2019 - JAMB Economics Past Questions & Answers - page 1

1

A demand which gives rise to the reverse of the law of demand is__________

A
Derived demand
B
Joint demand
C
Abnormal demand
D
Composite demand
CORRECT OPTION: c

 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. 

2

If two commodities are unrelated, a change in the price of one will____________

A
have effect on the quantity demanded of the other
B
have no effect on the quantity demanded of the other
C
increase the quantity demanded on the other
D
decrease the quantity demanded on the other
CORRECT OPTION: b

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. 

3

 

Price
(₦)
Quantity Demanded
8 10
6 12


If we move from 8 to 6, the elasticity of demand is_______

 

 

A
-1.25
B
0.62
C
1.25
D
1
CORRECT OPTION: c

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

 

4

In a perfect competition, the market price is determined by_______

A
the government
B
the producer
C
the consumer
D
the market supply and demand junctions
CORRECT OPTION: d

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. 

5

In the short-run, the monopoly makes_______

A
Normal profit
B
Abnormal Profit
C
Loss
D
Sales
CORRECT OPTION: b

 

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. 

6

The demand curve facing the monopolist in the foreign market is__________

A
Elastic
B
Inelastic
C
Perfectly elastic
D
Unitary
CORRECT OPTION: c

The foreign market is a perfect competitor then the monopolist is challenged with average revenue or horizontal demand curve or price line. 

The foreign market is perfectly competitive while the home market is monopolistic.

7

Supply is________

A
A stock
B
A Flow
C
Constant
D
A table
CORRECT OPTION: b

Supply has a time dimension, it relates to a period of time that's why it a flow. 

8

A rise in the supply of a commodity cause__________

A
an increase in the equilibrium price and decrease in the equilibrium quantity bought and sold
B
an increase in both equilibrium
C
a decrease in the equilibrium price and an increase in the equilibrium quantity bought and sold
D
a decrease in both equilibrium
CORRECT OPTION: c

There will be an excess supply over demand which will lead to a decrease in the equilibrium price and an increase in equilibrium quantity if the supply increase while the demand remains constant. 

9

The method obtained by adding all the reward of factors of production in national income is________

A
income approach
B
expenditure approach
C
value added method
D
output approach
CORRECT OPTION: a

Rent, Interest, wages & salaries and profit are the reward of factors of production. In national income adding the reward i.e R + I + W + P is used in calculating the income approach.

10

An economy in which the whole income is not consumed is referred to as______

A
Frugal economy
B
Spend thrift economy
C
Capitalist economy
D
Mixed economy
CORRECT OPTION: a

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. 

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