2020 NECO ECONOMICS ANSWERS
Here on this page you will find the complete answers for Neco economics exam 2020. Do well to verify each questions before answering.
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P: 10, 8, 6, 4, 2, 1
Qd: 0, 8,16, 24, 32, 36
When price = 10
When price= 8
Qd= 40-4(8)= 8
When price= 6
Qd= 40-4(6)= 16
When price= 4
Qd= 40-4(4) = 24
When price= 2
Qd= 40-4(2)= 32
When price= 1
Qd= 40-4(1)= 36
(1c) The slop of the curve indicate that the quantity demanded has negative correlation with price. The higher the price the lower the quantity demanded and vice versa
MR = ∆inTR/∆inQ
TR2 – TR1/Q2 – Q1
At Q = 2,
MR = 30-20/2-1 = ₦10
At Q = 3
MR = 60-30/3-2 = ₦30
At Q = 4
MR = 80-60/4-3 = ₦20
At Q = 5
MR = 120-80/5-4 = ₦40
At Q = 6
MR = 150-120/6-5 = ₦30
AR = TR/Q
At Q = 1
AR = 20/1 = ₦20
At Q = 2
AR = 30/2 = ₦15
At Q = 3
AR = 60/3 = ₦20
At Q = 4
AR = 80/4 = ₦20
At Q = 5
AR = 120/5 = ₦24
At Q = 6
AR = 150/6 = ₦25
MC = TC2 – TC1/Q2 – Q1
At Q = 1
MC = 40 – 0/1 – 0 = ₦40
At Q = 2
MC = 50 – 40/2 – 1 = ₦10
At Q = 3
MC = 60 – 50/3 – 2 = ₦10
At Q = 4
MC = 80 – 60/4 – 3 = ₦20
At Q = 5
MC = 110 – 80/5 – 4 = ₦30
At Q = 6
MC = 120 – 110/6 – 5 = ₦10
The conditions necessary for profit maximization are:
(i) MC = MR
(ii) When MC is cutting MR from below at equilibrium point.
*Draw the diagram*
From the above diagram, point “X” is the point of profit maximization.
a mathematical function showing the number of instances in which a variable takes each of its possible values.
is a measure of the amount of variation or dispersion of a set of values
the area of variation between upper and lower limits on a particular scale.
A table is a systematic and orderly arrangement of information, facts, or data using rows and columns for presentation, which make it easier for better understanding.
market is a place where buyers and sellers can meet to facilitate the exchange or transaction of goods and services. In Other examples include the black market, auction markets, and financial markets. In other words Markets establish the prices of goods and services that are determined by supply and demand.
(i)It’s a type of competition between others in the industry. This means more than one company is selling a similar product and competing in that market.
(ii)Everyone offers a similar product, but that product can’t be completely substituted. In other words, while other companies may sell goat’s milk soap, none of them are exactly like Betty’s soap because they do not contain all of the exact same ingredients.
(iii)All companies can enter or leave the industry when they want to. This means companies can enter in and sell goat’s milk soap when they think they can make money doing so. And, they can leave if they think there is no longer a market for the product.
(iv)Every company makes their own decisions about their products. So, they decide what price to sell their soap at and how many to make and sell. Because there’s such a demand for goat’s milk soap, Betty keeps a steady supply. And finally…
(v)There is product differentiation. Product differentiation means that companies try to distinguish or differentiate their products from others in the market so that their product is more enticing to customers.
Labour can be defined as all human efforts of any kind, either skilled or unskilled, mental or manual, directed towards the production of goods and services. The rewards for labour as a factor of production comes in form of wages and salaries.
(i) Education and training : The level of education and training received by a worker will go a long way towards increasing the efficiency of labor. A well educated or well trained worker is in position to increase efficiency in his work.
(ii) Level of commitment and attitude: The level of commitment and attitude of a worker can affect the efficiency of labour. When a worker is highly committed to his job, this will result in efficiency of labour.
