2022 NECO ECONOMICS THEORY ANSWERS
P: 10, 8, 6, 4, 2, 1
Qd: 0, 8,16, 24, 32, 36
When price = 10
When price= 8
Qd= 40-4(8)= 8
When price= 6
Qd= 40-4(6)= 16
When price= 4
Qd= 40-4(4) = 24
When price= 2
Qd= 40-4(2)= 32
When price= 1
Qd= 40-4(1)= 36
(1c) The slop of the curve indicate that the quantity demanded has negative correlation with price. The higher the price the lower the quantity demanded and vice versa.
MR = ∆inTR/∆inQ
TR2 – TR1/Q2 – Q1
At Q = 2,
MR = 30-20/2-1 = ₦10
At Q = 3
MR = 60-30/3-2 = ₦30
At Q = 4
MR = 80-60/4-3 = ₦20
At Q = 5
MR = 120-80/5-4 = ₦40
At Q = 6
MR = 150-120/6-5 = ₦30
AR = TR/Q
At Q = 1
AR = 20/1 = ₦20
At Q = 2
AR = 30/2 = ₦15
At Q = 3
AR = 60/3 = ₦20
At Q = 4
AR = 80/4 = ₦20
At Q = 5
AR = 120/5 = ₦24
At Q = 6
AR = 150/6 = ₦25
MC = TC2 – TC1/Q2 – Q1
At Q = 1
MC = 40 – 0/1 – 0 = ₦40
At Q = 2
MC = 50 – 40/2 – 1 = ₦10
At Q = 3
MC = 60 – 50/3 – 2 = ₦10
At Q = 4
MC = 80 – 60/4 – 3 = ₦20
At Q = 5
MC = 110 – 80/5 – 4 = ₦30
At Q = 6
MC = 120 – 110/6 – 5 = ₦10
The conditions necessary for profit maximization are:
(i) MC = MR
(ii) When MC is cutting MR from below at equilibrium point.
a mathematical function showing the number of instances in which a variable takes each of its possible values.
is a measure of the amount of variation or dispersion of a set of values
the area of variation between upper and lower limits on a particular scale.
A table is a systematic and orderly arrangement of information, facts, or data using rows and columns for presentation, which make it easier for better understanding.
Labor is the amount of physical, mental, and social effort used to produce goods and services in an economy. ..
(i) The payment of wages should be fair and prompt.
(ii) A part of profit, earned by the concern, must be paid to workers as an incentive.
(iii) Working conditions in the factories should be improved
(iv) The total period of work per day should not be more than eight hours.
[pick any five]
A tax is a compulsory levy imposed by a public authority against which tax payers cannot claim anything.
Rates refer to local taxation, i.e., taxation levied by (or for) local rather than central government. Normally rates are proportional to the estimated rentable value of business and domestic properties. Rates are often criticised as being unrelated to income.
Fee is a payment to defray the cost of each recurring service undertaken by the government, primarily in the public interest.
(iv) Licence fee:
A licence fee is paid in those instances in which the government authority is invoked simply to confer a permission or a privilege.
(v) Surplus of the public sector units:
The government acts like a business- person and the public acts like its customers. The government may either sell goods or render services like train, city bus, electricity, transport, posts and telegraphs, water supply, etc. The government also earns revenue from the production of commodities like steel, oil, life-saving drugs, etc.
(vi) Fine and penalties:
They are the charges imposed on persons as a punishment for contravention of a law. The main purpose of these is not to raise revenue from the public but to force them to follow law and order of the country.
(vii) Gifts and grants:
Gifts are voluntary contribution from private individuals or non-government donors to the government fund for specific purposes such as relief fund, defence fund during war or an emergency. However, this source provides a small portion of government revenue.
Overpopulation : this occurs when a species’ population exceeds the carrying capacity of its ecological niche.
(ii) Limit to improvement in agricultural productivity.
(iii) Global rise in population
(v) Limit to new roads.
