2010-12-22T07:11:00.001-08:00

PREFACE

This book « ASSIMILATION KEY POINTS ON ECONOMICS » is written to make for easy access to key points before each examination. This is because reading or searching a whole textbook each time may be tedious and tiring to most students. The book is made in a simplified and easier form for the students to fully comprehend and appreciate the study of economics.

The book also contains points, definitions and Titbits for quick remembrance before examinations. Objective questions and answers are also in place to allow students to do self assessment before any examination. The book is carefully and basically prepared for the students in senior secondary classes, WAEC students and undergraduate Economics students. It is also useful for adults in updating and upgrading their knowledge in Economics as it affects everyday life.

All correspondence should be addressed to

otunbashaki@yahoo.com or P.O BOX 3099 Mushin, Lagos, NIGERIA. Tel +22566315720 or +22555305961

November 2010.

For online version of the book and other materials, log on to :

www.educationandjobs.blogspot.com or

www.wiseeuro.blogspot.com

OTUNBA S. A

First Baptist Church Group of Schools Marcory – Abidjan

Côte d'Ivoire.

Table of contents

Page

Preface 3

Table of contents 4

Meaning and basic concept of Economics 5

Basic tools for economic analysis 8

Production 15

Division of labour, specialisation and scale of preference 24

The theory of cost 28

Business organisations 32

Population 48

Agriculture 55

Trade by barter and money 57

Inflation and deflation 60

Firm/industry/industrialization 63

Theory of consumer behavior 69

The theory of demand. Supply and

price determination 72

Financial institutions 83

Market structures 89

International trade 92

Appendix 1 97

Appendix 2 101

Questions and answers 103

CHAPTER ONE

MEANING AND BASIC CONCEPT OF ECONOMICS

I.1. Definitions of Economics

"A study of mankind in the ordinary business of life"

– Alfred Marshall

"An enquiry into the nature and causes of wealth of nations"

- Adam Smith

"The science which studies human behavior as a relationship between ends and scarce means which have alternative uses"

- Prof. Lionel C. Robbins

I.2. Basic Concepts of Economic

Wants: Insatiable desire or need by human beings to own goods or services that give satisfaction.

Scarcity: The limits supply of resources which are used for the satisfaction of unlimited wants.

Scale of preference: A list of unsatisfied wants arranged in the order of their relative importance.

Choice: A system of selecting or choosing one out of a number of alternatives.

Opportunity cost: An expression of cost in term of forgone alternatives

Why We study Economics

Judicious allocation of resources
Development of beneficial programs

For making relational decisions
Assists in preparation of budgets

For solution to economic problem
For production purposes

For maximization of profits
For provision of basic tools

Branches of Economics

Main branches

Macro-economics: Deal with larger units or aggregate of the economics
Micro-economics: Deal with smaller units or aggregate of the economics
1. Other Branches of Economics
Pure economics
Applied economics
Mathematical economics
Monetary economics
Business economics
Development economics

Basic Economics Problems

What to produce
When to produce
How to produce
For whom to produce

1.3. Different Economic Systems

The world economy can be broadly classified into three, these are:
a) The Capitalist System (market economic system): This allows the operation of price mechanism to dictate major economic decisions. In this system, productive resources are owned, controlled and managed by individuals.

Example of capitalist economy is United States of America. (USA)

b) The Socialist System (centrally planed Economy): In this economy, the state or the government owns the means of production (resources). Individuals are not allowed to own, control and mage means of production.

Example of socialist economy is Russia.

c) The Mixed Economic System: In this system, the government owns a substantial part of the major investments and also allows private ownership of means of production. That is, they practice both capitalist and socialist system. Most African countries, including Nigeria practice mixed economic system.

Relevant Examination Questions

Do you think the study of economics is necessary in a situation of abundant resources? Give reasons for your opinion.
Write short notes on: want choice, scarcity and opportunity cost.
In what ways can economics be considered as a science
Which economics system would you
consider the best and why?

CHAPTER TWO

2.0. BASIC TOOLS FOR ECONOMIC ANALYSIS

The use of basic tools makes it easier for better interpretation and understanding of economic principles. Examples are: tables, graphs, and charts, mean median, mode, standard deviation, variance, mean deviation, range, the quartile.

Definition of Economic Tools

2.1
Table: A systematic and orderly arrangement of information, fact or data using rows and columns for presentation, which make it easier for better understanding.

Characteristics of a table

A table must be very simple
It must be easy to understand
It must have a title or heading
The unit of measurement used in the table must be stated
The sub-heading for columns and rows used must be stated

2.2. Graph: These are diagrams showing a functional relationship between two variables. Examples of graphs are line graphs, pie graphs (charts), bar graphs, pictographs (pictograms).

CHAPTER TWO

2.0. BASIC TOOLS FOR ECONOMIC ANALYSIS

Definition of Economic Tools

2.1
Table: A systematic and orderly arrangement of information, fact or data using rows and columns for presentation, which make it easier for better understanding.

Characteristics of a table

A table must be very simple

It must be easy to understand
It must have a title or heading
The unit of measurement used in the table must be stated
The sub-heading for columns and rows used must be stated

2.2. Graph: These are diagrams showing a functional relationship between two variables. Examples of graphs are line graphs, pie graphs (charts), bar graphs, pictographs (pictograms).

Characteristics of Graphs

All graphs must be properly labeled
The units of measured must be indicated
Graphs must show the source of the data presented
All graphs must have title

Graphs must possess appropriate scales
All graphs must have x_-axis on the horizontal side and y_-axis on the vertical side
1. Line graphs: This is line uses for data on a graph where emphasis is on continuous change
2. Pie graphs (or charts): This is simple circle of any convenience size which is divided into sections or sectors, each which is proportional to the quantity or value it represents. The entire circle is represented by 360° and, or 100 %.
3. Bar charts (or graph): these are graphs made up of bars of rectangular which are of equal width and whose lengths are proportional to the quantities they represent. Examples of bar charts are: simple bar chart, component bar charts and multiple bar charts.
4. Pictograms: These are charts in which pictures or drawings of objects are used to represent item in a given data.

2.3. Measure of Central Tendency

This is also called measure of location. It is the statistical information that gives the middle or centre or average of a set of data. Examples are: arithmetic mean, median, mode, geometric mean and harmonic mean.

Arithmetic mean: this is the average of series of series of figures or values. It is obtained by dividing the sum of these figures by the total number of the items.
ε_x

Formulae 1: x =
n

This formulae is used when the figures are small and ungrouped

ε_fx

Formula 2: x =

This formular is used when the figures are large and repeat themselves

ε_fx

Formula 3: x =

_fx

This formular is suitable for grouped data.

Advantages of Arithmetic Mean:

It is very easy to calculate
It gives an exact value

iii- It is the best known average
1. It is very easy to understand
  1. It makes use of all available information in data
b) The Median: This is an average, which is the middle value when figured are arranged in order of magnitude.
(n+1)

Formula 1:

2

This formular is used when the number involved are add numbers.
(N+1)
Formular 2:

2
This is for grouped data of odd numbers of item.

c) The Mode: This is the most frequently occurring number in a set of numbers.
Uni-modal: This is having only one mode in a set of numbers
Bi-modal: This is having two modes in a set of numbers
Tri- modal: This is having three modes in a set of numbers

2.4. Measure of Dispersion or Variability
This refers to the degree of spread of the numerical value in a distribution. It measures the variation that occurs a given set of data. Examples are range, mean deviation, variance, the quartile and standard deviation. (highest) and the minimum (lowest) values in a set of data.

