Economics 2016 JAMB Past Questions
Economics 2016 JAMB Past Questions
1.Development plans fail in Nigeria mainly because of
- A. Corruption and political instability
- B. Over-dependence on foreign aid
- C. High cost of plan implementation
- D. Shortage of personnel
2.One of the major uses of national income statistics in Nigeria is to
- A. Equally distribute national income among citizens
- B. Determine the total population
- C. Compare population growth among nations
- D. Estimate per capita income
Explanation
Helps in measuring the economic performance of the country in terms of output goods/ services/ per capital income.3.The major characteristics of an undeveloped nation is
- A. Over-dependence on foreign products
- B. Dominance of the industrial sector
- C. High per capita income
- D. Efficient and sensitive financial sector
Correct Answer: Option A
Explanation
Characteristics- Low per Capita Income
- Inequitable Distribution of Wealth and Income
- Predominance of Agriculture
- Deficiency of Capital
- High Rate of Population Growth
- Unemployment and Underemployment
- A Dualistic Economy
- Technical Backwardness
- dependence on foreign products
4.Which of the following is NOT among the financial institutions in Nigeria?
- A. Federal Mortgage Bank
- B. Microfinance Banks
- C. Insurance Banks
- D. Federal Ministry of Finance
Explanation
The major categories of financial institutions include central banks, retail and commercial banks, internet banks, credit unions, savings, and loans associations, investment banks, investment companies, brokerage firms, insurance companies, and mortgage companies.
5.Given 0.25, 1.25, 1.80, 1.110, 10.20, 10.15 and 1.55.
Determine the range?
- A. 0.25
- B. 10.00
- C. 1.55
- D. 9.95
Correct Answer: Option D
0.25, 1.25, 1.55, 1.80, 1.110, 10.15 and 10.20
range = 10.20 - 0.25 = 9.95
6.One of the problems facing the Nigerian oil and gas industry is____________________?
7.The demand curve faced by a monopolist is_____?
8.The interest charged on loans is determined by the __________?
9.A country that is over-populated will face the problem of
10.If additional unit of a variable factor input causes a fall in the marginal product, this implies that
13. One of the factors that determine the supply of agricultural produce in Nigeria is
14
16. If Mr Wale took a loan for the purpose of investment, the demand for money is________________?
17. The overall demand for crude oil for various uses is an example of __________?
18. One of the factors limiting the effectiveness of division of labour in the production process is the
19. One of the important features of perfect competition is_____?
20. What effect would a change in price of a commodity have on its supply?
21.All pairs of quantities from which a consumer derives equal satisfaction can be plotted on__________?
22. Which of the following is a major determinant of price elasticity of demand?
Another important determinant of the elasticity of demand is how much it accounts for in consumer’s budget. In other words, the proportion of consumer’s income spent on a particular commodity also influences the elasticity of demand for it. The greater the proportion of income spent on a commodity, the greater will be generally its elasticity of demand, and vice versa.
23. If Nigeria has comparative advantage over Ghana in producing cocoa, this means_________?
24. One of the ways of improving the marketing of agricultural produce is by
27. Which of the following is NOT a source of government revenue?
28. Public limited liability companies are owned by__________?
29. The type of inflation that emanates from excess demand overs supply is___________?
30. The price elasticity of supply of perishable goods is_________?
31. In Nigeria, most agricultural policies are aimed at______?
32.One major problem encountered by ECOWAS is_______?
- Language barrier
- Widespread Poverty
- Human Rights Abuses
- Financial problems
- Strong External Influence
- Single currency
33.One of the characteristics of private enterprises is ______?
34.The concept of marginal utility indicates the relationship between utility and _________?
36.The demand for two or more commodities to satisfy a particular want is _____?
37
39. Public ownership of productive factors is a feature of_______?
40. If the marginal propensity to save is 0.8, calculate the multiplier?
The following general formula to calculate the multiplier uses marginal propensities, as follows:
1
1 - mpc
Hence, if consumers spend 0.8 and save 0.2 of every N1 of extra income, the multiplier will be:
1 = 1 = 5
1 - 0.8 0.2
41. Which of the following is a set of measures of dispersion?
43. Consumers allocate their resources based on the ______?
44.A country's terms of trade can be improved by________?
47. Which of the following can cause oil glut in the International market?
48
From the table above, the elasticity of supply is_____?
49.Localization of industry is encouraged because of
(ii) Availability of source of power.
(iii) Physical and climate conditions.
