Economics 2013 Jamb Examination

When a refinery reduces its cost per unit by buying and transporting crude oil in large quantities, it benefits from economies of scale.
This occurs because bulk purchases and large-scale operations reduce average cost through discounts, efficient production, and distribution advantages.
Diseconomies of scale, by contrast, happen when expansion leads to inefficiency and rising costs.

Isoquants represent combinations of inputs that yield the same level of output.
An isoquant that lies above and to the right of another indicates a higher output level because more of one or both inputs are used.
This reflects greater productive capacity and improved efficiency in resource use.

Per capita income measures the average income per person in a country and is obtained by dividing national income by the population.
It serves as a key indicator for comparing living standards between nations.
Higher per capita income generally implies a higher standard of living and better economic welfare.

Speculative demand for money refers to holding cash to take advantage of future changes in bond prices or interest rates.
It is inversely related to the interest rate because when interest rates are high, people prefer to invest in securities rather than hold cash.
Conversely, when rates are low, more money is held for speculation.

Utility refers to the satisfaction or pleasure a consumer obtains from using goods or services.
It is not derived from production or distribution but from actual consumption.
The greater the satisfaction a product provides, the higher its utility to the consumer.

Changes in the cost of storage can influence the willingness of producers to supply goods.
When storage costs are high, producers may reduce supply to avoid losses; when low, they may increase supply.
Thus, the cost of storage directly affects market supply decisions.

Elastic supply means producers respond quickly to changes in price.
If price decreases slightly, the quantity supplied will fall significantly because producers will find it less profitable to supply the market.
Thus, supply elasticity shows high responsiveness to price changes.

When the price of a commodity is set below its equilibrium level, demand exceeds supply, creating excess demand.
This shortage occurs because consumers want more of the good than producers are willing to supply at that price.
It often results in rationing or black markets.

A key criticism of the price mechanism is that it widens the inequitable gap between the rich and the poor.
In a free market, resources are allocated based on purchasing power, allowing the wealthy to access more goods while the poor are excluded.
This leads to income inequality and social imbalance.

To find the median, first arrange the data in ascending order: 10, 14, 15, 18, 22, 28, 30, 35, 38.
The median is the middle value, which is the 5th item in a set of nine numbers.
Hence, the median value is 22.