Economics 2025 Jamb Examination

The incidence of taxation depends on the relative elasticity of demand and supply. When demand is inelastic (meaning consumers are not very sensitive to price changes), the buyer bears a larger share of the tax burden because they continue to purchase the product even as the price rises. Conversely, if demand were elastic, the seller would have to bear more of the tax to avoid losing customers. While 'perfectly inelastic' would mean the buyer bears *all* the tax, the phrase 'more... than the seller' describes a state of general inelasticity where the consumer is less responsive to price changes than the producer.

A balanced budget occurs when the total amount of money a government or organization expects to collect (revenue) is exactly equal to the amount it plans to spend (expenditure) over a specific period. If revenue exceeds expenditure, it is called a budget surplus; if expenditure exceeds revenue, it is a budget deficit. Balanced budgets are often seen as a sign of fiscal responsibility, ensuring that an entity does not overextend itself or accumulate unnecessary debt.

Agro-service stations are intended to support farmers by providing essential inputs like fertilizers, improved seeds, and technical advice at subsidized rates. Therefore, their creation is a positive step toward agricultural development and is not a reason for policy failure. In contrast, vague goals, the abandonment (negation) of existing projects when governments change, and the distribution of outdated tools are all significant hurdles that have historically hindered agricultural growth in the region.

Equilibrium price is referred to as the 'market clearing price' because it is the specific price at which the quantity of goods supplied exactly equals the quantity of goods demanded. At this price, there is no surplus (excess supply) and no shortage (excess demand) in the market—every seller who wants to sell at that price can find a buyer, and every buyer who wants to buy can find a seller. The market is 'cleared' of all units offered and sought.

The table shows that as the number of units consumed increases from 1 to 5, the additional satisfaction gained from each extra unit (Marginal Utility) decreases from 10 to 5, 2, 1, and finally 0. This is the classic definition of the Law of Diminishing Marginal Utility, which states that as a consumer consumes more units of a specific commodity, the utility derived from each successive unit declines. This is distinct from 'diminishing returns' or 'marginal productivity,' which relate to the production side (inputs and outputs) rather than consumer satisfaction.

Division of labour involves breaking down a production process into a number of individual tasks, with each task performed by a separate worker. This leads to increased efficiency and skill (specialization), which significantly boosts total output. Furthermore, because workers become faster and more accurate at their specific tasks, and there is less time wasted switching between tools, the average cost of producing each unit of goods decreases. For an entrepreneur, this combination of higher volume and lower unit cost is the primary motivation for adopting this system.

Death rate (or mortality rate) is the measure of the number of deaths in a particular population, scaled to the size of that population, per unit of time. Infant mortality specifically refers to the death of children under the age of one. When calculating the natural growth of a population (Birth Rate - Death Rate), all forms of mortality, including infant mortality, are subtracted from the birth rate to determine how much the population is actually increasing or decreasing.

Inflation is characterized by a general increase in prices and a fall in the purchasing power of money. Individuals who receive a fixed income (like pensioners or salaried workers whose pay doesn't adjust quickly) suffer most because the 'real' value of their income drops; they can afford fewer goods and services with the same amount of money. While businessmen might see higher revenues and borrowers might pay back 'cheaper' money, fixed income earners find their standard of living consistently declining as prices climb.

The Law of Supply states that there is a direct (positive) relationship between price and quantity supplied, ceteris paribus. As the market price of a good falls, it becomes less profitable for producers to make and sell that good, leading them to reduce the quantity they bring to market. Conversely, higher prices provide an incentive for producers to increase output. This relationship is represented graphically by a supply curve that rises as you move from left to right.

An Economic Union represents a high level of economic integration. Beyond having free trade among members, a common external tariff (Customs Union), and the free movement of factors of production (Common Market), an Economic Union requires members to unify their economic policies. This includes harmonizing monetary policy (often involving a common currency and central bank) and fiscal policy (coordinating government spending and taxation) to ensure economic stability across the entire bloc.