(iv) growth of local industries and infrastructure
(v) Supply of trained labor.
(vi) Availability of capital.
(vii) Momentum of an early start.
50.A company's expenditure on raw materials is termed as_______?
Explanation
The range of a set of data is the difference between the highest and lowest values in the set. To find the range, first order the data from least to greatest. Then subtract the smallest value from the largest value in the set. Thus we have;0.25, 1.25, 1.55, 1.80, 1.110, 10.15 and 10.20
range = 10.20 - 0.25 = 9.95
6.One of the problems facing the Nigerian oil and gas industry is____________________?
- A. Over-capacity utilization
- B. The discovery of alternative oil sources
- C. Shortage of indigenous manpower
- D. The excess supply of petroleum products
7.The demand curve faced by a monopolist is_____?
- A. Positively sloped
- B. Vertical
- C. downward sloping
- D. Negatively Sloped
Correct Answer: Option C
Explanation
TheDemand Curve for a Monopolistic Market is of the same form as a regular Demand Curve. It is downward sloping because of the Substitution Effect, the Income Effect, and the Law of Declining Marginal Utility.8.The interest charged on loans is determined by the __________?
- A. Exchange rate
- B. Fiscal policy
- C. Risk associated with the loan
- D. Rate of production in the country
Correct Answer: Option C
Explanation
They make money on the interest they charge on loans because that interest is higher than the interest they pay on depositors' accounts. The interest rate a bank charges its borrowers depends on both the number of people who want to borrow and the amount of money the bank has available to lend.9.A country that is over-populated will face the problem of
- A. Low birth rate
- B. Low per capita income
- C. High wage rate
- D. Full employment
10.If additional unit of a variable factor input causes a fall in the marginal product, this implies that
- A. Total product starts declining
- B. Average product has become zero
- C. Diminishing returns has set in
- D. Increasing returns is operating
Correct Answer: Option C
11
Explanation
diminishing returns is the decrease in the marginal output of a production process as the amount of a single factor of production is incrementally increased, while the amounts of all other factors of production stay constant11
From the graph above P2 in price control situation is referred
- A. Minimum price
- B. Shut-down price
- C. Maximum price
- D. Mark-up price
12. The additional cost incurred by producing an additional unit of output is known as
- A. Fixed cost
- B. Total cost
- C. Average cost
- D. Marginal cost
Correct Answer: Option D
Explanation
Marginal cost is the additional cost incurred in the production of one more unit of a good or service.13. One of the factors that determine the supply of agricultural produce in Nigeria is
- A. Price of substitutes
- B. Technological development
- C. Consumers choice
- D. Consumers income
14
From the graph above, fixing maximum price of garri below equilibrium prices at P1 will
- A. Encourage the production of garri
- B. Create an excess supply of garri
- C. Increase the consumption of garri
- D. Decrease the consumption of garri
16. If Mr Wale took a loan for the purpose of investment, the demand for money is________________?
- A. Precautionary motive
- B. Transactionary and Precautionary motive
- C. Speculative motive
- D. Speculative and Transactionary motives
Correct Answer: Option C
Explanation
Speculative motive: A desire to hold cash in order to be poised to exploit any attractive investment opportunity requiring a cash expenditure that might arise.- We hold cash rather than other assets whose values are falling.
- We hold on to cash to be able to buy them when their prices actually fall.
- So this is money held to play the market.
- It is money held to buy (or sell) bonds, depending on one's expectations of future interest rates.
17. The overall demand for crude oil for various uses is an example of __________?
- A. derived demand
- B. competitive demand
- C. composite demand
- D. complementary demand
Correct Answer: Option C
Explanation
Composite demand is where goods have more than one use. An increase in the demand for one product leads to a fall in supply of the other. An example is milk which can be used for cheese, yoghurts, cream, butter and other products18. One of the factors limiting the effectiveness of division of labour in the production process is the
- A. Prevailing wage rate
- B. Level of technology
- C. Unemployment rate
- D. Population size
Correct Answer: Option B
1. The nature of goods and services : Some goods and services are suitable for large scale production while others cannot produced on large scale.
2. Increase cost of production : If cost of production is increasing as a result of high cost of inputs, division of labour cannot be possible.
3. Managerial ability : Managerial ability must be duplicated as the firm expands .This causes difficulties to management in organizing and coordinating the factors of production employed.
