2023 - JAMB Economics Past Questions and Answers - page 6

The part of income after tax that is not consumed is defined as "Saving." Saving refers to the portion of income that is not spent on consumption and is instead set aside for future use, investment, or emergencies.

A major factor contributing to productivity is the labor force. The effectiveness and efficiency of the labour force play a significant role in determining overall productivity in an economy. Improvements in education, skills, training, and the overall quality of the labor force contribute to increased productivity.

Agriculture accounts for about 60% of the active labour force in West Africa. The majority of people in West Africa are engaged in agricultural activities, contributing significantly to the region's employment and livelihoods.

The resultant effect of a fall in the profit margin of producers in an economy is that unemployment will increase. A decrease in profit margins can lead to cost-cutting measures by businesses, including reductions in workforce, which results in an increase in unemployment.

The demand for a good is price inelastic if the price elasticity is less than one. Price elasticity of demand measures the responsiveness of quantity demanded to changes in price. When the absolute value of the price elasticity is less than one, it indicates price inelastic demand, meaning that the percentage change in quantity demanded is smaller than the percentage change in price.

The lowest price the monopolist can charge and still make a profit as long as he covers his AVC is P2. Prices below price P2 will result in losses.

The marginal propensity to consume (MPC) is represented by the coefficient "c" in the equation C = C + cYd. It is also equal to ΔC/ΔY, representing the ratio of the change in consumption to the change in income.

Additionally, the slope of the consumption function, represented by "c" in C = C + cYd, is another way to express the MPC.

An increase in nominal income without an increase in prices will result in increased real income. Real income is the purchasing power of income adjusted for changes in price levels. If nominal income (the amount of money received) increases, and there is no corresponding increase in prices (inflation), then the real purchasing power of that income increases.

An indicator of underdevelopment is low per capita income. Per capita income is the average income per person in a given area, such as a country. Low per capita income often indicates lower standards of living, limited access to resources, and overall economic challenges, which are characteristics associated with underdeveloped economies.

The business cycle is associated with various phases of economic activity. Recession is one of the phases of the business cycle. The business cycle consists of four main phases: expansion, peak, contraction, and trough.

During a recession (contraction phase), economic activity contracts, leading to a decline in output, employment, and income. Unemployment tends to rise during a recession. Seasonal variation and inflation are also aspects associated with different phases of the business cycle.