NECO 2021 Economics Essay and Objective Answers (4th August 2021)
Paper III & II: Objective & Essay – Economics 10:00am – 1:00pm.
Instruction: Answer Five (5) Questions in all, One from Section A and Four (4) from Section B.
X: 20, 30, 40, 50, 60, 70
F: 10, 8, 20, 13, 6, 3
Fx: 200, 240, 800, 650, 360, 210
x-x-bar: -21, -11, -1, 4, 19, 29
(x-x-bar)²: 441, 121, 1, 81, 361, 841
F(x-x-bar)²: 4410, 968, 20, 1053, 2166, 2523
Arithmetic mean (x-bar) = ∑fx/∑f = 2460/60 = 41.
Variance = ∑f(x-x-bar)²= 11140/60 = 185.67
Standard deviation= √variance
(i)It does not give a fall range of the data
(ii)It can be hard to calculate
(iii)It only used with data where an independent variable is plotted against the frequency of it.
%∆ in Quantity dd/ %∆ in income = 100/150
%∆ in Qty dd = ∆ In Qty dd/ old Qty dd x 100/1
= 10/10 x 100/1
%∆ in income = ∆ in income x 100/1
= 3000/2000 x 100/1
Positive income elasticity: This is as a result of having more quantity demand for milk as income increases.
(i) Change in price related commodity
(ii) Change in taste and fashion
(iii) Income of the consumer
Capital formation is a term used to describe the net capital accumulation during an accounting period for a particular country.
(i) Low level of Natural income and per capital income; The root cause of capital deficiency in under-developed countries is low level of real national and per capita income which limits to the motives of savings and investments. Due to lack of desired investments, capital formation has no increase. Hence, due to low production, there is low national and per capita income and, in turn, this forces to low capital formation.
(ii) Lack in demand of capital; Another cause of low rate of capital formation in under-developed countries in lack of demand of capital. In the words of Prof. Nurkse, “Low productivity in under-developed countries, people have low real income and, thus, purchasing power is low and so due to low demand.
(iii) Lack in supply of capital;Like demand of capital, lack of supply of capital is responsible for low capital formation. However, due to lack of necessary supply of capital in under-developed countries, the process of capital formation is not boosted up. As a result, capital formation remains at low level.
(iv) Lack of Economic and social overheads; Basic overheads like roads, buildings, communication, education, water, health etc. are generally lacked in under-developed countries which react as improper atmosphere for the capital formation and slow process of capital formation.
(v) Lack of skilled entrepreneurs;Able and efficient entrepreneurs are not available in under-developed countries. It is the only reason for low rate of capital formation. Due to absence of risk-taking entrepreneurs, establishment of industries and expansion is quite limited and industrial diversification is not carried out and no balanced development of economy is possible.
(vi) Lack of effective fiscal policy;Lack of effective fiscal policy or financial policy in under-developed countries also retard capital formation to some extent. Burden of taxation is too much which is out of people’s capacity to bear as their income is quite low. Besides, inflationary circumstances accrue and prices soar extremely high.
A wholesaler is a person whose business is buying large quantities of goods and selling them in smaller amounts.
(i)High price: Middlemen cause high price of goods by adding cost to the cost of goods.
(ii) Increase in advertisement: The introduction of middlemen in the chain of distribution leads to high cost of creating awareness to the customer.
(iii) Low profit: Middlemen will reduce the profit of the producer by increasing the cost of production for the producer.
(iv) Decrease in production: Middlemen will lead to decrease in production of goods that will affect the price of the goods.
Internal trade is the act of buying and selling of goods and services within a geographical area WHILE External trade is the buying and selling of goods and services between two or more countries.
(i)They both engage in exchange of goods and services
(ii) They both engage in trade e
(iii) They both involve in the use of money to facilitate trade.
(i) Buying and selling is between two or more countries
(ii) There is language barrier
(iii) It involves more documentation
(i) Buying and selling is within a country
(ii) There is no language barrier
(iii) It involves low documentation.
(i)Source of revenue: To get most income into the government purse, taxes are imposed on goods coming in from other countries.
(ii)Reduction of unemployment: This discourages importation and encourage infant industries to survive which will create jobs for more unemployment people.
(iii) To improve standard living: To help the citizens of a country to be self-sufficient and self reliant.
(iv)Balance of payment deficit: It helps to correct a country’s balance of payment deficit in the long run.
(v)Trade restriction: This enables the citizen to consume more locally made goods instead of foreign goods.