NECO Economics OBJ
- E — Mobility of labour
- D — MV = PT
- D — Economic system
- E — Increase in output per farmer
- B — 7%
- E — Subsistence farming
- B — Taiwan
- B — Marginal utility
- B — Scale of preference
- A — 1958
- B — Form utility
- C — Indifference curve
- A — Labour force
- B — Mean
- D — Entrepot trade
- E — Money supply
- C — Co-operative society
- C — How to produce
- B — Commercial bank
- B — Presence of small markets
- E — Mortgage bank
- D — At its maximum
- D — Job creation
- A — Regulation
- D — Variable
- B — Rent on land
- A — Downward sloping
- E — Market supply
- B — Inflation
- B — Subsistence farming
- B — Increase in revenue base
- B — International Bank for Reconstruction and Development
- C — Mortgage bank
- A — Fairly inelastic
- E — Wants
- C — Socialism
- E — Low literacy rate
- A — Capital market
- A — Commercial bank
- E — Service industry
- B — Wholesaler
- E — Standardisation
- D — Zero
- D — Increase participation of citizens in commerce and industry
- B — Stock of goods
- C — Encouraging rural–urban drift
- B — Devaluation of currency
- E — Source of raw materials to manufacturing industries
- E — High interest rate
- A — Consumers’ protection
- E — 6
- C — Unitary elastic
- E — Marketing and distribution
- D — 0.6
- D — Scarcity of resources
- A — Insurance companies
- A — Banks are strong and efficient
- B — 85 persons/km²
- E — Inelastic demand
- D — 0.1
COMPLETED!!!
NECO Economics Essay
Number 1
Number 2
Number 3
(PICK ANY FIVE)
(i) Organisation of factors of production: The entrepreneur brings together land, labour and capital and combines them in the correct proportion for the production of goods and services. He ensures that workers, machines, raw materials and business premises are properly coordinated.
(ii) Decision-making: The entrepreneur decides what to produce, how to produce, where to locate the business and the quantity of goods to produce. He also makes decisions concerning prices, sales and the market for the products.
(iii) Risk-bearing: The entrepreneur bears the risks and uncertainties involved in the business. Such risks may arise from low demand, competition, theft, fire, bad debts, price changes or unfavourable government policies.
(iv) Provision and raising of capital: The entrepreneur provides or raises the money needed to establish and operate the business. The capital may come from personal savings, bank loans, partners or investors.
(v) Innovation: The entrepreneur introduces new products, improved production methods, modern technology and better marketing techniques. This helps the business to reduce costs, improve quality and remain competitive.
(vi) Employment of labour: The entrepreneur recruits workers with the required skills and assigns duties to them. He also supervises their work and ensures that they are properly paid.
(vii) Planning and forecasting: The entrepreneur prepares plans for the present and future activities of the business. He estimates future demand, costs, sales and profits before making production decisions.
(viii) Supervision and control: The entrepreneur supervises the daily operations of the business to ensure that work is properly carried out. He identifies problems and takes corrective measures when necessary.
(ix) Marketing of products: The entrepreneur ensures that the goods and services produced reach the consumers. He makes arrangements for advertising, packaging, transportation, storage and distribution.
(x) Payment of rewards to factors of production: The entrepreneur pays wages to labour, rent for land and interest on borrowed capital. After paying all business expenses, he receives profit as his reward.
Number 4
(4a)
Effective demand is the desire for a commodity which is supported by the willingness and ability of the consumer to pay for it at a given price and at a particular time.
(4b)
(PICK ANY FIVE)
(i) Price of the commodity: When the price of a commodity falls, its quantity demanded usually increases. When its price rises, the quantity demanded normally decreases, other things remaining constant.
(ii) Income of the consumer: An increase in consumers’ income raises the demand for normal goods because they can afford to buy more. However, the demand for inferior goods may decrease as income rises.
(iii) Prices of related goods: The demand for a commodity may be affected by the prices of its substitutes and complementary goods. For example, an increase in the price of tea may increase the demand for coffee, while an increase in the price of petrol may reduce the demand for cars.