4. The size of the market :
5. Low development of distribution.
6. Government policies.
7. Where standardisation is difficult to achieve.
8. The indivisibility of work into smaller process.
9. Technological advancement
Explanation
FACTORS DISCOURAGING OR LIMITING DIVISION OF LABOUR1. The nature of goods and services : Some goods and services are suitable for large scale production while others cannot produced on large scale.
2. Increase cost of production : If cost of production is increasing as a result of high cost of inputs, division of labour cannot be possible.
3. Managerial ability : Managerial ability must be duplicated as the firm expands .This causes difficulties to management in organizing and coordinating the factors of production employed.
4. The size of the market :
5. Low development of distribution.
6. Government policies.
7. Where standardisation is difficult to achieve.
8. The indivisibility of work into smaller process.
9. Technological advancement
19. One of the important features of perfect competition is_____?
- A. Adequate knowledge of existing prices
- B. The influence on prices by individual economic units
- C. The restriction in terms of movement of goods and services
- D. The administration of a centralized price system
Correct Answer: Option A
Explanation
A perfectly competition has the following characteristics:- There are many buyers and sellers in the market.
- Each company makes a similar product.
- Buyers and sellers have access to perfect information about price.
- There are no transaction costs.
- There are no barriers to entry into or exit from the market.
20. What effect would a change in price of a commodity have on its supply?
- A. An increase in supply
- B. No change in supply
- C. A decrease in supply
- D. A change in the quantity supplied
Correct Answer: Option D
Explanation
A change in the price of a good or service, holding all else constant, will result in a movement along the supply curve. A change in the cost of an input will impact the cost of producing a good and will result in a shift in supply; supply will shift outward if costs decrease and will shift inward if they increase.21.All pairs of quantities from which a consumer derives equal satisfaction can be plotted on__________?
- A. An indifference curve
- B. An exceptional demand curve
- C. A budget line
- D. An isoquant map
Correct Answer: Option A
Explanation
An indifference curve is a graph showing combination of two goods that give the consumer equal satisfaction and utility. Each point on an indifference curve indicates that a consumer is indifferent between the two and all points give him the same utility.22. Which of the following is a major determinant of price elasticity of demand?
- A. The price of the commodity
- B. Availability of factors of production
- C. The prices of factors of production
- D. Income of the consumers
Correct Answer: Option D
Explanation
The Proportion of Consumer’s Income Spent:Another important determinant of the elasticity of demand is how much it accounts for in consumer’s budget. In other words, the proportion of consumer’s income spent on a particular commodity also influences the elasticity of demand for it. The greater the proportion of income spent on a commodity, the greater will be generally its elasticity of demand, and vice versa.
23. If Nigeria has comparative advantage over Ghana in producing cocoa, this means_________?
- A. Nigeria produces cocoa more cheaply than Ghana
- B. Nigeria and Ghana produce at the same level
- C. Ghana produces cocoa more than Nigeria
- D. Nigeria produces more cocoa than Ghana
Explanation
comparative advantage is the ability of an individual or group (Nigeria as the case maybe) to carry out a particular economic activity (such as making a specific product) more efficiently than another activity. Comparative advantage is when a country produces a good or service for a lower opportunity cost than other countries24. One of the ways of improving the marketing of agricultural produce is by
- A. Reviewing the land tenure system
- B. Ensuring even distribution of farm inputs
- C. Embarking on irrigation farming
- D. Establishing agricultural marketing boards
Correct Answer: Option D
Explanation
Improving the marketing of agricultural produce- Identify your farm's market.
- Set your farm apart.
- Create a farm logo.
- Write a tagline.
- Launch a website.
- Join farm associations.
- Attend farm-related events.
- Begin advertising.
25. The study of economics is necessary mainly because of
- A. Unemployment
- B. Unlimited resources
- C. Scarcity of resources
- D. Overpopulation
Correct Answer: Option C
Explanation
Economics is the study of how societies use scarce resources to produce valuable commodities and distribute them among different people.
26. If price of
yams decreases from N15.00 per tuber to N13.50 and the quantity supplied
decreases by 20%. What is the elasticity of supply?
- A. 2.00
- B. 0.50
- C. 1.50
- D. 1.00
Correct Answer: Option B
1.5 ÷13.50 x (100)
=11.11% ÷ 20%= 0.1111 ÷ 0.2
0.55555..
=0.5ans
Explanation
percentage change in price divided by % change in quantity supply 15.00-13.50=1.51.5 ÷13.50 x (100)
=11.11% ÷ 20%= 0.1111 ÷ 0.2
0.55555..
