JAMB Economics 2007 past questions and answers

The logical sequence of basic concepts in economics is

1. A.wants, choice, scarcity and opportunity cost
2. B.scarcity, choice, scale of preference and opportunity cost
3. C.wants, scarcity, choice and opportunity cost
4. D.scarcity, wants, choice and scale of preference

An economic system in which the producer and the consumer are the same is referred to as a

1. A.mixed economy
2. B.subsistence economy
3. C.capitalist economy
4. D.socialist economy

The choice of what to produce in a command economy is determined by

1. A.industrial establishments
2. B.labour unions
3. C.the government and labour unions
4. D.the central government

The range is used to

1. A.estimate the mean from grouped data
2. B.determine the spread of a set of data
3. C.calculate the standard deviation
4. D.measure the difference between the mean and the mode

Use the table below to answer questions 6 and 7. The table shows the wage distribution of workers.
Class mark (₦): 2 | 5 | 8 | 11 | 14
Frequency: 2 | 3 | 1 | 3 | 1
Calculate the mean wage.

1. A.₦14.80
2. B.₦10.00
3. C.₦7.40
4. D.₦4.00

Use the table below to answer questions 6 and 7. The table shows the wage distribution of workers.
Class mark (₦): 2 | 5 | 8 | 11 | 14
Frequency: 2 | 3 | 1 | 3 | 1
What is the median wage?

1. A.₦11.00
2. B.₦8.00
3. C.₦6.50
4. D.₦5.00

When the demand for a good increases owing to an increase in income, it means that

1. A.there is an increase in quantity demanded
2. B.inflation has taken place
3. C.demand has exceeded supply
4. D.there is an increase in demand

The major determinant of cross elasticity of demand is the

1. A.price of the good
2. B.degree of necessity of the good
3. C.level of income of consumers
4. D.closeness of the substitutes

A commodity is described as inferior when the

1. A.income effect is negative
2. B.income effect is positive
3. C.substitution effect is negative
4. D.substitution effect is positive

If P = ½(Q_s + 15), what is the quantity supplied at ₦9.00?

1. A.1.5
2. B.3.0
3. C.12.0
4. D.33.0

A firm operating at full capacity will have a

1. A.perfectly inelastic supply curve
2. B.perfectly elastic supply curve
3. C.fairly elastic supply curve
4. D.fairly inelastic supply curve

The coefficient of the price elasticity of supply is always

1. A.positive
2. B.negative
3. C.constant
4. D.zero

The world market for crude oil refers to the

1. A.total supply by OPEC members
2. B.total demand for and supply of crude oil
3. C.excess crude oil produced in the world
4. D.difference between the supply of and demand for oil

The division of labour requires that the task to be performed

1. A.must be done in stages
2. B.requires no special knowledge
3. C.is simple but strenuous
4. D.must be undertaken by experts

Use the table below to answer questions 16 and 17.
No. of workers | Total output (kg)
1 | 39
2 | 52
3 | 60
4 | 66
5 | 66
6 | 63
What is the marginal productivity when the number of workers is increased from 2 to 3?

1. A.180 kg
2. B.60 kg
3. C.20 kg
4. D.8 kg

Use the table below to answer questions 16 and 17.
No. of workers | Total output (kg)
1 | 39
2 | 52
3 | 60
4 | 66
5 | 66
6 | 63
The maximum number of workers that should be hired is

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

A characteristic of the linear production function is that

1. A.the percentage change in inputs exceeds output
2. B.output and all inputs change by the same percentage
3. C.the percentage change in output is greater than one
4. D.the percentage change in output is less than one

If the total fixed cost is the same regardless of output, the average fixed cost will be

1. A.increasing
2. B.maximum
3. C.minimum
4. D.decreasing

A firm incurs short-run costs when

1. A.operation is at its early stages
2. B.it cannot increase prices
3. C.some inputs cannot be varied
4. D.operation is at its later stages

An increase in the marginal cost of production causes

1. A.an upward movement along the supply curve
2. B.a downward movement along the supply curve
3. C.a leftward shift of the supply curve
4. D.a rightward shift of the supply curve

When a firm's average revenue curve is downward-sloping, its price elasticity of demand will be

1. A.one
2. B.between zero and infinity
3. C.greater than one
4. D.zero

The price per unit of a commodity to a buyer is the same as the

1. A.average revenue of the seller
2. B.marginal revenue of the seller
3. C.normal profit of the seller
4. D.marginal cost of the commodity