(iv) Taste, fashion and preference: A commodity that becomes fashionable or popular will experience an increase in demand. A change in consumers’ taste against the commodity will reduce its demand.
(v) Size and structure of the population: A large population creates a greater demand for goods and services. The age, sex and occupation of the population also determine the types of commodities demanded.
(vi) Advertisement: Effective advertisement creates awareness and persuades consumers to buy a product. This may increase the demand for the advertised commodity.
(vii) Consumers’ expectations: If consumers expect the price of a commodity to rise in the future, they may buy more of it now. If they expect the price to fall, they may postpone their purchases.
(viii) Season and weather: The demand for some commodities changes according to the season. For example, the demand for umbrellas increases during the rainy season, while the demand for cold drinks rises during hot weather.
(ix) Distribution of income: When income is fairly distributed, many people have the ability to buy goods and services, thereby increasing demand. Unequal distribution of income may reduce the demand for many common goods.
(x) Government policy: Taxes, subsidies, import restrictions and laws can affect demand. A heavy tax may raise the price and reduce demand, while a subsidy may lower the price and increase demand.
Number 5
(5a)
Price system is the mechanism through which the forces of demand and supply determine the prices of goods, services and factors of production in an economy.
(5b)
(PICK ANY FOUR)
(i) Allocation of resources: The price system directs land, labour and capital to the production of goods that are highly demanded. Producers move resources towards activities where prices and profits are higher.
(ii) Determination of prices: It helps to determine the market prices of goods and services through the interaction of demand and supply.
(iii) Rationing of scarce goods: When a commodity is scarce, its price rises. The higher price reduces the quantity demanded and distributes the limited supply among those who are willing and able to pay.
(iv) Guidance to producers: Rising prices and profits encourage producers to increase output, while falling prices may make them reduce production.
(v) Guidance to consumers: Consumers use prices to decide what quantity of a commodity to buy. When prices rise, they may reduce consumption or choose cheaper substitutes.
(vi) Determination of factor rewards: The price system determines wages for labour, rent for land, interest on capital and profit for entrepreneurs.
(vii) Encouragement of competition: Producers compete to attract consumers by reducing prices, improving quality and introducing better production methods.
(viii) Promotion of efficiency: Firms try to reduce production costs and avoid waste so that they can earn higher profits and remain in business.
(ix) Adjustment of demand and supply: A rise or fall in price helps to remove shortages and surpluses by bringing quantity demanded closer to quantity supplied.
(x) Encouragement of innovation: The desire to earn profit encourages producers to introduce new products, modern technology and improved production methods.
(5c)
(i) In a capitalist price system, prices are mainly determined by demand and supply, while in a socialist price system, prices are largely fixed or controlled by the government.
(ii) In a capitalist system, private individuals decide what and how much to produce based on profit, while in a socialist system, the government plans production according to social needs.
(iii) A capitalist price system encourages private ownership and competition, while a socialist price system is based mainly on public ownership and government control.
(iv) Consumer choice is wider under the capitalist price system, while consumer choice may be more limited under the socialist price system.
Number 6
(6a)
A marketing board is a government-established organisation responsible for buying, grading, storing, processing and selling agricultural produce on behalf of farmers.
(6b)
(PICK ANY THREE)
(i) Purchase of agricultural produce: The marketing board buys crops such as cocoa, cotton, groundnut and palm produce from farmers through licensed buying agents. This provides farmers with a ready market for their products.
(ii) Stabilisation of prices: The board fixes or guarantees minimum prices for agricultural produce. This protects farmers from sudden falls in market prices and helps to maintain stable incomes.
(iii) Grading and standardisation: It grades agricultural produce according to quality, size and purity. This ensures that only products of acceptable standard are sold locally or exported.
(iv) Storage of produce: The marketing board provides warehouses and other storage facilities for agricultural products. This reduces spoilage and allows produce to be kept until market conditions improve.
(v) Marketing and exportation: It arranges the sale and export of agricultural produce to foreign countries. It may negotiate with overseas buyers and organise transportation to the ports.
(vi) Provision of information: The board gives farmers information about market prices, quality requirements, demand and improved production methods.
(vii) Financing agricultural development: Part of the surplus earned by the board may be used to provide roads, research facilities, improved seedlings and other services that support agricultural production.