Other formulars.
1. Geometric mean (G) = √
  
  N
2. Harmonic mean (H) =
  Ε ^1/x
Ε_X²
1. Quadratic mean or RMS =√ N
          ε ( x – x)
d- Mean deviation (M.D) =
N


ε ( x – x)²
e- Variance (V) =
         n

ε ( x – x)²

f- Standard deviation (S.D) = √ n

Fig. 1: Example of graphs
1. Line graph b) Pie chart
1. Bar chart c) Pictograms
Relevant Examination Questions:
1. State four characteristics of a table
2. Distinguish between Measure of Central Tendency and Measure of Dispersion
3. State five advantages of arithmetic mean
4. State three examples each of charts, graphs
CHAPTER THREE

3. PRODUCTION
3.1. Production: This is the various economic activities aimed at the creation of goods and services and the distribution of these to the final consumers for the satisfaction of human wants. It is also defined as the creation of utility. Production process involves three major groups of people. These are producers, distributors and consumers.
3.2. Types of goods: This can be classified into two major categories, consumer goods and capital goods. Consumer goods can further be divided into two classes: durable goods and non-durable goods.
Examples of consumer goods are milk, radio, cake, the services of police, nurse, lawyer, etc.
Examples of durable goods are radio, tables, shirts, and spoon.
Non-durable goods have examples of meat, egg, bread, milk, etc.
Examples of capital goods are buildings, lorries, machines, cars.

3.3. Types of production: Direct and indirect production
a- Direct production is the types of production in which an individual produces goods and services only for family use and consumption

b- Indirect production is the type in which goods and services are produced in large scale mainly for sale. Indirect production is also divided into three major groups: primary, secondary and tertiary production.
Primary production refers to the extraction of raw materials provided by nature. Examples are fishing, mining, and agriculture.
Secondary production is the transformation or conversion of basic raw materials or semi-finished goods into final forms that are acceptable to the consumers. Examples are cars, clothes, roads, etc.

c- Tertiary production is concerned with the provision of commercial and professional services to the people. Examples are retailers, transporters and the services of professionals: lawyers, teachers, doctors, musicians, etc.

Importance of Production
1. Availability of goods and services
2. Increase in wealth of people
3. Improvement in the standard of living
4. Acquisition of skits
v- Increase in export potentials

3.4. Factors of production: These refer to agents and resources which are combined together to produce goods and services. These are four: land, labour, capital and entrepreneur.

a- Land: It is defined in economics as free gift in nature. in economics, land include earth surface, forest, mineral resources, oceans, atmosphere, etc.
Characteristics of land:
1. Land is immobile
2. The supply of land is fixed
3. Land is a free gift of nature
4. The reward of land is rent
5. Land is heterogeneous
6. The quality and value of land varies
7. It is subject to diminishing returns
Importance of land
1. It is used for farming purposes
2. It is used to rear livestock
3. It is used for fishery purposes
4. It can be used as collateral security
5. It is used for construction purposes
6. It is used for social and recreational purposes
  e.g to build schools, stadia
7. sources of minerals
8. it is also used for transportation purposes
b- Labour: This is all form of human effort put into or utilized in production. It is man's mental and physical exertions generated in the process of production. The reward for labour is wages and salaries. Types of labour are: Skilled and unskilled.
1. Skilled labour: This category of labour makes use of their mental effort in production. They have undergone relatively long and specialized training.
Examples are teacher, lawyers, engineers, pilots and sailors
Unskilled labour: this requires little or no formal education or training. Examples are guards, messengers, cleaners, etc.
Characteristics of labour
1. Labour is mobile
2. Labour is skilful
3. The supply of labour is not fixed
4. Labour has feelings
5. Labour controls ether factors of production
6. Labour is a human factor and has initiative
Capital: This is man-made assets used in production. It is the stock of previous wealth invested in order to produce future wealth.
Types of capital: The different types or forms of capital include
Fixed capital: These are assets which are not used up in the course of production. Examples are land, building, plants, etc.
Circulatory or working capital: These are assets which are used up in the course of production. Examples are water, fuel, raw materials.
Liquid or current capital: These capitals are required for the day-to-day running of productive activities. Examples are finished goods, money.
Social capital: These are forms of capital or assets provided by the government that aid production. Examples are road, electricity, water, etc.

Characteristics of capital
1. Capital is man-made
2. It is subject to depreciation
3. It is durable
4. It exists in different forms
5. It promotes division of labour
The Entrepreneur: This organizes and co-ordinates ether factors of production in order to produce goods and services.
Characteristics of entrepreneur
1. entrepreneur bears the risk in production
2. the organizes productive resources
3. he makes the necessary decisions
4. the control ether factors of production
Fig 3:
Goods

Consumer goods Capital goods

Durable goods Non-durable goods

Fig 4 :          Production

Direct production Indirect production

Primary Secondary Tertiary
production production production

Fig 5: Factor of production

Land Labour Capital Entrepreneur

Unskilled Skilled

Fixed Circulatory liquid Social

3.5. law of diminishing returns : It states that as successive units of a variable factor (e.g labour or capital) is applied to a given fixed factor (e.g land), output will increase at first but it will get to appoint at which the addition of one or more unit of the variable factor will result in less additional units of output. This law is otherwise called the law of variable proportions.
3.6. Capital consumption: This refers to the using up of existing capital stock and not replacing worn-out capital goods used in production.
3.7. Production Possibility Curve (PPC).
This refers to a graph showing the possible combinations of different commodities that can be produced in a given economy, given the prevailing level of technology, if all the available productive resources are efficiently utilized.
3.8. Concepts of Total, Average and Marginal Productivity
a- Total product (TP): This is defined as the total quantity of commodities produce at a particular time as a result of the combination of all factors of production.
b- Average product (AP): This is the output per unit of the variable factor (labour or capital) employed.
c-
Marginal product (MP): This is the addition to total output brought about as a result of the employment of an additional unit of a variable factor.

Formular 1: TP = AP x Labour
TP
Formular 2: AP =
         Labour

         Changes in TP
Formula 3: MP =
         Changes in variable factor

The formulars are applied to obtain the table below.

Table 1:

N° of workers
TP (Kg)
AP (Kg)
MP (Kg)
1
100
100
-
2
300
150
200
3
600
200
300
4
1000
250
400
5
1200
240
200
6
1300
217
-100

Fig. 6:

Possible examination questions:
1. What is mean by production?
2. Clearly distinguish between labour and entrepreneur as factors of production
3. If the AP of a company is 85 000 tones produced by 6 labours. Calculate the total product
4. Explain six important of land as factor of production.
CHAPTER FOUR
4.0 Division of Labour, Specialisation and Scale of Production
4.1. Division of labour: This is the breaking down of a production process into a number of separate operations, where-by each operation is performed by one person or group of persons
4.2. Specialisation: This is defined as the concentration of productive efforts of an individual, a firm or a country in a given aspect of economy activity in which it has the greatest advantage over others.
Types of specialization and division of labour
1. Specialization by process: This is the type of specialization in which a production process is divided into different operations or stages and each worker, firm or country concentrate on only one operation or stage.
Specialisation by sex: This is a type of specialization in which certain occupations are exclusive either for males or females as dictated either by law, custom or tradition. For example, women are dominantly found in nursing, while men dominated mining industry.
Specialisation by product: This is when a firm, goverment or individual concentrates on production of a particular commodity.
Territorial or geographical specialization: This is when certain region or territory specializes on production of certain products. For examples ram is reared among the

Fulanis while crude oil is found in Niger Delta.
Advantages of Division of Labour and Specialisation
1. It leads to increase in production
2. It saves time during production
3. It makes development of greater skill
4. It causes less fatigue
5. It leads to development of technology
6. It facilitates production of standard goods
7. It leads to lower unit cost
Disadvantage of Division of Labour and specialization
1. It creates monitoring and boriness
2. It causes decline in craftsmanship
3. There is problem of mobility of labour
4. There is problem of increased inter-dependence
5. It causes decrease in use of skill (Craftsmanship)
Disadvantage of Division of Labour and specialization
1. Small size of market
2. Inability to break down production process
3. Level of technology
4. Bad government policies
5. Lack of qualified labour
6. Inadequate capital for production
4.3. Economies of Scale
This can be defined as the growth of a firm as a result of the expansion of the volume of productivitive capacity

resulting in increase in output and a decrease in its cost of production per unit of output.

Diseconomies of scale (DS)
This is direct opposite of economies of scale.

