2024 - JAMB Economics Past Questions and Answers - page 1

The question explores the relationship between wage rates and the average revenue product (ARP) of labor to determine a firm's profitability.* **Average Revenue Product (ARP):** This represents the total revenue generated divided by the quantity of labor employed. It signifies the revenue generated by each unit of labor, on average.* **Wage Rate:** This is the cost of employing each unit of labor.When the wage rate is less than the ARP, each unit of labor generates more revenue than its cost. The difference between the ARP and the wage rate contributes to profit. Because the wage rate is lower than the amount of revenue generated by each worker, the firm is earning a profit above the normal level (which just covers costs, including a reasonable return for the business owner). This is known as supernormal profit.

The product possibility curve (PPC) illustrates the following:* Scarcity of resources: The PPC demonstrates that there are limited resources available to produce goods and services.* Unemployment of labor: Points inside the curve indicate unemployment of resources, including labor.* Inefficiency in the use of resources: Points inside the curve also represent inefficient use of resources.* Economic development: The PPC is a static model, it does not directly emphasize economic development. Economic development is usually shown as an outward shift of the PPC.

The economic problem arises because of scarcity. Scarcity means that resources are limited, while human wants are unlimited. This fundamental imbalance forces us to make choices about how to allocate scarce resources to satisfy the most pressing wants.

The question asks for the type of business organization that is NOT a type of business organization.* **Co-operative society:** A type of business organization where people come together to achieve a common goal, usually economic.* **Partnership:** A business organization involving two or more people who agree to share in the profits or losses of a business.* **Entrepreneurship:** This is the process of starting and running a business, and not a specific type of business organization itself. It can lead to the formation of any of the other types of business organizations.* **Public corporation:** A business organization owned by the government.Therefore, entrepreneurship is not a business organization itself.

The variance is the square of the standard deviation.To calculate the variance:1. Square the standard deviation: 3.6 * 3.6 = 12.96

An oligopoly is a market structure characterized by a few sellers and many buyers. The sellers in an oligopoly have some control over the market price due to the limited number of firms.* **Duopoly:** A market structure with only two sellers.* **Omonopoly:** This is not a standard economic term.* **Perfect competition:** A market structure with many sellers and many buyers, where no single firm can influence the market price.

The balance of payments records all financial transactions between a country and the rest of the world. Policies that increase exports or decrease imports improve the balance of payments.* **A.** Anti-dumping policies: These policies restrict imports that are sold at unfairly low prices, thus improving the balance of payments.* **B.** Granting subsidies to export producers: This makes exports cheaper and more competitive, thereby increasing exports and improving the balance of payments.* **C.** Decreasing taxation on personal income: This increases disposable income, which can lead to increased spending on imports, thus worsening the balance of payments.* **D.** Increasing import duties: This makes imports more expensive, reducing imports and thus improving the balance of payments.

In the event of bankruptcy, the owners of a joint-stock company are only liable for the amount of capital they invested in the company. Their personal assets are protected.

The question refers to a diagram showing a movement between points. Without the diagram, it is impossible to be certain about the answer. However, since the options are related to economic concepts, the movement could be illustrating economic growth. Economic growth is often represented by a shift in the production possibilities frontier (PPF). Moving from one point to another on the PPF represents a change in production levels or allocation of resources which signifies some form of economic change.

When the price of a commodity increases and consumers switch to another commodity, the two commodities are substitutes. This is because consumers are replacing one with the other to satisfy their needs.