2019 - JAMB Economics Past Questions and Answers - page 1

 A normal demand lower price more will be demand but Abnormal demand curve slopes upward from left to right indications, It higher price more will be demanded which give reverse. A normal demand curve slopes downward from left to right indication. 

A change in the price of refrigerator and bicycle has no effect on each other. A change in the price of refrigerator will have not affect the bicycle since they are not related. The two goods are independent goods. 

NOTE : The elasticity of demand is always positive. Therefore, the negative sigin is ignored or extra negetive sign is introduced to make it postive.

 

 

 

The elasticity of demand is calculated using:

ρd

=

% Δ in P % Δ in Q

Where P = Price
Q = Quantity Demanded

Therefore,

%

Δ

in

P

=

6 - 8 8

×

100

= -25%
 

%

Δ

in

Q

=

12 - 10 10

×

100

= 20%
 

ρd

=

-25 20

=

-1.25

=

1.25

The answer is 1.25

 

The Demand and Supply determined the price the firm can sell any quantity it wishes, Since the buyers or sellers cannot influence the price of goods and services. 

 

The short-run monopoly sells OM output at MP (OB) price. The total monopoly profits are AP × CA = CAPB is shaded in the diagram.
CAPB indicates Abnormal profit of the monopolist.

Short-runs is s period where some factors are fixed,while some are variable. 

The demand curve facing a monopolist in the foreign market is likely to be elastic. This is because the monopolist has to compete with other firms in the foreign market, offering similar products. This competition makes consumers more sensitive to price changes. If the monopolist raises its price, consumers can switch to other sellers, leading to a more elastic demand.

Supply is a flow concept. It refers to the quantity of a good or service that producers are willing and able to offer for sale at various prices over a specific period of time.

A rise in the supply of a commodity leads to: * **A decrease in the equilibrium price:** With more of the commodity available, the price will tend to fall as sellers compete to sell their goods. * **An increase in the equilibrium quantity bought and sold:** Consumers will be able to purchase more of the commodity due to the lower price and increased availability, leading to a higher quantity exchanged in the market.

The income approach to calculating national income involves summing all the incomes earned by the factors of production (wages, salaries, rent, interest, and profits) within a country during a specific period.

An economy in which the income is shared between consumption and saving or consumption and investment i.e
γ = c + s or γ = C + I 

It is known as frugal economy.