Types of Economies of Scale and Diseconomies of scale
1. Internal economies and internal diseconomies
2. External economies and external diseconomies
While internal economies and internal diseconomies deals with advantages derives and disadvantages (problems) derived by a firm as a result of their increase in size or growth, caused by internal factors.
External economies and external diseconomies deals with advantages and disadvantages derived by a firm as a result of their increase in size or growth or output causes by external factors.
Classification of internal economies of scale: these are classifications of advantages derivable by a firm as a result of internal factors.
These are:
1. Financial economies
2. Administrative economies
3. Research economies
4. Technical economies
5. Specialization economies
6. Welfare economies
7. Risk bearing economies
8. Marketing economies
Limitations to large scale production or to the growth of firms.
Same as limitations to division of labour and specialization

Possible examination questions:
1. Explains the reasons that may motivate an entrepreneur to adopt division of labour.
2. Distinguish clearly between internal economies of scale and external economies of scale.
3. State the demerits of specialisation
5.0 THE THEORY OF COST
5.1. Cost of Production may be defined as the sum total of all the payments to the factors of production used in the production of goods and services. For production to take place, all the factors of production must be present and must all be costed.
Cost is basically divided into two. These are fixed const (FC) and variable cost (VC).
Fixed cost (overhead cost or unavoidable cost) is the cost of an enterprise which does not change with change of output.
Variable cost (direct cost), is defined as the cost of production which varies or changes directly with the level of output.
Variable cost (direct cost) is defined as the cost of production which varies or change directly with the level of output.
The two cost above (FC and VC) lead to the third called total cost (TC). TC is the total sum of fixed and variable cost incurred by an enterprise in the production of a particular commodity.
Mathematically FC + VC = TC

Other forms of cost emanated from the above three costs. These are:
1. Average cost (AC) or average total cost (ATC): This is the cost per unit of output. Mathematically
  Total cost (TC)
AC or ATC =
Total output (TQ)
Average variable cost (AVC): This is the cost per unit of a variable cost of output.
Total cost (TC)
AVC =
Total output (TQ)

Average fixed cost : This is the fixed cost of producing a unit of output

Total fixed cost (TFC)

AFC =

Total output (TQ)

Marginal cost (incremental cost): It is the extra cost of increasing output by one more unit. This is the cost difference in producing an additional unit of an enterprise's output.
Changes in TC ΔTC

Marginal cost (MC) = =

Changes in output Δ Q

Worked example

A firm produced 100 bags of salt incurring fixed cost of 400 000 and variable cost of 120 000

Calculate:

Total cost
Average cost
Average fixed
Average variable cost

Solution:

TC + FC + VC = N400 000 + N120 000 = N 520 000

TC 520 000
AC = = = N5 200
TQ 100

TFC 400 000
AFC = = = N4 000
TQ 100

TVC 120 000
AVC = = = N1200
TQ 100

5.2. Implicit and explicit cost:

Explicit cost is the cost made directly for the materials used during the course of production. Examples are direct cost on salaries, raw materials, transportation, etc.

Implicit cost is the cost which the owner of the firm directly incurs on factor of production

Examples include investor's salary, normal profit and other personal expenses.

Practice question

Choose the appropriate formulars to solve these questions on the table below:

Table 2

Output	TFC	TVC	TC	AVC	ATC	MC
Q	N	N	N	N	N	N
0	100	0	100	0	100
1	100	40	140
2	100	64	164
3	100	80	180
4	100	88	188
5	100	96	196

Possible examination questions

List and explain five cost concepts
Write any three formulars on cost concept

CHAPTER SIX

6.0 BUSINESS ORGANISATIONS

6.0. This can be defined as an enterprise set up an individual or group of individuals, government or its agencies for the main purpose of making profit and providing goods and services for the satisfaction of human wants.

Type of business organisations

These are two major types of business organisations. These are private enterprise and public enterprises.

Private enterprise: These are enterprises owned and managed by private individuals. This major aim is to maximise profits. Examples include sole proprietorship, partnership and companies.
Public enterprise: Contrary to private enterprises, public enterprises are the types of business organisations which are owned, controlled and managed by the government. The enterprises have the major objective of providing social services to the people. Examples are M.TA, MNPC, NPA, etc.
Characteristics of private and public enterprise in tabular form:

	Private enterprises	Public enterprises
Ownership	Owned by individuals	Owned by government
Capital	Provided by individuals	Provided by the government
Objective	Tomaximise profit	To provided social service
Control	By elected BOD	By appointed BOD
Monopoly	No monopoly	Enjoys monopoly
Management	More efficient	Less efficient
Risk bearer	By the owners	By tax payers
Extabishement	By registration	By acts of parliament

Table 3

6.1. Problems of private enterprise in Nigeria

1. Duadequate capital

2. Insufficient raw materials

3. Inefficient management

4. Poor power supply

5. Lack of specialization

6. Low level of technology

7. Poor quality of production

6.2. Sole proprietorship and partnership

Sole proprietorship may be defined as a form of business enterprise owned, financed and managed by one person with

the primary aim of maximizing profit. It is also called one-man business.

Examples are found in trading and service industries like lawyers, musicians.

Advantages of sole proprietorship

It involves small capital

It is very easy to start
Decisions are casier to take
It is easy to manage
It can survive so easily
All profits (losses belong to the owner)
There is privacy in running the business
There is close relationship between the owner and the workers

Disadvantages of sole proprietorship

There is problem of continuity
Problem of raising enough capital
The owner bears the risk alone
It has unlimited liability
It lacks specialization
There is limit to expansion

Partnership: This is defined as a type of business organization in which two to twenty persons agree legally to set up and manage a business outfit with the sole aim of

making profit

Types of partnership

Limited partnership
General or ordinary partnership

Type of partners

General partner (GP)
Limited partner (LP)
Active partner (AP)
Nominal or quasi-partner (NP)
Sleeping or domant partner (SP)

Types of partners and their features in tabulation.

Table 4

Particulars	LP	GP	AP	NP	SP
Contributing capital				X
Management role	X			X	X
Limited liability		X	X	X	X
Business running	X			X	X
Share of profit / loss
Taking salary	X			X	X

6.3.1. Deed of partnership is (a book containing) agreements, rules and regulations guiding the members of a partnership. The agreement contains some of these:

i- The names of partner

ii- The name of the firm

iii- The nature of the business

vi- The objective of the firm

iv- The rights and duties of each partner

v- Sharing formular for profit and loss

Advantages of partnership business

Has more financial resources than sole proprietorship
Decision can be jointly made
There is large production
There is sharing of risk and liabilities
There is privacy on the financial position of the business
There is better chance of continuity
No legal formalities is required
Possibility of loan facilities
Specialization in management
Greater possibility of expansion

Disadvantages of partnership

Business is not a legal entity
There is limited growth of the business
Difficulty in management
It can not be quoted on the stock exchange
Disagreement between partners can cause havoc

6.3. Company

A company can be defined as a legal person or entity created by the association of a number of people in accordance with the law for the purpose of pooling their

capital together in order to set up a business venture. Examples include coca cola plc, Dunlop Nig. plc, and Julius Berger Nig. plc.

Types of companies

Unlimited liability companies: The liability of members in this type of company is unlimited. That is they are entitle to settle the obligations (debts) of the company to the extent of all their estate (properties)
Limited liability companies: This means, the liability of the members (owners) of the company is limited (not more than) to the extent of capital they contribute for the business.

Type of limited liability companies

Companies limited by guarantees: This type of companies is principally formed not for the purpose of business, but to promote and develop certain interests.
Companies limited by shares: This is principally formed for business purpose and liabilities of the owners are limited to the amount of capital (share) they have in the company.

Types of limited company

Private limited liability company
Public liability company

Similarities between private and public limited liability companies:

Both companies have legal entity or status

The liability of the members are limited to the extent of amount they contribute

iii- There is more likely of continuity of existence

iv- Profits are easily ploughed back to the business

v- Both companies have access to large capital outlay

vi- Both companies are run by board of Directors (BOD) elected by the owners

Tabulated differences between private and public limited company

(Note that these also represent characteristics and advantages of one over another.)

Table 5

Particulars	Private	Public
Shares	Not easily transferrable	Easily transferable
Stock exchange	Shares are not quoted	Share are quoted
Shareholder	2- 50	7-infinity
Debentures	Not issuable	Issuable
Name title	"Ltd" (limitted)	"plc"
Managed	By the owners	By BOD
Account book	Not publicized	Should be publicized

6.4. Formation of the limited liability company

Either private or public, three documents are required by the promoter (on behalf of the owners) to register a company with the registrar of companies. These documents are:

a) Memorandum of Association (MOA): This document forms the constitution of the company containing objectives and powers of the company to the outside world. MOA contains the name of the company, the registered address, objectives, names of founders and status of the company.

b) Article of association (AOA): This contains the regulations which govern the national management of the company's affairs, duties, rights and powers of the shareholders.

c) Prospectus: This is used to invite the public to subscribe for shares of the company.

