Economics 2022 Jamb Examination

Palm oil and palm kernel are obtained from the same raw material — the palm fruit. This means the production of one automatically results in the production of the other, making them jointly supplied goods.
Joint supply occurs when an increase in the production of one commodity leads to an increase in the supply of another because both are products of the same process. Therefore, the relationship between palm oil and palm kernel fits this concept directly.

A supply curve that is parallel to the X-axis (horizontal) shows that producers are willing to supply any quantity at a particular price. This means the slightest change in price would cause an infinite change in quantity supplied.
This situation describes infinite elasticity of supply, also known as perfectly elastic supply. Producers will only supply at that exact price and not at any other.

Consumer equilibrium occurs when the marginal utility (MU) obtained from consuming a commodity equals the price paid for it. At this point, the consumer allocates income in a way that maximises satisfaction.
When MU = Price, the consumer has no incentive to adjust consumption further because the utility gained from the last unit consumed matches the sacrifice made in terms of price.

In the long run, firms can vary all factors of production, and economies of scale become significant. Increasing returns to scale occur when a proportionate increase in all inputs leads to a more than proportionate increase in output.
This results in lower average cost because larger-scale production spreads costs more efficiently across outputs and improves productive efficiency.

A price floor is a minimum price set above equilibrium to protect producers, often used in agricultural markets. When fixed above the equilibrium price, the quantity supplied exceeds the quantity demanded.
This mismatch creates excess supply, also known as a surplus. Producers supply more because of the higher guaranteed price, while consumers reduce demand because the price is artificially high.

In the long run, all costs are variable. A firm must be able to cover its average variable cost to remain in production. If average revenue falls below average variable cost, the firm cannot cover its operating expenses.
This situation makes continued production unsustainable, forcing the firm to shut down to avoid increasing losses.

Owners (shareholders) of joint-stock companies enjoy limited liability. This means their financial risk is restricted to the amount invested in the company.
If the company goes bankrupt, creditors can only claim the company’s assets, not the personal belongings of shareholders. Therefore, shareholders lose only the capital they invested.

Wholesalers often provide credit facilities to both producers and retailers. They purchase goods in bulk from producers and may allow retailers to buy on credit, easing business operations.
This financial role supports the flow of goods through the distribution chain and reduces the financial burden on smaller retailers.

Seasonal unemployment occurs when workers cannot work during specific periods because demand for their services fluctuates seasonally. School canteen workers experience reduced or no work during school holidays when students are absent.
This interruption follows a predictable pattern tied to the school calendar, which is the hallmark of seasonal unemployment.

Positive checks in Malthusian theory include war, famine and natural disasters, all of which increase the death rate to balance population growth with food supply.
If natural calamities occur, they act as positive checks by raising mortality levels, thereby slowing population growth. Thus, the occurrence of natural calamities aligns with Malthus’s description of positive checks.