Economics 2022 Jamb Examination

Diminishing returns occur when additional units of a variable input lead to progressively smaller increases in output.
Typical causes include excessive variable inputs, fixed factors becoming limiting, land fragmentation, or the use of outdated technology.
Technological innovation, however, improves productivity and shifts the production function upward. This increases output rather than causing diminishing returns.
Therefore, technological innovation does not contribute to diminishing returns.

A minimum price (also known as a price floor) is set above the equilibrium price. At this higher price, producers are willing to supply more, but consumers are willing to buy less.
This mismatch generates excess supply, also called a market surplus. The market does not clear automatically, and government intervention may be needed to purchase the surplus.

A minimum price is a legally imposed lowest price at which a product may be sold. This is commonly referred to as a price floor.
A price ceiling, by contrast, is the maximum allowable price. A price mechanism refers to how prices are determined in a market. Therefore, the correct term for minimum price legislation is price floor.

A firm is in equilibrium when it maximises profit. The necessary condition is \( MC = MR \).
The sufficient condition requires that the marginal cost curve cuts the marginal revenue curve from below, ensuring that cost rises after the equality point so that the firm does not continue producing beyond the profit-maximising output.
This condition confirms stability of equilibrium, making option D correct.

The primary objective of cooperative societies is to promote the welfare of members through collective effort.
This includes fair pricing, shared resources, mutual support, and equitable distribution of benefits.
Thrift and credit societies are only one type of cooperative, so option B is not broad enough. The central purpose aligns with improving members’ welfare, making option C correct.

Joint-stock companies benefit from limited liability and continuity, even when shareholders die.
However, because ownership is separated from management, shareholders have limited control over daily decision-making. Professional managers usually run the company, and this separation can reduce direct influence by shareholders.
This makes option D the valid disadvantage.

Middlemen perform distributive functions that make goods more accessible to consumers. One of their key duties is breaking bulk—purchasing goods in large quantities from producers or wholesalers and selling them in smaller units to retailers or final consumers.
This facilitates easier distribution and consumption, making option D correct.

Retailers serve as the final link between wholesalers and consumers. Their central function is breaking bulk by purchasing in large quantities and selling in smaller units suitable for household consumption.
While retailers may advertise or grant credit, these are secondary roles. Their fundamental responsibility aligns with option B.

Rapid population increase often brings several economic challenges, but it can also expand the market size for goods and services.
A larger population increases demand, encourages production, and may stimulate investment. Other options represent negative effects, such as increased dependency or lower living standards.
Thus, the beneficial effect is a wider market, as stated in option C.

Labour efficiency is influenced by skills, welfare, motivation, technology, and quality of tools available. Education, welfare services, and quality factor inputs are all significant determinants.
Race and colour, however, have no economic bearing on productivity. They do not determine the skill, motivation, or efficiency of workers.
Therefore, option C does not affect labour efficiency.