After the promoter has filed these three documents with the registrar of companies, the ROC issues certificate of incorporation to give legal entity to private limited company.

Certificate of trading: This is a document which allows public limited company to commence business activities. These COT and ROC are both given to public limited company.

Sources of finance to companies:

Loans and overdraft
Sales of shares
Sales of debentures (plc only)
Equipment leasing
Ploughing back of profit
Access to trade credit
Access to hire purchase

Fig 9:

Chart of business organizations

Sole proprietorship Partnership Companies

Limited General unlimited limited

Private Public

6.5. Shares

A share can be defined as the individual portion of the company's capital owned by shareholders.

Types of shares

These are two major types of shares. These are:

Preference share: This is a type of shares which has priority in terms of dividend payment and repayment of capital in the event of winding up.

Types of preference shares are:

Cumulative preference share
Participating preference shares
Redeemable preference shares
Non-cumulative preference shares
Non-participating preference shares

b) Ordinary shares (equities): The ordinary shareholders are the real owners of the business. They are the risk bearers of the business.

Types of ordinary shares

Deferred or founder's shares
Preferred ordinary shares

Chart of shares

Fig : 10 Deferred shares

Ordinary

Prefered ordinary shares

Cumulative shares

Preference Participating shares

shares Redeemable shares

Non-cumulative shares

Non-participating

Characteristics of ordinary shares and preference shares in tabulated form

Table 6

Particular	Preference shares	Ordinary shares
Rates of interest	Fixed	Not fixed
Receiving dividient	Receive first	Receive after
At liquidation	Receive back Their capital first	Receive back Their capital after
AGM voting Right	Can not vote Can not be voted	Can vote Can be voted

6.6. Capital: This is the resources that are used to start and run a business.

Types of capital: There are different types of capital. These are:

a) Authorised capital (Registered and Nominal): This is the amount of capital stipulated in the MOA considered as enough to set up and run a company.

b) Issued capital: This is the part of authorized capital given out to members of the public for subscription.

c) Called-up capital: This is part of issued capital which the management has offered to the public to be called.

d) Reserved capital (uncalled up). This represents the part of issued capital has not been called up by the public.

6.7. Stocks: This can be defined as the bundle of shares or mass of capital which can be transferred in fractional amounts.

6.8. Debentures: A debenture is a bond, acknowledging a fixed rate of interest.

Types of debentures

Mortgage debentures
Simple or naked debentures
Redeemable debentures
Irredeemable debentures
Secured debentures

Tabulated differences between debenture and shareholder

Table 7

	Debenture	Shares
1	A debenture is a certificate of indebtedness	A share is a unit of capital
2	It is a loan	It is not a loan
3	Holder is a creditor	Holder is one of the owners of the company
4	Holders receive interest	Holders receive dividend
5	The holder is entitled to fixed, regular and predetermined payment of interest	Holder is entitled to dividends that may vary with profits

6.9. Public corporations: This is also called public Enterprises or statutory corporation. It is a large scale organization set up, owned and financed by the government of a country mainly to provide services to the members of the public. Examples are :

Nigerian National Petroleum Corporation (NNPC).

Nigerian Telecommunication limited (NITEL)
Federal radio Corporation of Nigeria (FRCN).

Features of public corporation

Public corporations are owned and financed by the government
It is established by decree or act of parliament
Its objectives is to provide essential services and not for profit making
It has legal entity
It is managed by BOD appointed by the government
It requires huge capital
Employees are civil or public servants

Specific problems of public corporation

High degree of corruption, mismanagement and embezzlement.
Political instability
Favouritism in appointment
Negative attitude of civil servants

Sources of finance to public corporations

Loans and overdraft
Internally generated revenue
Grant from government
Grant from international financial institutions e.g IMF
Grant from foreign countries e.g Britain, USA.

6.10. Co-operative societies

This is a voluntary business organization in which a group of individuals with common interest pool their resources together to promote the economic welfare of their members in production, distribution and consumption of goods and services.

Characteristics of co-operative societies

Co-operative society is formed by two or more people
Promotion and advancement of interest of their members
It is controlled and managed by elected committee members
The capital is raised through voluntary contributions
There is possibility of perpetual existence
The liability of members is limited
It is democratic in nature

Types of co-operative societies

Producers co-operative society
Consumers co-operative society
Wholesale co-operative society
Retail co-operative society
Credit and thrift society

6. Multipurpose co-operative society

Advantages of co-operative society

Encouragement of saving
There is financial assistance to members
Improving member's standard of living
Opportunity for loan facilities
Strong inter-personal relationship
Educating their members
Encouragement of hardworking
Strong inter-personal relationship

Disadvantages of co-operative society

Problem of loan recovery from members
High level of illiteracy among members
Lack of initiative
The society evde payment of tax
Lack of discipline among members

6.11. Joint ventures

Joint ventures or enterprises are those businesses in which private investor and government are in partnership. One main objective of joint venture is to combine some of the advantages of government and private ownership.

Possible examination questions

1. a. Give five reasons why government participate in joint ventures

b. write five sources of funds available to public corporations

2. Differentiate between share and debenture

3. Which form of business would you consider the best? Give sufficient reasons.

4. Give five advantages of sole proprietorship over partnership business.

5. Discuss the two types of limited liability companies.

CHAPTER SEVEN

7.0. POPULATION

Population is defined as the total number of people living within a country or a geographical area at a particular time.

7.1. Population censor: This is the headcount of all nationals of a country at a particular time. It refers to governments' counting of the children, adults, male, female, abled and disabled at a given period of time.

Characteristics of a good population census

It must be conducted by the governments
It must be done simultaneously throughout the country
It must involve physical counting of the citizens
It must involve population census experts

Types of population census

Defacto population census
De jure population census

Importance or reasons for population census

To determine the population size
To owns the accordable revenue
To forecasts future economic needs
Determines employment rate
Determines the citizen's standard of living
For proper distribution of resources
For provision of social amenities
Allocation of parliamentary seat

9. To know the level of manpower

10. To assist in getting financial aids

Common problems of population census in West Africa

High level of illiteracy
High cost of conducting the census
Persistence political and economical problems
Lack of adequate trained professionals
Inadequate infrastructural facilities
Poor regional planning
Wrong religious and moral beliefs

Determinants of population size and growth

Birth rate: The birth rate or natality rate of a country refers to the rate at which children are being given birth to in that country. High birth rate may cause overpopulation while low birth rate may cause low
population.

Factor affecting birth rate

Early or late marriage
Desire for large or small families
Religion beliefs
Improved standard of living
Government aid to the people

Death rate: Death rate or mortality rate of a country refers to the rate at which people (both adult and children) die in a country.

Factors affecting death rate

Ratio of male to female
Poor medical services
High rate of infant mortality
Rate of poverty
Natural disasters
Man-made disasters

c) Migration: This is defined as the movement of people from one geographical area to another, involving permanent or temporary residence or settlement.

Types of migration

Emigration : This is the type of migration in which people leave their own countries, i.e. movement out of a country
Immigration: This is the type of migration in which people enter into another of a country.

Forms of migration

Rural to urban migration
Rural to rural migration
Urban to rural migration
Urban to urban migration
International migration
Seasonal migration

Factors affecting migration

The occurrence of natural disasters
Physical and climate conditions

3. Insecurity and political instability

4. Differences in economic opportunity

5. Differences in social amenities

Advantage of migration

It reduces population density
It boosts market at the receiving region
It promotes cultural integration
It supplies migrant labour at the receiving end
It reduces pressure on social amenities

Disadvantages of migration

It increases high cost of living at the receiving end
It breeds social vices
It leads to unemployment at the receiving end
It leads to pressure on social amenities at the receiving region
It leads to congestion in housing and transportation at the receiving region

7.2. Population density: This is the number of persons per square kilometer of land. Mathematically:

Total population

Population density:

Land area

ii. Total population = Population density x Land area

Total population

iii. Land area =

Population density

7.3. Overpopulation: This is a situation when the population (of a country) is more than the country's physical and human resources. That is, overpopulation refers to a situation where the population exceeds the available resources of the country.

