2025 JAMB ECONOMICS
Question 1
Sensitivity of demand to change in price is known as
A. Cost-plus price
B. Break even price
C. Price elasticity
D. Inelastic
Answer: C. Price elasticity
Explanation: Price elasticity of demand measures the extent to which demand responds to a price change.
Question 2
Sensitivity leads to
A. Opportunity cost
B. Choice
C. Abundance
D. Borrowing
Answer: B. Choice
Explanation: Scarcity requires consumers to choose among wants ranked in their scale of preference.
Question 3
When an imperfect market is in equilibrium, the producers
A. Lose
B. Earn super profit
C. Earn normal profit
D. Shut down
Answer: C. Earn normal profit
Explanation: At long-run equilibrium in an imperfect market, the producer earns normal profit.
Question 4
Net National Product is
A. Gross domestic product less depreciation
B. Gross national product less depreciation
C. Gross national product
D. Gross national product less depreciation
Answer: D. Gross national product less depreciation
Explanation: Subtract depreciation from gross national product to obtain net national product.
Question 5
Which of the following is a measure of dispersion?
A. Range
B. Mean
C. Median
D. Mode
Answer: A. Range
Explanation: Range is classified as a dispersion measure because it indicates how widely the data are spread.
Question 6
A tax system which is equitable is
A. Progressive tax system
B. Proportional tax system
C. Regressive tax system
D. Equal tax system
Answer: A. Progressive tax system
Explanation: Progressive taxation applies the ability-to-pay principle by taking a greater income share from higher earners. This promotes equity and places a relatively smaller burden on low earners.
Question 7
Which of the following can affect labour market supply?
A. Population
B. Education
C. Gender
D. All of the above
Answer: D. All of the above
Explanation: The population’s size and age distribution determine the potential workforce. Education influences skills and job eligibility, while gender participation patterns and barriers influence entry into the labour force.
Question 8
Which of the following is a feature of a perfect market?
A. Information cost is zero
B. Preferential treatment
C. Restriction to entry
D. Zero competition
Answer: A. Information cost is zero
Explanation: Information has zero cost in a perfectly competitive market. Its features include numerous buyers and sellers, so no individual controls the market; identical products, so buyers have no seller preference; unrestricted entry and exit; complete and freely available information; and price-taking firms and consumers that accept the prevailing market price.
Question 9
The law of demand states that, with an increase in price, there is
A. Decrease in quantity demanded
B. Increase in quantity demanded
C. Decreased demand
D. Increased demand
Answer: A. Decrease in quantity demanded
Explanation: According to the law of demand, quantity demanded falls as price rises and increases as price falls.
Question 10
Which of the following would cause a change in the quantity demanded of a product?
A. Changing prices of related products
B. Changing consumer tastes
C. Increasing consumer income
D. Decreasing price of product
Answer: D. Decreasing price of product
Explanation: A change in the commodity’s own price changes quantity demanded. Changes in other factors instead change demand itself.
Question 11
Increase in demand can occur due to:
A. Increase in income of the consumer
B. Decrease in price of the complementary good
C. Increase in price of the substitutes
D. All of these
Answer: D. All of these
Explanation: Demand for a normal good may increase with income, a fall in a complementary good’s price or a rise in a substitute’s price. These non-price influences can shift the demand curve rightwards.
Question 12
Violation of Law of Demand occurs when
A. Negative income effect is greater than substitution effect
B. Negative income effect is less than substitution effect
C. Income effect is negative
D. Substitution effect is negative
Answer: A. Negative income effect is greater than substitution effect
Explanation: For a Giffen good, the negative income effect is stronger than the substitution effect. A price rise cuts real income enough to increase purchases of the inferior good, producing an upward-sloping demand relationship.
Question 13
Movement along the demand curve illustrates
A. Shift in quantity demanded
B. Complement effect
C. Change in quantity demanded
D. Income effect
Answer: C. Change in quantity demanded
Explanation: Movement along a demand curve represents a change in quantity demanded.
