2014 - JAMB Economics Past Questions and Answers - page 5

The major determinant of the total volume of output in an economy is the size of the labor force.

• The labor force represents the available human resources capable of producing goods and services.
• A larger labor force generally implies a greater potential for production, all other factors being equal.

The labor force represents the portion of a population that is either employed or actively seeking employment. This is directly related to the number of people available and willing to work. The age, geographical distribution, and sex distribution of the population are related factors, but the most direct determinant is the number of people who are actually available for work.

The shift from DoDo to D1D1 represents a change in demand. The factors that cause a shift in demand are:

• Consumers' income: An increase in consumer income generally leads to an increase in demand for normal goods, shifting the demand curve to the right.
• Population size: An increase in population size leads to an increase in the overall demand for goods and services, causing a rightward shift in the demand curve.

The consumer attains equilibrium where the indifference curve is tangent to the budget line. In the provided graph, point K is the point where the indifference curve touches (is tangent to) the budget line. This tangency point represents the highest level of satisfaction the consumer can achieve given their budget constraint.

To calculate the price elasticity of supply, we use the following formula:

Price Elasticity of Supply (PES) = (% Change in Quantity Supplied) / (% Change in Price)

From the table:

• Initial Price (P1) = ₦20
• Initial Quantity Supplied (Q1) = 10 units
• New Price (P2) = ₦30
• New Quantity Supplied (Q2) = 15 units

1. Calculate the percentage change in quantity supplied: % Change in Quantity = [(Q2 - Q1) / Q1] * 100 % Change in Quantity = [(15 - 10) / 10] * 100 % Change in Quantity = (5

To find the equilibrium price, we need to equate the quantity demanded (Qd) and the quantity supplied (Qs).

1. Set Qd equal to Qs: 40 - 2P = 6P + 24

2. Isolate P (price):

   • Add 2P to both sides: 40 = 8P + 24
   • Subtract 24 from both sides: 16 = 8P
   • Divide both sides by 8: P = 2

Therefore, the equilibrium price is 2. However, this is not an option, there must be a mistake in the question. Let's calculate the equilibrium quantity as well to check if it aligns with any provided options.

Substitute P =