neco 2019 economics | Essay

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Question 1 View Details
An economy produces only two commodities: rice and cloth. With the resources currently available, the maximum combinations of output are shown in the table below. | Rice (tonnes) | Cloth (units) | |---------------|---------------| | 0 | 100 | | 40 | 80 | | 80 | 40 | | 120 | 0 | Using this information, answer the following:
Question Parts
(a)
Explain, with reference to the table, the meaning of scarcity in this economy.
(b)
Define opportunity cost. Then calculate the opportunity cost of increasing rice production from 40 tonnes to 80 tonnes.
(c)
Sketch a Production Possibility Frontier (PPF) for the economy using the data in the table. Briefly describe what a point inside the curve, a point on the curve, and a point outside the curve each represent.
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Question 2 View Details
The market for bottled water in a city is described by the following linear equations: - Demand: Qd = 500 – 5P - Supply: Qs = 100 + 3P where Q is quantity in thousands of litres per month and P is price in ₦ per litre. The government introduces a specific tax of ₦20 per litre on producers. Answer the following:
Question Parts
(a)
Determine the equilibrium price and quantity before the tax is imposed.
(b)
Write the new supply equation after the tax and calculate the new equilibrium price paid by consumers, the price received by producers, and the equilibrium quantity.
(c)
Compute the total tax revenue earned by the government. Based on the changes in price, discuss which group (consumers or producers) bears a larger share of the tax burden.
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Question 3 View Details
The table below shows the quantity demanded of a commodity at different prices in a competitive market. | Price (₦) | Quantity Demanded (units) | |-----------|---------------------------| | 200 | 500 | | 150 | 800 | | 100 | 1300 | Using this information, answer the following questions.
Question Parts
(a)
Calculate the price elasticity of demand between the price of ₦200 and ₦150 using the midpoint (arc) method. Show all steps.
(b)
Interpret the elasticity coefficient obtained in part (a). State what it implies for total revenue when the price falls from ₦200 to ₦150.
(c)
The government imposes a specific tax of ₦20 per unit on this commodity. Discuss how the tax burden will be shared between consumers and producers, using the elasticity result from part (a).
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Question 4 View Details
A firm produces a single product using labour (L) and capital (K). Capital is fixed at 10 units. The table shows the total output (Q) obtained as the number of workers employed varies. | Labour (L) | Total Output (Q) | |------------|------------------| | 1 | 15 | | 2 | 35 | | 3 | 60 | | 4 | 90 | | 5 | 120 | Answer the following questions.
Question Parts
(a)
Calculate the marginal product of labour (MPL) for each additional worker hired (from the 1st to the 5th worker). Present your answers in a table.
(b)
Identify the range of labour input over which the law of diminishing marginal returns sets in. Explain the economic reasoning behind this observation.
(c)
Assuming the firm operates in the short run with capital fixed, discuss how the shapes of the total product curve and the marginal product curve influence the shape of the firm's short‑run average cost (AC) and marginal cost (MC) curves.
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Question 5 View Details
A small manufacturing firm provides the following data on its total cost (TC) of production at various output levels (Q). All costs are in Nigerian Naira (₦).
Question Parts
(a)
Calculate the average total cost (ATC) when output is 100 units and when output is 200 units.
(b)
Estimate the marginal cost (MC) of producing the 101st to the 150th unit using the data provided.
(c)
Using the table, identify the range of output over which the firm enjoys economies of scale (i.e., where ATC is falling). State the reasoning clearly.
(d)
If the market price is ₦120 per unit, should the firm continue production at the 150‑unit level in the short run? Justify your answer by comparing price with average variable cost (AVC).
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Question 6 View Details
In a small town, eight firms sell a homogeneous product. Each firm faces the individual demand curve P = 200 – 2Q_i, where Q_i is the quantity sold by the firm. All firms have a constant marginal cost (MC) of ₦40 per unit and there are no fixed costs.
Question Parts
(a)
Determine the profit‑maximising output (Q_i) and the corresponding price (P) for a typical firm in the short‑run equilibrium.
(b)
Calculate the economic profit earned by each firm at this output level.
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Question 7 View Details
The table below shows selected macro‑economic data for Country X for the year 2022 (all values are in ₦ billions).\n\n| Component | Value |\n|------------------------------|-------|\n| Consumption (C) | 4,500 |\n| Investment (I) | 1,200 |\n| Government expenditure (G) | 800 |\n| Exports (X) | 600 |\n| Imports (M) | 500 |\n| Net factor income from abroad (NFIA) | -30 |\n| Depreciation (D) | 400 |\n\nUsing the above information, answer the following questions.
Question Parts
(a)
Calculate the Gross Domestic Product (GDP) at market prices using the expenditure approach.
(b)
Using the data, compute the following:
() Net National Product (NNP) at factor cost.
() Gross National Income (GNI) at market prices.
(c)
Explain two ways in which a rise in imports could affect the national income of Country X, referring to the components of the expenditure approach.
(d)
The government plans to increase investment by ₦200 billion financed by borrowing. Discuss qualitatively how this policy would likely affect the equilibrium level of national income in the short run, using the multiplier concept.
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Question 8 View Details
The Central Bank of Nigeria has the following monetary data for the current quarter:\n\n- Reserve requirement ratio (RRR) = 10%\n- Currency‑to‑deposits ratio (c) = 0.25 (i.e., the public holds 25% of bank deposits as cash)\n- Initial monetary base (MB) = ₦2,000 billion\n- The Central Bank conducts an open‑market sale of government securities worth ₦500 billion.\n\nUsing this information, answer the questions below.
Question Parts
(a)
Calculate the money multiplier before the open‑market sale.
(b)
Determine the change in the money supply resulting from the sale of securities, assuming no change in other variables.
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