Control of overpopulation

Family planning
Discouragement of early marriage
Increase in food and infrastructural facilities.
Sex and mass education
Encouragement of emigration

7.4. Under population: This is the type of population that is less than the available resources of a country. It means the size of the population is so small that when combined with the available resources. It will secure minimum returns per head.

7.5. Optimum population: This is the middle point of overpopulation and under population. It is defined as the type of population which when combined with the available resources and the given level of existing technology secures maximum return per head.

The below graph shows relationship between overpopulation, under population and optimum population.

Fig. 11

This indicates that as the population of 70 million. The best return per head of 250 is obtained

7.6. Population distribution

Population can be distributed into the following categaories:

Age distribution: This is the breaking down of population of a country into age groups. These are :

0-17
60 years and above

Independent population

iii. 18-60

Working population or labour force

b) Sex distribution: This is classification of given population according to sex and gender (ie male and female)

c) Occupational distribution: This refers to classification into different types of work they engage. This can be primary, secondary or tertiary.

d) Geographical distribution: This is distribution into separate geographical areas within a country.

For more on Population figure see appendix 2.

Possible examination questions

What are the factors responsible for Nigeria's population?
Why do government conduct population census?
Where the ratio of dependant to independent population is 3:2. What are the likely implications of this?

CHAPTER EIGHT

AGRICULTURE

8.1. Agriculture is simply defined as the production of crops and rearing of animals for man's use

Importance of agriculture

Provision of food
Employment opportunities
Sources of foreign exchange
Development of towns
Provision of raw materials for industries

Components of agriculture: This is otherwise called branches of agriculture. These are:

Crop production
Livestock production
Forestry
Fish farming

Systems of agriculture are:

Peasant farming or subsistence farming
Plantation farming
Mechanized farming (Commercial)
Co-operative farming

Problems of agricultural development in West Africa:

The type of land tenure system

2. Inadequate credit facilities

3. Poor transportation network

4. Lack of storage and processing facilities

5. Lack of basic amenities

6. Lack of technical know-how

7. Problems of pest and diseases

8. Poor marketing system

9. Political and social instability

10. Rural to urban movement

Agricultural policies in Nigeria

Operation Feed the nation (OFN) : 1976 to 1979
Directorate of foods, roads and rural infrastructure (DFRRI) 1986
Green revolution 1979-1983
Land use decree 1978

Possible examination questions

What are the likely solutions to the agricultural problems in Nigeria
Discuss any four branches of agriculture
Discuss five contributions made by agriculture to the industrial development of Nigeria

CHAPTER NINE

TRADE BY BARTER AND MONEY

9.1 Trade by Barter

This may be defined as a form of trading in which goods are

exchanged directly for other goods without the use of money

Problems associated with trade by barter

Problems of double coincidence of wants
No fixed rate of exchange
There is wastage of time and effort
Difficulty in storing wealth
There is problem of indivisibility
It discourages borrowing and lending
It discourages large scale production

9.2 Money is anything that is generally acceptable as a medium of exchange and in the settlement of debts.

Historical development of money:

Use of cattle, cowries, shells, salt, tobacco and beads.
Precious metals like silver and gold
Cutting of metals into pieces making coins
Use of receipts issued by goldsmith as paper money.
Inconvertible paper money

Characteristics of money

It must be generally acceptable
It must be easily portable
It must be relatively scarce
It must have the same quality (size and colour)
It must have long durability
The value of money must be stable

7-
It must be easily recognizable
8- It must be easily divisible
9- It must have intrinsic value
Function of money
It serves as a medium of exchange
It serves as a standard of deferred payment
It serves as a unit of account
It serves as a store of value
It serves as a measure of value
Forms or types of money
Coins (5K, 10K or 50CFA)
Commodity money (gold, diamond, beads)
Banks notes(N50, N100, 1000CFA)
Partial money (petrol vouchers, cheques, tickets)
Legal tender (naira, dollar)
1. Deposit money
2. Token money
Representative money: This is also called quasi money. Examples include:
i-Money order ii. Bank order iii. Credit transfer iv. Cheques v. Postal order vi. Bank draft
vii. Certified cheque viii. Promisory note
For more of Population figure see appendix 1.

Demand for money: This is the amount of money which all individuals in the economy wish, for various reasons. Motives or reasons for holding money
1. Speculative motives:
2. Transactionary motives : for day-to-day transactions
3. Precautionary motives : unforeseen circumstances
Supply of money: This is the amount of money available for une in the economy at a given period of time.
Factor affecting supply of money:
1. Bank rate ii. Cash reserve (eash ratio)
2. Economic situation
iii. Total reserves of the control bank
The value of money
This is the quantity of goods and services which a given amount of money can buy. This is otherwise called purchasing power.

Factor affecting the purchasing power of money
1. The price level of goods and services
2. The quantity of money supplied
3. The speed of money in circulation
4. Inflation and deflation
5. Volume of goods and services
Mathematically, money is measured by the term 'price index'.
Price in the current year
Price index =
Price in the previous year
this is expressed as a percentage.

Possible examination questions
1. Highlights the origin of money
2. Stable ten characteristics of money
3. Why is money better than trade by barter
4. List eight representations of money
CHAPTER TEN

INFLATION AND DEFLATION
10.1. Inflation: This may be defined as a persistence rise in the general price level of goods and services.

Types of inflation
1. Demand-pull inflation
2. Cost-push inflation
3. Hyper-inflation
4. Persistence or creeping inflation
Causes of inflation
1. Increase in demand
2. Lows production
3. War
4. Increase in salaries and wages
5. High cost of production
6. Increase in population
7. Level of importation
8. Excessive bank lending
9. Inadequate storage facilities
10. Hoarding
Control of inflation
1. Use of fiscal measures eg increase in direct tax
2. Surplus budget or reduction in government expenditure
3. Industrialization: increase in output
4. Increased production
5. Use of contradictory monetary measures
6. Use of income policies
7. Control of importation
8. Checking hoarding of goods

Terminologies Associated with inflation
Inflationary gap: This is a situation in which the total demand in the economy exceeds the total supply of goods and services available to satisfy demand
Inflationary spiral: This is caused by an interaction still rise higher, thereby increasing the cost of production of income factors especially wages and prices such that an increase in the price level causes workers to demand higher wage which causes the price level to
Disinflation: refers to a set of measures by which the inflationary pressure in an economy is removed so as to maintain the value of money.
d) Reflation: it refers to an economic state of affairs in which prices, employment etc are picking up again as a result of conscious government policy to that effect.
Stagflation: Refers to a high rate of inflation which exists at the same time as industrial production is slowing down.

Deflation: This is a continuous fall in the price level of goods and services as a result of decrease in the volume of money in circulation

Causes of deflation
1. Budget surplus
2. Increase in bank rate
3. Increase in production
4. Increase in taxation
Possible examination questions
1. Differentiate between inflation and deflation
2. Discuss the following inflation terms :
  1. inflationary spiral
  2. Reflation
  3. Stagflation
3. Explains any four ways of controlling inflation
CHAPTER ELEVEN

11.0 FIRM/INDUSTRY/INDUSTRIALISATION
11.1 Firm: A firm is a basic unit within which factors of production are organized for the purpose of producing wealth

11.2 Industry: An industry is a group of firm producing similar products and under separate administration or management

Types of industry
1. Manufacturing industry
2. Mining industry
3. Construction industry
4. Processing industry
5. Transport industry
6. Power and energy industry
Location of industry: This is the sitting or establishment of a firm or industry in a particular place.

