2022 Neco Economic Questions and Answers
(2).
(1).
(3ai)
Money cost refers to the actual monetary expenditure or price of a particular good, service, or resource, for example, if you purchase a smartphone for N50,000, the money cost is N50,000 WHILE Opportunity cost refers to the value of the next best alternative forgone when making a decision. For example, if you choose to buy the smartphone for N50,000, the opportunity cost could be the vacation you could have taken with that money or the other items you could have purchased.
(3aii)
Normal goods are goods for which demand increases as consumer income rises, and demand decreases as consumer income falls. Examples include luxury goods, such as high-end cars, designer clothing, or gourmet food WHILE Inferior goods are goods for which demand decreases as consumer income rises, and demand increases as consumer income falls. Examples of inferior goods include generic store-brand products, low-cost fast food, or public transportation.
(3bi).
The scale of preference assist individuals in making efficient allocations of their resources by providing a framework for prioritization, resource allocation, considering opportunity costs, rational decision-making, and adaptability.
(3bii)
FIRMS:
The scale of preference assists firms in making efficient resource allocation decisions by providing a systematic framework to identify preferences, allocate scarce resources, analyze opportunity costs, optimize returns on investment, and adapt to changing circumstances.
(3biii)
GOVERNMENT:
The scale of preference assists governments in making efficient allocations of their resources by considering the priorities, preferences, and needs of the population.
(4a)
Economic system refers to the structure and organization of production, distribution, and consumption of goods and services within a society.
(4bi) Aim of production:
(i) Capitalist Economy: In a capitalist economy, the primary aim of production is to generate profit. Private individuals and businesses own and control the means of production, such as factories and businesses, and their main objective is to maximize their profits and wealth accumulation.
(ii) Socialist Economy: In a socialist economy, the aim of production is often centered around meeting the needs of society as a whole. The state or collective ownership controls the means of production, and the focus is on providing goods and services that benefit the entire population rather than solely pursuing individual profits.
(4bii) Consumer sovereignty:
(i) Capitalist Economy: In a capitalist economy, consumer sovereignty is a fundamental principle. Consumers have the freedom to choose and influence what goods and services are produced through their purchasing decisions. Businesses respond to consumer demand and compete to attract customers by offering products and services that cater to their preferences.
(ii) Socialist Economy: In a socialist economy, consumer sovereignty is typically more limited. The state or central planning authority often determines the production and distribution of goods and services based on collective interests and social priorities. While consumers still have access to goods and services, their choices may be constrained or influenced by the state's decision-making processes.
(4biii) Competition:
(i) Capitalist Economy: Competition plays a crucial role in a capitalist economy. Multiple private individuals and businesses operate within the market, striving to gain a competitive edge and maximize their profits. Competition fosters innovation, efficiency, and productivity, as businesses seek to attract customers and outperform their rivals.
(ii) Socialist Economy: Competition is less prevalent in a socialist economy, particularly in sectors where state ownership and central planning dominate. The priority is on cooperation and collective goals rather than competition among businesses. Some socialist economies may still allow limited competition in certain areas to spur innovation and efficiency.
(4c).
(i) Fixed Supply: Land is a finite resource, and its supply cannot be increased. The quantity and quality of land available for production remain relatively constant over time.
(ii) Immobility: Unlike other factors of production such as labor and capital, land is immobile. It cannot be easily relocated to different areas or transferred between industries. The location of land is an inherent characteristic that influences its value and productivity.
(iii) Heterogeneity: Land exhibits heterogeneity in terms of quality, fertility, natural resources, and geographical features. Different parcels of land have varying levels of suitability for specific purposes such as agriculture, mining, construction, or residential use.
(iv) Indestructibility: Land is generally considered indestructible and persists over time. While human activities can alter the quality or condition of land, the underlying physical space remains.
(v) Passive Income: Land can generate passive income in the form of rent, lease payments, or royalties. Due to its fixed supply and immobility, landowners can earn income by allowing others to use their land for various purposes.
(vi) Location Value: The value of land is influenced by its location and proximity to markets, infrastructure, transportation networks, natural resources, and amenities. Desirable locations tend to have higher land values and can offer strategic advantages for businesses.
(vii) Natural Resources: Land often encompasses valuable natural resources such as minerals, oil, gas, water, timber, and wildlife. These resources can be extracted and utilized for economic purposes.
(viii) Land Ownership: Land ownership can be held by individuals, businesses, governments, or communities. Property rights associated with land ownership allow individuals or entities to use, transfer, or exclude others from the land.
(5a)
A sole proprietorship is a business model where an individual is an owner as well as the operator of the business Whereas A partnership is a business model where two or more persons agree to carry on business and share profits and losses mutually.
(5b)
(i) Sole owner of the business
(ii) Unlimited liability
(iii) No legal entity
(iv) Sole decision maker.
(5c)
(i) Generation of Income through Public Issue of Shares: One of the major channels through which Public Limited Companies generate capital is y selling shares to the public.
(ii) Security for Loan Advancement: Public Limited Companies can obtain and secure loans using the assets of the company as security as opposed to using the personal assets of the members.
(iii) Spreading Risks of Ownership: Because a Public Limited Company allows for pubic and unlimited membership, the risk of ownership is then spread amongst many people as opposed to being centered on a few as in the case of a Private Limited Company.