=0.5ans
27. Which of the following is NOT a source of government revenue?
- A. Taxes, Fees, licenses and fines
- B. Personal income, disposable income and transfer earnings
- C. Interest, dividends, profits and earnings
- D. Grants, aids and borrowing
Correct Answer: Option B
Explanation
Sources of government revenue- Individual Income Tax.
- grants, borrowing etc
- Corporate Income Tax.
- Federal Excise Taxes.
- Other Revenues.
- Interest, dividends, earnings
28. Public limited liability companies are owned by__________?
- A. The federal government
- B. Private and individual organizations
- C. The state government
- D. The federal and state governments
Correct Answer: Option B
Explanation
public limited company; A company whose securities are traded on a stock exchange and can be bought and sold by anyone. Public companies are strictly regulated, and are required by law to publish their complete and true financial position so that investors can determine the true worth of its stock (shares). They are owned by shareholders (private individuals / organisation)29. The type of inflation that emanates from excess demand overs supply is___________?
- A. Galloping inflation
- B. Imported inflation
- C. Demand-pull inflation
- D. Cost-push inflation
Correct Answer: Option C
Explanation
Demand-pull inflation arises when aggregate demand in an economy outpaces aggregate supply.30. The price elasticity of supply of perishable goods is_________?
- A. Elastic
- B. Unitary
- C. Inelastic
- D. Zero
Correct Answer: Option C
Explanation
In case of perishable goods such as vegetables, fruits, and other eatables, thesupply would be inelastic.This is because the supply of perishable goods cannot be increased or decreased easily. As supply cannot be increased or decreased easily, therefore elasticity of supply is said to be relatively inelastic.31. In Nigeria, most agricultural policies are aimed at______?
- A. Ensuring equitable distribution of income
- B. Liberalizing all sectors of the nation's economy
- C. Encouraging the development of manufacturing sector
- D. Achieving self-sufficiency in food production
32.One major problem encountered by ECOWAS is_______?
- A. Conflict of interest among members
- B. Increasing population
- C. Weakness in the trade relationship
- D. Language barrier
Explanation
PROBLEMS THE ECONOMIC COMMUNITY OF WEST AFRICAN STATES- Language barrier
- Widespread Poverty
- Human Rights Abuses
- Financial problems
- Strong External Influence
- Single currency
33.One of the characteristics of private enterprises is ______?
- A. Provision of welfare to the citizens
- B. That tax payers bear all the risks
- C. Public ownership of shares
- D. Individual funding of business activities
Correct Answer: Option D
Explanation
characteristics of the private enterprise system:- Private ownership of property.
- Entrepreneurship.
- Consumer independence.
- Market forces (competition, supply and demand, profit motive)
34.The concept of marginal utility indicates the relationship between utility and _________?
- A. Price
- B. Satisfaction
- C. Cost
- D. Revenue
Correct Answer: Option B
Explanation
utility is the satisfaction or benefit derived by consuming a product; thus the marginal utility of a goods or service is the change in the utilityfrom an increase in the consumption of that good or service.
35. In Nigeria, unemployment can be minimized through______?
- A. Diversification of the economy
- B. Strict immigration law
- C. Paying unemployment benefits
- D. Restrictive fiscal policy
Explanation
Economic diversification is the process of shifting an economy away from a single income source toward multiple sources from a growing range of sectors and markets. Traditionally, it has been applied as a strategy to encourage positive economicgrowth and development.36.The demand for two or more commodities to satisfy a particular want is _____?
- A. Derived
- B. Composite
- C. Competitive
- D. Joint
Correct Answer: Option D
Explanation
Joint demand refers to the relationship between two or more commodities or services when they are demanded together to satisfy one want. There is joint demand for cars and petrol, pens and ink, tea and sugar, etc. Jointly demanded goods are complementary.37
The supply curve above is
- A. Fairly inelastic
- B. Perfectly inelastic
- C. Unitary elastic
- D. Perfectly elastic
Correct Answer: Option C
38. One of the factors affecting change in demand for a commodity is the _______?
- A. Supply of the commodity
- B. Availability of the substitutes
- C. Price of the commodity
- D. Technical know-how
Correct Answer: Option C
Explanation
- Tastes and Preferences of the Consumers
- Income of the People:
- Changes in Prices of the Related Goods
- Advertisement Expenditure:
- The Number of Consumers in the Market
- Consumers' Expectations with Regard to Future Prices
39. Public ownership of productive factors is a feature of_______?
- A. Socialism
- B. Capitalism
- C. Feudalism
- D. Mixed economy
Correct Answer: Option A
Explanation
Socialism is an economic and political system based on public or collective ownership of the means of production. it is an economic and political theory advocating collective or governmental ownership and administration of the means of production40. If the marginal propensity to save is 0.8, calculate the multiplier?