Factor influencing location of industry
1. Proximity to source of raw materials
2. Nearness to market
3. Availability of capital
4. Nearness to source of capital
5. Availability of skilled labour
6. Adequate transport network
7. Political stability
8. Favorable climate
9. External economies
10. Government policies

11.3 Localization of industries
This refers to the concentration of firms or industries producing similar products in an area

Advantages of localization of industries
1. It encourages development
2. Emergence of subsidiary firms
3. Generation of employment
4. Emergence of organized market
5. Creation of competition
6. Emergence of a pool of skilled labour
7. Attraction of more people
8. Provision of social amenities
9. Encouragement of division of labour and specialization
10. It cause external economies
Disadvantages of localization of industries
1. It leads to congestion
2. Pressure on social amenities
3. It results in uneven development
4. It causes structural unemployment
5. Increase in crime rate
6. It causes environment pollution
7. Targets for enemy attack
8. It encourages rural to urban migration
11.4 Industrialisation: This can be defined as the process of transforming an economy based on extractive activities into one based on manufacturing.
Importance of industrialization on economy
1. Increase in Gross National Product (GNP)
2. Employment opportunities
3. Improves trade balance
4. Improving standard of living
5. Diversification of the economy
6. Technological development
7. Increase in production
8. Conservation of foreign exchange
9. Stimulation of other sectors
10. Training and development of skilled manpower
Reasons for the concentration of industries in urban centre
1. Availability of large market
2. Availability of labour
3. Good transportation network
4. Nearness to seaports and airports
5. Availability of finance
6. Presence of infrastructural facilities
11.5. Indigenisation
Indigenisation is the transfer of ownership and control of business enterprises from foreigners to the indigenes. It is backed up in Nigeria by Nigerian Enterprises Promotion Decree of Federal Government in 1972.

Advantages of industrialisation
1. Ensures indigenous participation in establishment of industries.
2. Development of local technology
3. Acceleration of industrial development
4. Reduction in foreign control of the economy
5. Ensures self reliance
6. Provision of employment opportunities
7. Increase in standard of living
8. Development of private initiatives
Disadvantages of indigenisation
1. Discouragement of foreign investment
2. It can lead to disharmony between countries
3. It can lead to capital flight
4. Inexperience and incompetence can destroy local industries
5. Rich people can hijack the economy
11.6 Nationalisation
Nationalisation is a deliberate policy by which government takes over the control and ownership of private enterprises due to economic, political, social or strategic reasons
Reasons / Advantages of nationalisation
1. For strategic reasons e.g Security, defence
2. To prevent exploitation by monopolist
3. For political reasons
4. To avoid foreign dominance of the economy
5. Because of large capital
6. To prevent wasteful competition
7. To eliminate washing of resources

Disadvantages of nationalization
1. Prevention of private initiatives
2. Consumers can be easily exploited
3. Low productivity and inefficiency
4. High level of corruption and mismanagement
5. Resources can be misallocated
11.7 Commercialisation and Privatisation
Commercialization: This is a policy geared towards making state-owned enterprises to because more efficient and profit oriented
Privatization: This is a policy designed to enable individuals and private or corporate organizations take ob=ver the ownership and control of government businesses such as public companies and corporations.

Reasons/Advantages of Commercialisation and
Privatisation
1. Efficient management
2. Generation of more revenue
3. Creation of alternative choice
4. Emergence of innovations
5. Autonomy of enterprises
Disadvantages of commercialization / Privatisation
1. Decrease in standard of living
2. Reduction in employment
3. Uneven distribution of income
4. Loss of consumers' welfare scheme
Possible examination questions
1. Clearly differentiate between indigenisation and nationalisation
2. What ways is industrialization useful to economic development
CHAPTER TWELVE

12.0 THEORY OF CONSUMER BEHAVIOR

12.1 The concept of Utility: This is defined as the satisfaction that a consumer derives from consuming a commodity or service at any particular time. Utility is relative to a consumer and the variations depend on time, place and form.

Types of Utility
1. Form utility
2. Place utility
3. Time utility
Formular:
1. Total utility (TU) = Average utility x Quantity consumed
  
  Total utility
2. Average utility (AU) =
  Quantity consumed
Changes in TU
1. Marginal utility (MU) =
  Changes in consumption
The law of diminishing marginal utility: It states that the satisfaction derived from consuming successive units of a commodity will diminish as the total consumption of the commodity increases

12.2 Concept of Origin
This refers to the minimum (or smallest) quantity of a commodity which must be consumed before the commodity can yield any satisfaction to the consumer.

12.3. Utility maximisation

MUA MUB MUC MUD
= = =
PA PB PC PD

Where MU is the marginal utility, P is the price and A, B, C and D is commodities.

12.4. The concept of indifference curves
An indifference curve is the one which shows the possible combination of two commodities, each yielding the same satisfaction or utility to the consumer

fig.12: Indifference curve graph

Practice question
Table 8
Qty
TU
AU
MU
0
0
_
0
1
10
_
10
2
16
_
6
3
20
_
4
4
22
5.5
_
5
_
5
_

Fill the spaces above with the appropriate formular

Possible examination question
1. Discuss the forms of utility
2. Explain the followings:
  1. Concept of origin
  2. Concept of indifference curve
  3. Marginal utility
3. Explain the term utility
CHAPTER THIRTEEN

13.0 THE THEORY OF DEMAND. SUPPLY AND PRICE DETERMINATION
13.1 The theory of demand: Demand is the ability and willingness to buy a specific quantity of goods or services at a given price and at a particular period of time.
Effective demand: This is defined as a desire backed-up by ability and willingness to pay for specific quantities of a commodity at alternative prices and within a period of time.

Types of demand
1. Derived demand
2. Joint or complementary demand
3. Competitive demand
4. Composite demand
Factor affecting demand
1. The price of the commodity
2. The price of other commodities
3. Income of the consumer
4. Changes in taste of the consumer
5. Population size
6. Advertisement
7. Periods of festival
8. Expectation of changes in price
9. Weather and climate
10. Government policy
Changes in quantity demanded: Changes in quantity demanded of a commodity means a movement from one point to another on a demand curve. Such movement is caused by changes in the price of the commodity under consideration.
A change in quantity demanded can be of two parts:
1. Increase in the quantity demanded
Fig 13

b) Decrease in quantity demanded

Fig. 14

Shift or change in demand (increase or decrease) is determined by other factors affecting demand except the price of the commodity.

13.2 Laws of demand and supply
1. The first law of demand and supply:
This states that all things being equal, the higher the price, the lower the quantity of goods that will be demanded and the lower the price, the higher the quantity of goods that will be demanded
The second law of demand and supply: This states that, all things being equal, the higher the price, the higher the quantity of a commodity that will be supplied and the lower the price, the lower the quantity of a commodity that will be supplied.
The third law of demand and supply: This states that the equilibrium price is that price which equates demand with supply.
The fourth law of demand and supply: "An increase in demand will cause an increase in both the equilibrium price and quantity supplied, while a decrease in demand will cause both equilibrium price and the quantity supplied to fall".

The fifth law of demand and supply: "An increase in supply of a commodity will cause the equilibrium price to fall and the quantity demanded to increase and vice versal.

13.3. Exceptional (Abnormal) demand

This is a demand pattern which does not abide by the laws of demand but give rise to the reserve of the law.

Graph of demand curve

Fig. 15

Causes of exceptional demand

Articles of ostentation e.g jewellery, luxury cars
Articles of necessity: e.g inferior goods
Expectation changes in price
Rare commodities e.g antique furniture.

13.4 Elasticity of demand: This may be defined as the degree of responsiveness of demand to little changes in the price of a commodity.

Elasticity of demand can be of these three:

Price elasticity of demand (co-efficient of price elasticity)

Types of price elasticity of demand:

Elastic demand i.e fairly elastic demand

Fig. 16

price

Quantity demanded

ii- Inelastic demand ie fairly Inelastic demand

Fig. 17 price

iii- Unity or unitary elastic demand

fig. 18

iv- Perfectly elastic demand i.e. infinitely elastic demand

fig. 19

v- Perfectly inelastic demand ie zero elastic demand

2- Income elasticity of demand: This is divided into two:

Positive income elasticity of demand
Negative income elasticity of demand
Cross elasticity of demand

13.5. Formulars

Percentage change in demand

1- Elasticity of demand (ED) =

Percentage change in price

% Δ Qd

% Δ Q

2- The co-efficient of cross elasticity of demand

Percentage change in quantity demanded % Δ Qd

= =

Percentage change in income % Δ I

3- The co-efficient of income elasticity of demanded

Percentage change in quantity demanded of commodity x

Percentage change in price of commodity Y

% Δ Qdx

% Δ PY

Factors affecting elasticity of demand

The income of the consumer
Close substitute of a commodity
Nature of commodity
Habit
Multiple usage of commodity

13.6 Supply

This is the quantity of a commodity which a producer is witling and able to offer for sale at a particular price and at a particular period of time.

