2021 JAMB ECONOMICS
Question 1
One of the following is not a function of money
A. It serves as store of value
B. It encourages trade by barter
C. It is a standard for deferred payment
D. It serves as a unit of measurement
Answer: B. It encourages trade by barter
Explanation: Money was created to overcome the difficulties of barter, so it could not have promoted that system.
Question 2
A change in demand is
A. Upward movement along the demand curve
B. Downward movement along the demand curve
C. A shift in demand curve
D. None of the above
Answer: C. A shift in demand curve
Explanation: A change in demand is another way of describing a shift of the demand curve.
Question 3
Which of the following will increase government revenue
A. Increasing tax on price elastic goods
B. Increasing tax on perfectly elastic goods
C. Increasing tax on unitary elastic goods
D. Increasing tax on price inelastic goods
Answer: D. Increasing tax on price inelastic goods
Explanation: Elasticity measures how strongly quantity demanded responds to price changes. To raise revenue, government should target goods whose demand responds less to price changes, meaning inelastic goods.
Question 4
Optimum population is
A. Highest possible population
B. Lowest possible population
C. Best density population
D. Equilibrium level of population
Answer: D. Equilibrium level of population
Explanation: Optimum population gives the highest real output or income per person for the resources and technology available. It is the population level best matched to those resources.
Question 5
Market demand schedule is
A. Sum of individual demand schedule
B. Individual demand schedule
C. Market demand plan
D. None of the above
Answer: A. Sum of individual demand schedule
Explanation: Adding the demand schedules of all individual buyers produces the market demand schedule.
Question 6
Use the following information to answer Questions 6 and 7. What is the fixed cost?
A. Unavailable
B. 100
C. 3
D. 3Q
Answer: B. 100
Explanation: Fixed cost does not depend on output. In the equation, setting Q = 0 leaves C = 100, so fixed cost is 100.
Question 7
What is total variable cost at 100 level of output?
A. 300
B. 400
C. 100
D. None of the above
Answer: A. 300
Explanation: Variable cost changes with output. The output-dependent term is 3Q, giving a variable cost of 3(100) = 300.
Question 8
Which of the following is not an economic drive?
A. IMF
B. AfDB
C. WHO
D. EU
Answer: C. WHO
Explanation: WHO stands for World Health Organization and mainly addresses public health. The remaining institutions listed deal with finance, development or economic integration.
Question 9
Demand for a SIM card is
A. Competitive demand
B. Composite demand
C. Complementary demand
D. Derived demand
Answer: C. Complementary demand
Explanation: Because a phone and SIM card work together for mobile communication, they have joint or complementary demand.
Question 10
The multiplier is
A. 1/MPS
B. 1/APS
C. 1/MPC
D. APC
Answer: A. 1/MPS
Explanation: The multiplier is calculated as 1/MPS, with MPS representing marginal propensity to save.
Question 11
OPEL is a/an
A. Monopoly
B. Monopolistic
C. Oligopolistic
D. Duopolistic
Answer: C. Oligopolistic
Explanation: OPEL operates as a cartel, and most cartels have an oligopolistic structure.
Question 12
A periodic head count is referred to as
A. Censor
B. Census
C. Censure
D. Sensor
Answer: B. Census
Explanation: A census is a head count carried out periodically in a specified area.
Question 13
A price set below the equilibrium is
A. Price ceiling
B. Price flooring
C. Price shortage
D. Excess price
Answer: A. Price ceiling
Explanation: A binding price ceiling sets the highest legally permitted price below equilibrium. It restricts sellers’ prices and generally produces excess demand.
Question 14
In the long run, all costs are
A. Fixed
B. Stable
C. Variable
D. Unstable
Answer: C. Variable
Explanation: There are no fixed costs in the long run; all costs can vary.
Question 15
Given the following data, use it to answer Questions 15 and 16:
2, 4, 2, 3, 1, 2, 4, 1, 2, 3
What is the mode?
A. 2
B. 4
C. 3
D. 1
Answer: A. 2
Explanation: The mode is the value occurring most frequently.
Question 16
Using the data above, what is the mean of the data?
A. 2
B. 2.4
C. 2.5
D. 1
Answer: B. 2.4
Explanation: The arithmetic mean is calculated as follows:
(2 + 4 + 2 + 3 + 1 + 2 + 4 + 1 + 2 + 3) ÷ 10
= 24 ÷ 10
= 2.4
Question 17
In comparing the standard of living, which of the following is most useful
A. National income
B. Return on Investment
C. Rate of inflation
D. Per capita
Answer: D. Per capita
Explanation: Per capita income measures income per person and is used to compare economic performance.
Question 18
Speculative demand for money depends on
A. Income
B. Return on investment
C. Marginal propensity to consume
D. None of the above
Answer: B. Return on investment
Explanation: Speculative money demand responds to interest rates and anticipated returns on financial assets. People prefer cash to bonds if they expect bond prices to decline or judge bond returns insufficient.
Question 19
SEC is charged with
A. Regulating banks
B. Regulating Insurance firms
C. Regulating Stock market
D. Regulating mortgage
Answer: C. Regulating Stock market
Explanation: The Securities and Exchange Commission, or SEC, oversees the stock market.
Question 20
If the fixed cost for a firm is 40 while the variable cost per unit is 2, which of the following equations can represent the cost function for the firm?
A. 42q
B. 2q − 40
C. 2q + 40
D. 2q
Answer: C. 2q + 40
Explanation: The cost function adds fixed cost to variable cost.
Question 21
Which of the following is not fiscal policy
A. Budgeting
B. Tax
C. Borrowing
D. Interest rate
Answer: D. Interest rate
Explanation: Interest rates are used in monetary policy. Fiscal policy deals with public revenue and spending through measures such as budgets, taxes and government borrowing.
