2017 - JAMB Economics Past Questions and Answers - page 1

A partnership may be defined as a type of business organization in which two to twenty persons

agree legally to setup and manage a business outfit with the sole aim of making profit. The people

involved in partnership agreement are called partners and they share the profit, losses and risk of

the business.

A family owned business is any business in which two or more family members are involved and

the majority of ownership or control lies within a family.

Land is defined in economics as a free gift of nature. Land does not only include land surface of

the earth but all other free gift of nature or natural resources like forest, mineral resources, rivers,

oceans, atmosphere, etc. unlike other factors of production, the supply of land is limited. In other

words, land is a fixed factor of production, it is inelastic

A budget deficit is the annual shortfall between government spending and tax revenue. The deficit is the annual amount the government need to borrow to balance up the budget. When the government borrows, it offers to pay interest payment to those who the money was borrowed. The deficit is also funded by selling government bonds to private sector to do this, the government offers to pay an interest payment to those who buy the bonds. The interest rate attracts investors to lend the government money.

Every society answers the three basic economic questions differently, in doing so, each confronts

the same fundamental problems: resources allocation and scarcity. For every society, the answer

to the three basic questions depend on what kind of economic system it uses. The term economic

system refers to the way in which a society organize the production and distribution of goods and

services.

Many Nigerians perceive the Niger Delta as synonymous with the oil producing areas of Nigeria.

In other words, the Niger Delta includes the states of Abia, Akwa Ibom, Bayelsa, Cross River,

Delta, Edo, Imo, Ondo and Rivers.

The region is blessed with abundance of human and physical resources, including the majority of

Nigeria's oil and gas deposits, good agricultural lands, extensive forests, excellent fisheries, as well

as with a well-developed industrial base.

The Niger Delta region of Nigeria is richly endowed with natural resources with oil and gas accounting for over 85% of the Nation's gross domestic product (GDP); over 95% of the National budget; and over 80% of the national wealth.

Production possibility curve (PPC) shows the possible combination of different commodities that can be produced in a given economy given the prevailing level of technology, if all the available productive resources are efficiently utilised.

The reason for the shape of the PPC is something called the law of increasing opportunity costs. Basically, what this means is that as an economy devotes more of its resources to one kind of product, it becomes less efficient because, not all resources are equally suitable for all the industries. If resources are transferred from good A to B, initially the resources to be transferred will be those which could be the least efficient for A. Later, as more of good B needs to be produced, the resources that may be very efficient for good B and not so efficient for good B may also be transferred. In this situation, the economy loses on both sides. That means, the economy is usually inefficient on both ends of the PPC curve while it is the most efficient when resources are appropriately allocated for both goods according to their suitability which make the PPC to be curved. This is why the PPC is flatter at its end point and more curved in the middle.

• Economic growth refers to an increase in the production of goods and services in an economy over a period of time.
• Gross Domestic Product (GDP) is the total market value of all final goods and services produced within a country in a given period. A high GDP indicates that the economy is producing more goods and services, thus signifying economic growth.
• The other options are not direct indicators of economic growth:
  • High tax rates can sometimes be associated with economic growth if the revenue is used to invest in infrastructure.
  • Technology development is a driver of economic growth, but it is not the indicator itself.
  • High-interest rates can sometimes hinder economic growth.

The graph illustrates a shift of the supply curve to the left. This signifies that at every price level, the quantity supplied has decreased.

The law of diminishing marginal utility states that the Satisfaction derived from consuming successive units of a commodity will diminish as the total consumption of the commodity increases. In other words, the total utility increases as more of a commodity is consumed but increases at a diminishing rate.