Fig.20

Types of supply

Composite supply
Joint or complementary supply
Composite supply

Factors affecting supply

Price of the commodity
Level of technology
Cost of production
Government policy
Weather and climatic condition
Taxation/ policy of government
Price of other commodities
Number of producers of such product
Natural disasters

Change in quantity supplied

This is the direct opposite of change in quantity demanded.

Change in quantity supplied can be of this two:

Increase in quantity supplied
Increase in quantity supplied

Shift in change in supply: This is also grouped into two:

Increase in supply
Decrease in supply

Market discrimination
Availability of storage facilities

13.6 Equilibrium Price

Equilibrium price is the price at which the quantity demanded is equal to the quantity of commodities supplied. The point where the demand curve meets the supply curve is called equilibrium position or equilibrium point.

Fig. 21

Changes in equilibrium: This can changed by

Increase in demand
Decrease in demand
Increase in supply
Decrease in supply

13.7 Price legislation

This is otherwise called price control policy. This is defined as how government or its agency fixes the price of essential commodities

Price control can be

Minimum price control policy
Maximum price control policy

Objectives of price control policy

To prevent the exploitation of consumers by producers
To avoid or control inflation
To help low income earners
To control the profits of companies
To prevent fluctuation of price of some products eg agricultural produce
To stabilise the income of some products
To make possible planning for facture output

Likely examination questions

What is meant by price elasticity of demand
Differentiate between changes in demand and changes in quantity demanded
What are the factor affecting supply
Using graph, explain the concept of equilibrium

CHAPTER FOURTEEN

14.0 FINANCIAL INSTITUTIONS

Financial institutions refer to all business organisations which hold money for individuals and institutions and may borrow from them in order to give loans or make other investments.

Types of financial institutions: These are two types

Banking financial institutions:
1. Commercial banks
2. Central bank
3. Merchant banks
4. Mortgage banks
5. Development banks
6. Saving banks
Non-banking financial institution:
1. Insurance companies
2. Hire purchase companies
3. Building societies

14.2 Bank

A bank is a commercial institution which performs various financial activities e.g accepting and handling of deposits of its customers

Origin of banking:

See historical development of money on page.

Types of bank accounts: These are three:

Current account
Saving account
Fixed deposit account

Credit facilities provided by commercial bank

Loan
Overdraft
Discounting bill of exchange

Table 9

Tabulated differences between loan and overdraft

Particular	Loan	Overdraft
Collateral security	It is required	Not required
Rate of interest	Lower rate	Higher rate
Repayment time	At a fixed time	Gradual reduction
Separate account	Loan account is opened	No need of separate account

Problems of commercial banks in Nigeria

Banks concentration in urban centres
Low savings culture
High level of corruption
High level of illiteracy
Government frequent interventions

14.3. Central bank: Central bank is the highest financial institution in a country which carries out the monetary policy of the government.

Functions of the central bank

Banker to the government
Issuance and control of currency
Banker's banks (Bank to commercial banks)

4- Lender of lost resort

5- Foreign exchange transactions

6- Management of national debt

7- Responsible for monetary policy

How Central bank controls the commercial banks. The instruments which the central bank uses to control commercial banks are:

Open Market operation (OMO)
Liquidity ratio or cash ratio
Bank rate 4-Special directives
Special deposit 6- Moral evasion

Tabulated differences between central bank and commercial bank
table 10

Central bank	Commercial bank
Does not accept deposit from the public	Accepts deposit from the public
Owned by government	Owned by the public or government
Formulates and executed monetary policies	Do not formulate and execute monetary policies
Accountable to the federal government	Accountable to shareholders
Only one central bank	Many commercial banks
Not for profit making	As profit making
As banker to the banks and government	As banker to individuals and institutions
Establishment by act of parliaments	Established by incorporation

14.4 Cheques

Cheque is defined as a bill of exchange drawn on a banker payable on demand.

Advantages of payment by cheque

It is highly convenient
A safe means of payment
An evidence for payment
Saves time and energy
It is use for record purposes

Parties to a cheque
Drawer: A drawer is the person responsible for drawing a cheque. The owner of the account on which the cheque is drawn
Drawee: This is the bank on which the cheque is drawn
Payee: This is the person to whom the cheque is made payable

Types of cheque
Order cheque
Bearer cheque
Dishonoured cheque
Crossed cheque
Stale cheque
Post-dated cheque

Forms of crossed cheque
General crossing
Special crossing

Forms of special crossing

Non-negotiable crossing
Account payee only

Fig. 22

Order Stale

Bearer Cheque Post-dated

Open Dishonoured

Crossed

General Special

Crossing crossing

Non-negotiable Account payee only

14.3 Modern Financial Markets

a) Money market: This is a market for short-term loan

b) Capital market: This is a market for medium-term and log-term loans. It serves the needs of industry and commercial sector.

c) The stock exchange market: This is a highly organised market where investor can buy and sell existing securities like shares, stocks, debentures, etc.

Importance of stock exchanges

An avenue for raising capital
Provision of information to investors
It facilitates transfer of investment
Provision of employment opportunities
A market to make investment
It provides yardsticks for measuring companies' performance

Possible examination questions
Enumerate the problems of commercial bank in west Africa
State the advantages of crossed cheques
Tabulated five differences between the Central bank and commercial banks
What are the roles of commercial banks to economic development of a nation

CHAPTER FIFTEEN

MARKET STRUCTURES

15.1 Market: A market is a point of contact, place or any means of communication whereby sellers and buyers can communicate with one another, to exchange goods and services at determined market forces.

15.2 Types of markets

a) According to commodities sold in them

i- Money market

ii- Capital market

iii- Consumers goods market

iv- Primary products market

v- Factor market

Vi- Foreign exchange market

Vii- Labour market

Viii- Stock exchange market

b) According to channel of distribution

i- Wholesale market

ii- Retail market

c) According to prices

i- Perfect market

ii- Imperfect market

Perfect market: This is a type of market in which buyers or sellers cannot influence the prices of goods and services. It is otherwise called competitive market or perfect competition.

Characteristics of a perfect market

Homogeneous goods must be sold
There should be free entry and free exit
Large buyers and sellers are involved
There should be perfect knowledge about the goods
The goods must be portable ones
Easy transfer of factors of production

Imperfect market: This is a type of market in which prices of goods and services can easily be influenced by the sellers or buyers.

Characteristics of imperfect market

There are direct opposite to characteristics of perfect market.

Types of imperfect market

Monopoly
Monopolistic competition
Duopoly
Oligopoly
Monopsony

Monopoly: This is a market situation where there is only one producer supplier of a particular goods and services that has no substitute

Causes of monopoly

By act of parliament
Patent law
Level of technology
Merging of producers
Natural cause

Advantages of monopoly

There is tendency for standardisation
Centralised management
Economies of large scale production
There is greatest efficiency
Avoidance of duplication
Increase in supply

Disadvantages of monopoly

Loss of freedom of choice
Danger of exploitation
It leads to hoarding
Possibility of overproduction and waste
Decline in efficiency

Likely examination question

Differentiate between perfect market and imperfect market
Explain the advantages and disadvantages of monopoly
List the type of market according to the types of commodity sold in them.

CHAPTER TWENTY-ONE

International Trade

21.1. Definition : International trade is also called foreign trade or external trade. It involves the exchange of goods and services between two or more countries.

Types of international trade

Bilateral international trade
Multilateral international trade

21.2. International trade: This is also known as home trade or domestic trade. It involves the exchange of goods and services among people within a particular country.