Question 14
Sustained growth will translate to
A. Money
B. Development
C. Nothing
D. None of the above
Answer: B. Development
Explanation: Lasting economic growth contributes to development when rising output and income improve living standards, health, education and opportunities for productive activity.
Question 15
In a monopolistic competition there is
A. Product differentiation
B. No competition
C. Super normal profit
D. Perfect information
Answer: A. Product differentiation
Explanation: Monopolistic competition combines competition among firms with differentiated products.
Question 16
When the proposed expenditures of the government equal its proposed revenue, then, the government is operating
A. Imbalanced budget
B. Deficit budget
C. Surplus budget
D. Balanced budget
Answer: D. Balanced budget
Explanation: A balanced budget matches proposed expenditure with estimated revenue.
Question 17
Minting of money is the function of
A. Central Bank of Nigeria
B. Commercial Banks
C. Minting and printing
D. Nigerian Security Minting and Printing PLC
Answer: D. Nigerian Security Minting and Printing PLC
Explanation: The Nigerian Security Minting and Printing PLC carries out the printing of Nigerian currency.
Question 18
Which of the following is not a reason for holding cash?
A. Precautionary motive
B. Speculative motive
C. Transactionary motive
D. Holding motive
Answer: D. Holding motive
Explanation: The motives for holding cash are transactions, precaution and speculation.
Question 19
The graph that shows different combinations of two commodities a consumer can consume and still remain at the same level of satisfaction is the
A. Production possibility curve
B. Budget line
C. Indifference map
D. Indifference curve
Answer: D. Indifference curve
Explanation: An indifference curve traces two-good combinations a consumer can choose without changing total utility.
Question 20
IMF means
A. Interdenominational Monetary Fund
B. International Mountain of Fire
C. International Monetary Fund
D. International Money Fund
Answer: C. International Monetary Fund
Explanation: IMF stands for the International Monetary Fund.
Question 21
Indifference curve is for ….
A. Producer
B. Labourers
C. Consumer
D. None of the above
Answer: C. Consumer
Explanation: An indifference curve traces two-good combinations a consumer can choose without changing total utility.
Question 22
When elasticity is zero, the demand curve is
A. Perfectly elastic
B. Perfectly inelastic
C. Concave
D. Downward sloping
Answer: B. Perfectly inelastic
Explanation: Zero elasticity indicates perfectly inelastic demand.
Question 23
Inferior goods are referred to in Economics as goods
A. Whose quality is low
B. Consumed by very poor people
C. Whose consumption falls when consumers’ income rises
D. Which satisfy only the basic needs
Answer: C. Whose consumption falls when consumers’ income rises
Explanation: An inferior good has demand that moves inversely with consumer income. Higher income reduces its quantity demanded, while lower income increases it.
Question 24
The foreign exchange market is a market where
A. Graded commodities like wheat, flour, etc. are sold and bought
B. Currencies are sold and bought
C. Treasury bills are sold and bought
D. Government bonds are sold and bought
Answer: B. Currencies are sold and bought
Explanation: Currencies are traded in the foreign exchange market.
Question 25
Which of the following can be regarded as a liability of a commercial bank?
A. Advances
B. Deposits
C. Treasury bills
D. Overdrafts
Answer: B. Deposits
Explanation: Every deposit represents a liability for a commercial bank.
Question 26
As consumption of milk increases, its marginal utility to a drinker will
A. Increase
B. Remain constant
C. Fluctuate
D. Decrease
Answer: D. Decrease
Explanation: As more of a commodity is consumed, the extra utility obtained from it declines.
Question 27
Which of the following sectors of the economy is estimated to be the largest employer of labour in Nigeria?
A. Construction
B. Agriculture
C. Distribution
D. Mining and petroleum
Answer: B. Agriculture
Explanation: Agriculture generates jobs through crop farming, livestock, fishing and associated activities. It is the largest employing sector among this examination’s choices, without implying that it holds that position in every country.