Question 22
Nigeria’s economic system is
A. Capitalism
B. Mixed
C. Socialism
D. Communism
Answer: B. Mixed
Explanation: A mixed economy involves active participation by government and private individuals. Nigeria is therefore classified as a mixed economy.
Question 23
A savings account is also known as
A. Demand deposit
B. Current account
C. Fixed account
D. Life deposit
Answer: A. Demand deposit
Explanation: A savings account is described here as a demand deposit account because its holder can request the deposit at any time.
Question 24
For a free good, the marginal cost of one more user is always
A. One
B. Zero
C. Positive
D. Negative
Answer: B. Zero
Explanation: Under the stated assumption, a free good is plentiful compared with demand, so one more user creates no opportunity cost. Its marginal cost is zero.
Question 25
In locating an industry, all of the following are considered except
A. Money
B. Availability of raw materials
C. Labour abundance
D. Infra-structural proximity
Answer: A. Money
Explanation: Raw materials, labour and infrastructure directly influence location choice among the listed options. Finance enables business establishment but alone does not indicate the best site.
Question 26
If input and output increase or decrease at the same rate then the firm has
A. Increasing return to scale
B. Decreasing return to scale
C. Constant return to scale
D. None of the above
Answer: C. Constant return to scale
Explanation: Constant returns to scale mean that increasing all inputs by a given proportion increases output by the same proportion. Doubling every input, for example, doubles output.
Question 27
David Ricardo postulated
A. Theory of diminishing return
B. Theory of comparative cost advantage
C. Population theory
D. Theory of cost
Answer: B. Theory of comparative cost advantage
Explanation: David Ricardo’s comparative cost theory shows that countries gain by specializing in goods with lower opportunity costs. He set it out in On the Principles of Political Economy and Taxation in 1817.
Question 28
Which of the following doesn’t determine the wage/salary of a worker
A. Age
B. Year of education
C. Work experience
D. Nature of work
Answer: A. Age
Explanation: Age is not a basic determinant of workers’ salaries.
Question 29
The major problem of barter system is
A. Indivisibility
B. Lack of store of value
C. Double coincidence of wants
D. Lack of standard measurement
Answer: C. Double coincidence of wants
Explanation: Barter’s central difficulty is finding a double coincidence of wants: someone who wants what you offer and has what you want in return.
Question 30
Devaluation of currency is
A. Import encouraging
B. Import discouraging
C. Import unaffected
D. None of the above
Answer: B. Import discouraging
Explanation: Devaluation raises the cost of foreign currency and imported goods, thereby discouraging imports.
Question 31
If demand is greater than supply then the market is
A. At equilibrium
B. Balanced
C. At disequilibrium
D. Imbalance
Answer: C. At disequilibrium
Explanation: The market is in equilibrium when demand equals supply. Any other situation represents disequilibrium.
Question 32
A list of an individual’s wants in order of priority is called
A. Priority list
B. List of wants
C. Demand schedule
D. Scale of preference
Answer: D. Scale of preference
Explanation: A consumer creates a scale of preference by listing wants according to their importance.
Question 33
Price mechanism is most effective in which of the following?
A. Capitalist economy
B. Communist economy
C. Socialist economy
D. Mixed economy
Answer: A. Capitalist economy
Explanation: The price mechanism, often called the invisible hand, coordinates demand and supply without government intervention. It therefore works most effectively in a capitalist economy.
Question 34
Given D = −5 + 0.7P, use the information to answer Questions 34 and 35.
What type of goods has that demand function?
A. Elastic
B. Inelastic
C. Fairly inelastic
D. Perfectly inelastic
Answer: A. Elastic
Explanation: For D = −5 + 0.7P, point elasticity in absolute terms is:
0.7P/(0.7P − 5)
This exceeds one wherever demand is positive, making the function elastic. The coefficient 0.7 measures slope alone, rather than elasticity.
Question 35
Given D = −5 + 0.7P, use the information to answer Questions 34 and 35.
What is the price when quantity demanded is 16?
A. 30
B. 40
C. 30
D. 10
Answer: A. 30
Explanation: Substitute D = 16 into:
D = −5 + 0.7P
16 = −5 + 0.7P
21 = 0.7P
Therefore:
P = 30
Question 36
One of the following is not among the aims of ECOWAS
A. Promotion of free trade among member countries
B. Amonisation of currencies
C. Prevention of smuggling within members’ territories
D. Expansion of markets for member countries
Answer: C. Prevention of smuggling within members’ territories
Explanation: Preventing smuggling is not listed among ECOWAS’s aims.
Question 37
Labour force comprises
A. Gainfully employed youth
B. Working age bracket
C. Dependent population
D. All of the above
Answer: B. Working age bracket
Explanation: The labour force consists of people of working age who are willing and capable of working in the economy.
Question 38
Which of the following is not a component in the computation of GNP using expenditure approach?
A. Government expenditure
B. Investment
C. Export
D. Consumers’ income
Answer: D. Consumers’ income
Explanation: When calculating GNP by the expenditure approach, consumers are represented by their consumption spending rather than their income.
Question 39
Which of the following is not among the items in the current account?
A. Export of crude oil
B. Payment for insurance
C. Medical fees
D. Debt servicing
Answer: A. Export of crude oil
Explanation: Crude oil exports are tangible items. The explanation identifies only invisible items as being recorded in the current account.
Question 40
Which of the following is not a fundamental economic question?
A. How much capital is required to produce
B. What to produce
C. For whom to produce
D. How to produce
Answer: A. How much capital is required to produce
Explanation: Every economy must decide what to produce, how to produce it and for whom it should be produced.