2017 - JAMB Economics Past Questions and Answers - page 5

where;

N = number of items in the distribution

X = is variable

x̄ = Arithmetic mean

∑ = sum of

A perfect market may be defined as one in which buyers or sellers cannot influence the price of goods and services. That is, the buyers or sellers are price taker since there exist a common price for commodities throughout the market.

Given C = 10 + 0.6Y when Y = 20

Substitute for the value of Y in the equation to calculate the actual value for C

Therefore, C = 10 + 0.6(20)

                       C = 10 + 12<br />

                       C = 22.00

Money market can be defined as a market for short term loan. The market consists of institution

or individuals who either have money to lend or wish to borrow on a short term basis. The central

bank is the sole authority in the banking industry and act as banker to the government and the

commercial banks.

The stock market is an instrument for raising fund for limited liability companies which have

shares of the company to give out in exchange for fund.

Insurance company are financial institution that are concerned with insurance. Insurance company

indemnify the insured against loss which he may suffer in the future upon payment of a premium.

Opportunity cost refers to a benefit that a person could have received, but gave up, to take another course of action. Opportunity cost helps the government in the preparation of budget, since it assists in the effective allocation of scarce resources to certain sector of the economy. It helps in making certain decision e.g. the priority areas that may require immediate attention.

Personal income, disposable income and transfer earnings are sources of individual income after

payment of taxes and charges left to be spent or saved as one wishes.

Source of Government revenue include Grants, aids, borrowings, taxes, fees, licences, fines,

dividends, profit and many others but not personal income. Disposable income and transferable income.

Limited partnership is one who has agreed to contribute a certain sum to a partnership in business and is prevented by law from taking any active part in the management and administration of the business. He is liable for debts and obligations of the partnership only up to the amount of capital he has contributed. A limited partner has limited liability.

Indirect tax refers to taxes which are imposed or levied on goods and services. The producers bear the initial burden of tax before shifting them to the final consumers in the form of higher price.

Localization of industry is encouraged by improvements in infrastructure because:

• Infrastructure's Role: Good infrastructure (roads, transportation, utilities, communication) reduces production costs and makes it easier to operate in a specific location.
• Impact on Industry: Improved infrastructure facilitates the smooth flow of goods, services, and information which encourages industrial growth in a particular area.

Here's the breakdown:

• Traditional budgeting starts with last year's funding appropriation: This is the core principle. Traditional budgeting uses the previous year's budget as a base and makes incremental adjustments.

• Why the other options are incorrect:

  • A: Traditional budgeting is less focused on goals and objectives compared to zero-based budgeting.
  • B: Zero-based budgeting requires justifying every expense and doesn't produce a single level of appropriation.
  • D: Zero-based budgeting does systematically consider alternatives to current operations. This is a key feature of this budgeting method.