(i) Epileptic Electric Power Supply. Lack of regular electric power supply is the biggest cause of unemployment in Nigeria. …
(ii) Lack of quality education:
Most employers believe that Nigerian graduates are unemployable. This is the result of the educational program which usually include theories and a lack of practical use of knowledge.
(iii) High and Rapid Population Growth:
One of the major factors responsible for the high level of unemployment in Nigeria is the rapid growth in population. There has been an increase in the growth of the labor forces along with the inadequate supply of jobs. The rapid population growth has been coupled with rural-urban migration. This has increased the population in cities thereby raising the level of joblessness.
(iv) Unstable and corrupt political environment:
Another key problem is poor leadership and high level of corruption in Nigeria. The failure of the government to perform their constitutional duties has resulted in the high level of unemployment.
(v) Lack of infrastructure:
Lack of good roads, steady and sustainable power supply has made the economy hostile to investors. The lack of infrastructure has led to the high cost of production. The absence of investors influences the number of available jobs. The operating companies also use fewer people because of the high cost of production.
A retailer: is a person or business that you purchase goods from. Retailers typically don’t manufacture their own items.
(i) They provide valuable information and feedback to producers about consumer behavior, changing tastes and fashions, upcoming rival businesses, etc.
(ii) They enable manufacturers to concentrate on the primary function of production by handling the ancillary functions of warehousing, distribution, advertising, insurance, etc. They promote the goods to the consumers on behalf of the producers.
(iii) Middlemen like banks and other financial institutions render financial services to manufacturers.
(iv) They make the goods and services available to consumers at the right place, at the right time, and in the right quantity.
(v) Buyers and sellers are often unwilling to assume the market risk for fear of a possible loss. It is the middlemen in the process chain who assume the risks of theft, perishability, and other potential hazards.
market is a place where buyers and sellers can meet to facilitate the exchange or transaction of goods and services. In Other examples include the black market, auction markets, and financial markets. In other words Markets establish the prices of goods and services that are determined by supply and demand.
(i)It’s a type of competition between others in the industry. This means more than one company is selling a similar product and competing in that market.
(ii)Everyone offers a similar product, but that product can’t be completely substituted. In other words, while other companies may sell goat’s milk soap, none of them are exactly like Betty’s soap because they do not contain all of the exact same ingredients.
(iii)All companies can enter or leave the industry when they want to. This means companies can enter in and sell goat’s milk soap when they think they can make money doing so. And, they can leave if they think there is no longer a market for the product.
(iv)Every company makes their own decisions about their products. So, they decide what price to sell their soap at and how many to make and sell. Because there’s such a demand for goat’s milk soap, Betty keeps a steady supply. And finally…
(v)There is product differentiation. Product differentiation means that companies try to distinguish or differentiate their products from others in the market so that their product is more enticing to customers.
nationalisation, is the process of transforming privately owned assets into public assets by bringing them under the public ownership of a national government or state.
-Advantage of indigenization-
(i)The process of indigenization creates
development of private industries in the country It helps to bring in more revenue in the country as the creates more revenue opportunities
(ii)Indigenization leads to more employment opportunities for the people in the country: indigenization leads to more Creation of industries thus, leading to creation of more job opportunities
(iii)Indigenization leads to self reliance of the countries and more participation of the people in running the business
-Disadvantage of indigenization-
(i)The problem with indigenization is that it discourages foreign control of an economy and foreign investments
(ii)The companies look maximize their profits due to which the cost of production becomes high
balance of payments (BOP) is a statement of all transactions made between entities in one country and the rest of the world over a defined period of time, such as a quarter or a year.
(i) Expenditure-Reducing Policies:
The important way to reduce imports and thereby reduce deficit in balance of payments is to adopt monetary and fiscal policies that aim at reducing aggregate expenditure in the economy.
(ii) Trade Policy Measures: Expanding, Exports and Restraining Imports:
Trade policy measures to improve the balance of payments refer to the measures adopted to promote exports and reduce imports. Exports may be encouraged by reducing or abolishing export duties and lowering the interest rate on credit used for financing exports. Exports are also encouraged by granting subsidies to manufacturers and exporters.