Economics questions and answers, JAMB, 1978

JAMB Economics, 1978:

1. Suppose that the equilibrium price of an article is N5.00 but the government fixes the price by law at N4.00. The supply will be _____.

1. the same as the equilibrium supply
2. greater than the equilibrium supply
3. less than the equilibrium supply
4. determined later by government
5. none of the above

 

2. A budget deficit means _____.

1. that a country is buying more than it is selling
2. that a country is selling more than it is buying
3. a government is spending more than it takes in taxation
4. a government is spending less than it takes in taxation
5. a government is spending as much as it takes in taxation

 

3. When elasticity is zero, the demand curve is _____.

1. perfectly elastic
2. perfectly inelastic
3. concave
4. downward sloping
5. circular

 

4. Which of the following is NOT a reason for the existence of small firms?

1. Scale of production is limited by the size of the market
2. Expansion brings diminishing returns
3. Large firms can cater for wide markets
4. Small firms can provide personal services
5. All of the above

 

5. Inferior goods are defined in Economics as goods _____.

1. whose quality is low
2. consumed by very poor people
3. whose consumption falls when consumers’ income rises
4. which satisfy only the basic needs
5. none of the above

 

6. Malthus became known through his popular theory which may be stated simply as _____.

1. the death rate may become so high that people may not be able to produce
2. the population may outgrow the means of subsistence
3. the people will eventually decide not to have children
4. migration of people from one place to another may leave some parts of the world barren
5. all of the above

 

7. A commercial bank is unique in that it is the only institution that _____.

1. makes loans available to private people and business men
2. accepts deposits
3. can store people’s valuables
4. can transfer money from one place to another for its customers
5. saves money through the granting of credits

 

8. Which is an example of an invincible item in the Trade Account of Ghana?

1. Export of cocoa from Ghana
2. Import of oil from Nigeria
3. A gift of Peugeot 504 by a firm in Nigeria to another firm in Ghana
4. Payment for shipping and insurance by a Ghanaian company to companies outside Ghana
5. None of the above

 

9. Which of the following is NOT a direct effort to increase agricultural production in Nigeria?

1. Operation feed the Nation
2. Nigerian Youth Service Corps
3. Increased loans to farmers and cooperatives
4. Research in agriculture and extension services
5. Mechanization in Agriculture

 

10. If a company doubles all its output and discovers that its output is more than doubled, we can say that the company is experiencing _____.

1. increasing marginal utility
2. diseconomies of scale
3. increasing costs
4. constant-returns to scale
5. increasing returns to scale

 

11. Price control cannot work in Nigeria because _____

1. the population is too large
2. the policemen hate to arrest people
3. while it is fairly easy to control the producers and the importing firms, the small distributors are too many to be controlled
4. control cannot work under a military rule
5. too many things are produced in the country

 

12. A country has a surplus in its balance of visible trade if _____.

1. the value of imports exceeds the value of exports of goods
2. the value of exports exceed the value of imports of goods
3. the value of goods exported is equal to the value of goods imported
4. it is able to spend a lot on capital programmes
5. commercial banks’ assets increases

 

13. The Foreign Exchange Market is a market where _____.

1. graded commodities like wheat, coffee etc. are sold and bought
2. currencies are sold and bought
3. treasury bills are sold and bought
4. Government bonds are sold and bought
5. Treasury certificates are sold

 

14. Which of the following financial assets carry the lowest rate of interest in Nigeria?

1. Commercial bills
2. Call money
3. Treasury bills
4. Development Loan Stocks
5. Deposits with Federal Savings Bank

 

15. The effect on the demand for product A caused by a change in price of product B is called _____.

1. cross-elasticity of demand
2. elasticity of supply
3. competitive demand
4. composite demand
5. joint demand

 

16. Which of the followings can be regarded as a liability of a commercial bank?

1. Advances
2. Deposits
3. Treasury bills
4. Overdrafts
5. Cash

 

17. A tax which takes a higher percentage from higher incomes is called _____.

1. a regressive tax
2. a progressive tax
3. a proportional tax
4. an indirect tax
5. a direct tax

 

18. Which of the following statements is true?

1. A proportional tax is one which takes from high-income people a larger fraction of their income than it takes from low-income people
2. Taxes on commodities or services which can be shifted elsewhere are usually called direct taxes
3. The sole proprietor is a legal entity
4. The influence on demand on price will be smallest in the short-run
5. The cost of production is the most important determining factor of supply in the long run

 

19. The largest liability appearing on the books of a commercial bank is _____.

1. cash
2. deposits
3. loans and advances
4. capital and reserves
5. treasury bills

 

20. The Lagos clearing house is _____.

1. a commodity market
2. an import licensing center
3. another name for the Lagos Stock Exchange
4. an insurance and underwriting center
5. a cheque sorting center

 

21. The biggest source of government revenue in Nigeria is _____.

1. mining rents and royalties
2. company income tax
3. import duties
4. export duties
5. petroleum profit tax

 

22. An increase in liquid reserve requirements by the Central Bank of Nigeria will result in _____.

1. a reduction in commercial banks’ excess reserves
2. more commercial bank loans to members of the public
3. an increase in commercial banks’ excess reserves
4. no change in commercial banks’ excess reserves
5. a reduction in central bank’s gold reserve

 

23. A distinguishing characteristics of the consumers’ cooperative is the fact that _____.

1. the customers are the owners
2. the customers are the workers
3. the customers are the managers
4. the customers are low income people
5. the customers are high income people

 

24. Disposable income is the same thing as _____.

1. personal income minus personal savings
2. personal income minus taxes
3. national income minus depreciation
4. exports minus imports
5. savings plus investments

 

25. Marginal cost is _____.

1. the lowest cost of producing goods
2. the cost of production of the most efficient firm in an industry
3. the cost of production of the most inefficient firm in an industry
4. the cost of production of the last or extra unit of goods produced by a firm
5. the cost of production at which the minimum is obtained by a firm

 

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