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 is the process by which the productive capacity of an economy increase over a given period, leading to a rise in the level of the national income.
Gross domestic product is the total market value of all goods and services produced by a country in a specific time period typically a year. This includes earnings from foreign investments.

GDP = Consumption +Government +investment +Export − Imports
GDP is considered the broadest indicator of economic growth because GDP represent the market value of all goods and services produced by the economy during the given period including personal consumption, government purchase, private inventories, paid in construction cost and the foreign trade balance (export added, import are subtracted).
There are other indicators of economic growth such as; Consumer Price Index (CPI), Producer Price Index (PPI), Consumer Confidence Index (CCI), Money supply, Employment and others. However, High tax rate, Technology Development and High interest rate are not a part of the list.

There is an increase in the quantity supplied if the quantity supplied increases as a result of an
increase in price of the commodity.

From the graph, an increase in the price of the commodity from p1 to p2 brought about a
corresponding increase in quantity supplied from q1 to q2.

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.