(viii) Quality control: The board inspects produce before sale or export to prevent poor-quality goods from damaging the country’s reputation in international markets.
Number 7
(PICK ANY FIVE)
(i) Inadequate power supply: Electricity supply in Nigeria is irregular and insufficient. Many industries depend on generators and alternative energy sources, which increase production costs and reduce profits.
(ii) Shortage of capital: Establishing and operating industries requires large amounts of money for buildings, machinery, raw materials and workers’ wages. Many entrepreneurs cannot obtain enough capital, while bank loans attract high interest rates.
(iii) Poor transportation facilities: Bad roads, inadequate railway services and congested ports make the movement of raw materials and finished goods difficult and expensive. This causes delays and increases production costs.
(iv) Shortage of skilled labour: Nigeria lacks enough trained engineers, technicians, machine operators and industrial managers. Industries may employ foreign experts at high costs or operate below their full capacity.
(v) Inadequate supply of raw materials: Some industries depend heavily on imported raw materials. Shortages, high import costs and delays at the ports may interrupt production and force factories to reduce output.
(vi) Small market and low purchasing power: The low income of many Nigerians limits their ability to purchase manufactured goods. This reduces sales and discourages producers from expanding their industries.
(vii) Competition from imported goods: Locally manufactured goods face strong competition from cheaper or better-known foreign products. This may reduce the demand for Nigerian products and cause local factories to close.
(viii) Political instability and insecurity: Changes in government policies, communal conflicts, kidnapping and other security problems discourage local and foreign investors from establishing industries.
(ix) Inconsistent government policies: Frequent changes in taxes, import duties, exchange-rate policies and industrial regulations make long-term business planning difficult. Investors may therefore avoid the industrial sector.
(x) Use of obsolete machinery: Some industries use old and inefficient machines that produce fewer and lower-quality goods. The cost of purchasing, importing and maintaining modern equipment is often very high.
(xi) Corruption and bureaucracy: Bribery, unnecessary delays and complicated procedures for obtaining licences, land and permits increase the cost of establishing and operating industries.
(xii) Inadequate technological development: Limited research, weak technical education and dependence on foreign technology slow down innovation and industrial growth in Nigeria.
Number 8
(8a)
Savings and investment are closely related because savings provide the funds required for investment in an economy.
(i) Savings refer to the part of income that is not spent on current consumption, while investment refers to expenditure on capital goods such as machines, factories, buildings and equipment.
(ii) Money saved by individuals and firms is deposited in banks and other financial institutions. These institutions lend the money to entrepreneurs and businesses for investment.
(iii) An increase in savings increases the amount of loanable funds available for investment. This may reduce the rate of interest and encourage firms to borrow and expand production.
(iv) Low savings reduce the amount of funds available to investors. This may lead to high interest rates and slow economic growth.
(v) Investment generates income and employment. The additional income earned may lead to further savings, which can finance more investment.
(vi) In national income accounting, planned savings may not always equal planned investment, but actual savings are equal to actual investment at equilibrium.
(vii) When savings are greater than investment, total spending falls, stocks of unsold goods may increase and production may decline.
(viii) When investment is greater than savings, total spending rises, production and employment may increase until equilibrium is restored.
Therefore, savings are an important source of funds for investment, while investment helps to generate the income from which future savings are made.
(8b)
(PICK ANY THREE)
(i) Level of disposable income: Personal consumption expenditure mainly depends on the income available to individuals after paying taxes. When disposable income increases, people generally spend more on goods and services. When income falls, consumption expenditure usually decreases.
(ii) Rate of interest: A high rate of interest encourages people to save because they can earn more returns on their deposits. It also makes borrowing more expensive, thereby reducing consumption. A low interest rate discourages saving and encourages borrowing and spending.
(iii) Wealth of the consumer: Individuals who own valuable assets such as houses, land, shares and savings may spend more because they feel financially secure. A fall in the value of their assets may reduce their consumption expenditure.
(iv) Availability of credit facilities: Easy access to loans, hire purchase and credit cards enables consumers to buy goods even when they do not have enough cash. Strict credit conditions reduce personal consumption expenditure.
