JAMB Economics 2010

A: efficient allocation of resources

Economics examines choices about scarce resources and their competing uses. Efficient allocation is the broad concern encompassing production, consumption and exchange.

D: a measure of dispersion

Standard deviation describes how widely observations are dispersed around their mean. It is a measure of spread, not a measure of central location such as the mean or median.

C: mode

The mode is the most frequently occurring value. For dress or shoe sizes, the modal size identifies the size purchased or observed most often.

B: more by producers

The less elastic side of a market bears more of a tax burden. Supply is less elastic than demand here, so producers have less ability to adjust and bear the larger share.

D: decrease

With elastic demand, the percentage reduction in quantity demanded exceeds the percentage increase in price. Total revenue, price multiplied by quantity sold, therefore falls.

B: utility can be ranked

Ordinal utility assumes consumers can rank bundles by preference. It does not require satisfaction to be measured in numerical utility units or permit inconsistent preferences.

A: the slope of a normal demand curve is negative

As consumption rises, the additional satisfaction from another unit normally falls. In the standard utility model, a lower price is then needed to induce purchase of additional units.

D: fairly elastic

A supply elasticity greater than one means quantity supplied changes by a larger percentage than price. Supply is relatively or fairly elastic, without necessarily being perfectly elastic.

C: jointly supplied

A by-product is produced alongside the main product in the same process. Increasing production of the main product also makes more of the by-product available, so the goods are jointly supplied.

D: market

In perfect competition, the interaction of total market demand and supply establishes price. Each individual firm accepts that price because it is too small to control the market.

C: diseconomies of scale

A rising long-run average cost curve means that expanding the scale of production raises average cost. This is the definition of diseconomies of scale.

C: slopes downwards

In the standard factor-demand model, firms demand more of an input when its price falls, other things equal. The resulting factor-demand curve slopes downward.

C: medium of exchange

Money as a medium of exchange lets people specialize and then trade their output for what others produce. It removes the need to find a barter partner with exactly matching wants.

A: increase money supply in the economy

A central bank purchase of treasury bills pays money to the sellers and adds liquidity to the banking system. This is an expansionary open-market operation that supports an increase in money supply.

C: Nominal GDP / Money supply

Income velocity measures nominal spending per unit of money. It is nominal GDP divided by the money supply, consistent with the identity MV = PY.

C: granting loans to customers

Commercial banks provide credit to customers and businesses. Issuing currency and setting monetary policy are central-bank functions rather than ordinary commercial-bank functions.

C: concentration of firms of an industry

Localization means firms in the same industry are concentrated geographically. It differs from merely locating a single firm near its customers.

D: 80%

In 2002 the working population is 32 thousand out of 40 thousand people. The proportion is 32/40 × 100 = 80%.

B: credit on Japan's balance of payments

Selling vehicles to Nigeria is an export for Japan. Export receipts enter as a credit in Japan's goods account within the balance of payments; Nigeria records the corresponding import debit.

C: promote economic and social development of member countries

The African Development Bank supports economic and social development in its member countries. Its development remit is broader than short-term lending or assistance only to the poorest members.