A major disadvantage of a socialist economy is that
Socialist economies prioritize state control, reducing consumer choice and sovereignty.
The statement that privatization leads to efficient resource management is best described as
The statement reflects an opinion on efficiency, making it normative.
The slope of a graph in economic analysis is important because it
Slope indicates whether variables have a positive or negative relationship.
The agricultural sector’s contribution to Nigeria’s GDP is approximately
Agriculture contributes about 25% to Nigeria’s GDP.
If GDP is N100 billion with oil at 60% and services at 30%, what is the difference in their contributions?
Oil = N60 billion, Services = N30 billion. Difference = N30 billion.
A 2% price rise reduces rice quantity from 250 to 200 tonnes. This shows a change in
A price increase causing less purchase is a change in quantity demanded.
A rise in income, ceteris paribus, causes
Higher income increases demand, shifting the curve rightward.
Price rises from N50 to N70, quantity falls from 500kg to 400kg. Calculate price elasticity of demand.
Elasticity = (-100/500) / (20/50) = 0.5.
An 8% price increase reduces quantity demanded from 1500 to 1492 units. The demand is
Elasticity = (-8/1500) / (8/100) = 0.067, indicating inelastic demand.
Interpersonal utility comparison is impossible because
Utility is subjective, varying between individuals.
When the total utility curve’s slope declines, marginal utility increases if the consumer
Reducing consumption increases marginal utility when total utility declines.
A consumer is in equilibrium when
Equilibrium occurs when marginal utility per unit of money is equal across goods.
If a consumer’s income increases, the budget line
Higher income shifts the budget line outward, increasing purchasing power.
Cocoa supply is influenced by
Seasonal conditions like weather significantly affect cocoa supply.
If quantity supplied is constant despite price changes, supply elasticity is
Constant supply regardless of price is perfectly inelastic.
Cost elasticity of supply measures
It measures how production responds to cost changes, reflecting productivity.
The invisible hand promotes the interests of
The invisible hand aligns market forces to benefit society.
Fixing price above equilibrium causes
Higher prices increase quantity supplied, leading to a surplus.
An important function of the price system is to
The price system directs resources to their most productive uses.
In the long run with all variable factors, firms experience
All variable inputs allow firms to achieve economies of scale.
A firm’s equilibrium point is where the isoquant is
Equilibrium is at the tangency of isoquant and isocost lines.
The long-run average cost curve touches short-run average cost curves at their
The long-run curve envelopes short-run curves at their minimum points.
If a firm doubles inputs and output is less than doubled, it experiences
Output less than doubling inputs indicates decreasing returns to scale.
Patents and copyrights enable monopolists to
Patents and copyrights create barriers to entry.
A discriminatory monopoly is characterized by
It charges different prices based on market-specific elasticities.
Net National Product is derived by deducting
NNP = GNP - depreciation.
Investment expenditure changes by N2 million, MPC is 0.75. What is the change in income?
Multiplier = 1/(1-0.75) = 4; Income change = 4 * N2m = N8m.
The multiplier for an MPC of 0.75 is
Multiplier = 1/(1-0.75) = 4.
Money with a higher market value than its face value is
Commodity money, like gold, has intrinsic value.
A basket costs N120 in the base year and N240 now. Calculate the price index.
Price index = (240/120) * 100 = 200.
The minimum deposit banks must keep with the central bank is set by the
Cash reserve ratio determines the minimum central bank deposit.
The major function of the money market is to
Money markets focus on short-term financing.
An ad valorem tax is imposed on
Ad valorem tax is based on the commodity’s value.
A huge national debt indicates that a nation’s gold reserves have
Large debt suggests reduced reserves to finance it.
Rapid economic development in Nigeria requires
Diversification reduces oil reliance, promoting growth.
The primary reason for economic growth is to
Growth aims to improve living standards via higher income.
An emerging agricultural export crop in Nigeria is
Cassava is a growing export crop in Nigeria.
In a village of 50, 25 died, 5 emigrated. What is the total population?
50 - 25 - 5 = 20 remaining population.
A firm’s marginal cost is N20, and it sells 100 units at N30 each. If fixed costs are N500, what is the profit?
Revenue = 100 * 30 = N3000. Total cost = (100 * 20) + 500 = N2500. Profit = N3000 - N2500 = N1000.
If the CPI rises from 120 to 132, what is the inflation rate?
Inflation rate = [(132 - 120) / 120] * 100 = 10%.
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