(v) Expectations about future income and prices: If consumers expect their income to rise, they may increase present consumption. If they expect prices to rise, they may also buy more goods immediately. Fear of unemployment or lower future income may make them reduce spending and save more.
(vi) General price level: An increase in the prices of goods and services reduces the purchasing power of consumers’ income. They may therefore buy fewer goods. A fall in prices may allow them to purchase more with the same amount of money.
(vii) Size and composition of the family: A large family normally spends more on food, clothing, education, healthcare and accommodation than a small family. The ages and needs of family members also influence the pattern of consumption.
(viii) Government taxation: Higher personal income taxes reduce disposable income and consumption expenditure. Tax reductions increase the amount of income available for spending.
(ix) Habit, taste and fashion: Consumers’ habits, preferences and changes in fashion affect the goods and services on which they spend their income. Strong preference for a product may increase expenditure on it.
(x) Distribution of income: Consumption expenditure tends to be higher when income is fairly distributed because low- and middle-income earners spend a large proportion of their income. When income is concentrated among a few rich people, total consumption may be lower because wealthy people save a larger proportion of their income.
Number 9
(9i) Under-population
Under-population is a situation in which the population of a country is too small compared with the available natural resources and capital.
It occurs when the available labour force is not sufficient to make full use of the country’s resources. As a result, land, minerals and other resources may remain under-utilised.
Under-population may lead to a small market, shortage of labour, low output and slow economic development.
(9ii) Over-population
Over-population is a situation in which the population of a country is greater than the available resources can adequately support at the existing level of technology.
It results in excessive pressure on land, food, housing, employment and social amenities.
Over-population may cause unemployment, poverty, overcrowding, low standard of living, environmental pollution and shortage of basic facilities.
(9iii) Optimum population
Optimum population is the size of population that, when combined with the available resources and technology, produces the highest output or income per person.
At this population level, resources are fully and efficiently utilised, while the standard of living is at its highest.
A population below the optimum level is under-populated, while a population above it is over-populated.
(9iv) Malthusian Population Theory
The Malthusian theory of population was developed by Thomas Robert Malthus.
According to the theory, population tends to increase in a geometrical progression, such as:
1, 2, 4, 8, 16, 32
Food supply, on the other hand, increases in an arithmetical progression, such as:
1, 2, 3, 4, 5, 6
Malthus argued that population would increase faster than food production. If the growth of population is not controlled, it will eventually exceed the available food supply.
This imbalance would lead to famine, hunger, poverty, disease, unemployment and a fall in the standard of living.
Malthus identified two major checks that could control population growth:
(i) Preventive checks: These are deliberate measures taken to reduce the birth rate. They include late marriage, moral restraint, celibacy and abstinence.
(ii) Positive checks: These are factors that increase the death rate. They include war, famine, epidemics, natural disasters and diseases.
The theory has been criticised because Malthus did not foresee improvements in agricultural technology, mechanised farming, international trade, birth control and modern medicine. These developments have made it possible for food production to increase faster in some countries.
Number 10
(10a)
Supply of labour is the total number of people who are willing and able to work at a given wage rate and within a particular period.
(10b)
(PICK ANY FOUR)
(i) Wage rate: A rise in the wage rate may encourage more people to offer their labour because working becomes more rewarding. However, at a very high wage level, some workers may prefer more leisure and reduce the number of hours they work.
(ii) Size of the population: A country with a large working-age population is likely to have a greater supply of labour than a country with a small population. A high birth rate may also increase the future labour force.
(iii) Age structure of the population: The supply of labour is higher where a large proportion of the population falls within the working-age group. A population made up mainly of children and elderly people will have a smaller labour supply.
(iv) Level of education and training: Education and vocational training increase the number of skilled and qualified workers available for employment. Lack of training may reduce the supply of labour required in specialised occupations.
(v) Working conditions: Good working conditions, such as a safe environment, reasonable working hours, job security and other benefits, attract more workers. Poor working conditions discourage people from offering their labour.
(vi) Mobility of labour: The ability of workers to move from one occupation or geographical area to another affects labour supply. High transport costs, lack of housing, family responsibilities and differences in qualifications may limit mobility.
