2017 - JAMB Economics Past Questions and Answers - page 3

A country's terms of trade (TOT) is the ratio of its export prices to its import prices. An improvement in the terms of trade means a country can buy more imports for a given amount of exports. Reducing the demand for imported goods can improve the terms of trade. Here's why:

• Reduced Import Demand: When a country reduces its demand for imported goods, it can potentially negotiate lower prices for those goods from its trading partners.
• Impact on Prices: Lower demand puts downward pressure on the prices of imports.
• Improved TOT: If import prices fall relative to export prices, the terms of trade improve.

Therefore, by reducing the demand for imported goods, a country can potentially improve its terms of trade.

Form utility refers to the change in the form or structure of a commodity during its manufacturing process in other to increase its utility. For example, a change in the form of raw cotton to clothing material. Cotton in its raw form does not give satisfaction until it is changed to a clothing

• Economic growth refers to an increase in the production of goods and services in an economy over a period.
• CPI (Consumer Price Index) and PPI (Producer Price Index) are indicators of inflation. While high inflation can sometimes signal economic problems, they are not direct indicators of growth.
• GDP (Gross Domestic Product) is a primary measure of economic growth, reflecting the total value of goods and services produced.
• High Level of Unemployment indicates a problem within the economy. It suggests the economy is not using all available resources efficiently. A high level of unemployment is not an indicator of economic growth, but rather the opposite.

The unique feature that distinguishes perfect and imperfect market conditions is the number of sellers and buyers.

• Perfect Competition: Characterized by a large number of buyers and sellers, none of whom have the power to influence the market price.
• Imperfect Competition: Includes markets like monopolies, oligopolies, and monopolistic competition, where there are fewer sellers and/or buyers, giving them some control over price.

The economic question of "how to produce" refers to, which techniques are to be adopted? This question is important because the choice of technique depends on the prices of the factors of production.

That is, if labour is cheap and capital is expensive, a labor-intensive technique would be considered and vice-versa. The prices of labour and capital are determined by the demand for and supply of labour and capital respectively.

The Mode refers to the most occurring number in a set of numbers or data. It is the most occurring value in a distribution.

The most direct economic impact of a trans-boundary pest or disease is the loss or reduced

efficiency of agricultural production weather of reduced productivity on crops or animals can be

long lasting. Although the loss of output from a trans-boundary pest or diseases may appear easy

to identify, it can nevertheless be difficult to measure in precise economic terms.

Tax, government generate income or revenues by taxing individual and corporate bodies. This process is referred to as taxation. Taxation is the act or method of imposing a compulsory levy by the government or it's agency on individuals and firms or on goods and services. Tax is the compulsory levy imposed by the government or it's agency on individuals and firm or on goods and services

Price control policy refers to how the government or its agency fixes the price of essential commodities. Price control is carried out in Nigeria by the price control board.

The price system function such a manner that the adjustments in the System take place almost automatically without and direction or dictation from a central authority, Price is the coordinator both of production and Consumption. The consumer’s are able to convey their preferences through the prices they are willing to offer. Similarly, the producers are able to indicate the accuracy or abundance of a commodity by mean of the price they are willing to accept, If price rise it changes demand and stimulates supply and vice versa. If there is a greater demand for a commodity than the supply thereof, then the adjustment between the two will be brought about. Conversely, if the supply is greater than the demand, the price will fall and bring about an equilibrium between the two