(iii) Efficient management : When efficient management is in place in any organization, it will go a long way towards improving efficiency of labour.
(iv) Efficiency of other factors of production: The efficiency of other factors of production like land, capital and entrepreneur when combined with efficient labour will increase productivity.
Tax: A tax is a compulsory levy imposed by a public authority against which tax payers cannot claim anything. It is not imposed as a penalty for only legal offence. The essence of a tax, as distinguished from other charges by the government, is the absence of a direct quid pro quo (i.e., exchange of favour) between the tax payer and the public authority.
Rates: Rates refer to local taxation, i.e., taxation levied by (or for) local rather than central government. Normally rates are proportional to the estimated rentable value of business and domestic properties. Rates are often criticised as being unrelated to income.
Surplus of the public sector units: The government acts like a business- person and the public acts like its customers. The government may either sell goods or render services like train, city bus, electricity, transport, posts and telegraphs, water supply, etc. The government also earns revenue from the production of commodities like steel, oil, life-saving drugs, etc.
Fine and penalties: They are the charges imposed on persons as a punishment for contravention of a law. The main purpose of these is not to raise revenue from the public but to force them to follow law and order of the country.
Gifts and grants: Gifts are voluntary contribution from private individuals or non-government donors to the government fund for specific purposes such as relief fund, defence fund during war or an emergency. However, this source provides a small portion of government revenue.
Overpopulation is the discrepancy between the structure of the population and economic growth in a specific, country or group of countries under a specific economic. in other words it a system within a definite historical epoch.
(i)Lower Life Expectancy: While higher life expectancy is leading to increases in population in developed countries, lower life expectancy may be caused by the booms in population that less developed nations are experiencing.
(ii)Extinction: The effect of overpopulation on the Nigeria’s wildlife is also a major issue. As demand for land grows, so too does the destruction of natural habitats, such as forests.
(iii)Resource Consumption; As the population grows, so too does the amount
of resources needed to keep so many people alive. Food, water and fossil fuels are all being consumed at record rates, placing greater demands on producers and the planet itself.
(iv)Increased Intensive Farming As population has grown over the years, farming practices have evolved to produce enough food to feed larger numbers of people. However, intensive farming methods also cause damage to local ecosystems and the land , which may pose
problems in the future.
(v)Overpopulation Could Lead to a Food Shortage: While the population has been rising as a result of increased food production, this producti
on has limits. More mouths need to be fed. Without an increase in food production that matches the rising population, deprivation and hunger will be on the rise and each individual will have access to smaller quantities of food.
nationalisation, is the process of transforming privately owned assets into public assets by bringing them under the public ownership of a national government or state.
-Advantage of indigenization-
(i)The process of indigenization creates
development of private industries in the country It helps to bring in more revenue in the country as the creates more revenue opportunities
(ii)Indigenization leads to more employment opportunities for the people in the country: indigenization leads to more Creation of industries thus, leading to creation of more job opportunities
(iii)Indigenization leads to self reliance of the countries and more participation of the people in running the business
-Disadvantage of indigenization-
(i)The problem with indigenization is that it discourages foreign control of an economy and foreign investments
(ii)The companies look maximize their profits due to which the cost of production becomes high
balance of payments (BOP) is a statement of all transactions made between entities in one country and the rest of the world over a defined period of time, such as a quarter or a year.
(i) Expenditure-Reducing Policies:
The important way to reduce imports and thereby reduce deficit in balance of payments is to adopt monetary and fiscal policies that aim at reducing aggregate expenditure in the economy.
(ii) Trade Policy Measures: Expanding, Exports and Restraining Imports:
Trade policy measures to improve the balance of payments refer to the measures adopted to promote exports and reduce imports. Exports may be encouraged by reducing or abolishing export duties and lowering the interest rate on credit used for financing exports. Exports are also encouraged by granting subsidies to manufacturers and exporters.
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