Economics 2023 Jamb Examination

Surplus economic units are those with excess funds, while deficit units need funds for expenditure or investment. Institutions that channel funds between these units are known as financial intermediaries.
They perform functions such as mobilisation of savings, allocation of resources and risk transformation. Tax officers and pension offices do not perform intermediation functions, and acceptance houses specialise mainly in trade-related finance.
Thus, financial intermediaries best represent the link between surplus and deficit units.

Cost-push inflation occurs when the general price level rises as a result of increased production costs such as wages, raw materials or energy prices.
Since firms respond to rising costs by increasing prices, cost-push inflation is directly linked to higher production costs. Demand-pull inflation arises from excess demand, while hyperinflation is extreme price instability and not necessarily tied to production cost changes.
Structural inflation stems from rigidities in the economy but does not directly raise production costs like cost-push inflation does.

The working population includes all individuals who are of working age, physically and mentally fit, and willing to work. It represents the labour force available for employment in an economy.
Mobility of labour refers to the ability to move between jobs or locations, while migrant labour describes workers who relocate across regions. Labour turnover measures the rate at which workers leave or join a firm.
Thus, only the working population fits the definition provided.

Cyclical unemployment is associated with fluctuations in the business cycle. When aggregate demand falls during economic recessions, output declines and unemployment rises.
The diagram shows a downward movement in economic activity followed by rising unemployment, a typical pattern of cyclical unemployment. Structural unemployment arises from mismatch of skills, while frictional unemployment results from job search processes. Voluntary unemployment occurs when individuals choose not to work.
The illustrated pattern aligns most closely with cyclical unemployment.

Low literacy rates contribute to high fertility levels, early marriages and limited awareness of family planning options. These factors increase population growth beyond the carrying capacity of available resources.
Disease and war generally reduce population size, and emigration decreases population pressure. Therefore, low literacy is a major driver of overpopulation, particularly in developing economies.

In a closed economy without government, the investment multiplier is defined as:\[ k = \dfrac{1}{1 - MPC} = \dfrac{1}{MPS} \]The multiplier increases when the marginal propensity to consume (MPC) rises or when the marginal propensity to save (MPS) falls.
A fall in MPS therefore increases the multiplier. Changes in actual saving or investment do not alter the multiplier because it depends on marginal, not absolute, values.

Economics is considered a social science because it applies systematic, logical and scientific methods to study human behaviour in relation to scarce resources.
It develops theories, tests hypotheses and uses empirical evidence to explain and predict economic outcomes. Although controlled laboratory experiments are limited in economics, the methodological approach remains scientific.
Thus, the scientific method is the key justification.

Marginal utility is the additional utility obtained from consuming one more unit.
For the second orange:\[ MU_2 = TU_2 - TU_1 \]\[ MU_2 = 16 - 9 = 7 \]The value decreases with each additional unit, consistent with diminishing marginal utility.
Thus, the marginal utility for the second orange is 7.

Developing countries typically face challenges such as high unemployment, dependence on a single primary commodity, low savings and low capital formation.
High capital formation is not a typical characteristic; instead, these economies suffer from inadequate investment and low productive capacity.
Thus, option C stands out as the feature not associated with developing countries.