Economics 2018 Jamb Examination

Zero elasticity means the quantity demanded does not change regardless of changes in price.
This is represented by a perfectly inelastic demand curve, which is vertical.
A vertical curve shows that consumers are completely unresponsive to price changes.

Direct taxes are paid directly to the government by individuals or organisations on income or wealth.
Purchase tax is an indirect tax because it is imposed on goods and services and paid through intermediaries such as sellers.
The others—capital gains tax, personal income tax and capital tax—are all direct taxes.

A limited liability company is legally owned by shareholders who provide capital by purchasing shares.
They bear limited liability, meaning their risk is restricted to the value of their shares.
This distinguishes it from sole proprietorships or partnerships.

An elasticity value of 0.43 indicates inelastic demand, meaning the percentage change in quantity demanded is smaller than the percentage change in price.
Thus, when price increases, total revenue tends to rise because consumers reduce their purchases only slightly.
This leads to a net gain, not a loss.

Salary is paid monthly, while bonuses are additional payments made occasionally.
The term that represents payment per hour of work is wage rate, which specifically measures earnings based on hours worked.

Consumer equilibrium occurs where the highest attainable indifference curve is tangent to the budget line.
Point K is the point of tangency, showing the combination of goods that maximises satisfaction given income and prices.

Utility in economics refers to the satisfaction or want-satisfying power derived from consuming a good or service.
It measures how well a product meets a consumer’s needs, not whether it is beneficial or advantageous in the general sense.

Concentrating industries in one location leads to external economies, which arise from improvements in infrastructure, specialised labour availability and supportive services within the area.
These benefits are shared by all firms within the industry cluster.

Changes in the demand for one product resulting from price changes in another product measure cross-elasticity of demand.
It shows whether goods are substitutes or complements depending on whether the cross-elasticity is positive or negative.

An upward movement along a supply curve indicates that producers are willing to supply more as price rises.
This reflects the law of supply, which states that quantity supplied increases with an increase in price, other factors being constant.