2022 - JAMB Economics Past Questions & Answers - page 1

1

Marginal cost is?

A

the lowest cost of producing goods

B

the cost of production of the most efficient firm in an industry

C

the cost of production of the most inefficient firm in an industry

D

the cost of production of the last or extra unit of goods produced by a firm

CORRECT OPTION: d

Option D is the correct answer.

The additional cost incurred in producing an additional unit of a good or service is known as the marginal cost.

2

The price mechanism 

A

regulates supply and demand

B

rations the consumers

C

rewards the producers

D

allocates scarce resources

CORRECT OPTION: d

Option D is the correct answer.

The price mechanism allocates scarce resources by using market prices to signal the relative scarcity of goods and services. When a good is scarce, the price tends to rise, signaling producers to increase supply and consumers to reduce demand. This process helps to ensure that resources are allocated efficiently to their most valuable uses.

3

In a free market economy, the rationing of scarce goods is done principally by?

A

the government

B

business organizations

C

the price mechanism

D

consumers

CORRECT OPTION: c

Option C is the correct answer.

In a free market economy, the price mechanism is used to ration scarce goods. When a good becomes scarce, its price rises, encouraging consumers to buy less and producers to supply more, which helps allocate the limited resources to their most valued uses.

4

Scale of preference shows

A

incomes of consumers in order of size

B

utilities enjoyed by consumers

C

opportunity cost of goods consumed

D

consumer's wants in order of priority

CORRECT OPTION: d

Option D is the correct answer. 

A scale of preference is a table that displays an individual needs and wants in either chronological order or according to priority.

5

There is unemployment of resources when production is

A

within the production possibility curve

B

outside the production possibility curve

C

along the production possibility curve

D

adequate to meet market demand

CORRECT OPTION: a

Option A is the correct answer. 

Inefficient use of resources, widespread unemployment, or resources not being fully employed are indicated by points inside the production possibility curve.

6

A major characteristic of natural resources is they

A

are unlimited in supply

B

have high cost of production

C

are free gifts of nature

D

do not command any price

CORRECT OPTION: c

Option C is the correct answer. 

Unlike man-made resources, which are produced by humans, natural resources exist naturally. Natural resources are products of nature and cannot be attributed to human activity.

7

A major disadvantage of a capitalist economy is that it

A

leads to low production of goods and services

B

requires large number of officials to operate

C

considers individual consumers' satisfaction

D

worsens income inequality among the citizens

CORRECT OPTION: d

Option D is the correct answer. 

The concentration of wealth and power over the means of production in the hands of a small number of people is one of the disadvantages of capitalism. The wealthy families always have control over society's wealth.

8

The mining sector of an economy contributes 60% to the Gross Domestic Product(GDP). If the GDP is $540, what is the contribution of the mining sector?

A

$ 90.00

B

$ 180.00

C

$ 324.00

D

$ 350.00

CORRECT OPTION: c

The contribution of the mining sector = 60% x 540 = 324

9

The increase in the demand for a commodity may lead to a decrease in the demand for another if both are

A

in complementary demand

B

of the same quality

C

in composite demand

D

in competitive demand

CORRECT OPTION: d

Option D is the correct answer. 

Competitive demand, also referred to as substituted demand. There are substitute commodities that have comparable utility and can satisfy similar wants. When the demand for one increases, the desire for the other decreases.

10

The demand curve for goods of ostentation is usually

A

negatively sloped

B

positively sloped

C

vertical

D

horizontal

CORRECT OPTION: b

Option B is the correct answer. 

Ostentation goods are expensive items like jewellery, gold watches, etc. The quantity demanded increases as the price rises. As a result, there is a positive relationship between price and quantity demanded.

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