- A. 1.25
- B. 5.00
- C. 1.30
- D. 2.25
Correct Answer: Option B
Explanation
The multiplier effect refers to the increase in final income arising from any new injection of spending. The size of the multiplier depends upon household's marginal decisions to spend, called the marginal propensity to consume (mpc), or to save, called the marginal propensity to save (mps).The following general formula to calculate the multiplier uses marginal propensities, as follows:
1
1 - mpc
Hence, if consumers spend 0.8 and save 0.2 of every N1 of extra income, the multiplier will be:
1 = 1 = 5
1 - 0.8 0.2
41. Which of the following is a set of measures of dispersion?
- A. Mean and median
- B. Mean and standard deviation
- C. Range and variance
- D. Mode and mean
Explanation
Range, interquartile range, and standard deviation are the three commonly used measures of dispersion
42. The slow pace of industrial growth in Nigeria can be attributed to__________?
- A. lack of raw materials
- B. lack of market for produce
- C. inadequate skilled labour
- D. over-dependence on the oil sector
Explanation
By implication, the dependence on oil revenue to finance national development has made the Nigerian economy highly susceptible to oil price volatility. This has in turn slowed the growth of other industries like agriculture because less attention and investment is being put in there43. Consumers allocate their resources based on the ______?
- A. Law of diminishing marginal utility
- B. Value in use and value in exchange principle
- C. Law of returns to scale
- D. Diamond and water paradox
Correct Answer: Option B
Value-in-use is the net present value (NPV) of a cash flow or other benefits that an asset generates for a specific owner under a specific use.
Explanation
Value-in-exchange: It is the amount of goods and services which we may obtain in the market in exchange of a particular thing. In other words, it is the price of a particular good which can be sold and bought in the market.Value-in-use is the net present value (NPV) of a cash flow or other benefits that an asset generates for a specific owner under a specific use.
44.A country's terms of trade can be improved by________?
- A. Revaluation of currency
- B. Collective bargaining
- C. Reducing demand for imported goods
- D. Imposing lower export duties
Explanation
A country can purchase more imported goods for every unit of export that it sells when its TOT improves. An increase in the TOT can, therefore, be beneficial because the country needs fewer exports to buy a given number of imports.To improve the terms of trade, imports have to be reduced to atleast match up exports
45. A government budget proposing to spend more than its expected revenue in a year will create_______?
- A. Opportunity for combating inflation
- B. Depression in the economy
- C. Shortage in money supply
- D. Opportunity for full employment
Correct Answer: Option D
Explanation
When the government spends more than it collects, a budget deficit exists.
46. Population growth is determined by_______?
- A. Dependency ratio
- B. Labour force
- C. Per capita
- D. Net migration
Explanation
Fertility, mortality and migration are principal determinants of population growth.Population change depends on the natural increase changes seen in birth rates and the change seen in migration. Changes in population size can be predicted based on changes in fertility (births), mortality (deaths) and migration rates.47. Which of the following can cause oil glut in the International market?
- A. Excess demand over supply
- B. Under- capacity utilization
- C. Excess supply over demand
- D. Economic boom
Correct Answer: Option C
Explanation
Oil glut is a Market situation where the supply of a good or service far exceeds its demand, usually resulting in a substantial fall in its price.48
From the table above, the elasticity of supply is_____?
- A. Inelastic supply
- B. Perfectly elastic
- C. Elastic supply
- D. Unitary elastic
Correct Answer: Option C
49.Localization of industry is encouraged because of
- A. Low interest charges on loans
- B. High standard of living
- C. Low foreign exchange rate
- D. Improvements in infrastructure
Correct Answer: Option D
Explanation
(i) Nearness to raw material.(ii) Availability of source of power.
(iii) Physical and climate conditions.
(iv) growth of local industries and infrastructure
(v) Supply of trained labor.
(vi) Availability of capital.
(vii) Momentum of an early start.
50.A company's expenditure on raw materials is termed as_______?
- A. Prime cost
- B. Explicit cost
- C. Average cost
- D. Implicit cost
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