorem tax
4. D.PAYE

The number of shareholders in a private limited liability company ranges from

1. A.two to seven
2. B.two to three
3. C.two to fifty
4. D.two to twenty

A major reason for having national development plans is to

1. A.ensure efficient use of available resources
2. B.involve people in national programmes
3. C.make government spend more on production
4. D.ensure that more citizens are involved in planning

The difference between payments and receipts for visible trade is called

1. A.bilateral trade
2. B.current balance
3. C.balance of payments
4. D.balance of trade

One of the causes of the present high rate of inflation in Nigeria is

1. A.increasing budget surplus
2. B.increasing factor costs
3. C.exchange rate appreciation
4. D.high capacity utilization

The final stage in the production process of any commodity involves its movement from the

1. A.retailer to the wholesaler
2. B.producer to the wholesaler
3. C.retailer to the consumer
4. D.wholesaler to the retailer

A change in demand for a normal good means

1. A.a shift in the demand curve
2. B.a change in the price elasticity
3. C.the demand changes as price changes
4. D.a movement along a given demand curve

In the diagram above, ST is the budget line while I, II and III represent indifference curves. A rational consumer will choose to consume at point

1. A.M
2. B.J
3. C.K
4. D.L

In order to increase revenue, the seller of a commodity whose demand is fairly elastic is advised to

1. A.increase price
2. B.reduce output
3. C.reduce price
4. D.retain price

In any set of data, median represents the

1. A.value that is most representative of the data
2. B.mid-position when the values are arranged in ascending or descending order
3. C.mid-position when the values are arranged randomly
4. D.difference between the highest and the lowest values when arranged in ascending order

Combination | Beans (Units) | Rice (Units)
K | 15 | 19
L | 20 | 17
M | 24 | 16
The table above shows the combinations of beans and rice that can be purchased by a consumer. The opportunity cost of moving from K to L is

1. A.2 units of rice
2. B.5 units of beans
3. C.17 units of rice
4. D.20 units of beans

One of the assumptions of ordinal utility in consumer behaviour is that

1. A.consumers are irrational;
2. B.marginal utility rises continuously
3. C.utility is measurable
4. D.utility can only be ranked

A large standard deviation is an indication of

1. A.the size of the sample
2. B.a wide spread around the mean
3. C.a wide difference between the mean and the mode
4. D.the difference between the highest and the lowest values

A major characteristic of a mixed economy is that

1. A.economic decisions are made by both the rich and the poor
2. B.both primary and secondary production are undertaken
3. C.the federal and the state governments undertake joint projects
4. D.economic activities are undertaken by both the public and private sectors

Given the cost function C = 160 + 36Q, what is the average cost at 20 units of output?

1. A.₦720.00
2. B.₦216.00
3. C.₦44.00
4. D.₦880.00

If an increase in the price of good X leads to an increase in the supply of good Y, X and Y are said to be

1. A.jointly supplied
2. B.competitive
3. C.composite
4. D.jointly demanded

The diagram above shows the shifts in both demand and supply curves. What is the new equilibrium point after the shifts?

1. A.E₃
2. B.E₁
3. C.E₄
4. D.E₂

Use the diagram above to answer this question. When there is a change from T to N, it implies that

1. A.supply has increased
2. B.quantity supplied has increased
3. C.quantity demanded has increased
4. D.price has fallen

Use the diagram above to answer this question. A movement from M to T implies that there has been

1. A.a decrease in supply
2. B.an increase in demand
3. C.a decrease in price
4. D.an increase in price

A necessary condition for specialization in an economy is the existence of

1. A.a regulated market
2. B.a competitive market
3. C.a medium of exchange
4. D.adequate capital

A firm operating at full capacity will experience rising short-run total costs when

1. A.prices of its variable inputs rise
2. B.prices of its variable inputs fall
3. C.there is a change in management
4. D.labour productivity increases

In a textile factory, the cost of cotton used is a typical example of

1. A.an average cost
2. B.a variable cost
3. C.a total cost
4. D.a fixed cost

A black market can occur when

1. A.supply is in excess of demand
2. B.consumption of the commodity is restricted
3. C.prices are set by government above the equilibrium
4. D.prices are set by government below the equilibrium