Economics 2021 Jamb Examination

A free market economy allocates scarce goods based on consumer choices and purchasing decisions. Consumers decide what to buy, and this influences how resources are distributed.
The government plays no direct role in rationing under a free market system, and the price mechanism simply reflects interactions between consumers and producers.
Since the main driving force behind allocation is consumer demand, consumers perform the primary rationing function.

The value of money is determined by its purchasing power, which is influenced by the general price level.
When prices rise, the value of money falls because each unit buys fewer goods and services. Conversely, when the price level falls, the value of money increases.
Gold backing and legal tender status do not directly determine money's real value in modern economies.

High population growth is influenced by improvements in hygiene, declining death rates, and high birth rates. These factors increase the number of surviving individuals.
The Family Planning Unit of Nigeria promotes population control and encourages smaller family sizes.
Therefore, it does not contribute to population growth but instead aims to reduce it.

Inflation occurs when aggregate demand exceeds aggregate supply. Reducing aggregate demand helps stabilise prices by lowering pressure on available goods and services.
Measures such as contractionary fiscal or monetary policies can achieve this reduction.
Higher wages, increased demand, or deficit budgeting would worsen inflation rather than curb it.

A corporation is a legal entity owned by shareholders who invest capital into the organisation.
These shareholders receive dividends and have voting rights proportional to their shares.
Although governments or individuals may own shares, the defining feature of corporate ownership is collective ownership by shareholders.

The price mechanism coordinates the forces of supply and demand by signalling how much producers should supply and how much consumers should buy.
As prices rise or fall, producers and consumers adjust their behaviour accordingly.
This regulation of supply and demand ensures an efficient allocation of scarce resources.

A regressive tax is one in which lower-income earners pay a higher proportion of their income as tax compared to higher-income earners.
Mr. A pays N200 out of N2,000 (10%), while Mr. B pays N400 out of N8,000 (5%).
This means the burden is heavier on the lower-income earner, making it a regressive tax.

Wholesalers typically buy in bulk, store goods, and transport them to retailers. They also break bulk and sometimes offer credit facilities.
Branding is mainly the responsibility of producers, who package and create brand identity for their products.
Therefore, branding is not a usual function of a wholesaler.

Elasticity of demand is calculated using the formula:\[ E_d = \dfrac{\% \; \text{change in quantity demanded}}{\% \; \text{change in price}} \]Quantity increases from 20 to 30:\[ \%\Delta Q = \dfrac{30 - 20}{20} = \dfrac{10}{20} = 0.5 \]Price increases from 4 to 5:\[ \%\Delta P = \dfrac{5 - 4}{4} = \dfrac{1}{4} = 0.25 \]Thus:\[ E_d = \dfrac{0.5}{0.25} = 2 \]This indicates that the demand for the commodity is elastic.

Utility refers to the satisfaction or benefit a consumer derives from consuming a good or service.
It is not synonymous with usefulness, but rather with the ability of a product to satisfy a want.
Therefore, the correct meaning aligns with the power of satisfying a want.