2011 Economics NECO Past Questions

Hint

Hint

Hint

(i). Source of raw materials: majority of the material used in industries in Nigeria is from agriculture.

(ii) A source of (employment) labour for industries: agriculture provides unskilled labour, which is in abundance to industries in Nigeria.

(iii) Creation of market: industrial product as fertilizer, pesticides, cutlass, hoes, etc

(iv) Provision: agriculture provides food used in feeding the teeming population of industrial sectors.

(v) A source of money for industries: a huge amount of money used in establishing and developing industries in Nigeria comes from agriculture.

(vi) It made available foreign exchange for the country from export which is then in-turn used in developing industries in Nigeria.

Hint

(i) Birth rate: if the birth rate rises, the population of the country will increase, cetrisparribus, and vice-versa.

(ii) Death rate: if the death rate should increase the possibility is that the population of the country will increase.

(iii) Immigration: if the rate of immigration is greater than emigration, the size of a country’s population will increase.

(iv) Political stability: the period of peace makes for population growth. The greater the peace in the country, the bigger its size.

(v) Early marriage: if the people in a country marry early, the size of the country’s population increases, but when the marriage is late the country’s population decreases.

(vi) The women population: if the number of women in a country’s more than that of the men, it is likely that the population of the country will increase more if the reverse occurs, the size of the population falls.

Hint

(a)

Supply of labour may be defined as the total number of capable men and women who are gainfully employed and those who fall in the age bracket capable and willing to work but have no work to do in a country at a particular period of the time.

(b) Factors affecting the supply of labour :

(1) Population: the greater the population of a country the greater will be the supply of labour, other things being equal

(2) Hour of work: the longer the hours people are willing to work, the greater the supply of labour will be and vice-versa

(3) Overtime wages: The higher the overtime wages the greater the supply of labour. Some employers pay high overtime wages. This induces many workers to work for earning.

(4) Schooling: if the school leaving age is very low, the labour supply will be high and vice-versa.

(5) Migration: if the number of immigrants is more than the emigrants. The supply of labour will be high and vice-versa.

Hint

(a)

Mixed economy is an economic system where the means of production are controlled by both the private sector and the public sector. The question of what to produce? How to produce ? for whom to produce? Are answered by both the private individuals and the government. Examples of countries operating this system are Nigeria, Britain, Ghana, etc.

(b)

Features of a mixed economy:

(i) Means of production are jointly owned by private individuals and government.

(ii) Profit motive: under mixed economy, the private sector tries to maximize profit while the public sector renders welfare services to the citizens

(iii) Economic decision in the economy are made by the government and the private sector.

(iv) The government modifies the forces of demand and in one way or the other regulates the economy

Hint

(a)

Export promotion is a deliberate government effort geared towards the establishment and deliberate promotion of industries that engage in the manufacture of exports.

(b) Measures taken by the government to encourage export promotion ;

(i) Granting tax holiday: Industries can be exempted from paying tax for a certain period so as to reduce their cost of production.

(ii) Conducive atmosphere: infrastructures especially power should be provided, this encourages local firms to compete well with the foreign

(iii) Industrialization: The government can promote export through industrialization, whereby the primary products are used/converted into finished goods that can be exported.

(iv) Creation of marketing board: This will facilitate easy export of goods produced by the small firms.

(v) Bilateral/Multi-lateral agreement: The government can encourage export promotion by entering into a trade agreement with other countries of the world.

(vi) Provision of Capital: this is done through the provision of loans to businessmen to set-up industries and the output can be exported.

Hint

(a) Specialization is the process by which an individual, a firm, or a country limits its productive efforts to particular areas of production in which it has greatest advantage over others.

(b)  Advantages of specialization:

(i) Greater skill and dexterity: Through repetition of the same job, workers develop greater skill and dexterity i.e increased knowledge of the particular Job is obtained.

(ii) Higher productivity: specialization lead to a higher output per worker – i.e each workers output is higher than it would be if he undertook all the process alone.

(iii)  Less fatigue: A worker becomes less tired since he merely repeats the same task as a routine and does have to strain himself either physically or mentally.

(iv)  The use of machines: Division of labour and specialization set free and encourage talented men for research and invention of specialized machines for the various separate processes.

(v)  Saving of time: Each worker keeps to the same tool or process all the time and thus saves the time he would have used switching from one tool or process to another.

Hint

(a)  A co-operative society is any group formed by people with a common interest who contribute money in the form of capital to promote the business interest of members. It is a voluntary association of people who have common interests.

(b) Features of co-operative society :

(i) Democracy: Each member has only one vote regardless of the contributions made to the society.

(ii) Private ownership: It is owned by private individuals, that is, it’s not owned by the government.

(iii) Promotion of members interest: It is set up by the people with a common interest in order to promote their business interest and for the provision of other welfare benefits.

(iv) Limited liability: The liability of members is limited to the amount contributed to the society.

(v) Controlled and managed by a committee: A committee is set up by members to manage and control the affairs of the society.

(vi) Perpetual existence: A co-operative society is similar to a limited liability company, as it can exist in perpetuity.

Hint

(a) Utility can be defined as the total amount of satisfaction a consumer derives from the consumption of a particular product at any particular point in time. It is also referred to as the ability of a product to give satisfaction to the consumer.

(b) Derivation of demand is based on the law of diminishing marginal utility. It slopes downward from left to right like the demand curve. A consumer demand for any product is a function of marginal utility. Marginal utility shows that as a more of a commodity is consumed the satisfaction declines, and the consumers will be willing to pay lower prices for more of such product.

Hint

(a) Terms of trade: refers to the rate at which a country’s export exchange for imports.

Terms of trade=index of export prices x 100

                               Index of import prices       1

Balance of trade: This refers to the total value of goods sold and bought by a country during a given period usually a year. It is the difference between a country’s visible export and import over a given period of the year.

(b) Correlation of balance of payment deficit;

(i) Devaluation: It is the official reduction in the value of a country’s currencies whereby making export cheaper and import will be more expensive.

(ii) Promotion of Import Substitution Industries: import-substituting industries will be set up to produce goods that were previously imported.

(iii) Export Promotion Measures: Measures that will encourage export should be put in place such as tax reduction/holiday, subsidies, concessions.

Hint

(a) Capital market: is the market for long-term loans. Long term loans are taken for business or to expand an already existing one. The sellers (in the market) are the finance houses while the buyers are business ventures. The price of the loans is the interest.

(b) Capital market is the market for long-term loans while the stock exchange is a market where shares, stock, and other securities are bought and sold. Stock exchange is one of the institutions involved in the capital market. It is the market where long term capital are sought for the expansion of an existing business.