Economics 2023 Jamb Examination

A tariff is a tax placed on goods brought into a country. This increases the cost of foreign products and protects local industries from cheaper imports.
Governments typically use tariffs to regulate trade, reduce dependence on foreign goods, and generate revenue.

Price inelastic demand occurs when the percentage change in quantity demanded is smaller than the percentage change in price. This is represented by elasticity less than one.
Consumers continue buying nearly the same amount even when the price changes.

A free good is abundant in nature and available without opportunity cost. Water in the ocean is naturally available in unlimited quantities and does not require human effort to obtain in its raw state.
This differentiates it from goods that require resources to produce or supply.

The marginal propensity to consume refers to the fraction of additional income that households spend on consumption. It is mathematically expressed as ΔC/ΔY, represented as the slope of the consumption function and also appears as coefficient c in the consumption equation.
Since all these meanings align with the concept, the combined option captures them accurately.

In the short run, a firm cannot vary all its inputs. At least one factor—often capital—remains fixed while others such as labour can be varied.
This is distinct from the long run, where all inputs can be changed.

The velocity of money measures how frequently money circulates in the economy to purchase goods and services. It is calculated as real GDP divided by the real money supply.
A higher velocity means money changes hands more rapidly, indicating greater economic activity.

Saving refers to disposable income that is not used for consumption. Households set aside this portion for future use, investment, or emergencies.
It is the difference between after-tax income and consumption spending.

An industry consists of firms that produce similar or related goods. These firms operate within the same category of production and often compete in the same market.
This distinguishes it from unrelated production activities that would not form an industry group.

Structural unemployment arises when workers’ skills no longer match the requirements of available jobs. Technological change and shifts in industry structure often cause this mismatch.
It differs from cyclical unemployment caused by recessions and frictional unemployment caused by job search.

Adam Smith introduced the concept of absolute advantage, explaining that countries should specialise in producing goods they can make more efficiently.
This formed an early foundation for international trade theory before later refinements such as comparative advantage.