The diagram above shows a firm operating under conditions of monopolistic competition. The curve W represents its

1. A.marginal revenue
2. B.marginal cost
3. C.average cost
4. D.average revenue

Corrections in the GNP figures for price changes require the use of a

1. A.price deflator
2. B.price index
3. C.retail price index
4. D.producer price index

One way of solving the problem of double counting is by computing national income using the

1. A.income method
2. B.expenditure method
3. C.value-added method
4. D.output method

In the circular flow of income model, the outflow variables represent

1. A.injections
2. B.income
3. C.leakages
4. D.expenditure

An advantage of electronic banking is that it

1. A.enables a customer to operate many accounts from different locations
2. B.enables many customers to operate joint accounts
3. C.enables a customer to operate his account from different locations
4. D.reduces the risk of bank fraud

A reduction in the bank rate encourages commercial banks to create money by

1. A.raising the interest rate
2. B.decreasing the interest rate
3. C.maintaining the interest rate
4. D.doubling the interest rate

Life insurance companies contribute to economic development by holding a part of their assets in

1. A.cash and near money
2. B.money-market instruments
3. C.equipment
4. D.long-term financial instruments

The non-bank financial institutions that are entrusted with workers' contributions towards retirement are

1. A.investment companies
2. B.pension funds custodians
3. C.pension funds administrators
4. D.mortgage institutions

A persistent rise in the prices of inputs will lead to

1. A.hyperinflation
2. B.stagflation
3. C.cost-push inflation
4. D.demand-pull inflation

The monetization policy is an offshoot of

1. A.NEEDS
2. B.SAP
3. C.PAYE
4. D.MDGs

A continuous increase in national income accompanied by the structural transformation of all indices is called

1. A.economic planning
2. B.economic growth
3. C.economic reforms
4. D.economic development

In a developing economy, productivity is measured by the

1. A.capital-output ratio
2. B.output per capita
3. C.output-labour ratio
4. D.output growth rate

The gains from international trade are shared on the basis of the

1. A.quantity produced of each of the traded goods
2. B.cost of production of each of the traded goods
3. C.terms of trade
4. D.bilateral trade agreements

One of the ways of correcting a deficit balance of payments is to

1. A.revalue a country's currency
2. B.devalue a country's currency
3. C.increase imports
4. D.reduce exports

The main objective of WTO is to

1. A.help countries with chronic balance of payments problems
2. B.help debtor nations solve their problems
3. C.ensure adequate tariff protection for infant industries
4. D.provide a mechanism for tariff reductions

The minimum number of shareholders for a joint-stock company is

1. A.2
2. B.3
3. C.4
4. D.7

The survival of a partnership depends on

1. A.the managerial ability of the partners
2. B.access to finance
3. C.the goodwill of the partners
4. D.political stability

A major objective of the Federal Government's initiative on cassava production in Nigeria is to

1. A.diversify the export base of the economy
2. B.ensure the availability of cassava
3. C.make cassava a staple food in the country
4. D.provide raw materials for industries

A country would develop its agricultural sector first so as to

1. A.stabilize the prices of agricultural products
2. B.stabilize the prices of industrial products
3. C.create a market for the agricultural sector
4. D.create a market for the industrial sector

Environmental degradation is more associated with

1. A.localization of industries
2. B.location of industries
3. C.decreased urbanization
4. D.urban-rural migration

Foreign investment can be attracted to Nigeria through

1. A.a review of the tax policy
2. B.a review of interest rates
3. C.the revaluation of the naira
4. D.a review of the naturalization policy

Industrialization is a prerequisite for balanced economic growth because it

1. A.encourages trade liberalization
2. B.stimulates the development of all sectors
3. C.enhances productivity in the manufacturing sector
4. D.expands employment opportunities in urban areas

Upstream oil activities involve the

1. A.exploration of crude oil
2. B.refining of crude oil
3. C.marketing of finished products
4. D.management of pollution

The Malthusian theory of population has been rendered ineffective by

1. A.government policies
2. B.natural disasters
3. C.birth control measures
4. D.technical progress

The movement of people from rural to urban areas affects the

1. A.occupational distribution of population
2. B.sex distribution of population
3. C.geographical distribution of population
4. D.age distribution of population

An upward review of the retirement age will affect the

1. A.demand for labour
2. B.supply of labour
3. C.wage rate
4. D.tax rate

The labour force of a country best describes

1. A.the number of people in paid employment
2. B.the number of people receiving pension
3. C.people within the retirement age
4. D.people within the working age