(iv) Separate Legal Identity: A duly incorporated Public Limited Company has an identity entirely different from that of the members. This means that the company is capable of independent existence and can enter into contractual transactions, acquire and own properties, and has the legal capacity to sue and be sued in its own name
(6a).
Location of industry may be defined simply as the sitting or establishment of a firm or industry in a particular place. An industry may be established either by individuals or government, either for economic or political reasons
OR
Location of industry refers to the geographical distribution or placement of industrial activities or businesses within a region or country. It focuses on understanding the factors that influence the decisions made by firms when choosing where to establish their production facilities
(6bi)
Raw materials: Cement producing industries should be located close to sources of raw materials to reduce cost of transportation. Perishable goods like fruits, palm oil industries, etc should be located near their raw materials
(6bii)
Market: There should be ready market for the products of any industry to be sited in a place. Fragile goods like glass, bulky goods like cement and other perishable goods should be located near the market. Such industries located or directed towards the market are called market- oriented industries.
(6biii)
Government policy: Government can encourage the location of industries through certain policies like: Direct participation in setting up of industries. Creation of industrial zones in the country Provision of infrastructures like electricity, pipe-borne water, roads and tele- communications.
(6c)
(i)It encourages development: The growth of industries leads to an increase in production of goods and services.
(ii)Emergence of subsidiary firms: As major firms concentrate in one area, other subsidiary service firms that assist those major firms in the production of goods usually emerge.
(iii)Generation of employment: The concentration of many industries in an area leads to the creation of many job opportunities.
(iv)Emergence of organised market: Localisation of industries assists in the emergence of organised market for the products.
(v) Creation of competition: The existence of many industries leads to a healthy competition among them in order to excel or outsell one another.
(vi) Attraction of more people: A highly concentrated industries estates attracts different shades of people to such area for one reason or the other.
(7a)
Gross Domestic Product is the total market value of final goods and services produced in a country at a particular period.
(7b)
The output approach is a method of computing national income. In this method, we calculate the national income in terms of final goods and services produced in an economy during a particular period. The final goods are those which are either available to the consumers for consumption or become a part of national wealth in the form of investment. The output approach estimates the national income by measuring the contribution of final output and services by each producing enterprise in the domestic territory of a country during a given accounting period.
(7c)
(i) Incomplete coverage: The expenditure approach may not capture all economic activities and transactions occurring within an economy. It relies heavily on data from surveys, sampling, and statistical estimations, which can introduce sampling errors and underreporting of certain economic activities, particularly those in the informal sector.
(ii) Double counting: One of the major challenges with the expenditure approach is avoiding double counting. Double counting occurs when the value of intermediate goods or services is included multiple times in the calculation of national income.
(iii) Quality and price changes: The expenditure approach typically measures the value of goods and services based on their market prices. Changes in the quality of goods over time are not adequately captured by using market prices alone.
(iv) Non-market activities: The expenditure approach primarily focuses on market transactions, excluding non-market activities that contribute to the overall well-being of society.
(v) Externalities and sustainability: The expenditure approach does not account for the negative externalities associated with certain economic activities, such as pollution or resource depletion.
(8a)
Embargo is a government-imposed restriction on trade or other economic activity with a particular country or group of countries. This restriction may include prohibiting or reducing imports, exports, financial transactions and/or travel to and from the targeted country.
(8b)
(i) Protection of Domestic Industries: Governments may impose tariffs to protect domestic industries from foreign competition. When foreign goods are imported at lower prices, it can lead to a decline in sales of similar domestically produced products. Tariffs can be seen as a way to make imports more expensive, thereby providing protection for local businesses and industries.
(ii) Generating Revenue: Tariffs on imports can generate revenue for governments. This revenue can be used to fund various government programs, infrastructure projects, or to reduce budget deficits.
(iii) National Security: Governments may impose tariffs on imports to protect national security interests. This could include limiting the import of goods that are critical to national defense or that could pose a threat to public safety. In times of war or economic conflict, tariffs can be seen as a way to preserve national interests and protect the country's economy from foreign influence.
(8c).
(i) Inflation: Tariffs can cause inflation, as domestic producers will be able to charge higher prices due to reduced competition from imports. This can ultimately result in higher prices for consumers, reducing their purchasing power and overall economic growth.
(ii) Retaliation: When a country imposes tariffs on another country's imports, the other country may respond by imposing tariffs of its own on the first country's exports. This can lead to a trade war, which harms both countries and global economic growth.
(iii) Reduced Efficiency: Tariffs can lead to reduced efficiency in the market, as domestic companies may become less productive and innovative due to reduced competition from imports. This can ultimately harm the industry as a whole and reduce economic growth.
(iv) Unfairness: Tariffs can be unfair, as they may favor certain domestic industries over others. This can lead to a lack of competition in certain industries, which ultimately harms consumers through higher prices and reduced innovation.
(v) Increased Costs of Living: Tariffs can significantly increase the cost of living for many people, as they increase the prices of imported consumer goods. This can disproportionately impact the poor, who may have limited options for purchasing basic necessities.
ECONOMICS OBJECTIVES ANSWERS
01-10: DBDDACACBA
11-20: CCACDDCBDC
21-30: BDBCABCDBC
31-40: ACABADACDC
41-50: BBDBCBBBBC
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