The basic economic problem faced by all societies is in the World
Scarcity of resources, relative to unlimited human wants, is the fundamental economic problem, requiring societies to make choices about resource allocation.
An effective way of controlling inflation in a mixed economy is to
Increasing productivity enhances the supply of goods and services, reducing upward pressure on prices and helping to control inflation.
A consumer surplus measures the
Consumer surplus is the difference between what consumers are willing to pay (based on marginal utility) and the actual price they pay for a good.
If the demand for one commodity excludes another, it is said to be
Competitive demand occurs when two goods are substitutes, and choosing one excludes the demand for the other, such as tea versus coffee.
The median of an odd number set of scores is the
The median of an odd-numbered dataset is the middle value when the scores are arranged in ascending order.
In the process of production, total output is at maximum when
Total output reaches its maximum when the marginal product (MP) equals zero, as additional inputs no longer increase output.
Minimum price legislation by government will
A minimum price above equilibrium reduces quantity demanded while encouraging supply, leading to a surplus of the good.
The optimal range of output for a perfectly competitive firm is
In perfect competition, a firm maximizes profit where marginal cost (MC) is rising and equals marginal revenue, ensuring efficient output.
The short-run supply curve of a perfectly competitive firm is determined by its
The short-run supply curve for a perfectly competitive firm is the portion of its marginal cost curve above the average variable cost, as the firm will produce only if price covers variable costs.
A firm produces 50 units with a total cost of N1000. If the average total cost is N20, the total cost for 60 units, assuming the same ATC, is
Total cost = Average total cost × Quantity = N20 × 60 = N1200.
An increase in the circulation of money without a corresponding increase in output will lead to
An increase in money supply without increased output raises aggregate demand, causing prices to rise and resulting in inflation.
During the era of barter, money was generally in the form of
In the barter era, commodities like grain or livestock served as a medium of exchange, functioning as money.
A country achieves economic development when there is
Economic development is marked by a sustained increase in per capita income, reflecting improved living standards and economic growth.
The import-substitution strategy of industrialization is to encourage
Import-substitution industrialization promotes domestic production to replace imported goods, fostering local industries.
The main function of NNPC is to
The Nigerian National Petroleum Corporation (NNPC) is responsible for overseeing and regulating the development of Nigeria’s oil and gas sector.
The record of a country’s transactions in international trade is her
The balance of payments records all international economic transactions, including trade, capital flows, and transfers, for a country.
In modern economies, the Malthusian theory of population is ineffective because of
Birth control measures, such as contraceptives, limit population growth, countering Malthus’ prediction of population outstripping food supply.
The money paid per hour for work done is
The wage rate is the amount paid per hour for labor performed, typically for hourly workers.
The World Trade Organization is responsible for
The WTO promotes global trade by reducing barriers such as tariffs and subsidies, facilitating smoother international trade and investment.
The deflationary gap in an economy occurs when
A deflationary gap occurs when actual output falls below potential output, indicating insufficient aggregate demand in the economy.
A firm sells 200 units of a product at N50 per unit. When the price falls to N40, quantity demanded rises to 250 units. If the firm's marginal cost is constant at N30, what is the change in producer surplus?
Producer surplus = (Price - Marginal cost) × Quantity. Initial PS = (N50 - N30) × 200 = N4000. New PS = (N40 - N30) × 250 = N2500. Change = N4000 - N2500 = N1000.
Nigeria’s Vision 2030 aims to diversify the economy away from oil dependence. Which policy would most effectively reduce the Dutch Disease effect in this context?
Subsidizing manufacturing industries boosts non-oil sectors, countering Dutch Disease, which occurs when oil exports strengthen the currency and harm other industries.
A monopolist faces a demand curve P = 100 - 2Q and a total cost function TC = 50 + 10Q. To maximize profit, how many units should the monopolist produce?
Profit maximization occurs where MR = MC. Demand: P = 100 - 2Q, TR = 100Q - 2Q², MR = 100 - 4Q. TC = 50 + 10Q, MC = 10. Set MR = MC: 100 - 4Q = 10, Q = 22.5. Closest option is 20.
If the Central Bank of Nigeria increases the cash reserve ratio from 20% to 25%, and the total deposits in the banking system are N10 trillion, by how much will the money supply potentially contract?