Question 28
The expression “terms of trade” is used to describe
A. Quality of export
B. The direction of foreign trade
C. Terms of purchase on deferred payment basis
D. The rate at which export exchange for imports
Answer: D. The rate at which export exchange for imports
Explanation: Terms of trade express the rate of exchange between exports and imports. Calculate the index as the export price index divided by the import price index, multiplied by 100.
Question 29
Economics is called a social science because it is
A. A branch of social studies
B. A study of the ways man devises to satisfy his unlimited wants from unlimited resources
C. A dismissal science
D. The study of human wants by the means of scientific method of observation
Answer: D. The study of human wants by the means of scientific method of observation
Explanation: Economics is a social science because it applies scientific methods to develop theories explaining the behaviour of individuals, groups and organizations.
Question 30
If the consumer demand for product X increases as the price of product Y decreases, we can be fairly certain that
A. X and Y are complementary commodities
B. X and Y are substitute goods
C. X and Y are independent goods
D. X and Y are jointly supplied
Answer: A. X and Y are complementary commodities
Explanation: A lower price for Y raises the quantity of Y demanded and increases demand for goods used alongside it.
Question 31
Which of these alternatives is wrong? Central banks are
A. Bankers to the government
B. Bankers to commercial banks
C. Merchant banks
D. Controllers and regulators of money supply
Answer: C. Merchant banks
Explanation: Merchant banks are specialist institutions whose roles differ entirely from those of the Central Bank of Nigeria.
Question 32
Which of the following is not a direct tax?
A. Company income tax
B. Capital tax
C. Purchase tax
D. Personal income tax
Answer: C. Purchase tax
Explanation: Like value added tax, purchase tax is not imposed directly on its ultimate payer. It is therefore an indirect tax.
Question 33
By utility we mean
A. Usefulness
B. Power of satisfying a want
C. Beneficial
D. Advantageous
Answer: B. Power of satisfying a want
Explanation: In economics, utility means the total satisfaction gained from consuming a good or service.
Question 34
The quantity supplied of a commodity increases best when
A. Production increases
B. Demand increases
C. Price of the commodity increases
D. Population of the country increases
Answer: C. Price of the commodity increases
Explanation: The law of supply states that, with other factors unchanged, a higher own price increases the quantity supplied. This produces movement along the supply curve.
Question 35
The country will be over populated when
A. The rate of birth is high
B. The death rate is low
C. The growth rate is high
D. Population is increasing more than resources in the country
Answer: D. Population is increasing more than resources in the country
Explanation: Overpopulation occurs when population expands more rapidly than a country’s resources.
Question 36
Pure monopoly describes a market where
A. There are many sellers and a few buyers
B. Goods are sold at different price
C. Entry is not blocked, but no one cares to enter
D. None of the above
Answer: D. None of the above
Explanation: A pure monopoly exists when one seller supplies a product without close substitutes.
Question 37
Which of the following is not a component of national income at factor cost?
A. Wages earned by doctor
B. Rent paid to landlords
C. Indirect tax
D. Undistributed company profits
Answer: C. Indirect tax
Explanation: National income at factor cost reflects production costs. Indirect tax represents government income and is consequently excluded from national income at factor cost.
Question 38
Occupational mobility means
A. Moving company from one place to another
B. Changing work
C. Transfer of worker from one place to another
D. None of the above
Answer: B. Changing work
Explanation: Occupational mobility is the ease with which a person can move from one type of work to another.
Question 39
The ability of the producer to shift taxes imposed on his goods depends on
A. Price of the goods
B. Price of other goods
C. Price elasticity of the goods
D. Cost of factors of production
Answer: C. Price elasticity of the goods
Explanation: Price elasticity determines how readily producers can pass taxes on to consumers.
Question 40
Support from government to the citizens is referred to as
A. Advalorem
B. Social safety net
C. Social tax
D. Guarantee
Answer: B. Social safety net
Explanation: Modern governments use social safety nets as a major means of protecting vulnerable people.