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JAMB Economics Past Questions & Answers - Page 4

16.

When a kilogram of carrot is #8.00, 20 kilograms are demanded and when the price decreased to #6.000 per kilogram, 30 kilograms are demanded. The elasticity of demand equals to

$\frac{1}{2}$

View answer & explanation

Correct answer is D

Explanation

e = $\frac{∆Q}{∆P}\times\frac{p}{q}$

where ∆Q = Q2 - Q1 and ∆P = P2 - P1

e = $\frac{30 - 20}{6 - 8}\times\frac{8}{20}$

= -2 since price elasticity of demand is always positive, then e = 2

17.

Calculate the equilibrium level of national income (Y) where Y = C + I + G; C = 100 + 0.75Y; I = 50; G = 200

2000

100

1500

1400

View answer & explanation

Correct answer is D

y = $\frac{a + i + G}{1 - b}$

where b = 0.75

= $\frac{100 + 50 + 200}{1 - 075}$

= $\frac{350}{0.25}$

= 1400

Alternatively:
Y = C + I + G
Y = 100 + 0.75Y + 50 + 200
Y - 0.75Y = 350
Y( 1 - 0.75) = 350

= $\frac{350}{0.25}$

Y = 1400

18.

From the graph above, the consumer is at equilibrium at point

View answer & explanation

Correct answer is A

The consumer is at equilibrium is at point k where the slope of the indifference curve is tangential to the budget line.

19.

All of the following describes conditions necessary for existence of a perfect market EXCEPT

Lack of homogeneity of goods

Perfect knowledge

Large buyers and sellers

Portability of goods

View answer & explanation

Correct answer is A

Lack of homogeneity of goods is not a characteristics or features of a perfect market. The features/ characteristics are: perfect knowledge about the market, there is free entry and exit, there are large number of buyers and sellers, the goods are portable and homogeneous, there is no preferential treatment etc

20.

If the supply curve of labour market is given as S = 4L + 8. What is L when s = 20?

View answer & explanation

Correct answer is D

The supply curve of labour market is given as S = 4L + 8. To find the value of L when S = 20, we substitute S = 20 in the equation and solve for L. This gives us L = 3.