(vii) Retirement age: A higher official retirement age keeps workers in employment for a longer period and increases labour supply. Early retirement reduces the number of people available for work.
(viii) Government policy: Government policies concerning taxation, immigration, minimum wage, retirement, education and employment can influence labour supply. For example, allowing skilled immigrants into a country increases the available labour force.
(ix) Social and cultural attitudes: Religious beliefs, family traditions and society’s attitude towards women working may affect labour supply. In some societies, cultural practices may prevent certain groups from entering particular occupations.
(x) Availability of alternative sources of income: People who receive pensions, remittances, social benefits or income from property may be less willing to work. Those without alternative income may be more willing to offer their labour.
Number 11
(11a)
Comparative cost advantage is the ability of a country to produce a commodity at a lower opportunity cost than another country.
It explains why countries benefit from international trade when each country specialises in producing and exporting the commodity in which it has the lower comparative cost and imports the commodity in which it has the higher comparative cost.
(11b)
(PICK ANY FIVE)
(i) Two countries and two commodities: The theory assumes that international trade takes place between only two countries and that each country produces only two commodities. This makes it easy to compare their production costs.
(ii) Labour is the only factor of production: It assumes that labour is the only resource used in producing goods. The cost of producing a commodity is therefore measured by the quantity of labour required.
(iii) Labour is homogeneous: All workers are assumed to have the same skills, efficiency and productivity. One unit of labour is regarded as equal to every other unit of labour.
(iv) Constant cost of production: The cost of producing each commodity is assumed to remain unchanged as output increases. This means that the same amount of resources is required for every additional unit produced.
(v) Full employment of resources: All available labour and other productive resources are assumed to be fully employed. No resources remain idle in either country.
(vi) Perfect mobility of factors within a country: Labour and other resources can move freely from one industry to another within the same country without difficulty or additional cost.
(vii) Immobility of factors between countries: Factors of production cannot move freely from one country to another. Workers and capital remain within their respective countries.
(viii) Absence of transport costs: The theory assumes that moving goods from one country to another involves no transport expenses. Therefore, transport costs do not affect the benefits of trade.
(ix) Free trade exists: There are no tariffs, quotas, import licences or other government restrictions on international trade. Goods move freely between the countries.
(x) Perfect competition: There are many buyers and sellers, and no individual producer or consumer can control the market price. All participants have complete information.
(xi) Technology remains unchanged: The method of production and level of technology are assumed to remain constant during the period under consideration.
(xii) Similar tastes and preferences: Consumers in both countries are assumed to have similar tastes and willingness to purchase the commodities being traded.
Number 12
(PICK ANY FIVE)
(i) Investigation of economic and financial crimes: The EFCC investigates offences such as money laundering, advance-fee fraud, internet fraud, embezzlement, bribery, counterfeiting and illegal transfer of funds.
(ii) Prosecution of offenders: The commission arrests and prosecutes individuals, companies and public officials suspected of committing economic and financial crimes.
(iii) Recovery of stolen funds and property: The EFCC traces, freezes, seizes and recovers money, houses, vehicles and other property obtained through illegal activities.
(iv) Enforcement of financial laws: The commission enforces laws dealing with money laundering, fraud, corruption and other economic offences in Nigeria.
(v) Prevention of financial crimes: The EFCC monitors suspicious financial activities and gathers intelligence to prevent fraud, money laundering and other crimes before they occur.
(vi) Public enlightenment: The commission educates members of the public about the dangers of corruption, fraud and money laundering through campaigns, seminars and media programmes.
(vii) Cooperation with other agencies: The EFCC works with the police, banks, customs, immigration and other government agencies to investigate and control economic crimes.
(viii) International cooperation: The commission works with foreign governments and international organisations to trace criminals, recover stolen assets and fight cross-border financial crimes.
(ix) Monitoring financial institutions: The EFCC monitors banks and other financial institutions to ensure that they report suspicious transactions and obey anti-money-laundering regulations.
(x) Advising the government: The commission advises the government on policies and measures required to reduce corruption and other economic and financial crimes.
COMPLETED!!!