28 reviewed questions with answers and explanations.
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By advertising, a monopolistic competitive firm tries to shift its
B: demand curve to the right
Advertising aims to persuade more consumers to buy the firm's differentiated product at each price. Successful advertising therefore shifts the firm's demand curve to the right.
AI-reviewed · source checkedGiven that Y = C + I and C = bY, where b = 0.8, what is the multiplier?
A: 5
Substituting C = 0.8Y into Y = C + I gives 0.2Y = I, so Y = 5I. A one-unit increase in autonomous investment therefore produces a five-unit increase in equilibrium income.
AI-reviewed · source checkedThe role of the Central Bank in the economic development of Nigeria is to
D: maintain a stable price system
A central bank supports economic activity by pursuing monetary and price stability. Lending directly to ordinary customers and processing their routine cheques are commercial-banking activities.
AI-reviewed · source checkedThe primary function of non-bank financial institutions is to
B: mobilize saving for investment
Non-bank financial intermediaries collect savings and channel them into investments. Their role links savers with users of funds without requiring them to operate as deposit-taking commercial banks.
AI-reviewed · source checkedThe capital market provides business firms with the avenue to
B: obtain long-term funds
The capital market channels long-term finance to businesses through instruments such as shares and long-term bonds. Short-term borrowing belongs to the money market.
AI-reviewed · source checkedWhich of the financial institution is charged with the formulation of monetary policies in Nigeria?
A: The Central Bank of Nigeria
The Central Bank of Nigeria formulates and implements monetary policy. Deposit insurance and stock-market operations serve different functions from setting monetary policy.
AI-reviewed · source checkedGDP differs from GNP because GDP
C: measures production within the country during a particular period
GDP measures production within a country's territory during a period. GNP adds net primary income from abroad to GDP, so the domestic location of production is the relevant distinction.
AI-reviewed · source checkedThe distinction between perfect competition and monopolistic competition is that the latter is characterized by
C: product differentiation
Monopolistic competition involves differentiated products, giving each seller some influence over its own price. Perfect competition assumes homogeneous products, despite both models having many buyers and sellers.
AI-reviewed · source checkedThe downstream activities of oil companies in Nigeria involve
A: refining and distribution
Downstream petroleum activities process crude oil into usable products and move those products to users. Refining and distribution belong downstream; exploration and drilling are upstream activities.
AI-reviewed · source checkedThe movement of goods and services from producers to consumers is referred to as
B: the distribution chain
Distribution is the process of moving goods and services from producers to final consumers. The distribution chain includes the intermediaries and channels through which those products pass.
AI-reviewed · source checkedThe purpose of conducting a census is to enable a country to
D: plan her growth and development
A census supplies population counts and characteristics needed to plan schools, health services, housing and other development. Counting the population supports broader planning, not merely a single financial flow.
AI-reviewed · source checkedThe maximum wage legislation seeks to
D: ensure an upper limit to the wages payable
Maximum-wage legislation sets a ceiling on permitted wages. The defining feature is an upper limit, whether or not that limit is below the market wage and therefore binding.
AI-reviewed · source checkedImport duty concessions on industrial inputs directly benefit the
D: manufacturers
Manufacturers use imported industrial inputs in production. A concession on import duties lowers their direct input costs; any later benefit to consumers depends on how firms adjust prices.
AI-reviewed · source checkedThe difference between birth and death rates of a given population is referred to as the
C: natural growth rate
Natural population growth is births minus deaths, excluding migration. When birth and death rates use the same population base, their difference gives the rate of natural increase.
AI-reviewed · source checkedFiscal policy is the government’s plan to control aggregate demand by manipulating
B: revenue and expenditure
Fiscal policy uses government taxation and spending to influence aggregate demand. Changing money supply is monetary policy; government revenue and expenditure are the fiscal instruments.
AI-reviewed · source checkedif budget deficits are financed by borrowing, the crowding-out effects can be offset by an increase in
B: savings
Government borrowing can compete with private borrowers for available funds. More saving expands the supply of loanable funds, reducing the upward pressure on interest rates and the resulting crowding out.
AI-reviewed · source checkedWhen the importation of a commodity is limited to a definite quantity, the trade control means used is known as
D: quotas
An import quota places a numerical or quantity limit on how much of a commodity may be imported. It controls volume directly, unlike a tariff that adds a charge to imports.
AI-reviewed · source checkedThe excess of aggregate expenditure over full emploment level of output is referred to as
C: Inflationary gap
An inflationary gap exists when planned aggregate expenditure exceeds the value of output at full employment. With limited spare capacity, excess spending puts upward pressure on prices.
AI-reviewed · source checkedThe tax levied on goods and services at each stage of production is
B: VAT
Value added tax is collected through successive stages of production and distribution, with credit for eligible tax already paid on inputs. This makes it the multi-stage consumption tax described here.
AI-reviewed · source checkedThe difference between payments and receipts for visible trade is called
D: balance of trade
The balance of trade is the difference between the value of merchandise exports and imports. It covers visible goods trade, whereas the balance of payments also records services, income and financial transactions.
AI-reviewed · source checkedThe final stage in the production process of any commodity involves its movement from the
C: retailer to the consumer
The distribution process finishes when the retailer delivers the commodity to the final consumer. Transfers between producers, wholesalers and retailers are earlier stages in bringing it to the user.
AI-reviewed · source checkedIn order to increase revenue, the seller of a commodity whose demand is fairly elastic is advised to
C: reduce price
With elastic demand, a percentage reduction in price causes a larger percentage increase in quantity demanded. Over the elastic portion of the demand curve, lowering price therefore increases total revenue.
AI-reviewed · source checkedIn any set of data, the median represents the
B: mid-position when the values are arranged in ascending or descending order
The median is the central value after the observations have been ordered. For an even number of numerical observations, it is the average of the two central values.
AI-reviewed · source checkedA consumer can purchase these combinations of beans and rice: Combination | Beans (units) | Rice (units) K | 15 | 19 L | 20 | 17 M | 24 | 16 What is the opportunity cost of moving from K to L?
A: 2 units of rice
Moving from K to L increases beans from 15 to 20 units but reduces rice from 19 to 17 units. The sacrifice, and therefore the opportunity cost of the move, is 2 units of rice.
AI-reviewed · source checkedOne of the assumptions of ordinal utility in consumer behaviour is that
D: utility can only be ranked
Ordinal utility describes preferences by ranking alternatives, without assigning measurable amounts of satisfaction. A consumer may prefer one bundle to another without saying how many units of utility it provides.
AI-reviewed · source checkedGiven the cost function C = 160 + 36Q, what is the average cost at 20 units of output?
C: N44.00
At Q = 20, total cost is 160 + 36 × 20 = N880. Average cost is total cost divided by output: 880/20 = N44 per unit.
AI-reviewed · source checkedIf an increase in the price of good X leads to an increase in the supply of good Y, X and Y are said to be
A: jointly supplied
Jointly supplied goods are produced together. A higher price for X encourages more production of X and, as part of the same production process, also increases the supply of Y.
AI-reviewed · source checkedIn a textile factory, the cost of cotton used is a typical example of
B: a variable cost
Cotton is a raw material consumed as textiles are produced. Producing more textiles normally requires more cotton, so its total cost varies with output rather than remaining fixed.
AI-reviewed · source checked