neco 2024 economics | Essay

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Question 1 View Details
Economic theory states that scarcity forces individuals and societies to make choices. Using this premise:
Question Parts
(a)
Define "wants" and "needs" and explain the key difference between them.
(b)
Discuss how scarcity leads to the necessity of choice, and illustrate your discussion with two concrete examples from the Nigerian economy.
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Question 2 View Details
The market for a locally produced snack is described by the following linear equations: \(Q_d = 500 - 2P\) (quantity demanded) and \(Q_s = 3P - 150\) (quantity supplied), where \(P\) is the price in Naira per unit and \(Q\) is quantity in thousands of units. The government introduces a specific tax of \(\text{₦}50\) per unit on sellers. 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 compute the new equilibrium price paid by buyers and the price received by sellers.
(c)
Calculate the incidence of the tax on buyers and sellers (i.e., how much of the ₦50 tax is borne by each side) and discuss briefly the effect of the tax on total welfare (dead‑weight loss).
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Question 3 View Details
The table below shows the quantity demanded of wheat flour (in kilograms) at three different price levels in a local market. | Price (₦ per kg) | Quantity demanded (kg) | |------------------|------------------------| | 200 | 500 | | 250 | 460 | | 300 | 420 | Using the data above, answer the following: a) Calculate the price elasticity of demand between the price of ₦200 per kg and ₦250 per kg. Show all steps. b) Based on the elasticity obtained, state whether demand is elastic, unit‑elastic or inelastic in that range and explain the implication for total revenue when price rises from ₦200 to ₦250. c) Suppose the price of rice (a substitute for wheat flour) increases by 10 % and, as a result, the quantity demanded of wheat flour rises from 500 kg to 560 kg. Compute the cross‑price elasticity of demand for wheat flour with respect to rice and interpret the result.
Question Parts
(a)
Calculate the price elasticity of demand between the price of ₦200 per kg and ₦250 per kg. Show all steps.
(b)
Based on the elasticity obtained, state whether demand is elastic, unit‑elastic or inelastic in that range and explain the implication for total revenue when price rises from ₦200 to ₦250.
(c)
Suppose the price of rice (a substitute for wheat flour) increases by 10 % and, as a result, the quantity demanded of wheat flour rises from 500 kg to 560 kg. Compute the cross‑price elasticity of demand for wheat flour with respect to rice and interpret the result.
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Question 4 View Details
A small workshop produces hand‑woven bags. The table below shows the total output (TP) obtained at different levels of labour input (L) while capital is kept constant. | Labour input (hours) | Total product (bags) | |----------------------|----------------------| | 0 | 0 | | 2 | 30 | | 4 | 80 | | 6 | 130 | | 8 | 150 | |10 | 155 | Using this information, answer the following: a) Compute the marginal product (MP) and average product (AP) of labour for each labour interval. b) Identify the stage of production (Stage I, Stage II or Stage III) for each labour level based on the behaviour of MP and AP. c) The firm is currently employing 6 labour hours. Explain what will happen to total product and marginal product if an additional 2 labour hours are employed, and advise whether the firm should increase labour further.
Question Parts
(a)
Compute the marginal product (MP) and average product (AP) of labour for each labour interval.
(b)
Identify the stage of production (Stage I, Stage II or Stage III) for each labour level based on the behaviour of MP and AP.
(c)
The firm is currently employing 6 labour hours. Explain what will happen to total product and marginal product if an additional 2 labour hours are employed, and advise whether the firm should increase labour further.
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Question 5 View Details
A manufacturing firm produces a single type of widget. The fixed cost of production is ₦200,000 per month. The total cost of producing 1,000 widgets is ₦500,000 and the total cost of producing 1,500 widgets is ₦650,000. The firm sells each widget for ₦800.
Question Parts
(a)
Determine the variable cost per widget assuming variable cost is linear in output.
(b)
Write the total cost (TC) function in terms of output Q.
(c)
Calculate the average cost (AC) and marginal cost (MC) when output is 1,200 widgets.
(d)
Find the break‑even output level at which the selling price equals average cost.
(e)
Compute the profit (or loss) when the firm produces and sells 1,200 widgets.
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Question 6 View Details
In a certain product market the demand curve is linear and can be expressed as P = a – bQ, where P is the price per unit (in ₦) and Q is the quantity demanded. The firm operating in this market faces a constant marginal cost of ₦500 per unit. In the current situation the firm, which behaves as a monopolistically competitive seller, chooses an output of 2,000 units and charges a price of ₦1,200 per unit.
Question Parts
(a)
Using the profit‑maximising condition MR = MC, determine the values of a and b.
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Question 7 View Details
The following data relate to the economic activity of Country X for the year 2023 (in ₦ billions): - Compensation of employees: 450 - Rent: 80 - Interest: 70 - Profits: 150 - Indirect taxes net of subsidies: 60 - Depreciation (capital consumption): 90 - Net factor income from abroad: -20 (net outflow) Using this information, answer the questions below.
Question Parts
(a)
Define Gross Domestic Product (GDP) using the income approach and list its main components.
(b)
Using the data above, calculate: (i) Gross Domestic Product (GDP) at market prices, (ii) Net Domestic Product (NDP), (iii) Gross National Product (GNP), and (iv) Net National Product (NNP). Show all steps.
(c)
Explain two major limitations of using GDP as an indicator of the economic welfare of a country.
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Question 8 View Details
Consider the monetary system of Country Y, which operates a fractional‑reserve banking system.
Question Parts
(a)
Explain the mechanism by which commercial banks create money through the multiple‑deposit creation process. Include the role of required reserves and excess reserves.
(b)
If the Central Bank injects ₦200 million of new high‑powered money into the banking system and the statutory reserve ratio is 10 %, calculate the maximum theoretical increase in the money supply assuming banks lend out all excess reserves.
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