Money multiplier = 1 / Reserve ratio. Initial multiplier = 1 / 0.2 = 5, new multiplier = 1 / 0.25 = 4. Money supply change = Deposits × (New multiplier - Old multiplier) = N10 trillion × (4 - 5) = -N1250 billion.
Two firms in an oligopoly can choose to advertise (A) or not (N). Payoffs (in millions) are: (A,A) = (50,50), (A,N) = (80,20), (N,A) = (20,80), (N,N) = (60,60). What is the Nash equilibrium?
In Nash equilibrium, no firm benefits by unilaterally changing strategy. For (A,A), each firm gets 50; switching to N yields 20. Other pairs allow at least one firm to improve payoff. Thus, both advertising is the equilibrium.
A firm’s total cost function is TC = 100 + 5Q + 0.5Q². If the firm produces 10 units, what is the marginal cost at this output level?
Marginal cost = dTC/dQ = 5 + Q. At Q = 10, MC = 5 + 10 = N15.
If Nigeria’s population grows at 2.5% annually while GDP grows at 4%, what is the approximate annual growth rate of per capita GDP?
Per capita GDP growth ≈ GDP growth - Population growth = 4% - 2.5% = 1.5%.
A consumer has a utility function U = X^0.5 * Y^0.5, with prices Px = N4, Py = N9, and income M = N360. How many units of good X will the consumer purchase to maximize utility?
For U = X^0.5 * Y^0.5, MRS = (Y/X)^0.5 = Py/Px = 9/4, so Y = 2.25X. Budget: 4X + 9Y = 360. Substitute: 4X + 9(2.25X) = 360, 24.25X = 360, X ≈ 45.
Which strategy would most effectively promote backward linkage in Nigeria’s manufacturing sector?
Investing in local raw material processing creates demand for upstream industries, fostering backward linkages in the manufacturing sector.
A factory’s pollution reduces fishermen’s output by N500,000 annually. If the factory’s private cost is N2 million and social cost is N3 million, what is the optimal Pigovian tax to internalize the externality?
Pigovian tax = Social cost - Private cost = N3 million - N2 million = N1 million, internalizing the external cost of pollution.
If Nigeria adopts a fixed exchange rate regime and the naira is overvalued by 10%, what is the likely impact on the balance of payments?
An overvalued naira makes imports cheaper and exports costlier, increasing imports and causing a balance of payments deficit.
Nigeria’s agricultural sector faces a high dependency ratio. Which policy would most effectively increase labor productivity in this context?
Mechanized farming increases output per worker, reducing reliance on labor and addressing the high dependency ratio.
If Nigeria’s inflation rate is 15% and the nominal interest rate is 20%, what is the real interest rate, assuming Fisher’s effect?
Real interest rate = Nominal rate - Inflation rate = 20% - 15% = 5%.
A public good in Nigeria, such as street lighting, is characterized by
Street lighting is non-excludable (no one can be prevented from using it) and non-rivalrous (one person’s use does not reduce others’ use), defining it as a public good.
Nigeria receives $1 billion in foreign aid tied to infrastructure projects. If the marginal propensity to import is 0.2, what is the net increase in domestic aggregate demand?
Net increase = Aid × (1 - Marginal propensity to import) = $1 billion × (1 - 0.2) = $800 million.
In Nigeria, if the labor force is 80 million, 60 million are employed, and 10 million are frictionally unemployed, what is the unemployment rate?
Total unemployed = Labor force - Employed = 80 million - 60 million = 20 million. Unemployment rate = (20 million / 80 million) × 100 = 25%.
To reduce multidimensional poverty in Nigeria, which policy targets both income and non-income dimensions effectively?
Expanding access to education and healthcare addresses non-income dimensions like health and education, while also supporting income growth, tackling multidimensional poverty.
Nigeria’s current account shows exports of N2 trillion, imports of N2.5 trillion, net income of -N200 billion, and net transfers of N300 billion. What is the current account balance?
Current account balance = Exports - Imports + Net income + Net transfers = N2 trillion - N2.5 trillion - N0.2 trillion + N0.3 trillion = -N0.4 trillion = -N400 billion.
Nigeria’s power sector reform aims to increase electricity access. Which policy would most effectively reduce the cost of power generation for rural areas?
Off-grid solar systems provide a cost-effective and sustainable solution for rural areas, reducing reliance on expensive fossil fuels.
To finance a budget deficit, the Nigerian government can most effectively use
Borrowing from domestic banks provides immediate funds to finance a budget deficit, directly addressing government expenditure needs.
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