Economics (2017) | Study Mode

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Question 11
A
that production is inefficient
B
that demand is relatively inelastic
C
that production is unattainable
D
the law of increasing marginal cost
Explanation.
Production possibility curve (PPC) shows the possible combination of different commodities that can be produced in a given economy given the prevailing level of technology, if all the available productive resources are efficiently utilised.
The reason for the shape of the PPC is something called the law of increasing opportunity costs. Basically, what this means is that as an economy devotes more of its resources to one kind of product, it becomes less efficient because, not all resources are equally suitable for all the industries. If resources are transferred from good A to B, initially the resources to be transferred will be those which could be the least efficient for A. Later, as more of good B needs to be produced, the resources that may be very efficient for good B and not so efficient for good B may also be transferred. In this situation, the economy loses on both sides. That means, the economy is usually inefficient on both ends of the PPC curve while it is the most efficient when resources are appropriately allocated for both goods according to their suitability which make the PPC to be curved. This is why the PPC is flatter at its end point and more curved in the middle.

Correct Option:
A
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Question 12
A
High taxrate
B
Technology development
C
High gross domestic product
D
High interest rate
Explanation.
Economic growth is the process by which the productive capacity of an economy increase over a given period, leading to a rise in the level of the national income.
Gross domestic product is the total market value of all goods and services produced by a country in a specific time period typically a year. This includes earnings from foreign investments.

GDP = Consumption +Government +investment +Exort ? Imports
GDP is considered the broadest indicator of economic growth because GDP represent the market value of all goods and services produced by the economy during the given period including personal consumption, government purchase, private inventories, paid in construction cost and the foreign trade balance (exort added, import are subtracted).
There are other indicators of economic growth such as; Consumer Price Index(CPI), Producer Price Index(PPI), Consumer Confidence Index(CCI), Money supply, Employment and others. However, High taxrate, Technology Development and High interest rate are not a part of the list.

Correct Option:
B
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Question 13
A
net national product
B
gross domestic product
C
net income
D
disposable income
Explanation.
Gross domestic product (GDP) refers to the total money value of all the goods and services
produced in a country within a given time period but exluding net income from abroad. In
calculating GDP, emphasis is on earnings from citizens and foreign investment within the country.
Earnings of citizens and their investment abroad are exluded from GDP

Correct Option:
B
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Question 14
A
government
B
foreign investors
C
suppliers
D
consumers
Explanation.
This is because, according to the concept of equilibrium, if supply increases while demand remains constant, there will be an exess of supply over demand. This will bring about a decrease in the equilibrium price of the commodity and an increase in the equilibrium quantity. This gave rise to the fifth law of demand and supply which states that: an increase in the supply of a commodity will cause the equilibrium price to fall and the quantity demanded to increase, while a decrease in supply will cause the equilibrium price to rise but the quantity demanded will fall.

Correct Option:
D
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Question 15
A
20
B
17
C
32
D
9
Explanation.
Arithmetic mean, xfxbr> n
where:
x Arithmetic mean
= sum of
x= series of figures in a given data
f = nunmber of times a particular number occurs (frequency)
n = number of figures or element
From the question:
Since, xfxbr> N
Then, x= fxbr> N
=\(\frac{340}{20}\)

= 17

Correct Option:
B
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Question 16
A
huge volume of petroleum activities in the country
B
diversification system of economic activities
C
high demand for foreign commodities
D
high rate of unemployment
Explanation.
A mono-economy is an economy relying on one major exort or natural resources to bring most
of the currency into the country.
Nigeria is dependent on crude oil. Before now, agriculture and mining were the primary drivers of
Nigeria's economy but these has been abandoned since the 70's as a result of the discovery of oil.
Nigeria is now a mono-economic country that is, now relies solely on crude oil as her major source
of revenue.

Correct Option:
A
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Question 17
A
20
B
13
C
15
D
10
Explanation.
In this case, 4 workers produce 60kg of output therefore, the Average product of labour for the 3rd unit is 15kg. Given by:
Average product = \(\frac{\tex{Total product}}{\tex{Variable product}}\)

= \(\frac{60}{3}\)
= 15kg

Correct Option:
C
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Question 18
A
Treasury bill
B
Bill of exhange
C
Stocks and shares
D
Call money fund
Explanation.
Stocks and shares are securities purchase by individuals, which is evidence of contributing part of the total capital used in running an exsting industry. Stocks and shares are instruments used in capital market.

Correct Option:
C
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Question 19
A
collective bargaining
B
imposing lower exort duties
C
revelation of currency
D
reducing demand for imported goods
Explanation.
Tariffs are taxs or duties imposed on imports and exorts by the government of a country. The idea behind tariffs is to restrict the volume of trade or improve the international terms of trade.

Correct Option:
B
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Question 20
A
population density
B
Malthusian population theory
C
national population theory
D
demographical transition theory
Explanation.
The Malthusian population theory highlights the relationship between population and means of
subsistence. The main features of Malthusian theory about population are;
i. That population was growing at a geometric progressions such as 2,4,6,8,16,32, etc, while
food production or supply was growing at an arithmetical progression such as 1,2,3,4,5,
etc.
ii. That there is a tendency for all living things to grow beyond the food available to them
iii. That unless population increase is matched with means of subsistence, negative and
positive checks will come into force.
iv. That the checks can be war, diseases, epidemics and famine.
v. That population is essentially limited by the means of subsistence.

Correct Option:
B

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