Problems of international trade

Language differences
Problem of distance
High level of bureaucracy
Differences in currencies and their valves
Imposition of tariff
Trade imbalance among countries
Policies of each country
Weights and measurement standard
Culture / Religion
Transportation / Communication problems

Advantages of international trade

Sources of revenue to the exporting country
Promotion of economic development
Provision of employment opportunities

4- It leads to international specialization

5- It increases world output

6- Availability of variety of goods

7- It encourages closer international relationship

8- Increases standard of living

9- Equitable distribution of national resources

10- Acquisition of skills and ideas

Disadvantages of the international trade

Likely room for dumping
It affects infant industries
Destruction of cultural values of importation countries
Importation of dangerous goods
Creation of deficit balance of payment
Causing unemployment for importing country
It leads to exploitation

Divisions of International trade

Import trade
1. Visible imports
2. Invisible imports
Export trade
Entrepot

16.3 Balance of trade and balance of payment

Balance of trade refers to the total value of goods sold and bought by a country during a given period, usually a year. Balance of trade could be

Positive balance of trade
Negative balance of trade

Balance of payment is defined as a statement or record showing the relationship with between a country's total payment to other countries and its total receipts from them in year. A country's balance of payment can be grouped into:

Current account
Capital account
Monetary movement account

16.4 Tariffs: Tariffs are taxes or duties imposed on imports and exports by the government at a country.

Reasons for imposition of tariffs

To protect infant industries
To generate revenues
To prevent dumping
To have favourable balance of payments
To prevent importation of substandard goods
For employment generation
To promote self sufficiency
To control consumption pattern
To protect strategic industries
For political reasons

16.5 Terms of trade: This is defined as the rate at which a country's export exchanges for its imports.

Index of import price 100

Term of trade = x

Index of export price 1

The higher this figure, the better for a country.

16.6 Export promotion: This is also called export drive. It is any policy by which government encourages producers of export goods to earn more foreign exchange.

Government effort to encourage export promotion

Reduction of export duties
Subsidy for export based industries
Setting up of export promotion agencies
Granting of tax incentives
Infrastructural development
Granting of credit facilities
Reduction of freight rate
Devaluation of local currency
Organising / attending international trade fairs
Developing local content

16.7 Terminologies in international trade

a) Free trade: Free trade refers to non-restriction in international trade. That is, no embargoes, no custom duties quotas, no inter-border barriers etc.

b) Infant industries. These are newly established industries that are still in tutelage stage.

c) Devaluation: This is the lowering of the exchange value of a country's currency vis-à-vis other currencies

d) Depreciation: This is fall in the value of a country's currency against other currencies as a result of interplay of the forces of demand and supply

e) Dumping: Dumping is the practice of selling goods in foreign countries as lower prices than what are obtainable in the exporting country.

16.8 Economic integration: This may be defined as a form of international co-operation among nations to foster their economic interests. Examples of economic integration in Africa include:

Economic Commodity of West African States (ECOWAS)
African Union (AU)

Types of regional economics integration

Free trade area
Common market
Economic union
Customs union

APPENDIX 1

OLD CURENCIES GALLERY

Old forms of money

a)

Cowries used as money

Shell used as money

Old gold currencies (coins)

2- Old notes and coins

India's old currencies

ten pounds

c) Nigeria's old currencies

d) Ghana old currencies (1970)

20 MOST POPULATED COUNTRIES IN THE WORLD

Rank

Country

Population

1,330,044,605

1,147,995,898

303,824,646

237,512,355

191,908,598

167,762,040

153,546,901

140,702,094

138,283,240

127,288,419

109,955,400

92,681,453

86,116,559

82,369,548

81,713,517

78,254,090

71,892,807

Congo, Democratic Republic of the

66,514,506

Iran

65,875,223

Thailand
source : www.aneki.com/population


1
2	Carlos Slim Helu & family (Mexico)	60
3	Bill Gates (United States)	58
4	Lakshmi Mittal (India)	45
5	Mukesh Ambani (India)	43
6	Anil Ambani (India)	42
7	Ingvar Kamprad & family (Sweden)	31
8	KP Singh (India)	30
9	Oleg Deripaska (Russia)	28
10	Karl Albrecht (Germany)	27
11	Li Ka-shing (Hong Kong)	26.5
12	Sheldon Adelson (United States)	26
13	Bernard Arnault (France)	25.5
14	Lawrence Ellison (United States)	25
15	Roman Abramovich (Russia)	23.5
16	Theo Albrecht (Germany)	23
17	Liliane Bettencourt (France)	22.9
18	Alexei Mordashov (Russia)	21.2
19	Prince Alwaleed Bin Talal Alsaud (Saudi Arabia)	21
20	Mikhail Fridman (Russia)	20.8

Source: Forbes.com

Richest People in the World

17	Liliane Bettencourt (France)	22.9
18	Alexei Mordashov (Russia)	21.2
19	Prince Alwaleed Bin Talal Alsaud (Saudi Arabia)	21
20	Mikhail Fridman (Russia)	20.8

Source: Forbes.com

APPENDIX 2

20 Richest People in the World

No	Name (nationality)	Net worth ($Billion)
1	Warren Buffett (United States)	62
2	Carlos Slim Helu & family(Mexico)	60
3	Bill Gates (United States)	58
4	Lakshmi Mittal (India)	45
5	Mukesh Ambani (India)	43
6	Anil Ambani (India)	42
7	Ingvar Kamprad & family (Sweden)	31
8	KP Singh (India)	30
9	Oleg Deripaska (Russia)	28
10	Karl Albrecht (Germany)	27
11	Li Ka-shing (Hong Kong)	26.5
12	Sheldon Adelson (United States)	26
13	Bernard Arnault (France).	25.5
14	Lawrence Ellison (United States)	25
15	Roman Abramovich (Russia)	23.5
16	Theo Albrecht (Germany)	23

QUESTIONS

1. The most generally accepted definition of Economies is the one put forward by (a) Adam Smith (b) Pythagoras (c) Alfred Marshal (d) Prof-Lionel C Robbins.

2. Economics is regarded as (a) Pure Science (b) Social Science (c) Applied Science (d) Social Studies.

3. Economics studies relationship between (a) ends and scarce means (b) buying and selling (c) people and government (d) Man and environment .

4. Human want is refereed to (a) Scare means (b) ends (c) Economics (d) want.

5. The laboratory of economics is said to be (a) market (b) school (c) government (d) industry.

6. The list of unsatisfied wants arranged in the order of their relative importance is called (a) scarcity (b) choice (c) human wants are unlimited (d) scale of preference.

7. There is the need to make choice because (a) Human wants are limited (b) Human wants are unlimited (c) Homan wants are scare (d) Homan beings are rich.

8. Because human wants are so many and cannot be satisfied, it is said to be (a) insatiable (b) insatiable (c) unreasonable (d) satiable

9. Whish of these is not basic needs of life (a) chairs (b) food (c) housing (d) closing.

10. The subject that relates to society and to people lives in general is (a) Economics (b) Social Studies (c) Science

(d) Opportunity cost.

11. Economics is regarded as a science subject because it is based on (a) experiments facts (b) hearsay and doubtfulness (c) exploration and research (d) people lives.

12. One of the importances of scale of preference is that, it allows (a) wasting of money (b) ranking of needs (c) miserliness (d) wasting of time.

13. A system of selecting one out of a number of alternatives is (a) choice (b) needs (c) want (d) ends.

14. All of these are the reason why we study economies except (a) Allocation of resources (b) preparative of budget

15. One of the tools for economies activity is (a) choice

(b) Table (c) choirs (d) Money.

16. A systematic and orderly arrangement of information facts or date using rows and column for presentation is known as (a) table (b) graph (c) pie chars (d) bar chart.

17. One of the characteristics of a good graph is

(a) It most is colours (b) must be in rows (c) it must have a table (d) it must have crown.

18. Which of these is not a tool for economic analysis (a) table (b) graph (c) line scale of preference.

19. Calculate the mean of the following scores: 14, 18, 24, 16, 30, 12, 20, and 10 (a) 20 (b) 19 (c) 18 (d) 17.

20. Arithmetic mean is also called (a) English mean

(b) Mathematic mean (c) Median (d) average.

21. The shape of pie-chart is (a) circle (b) square

22. In a graph, the horizontal line is the (a) X axis

(b) Y axis (c) A axis (d) Z axis.

23. One of the important of graph is that it shows

(a) Relationships between two odds (b) relationships between two equals (c) relationships between two variable (d) equals between two variables.

24. The percentage 200 of 720 is (a) 100° (b) 100% (c) 27.8 (c) 23.8%.

25. The degree, 50 of 720 is (a) 25° (b) 25% (c) 680°

(d) 29.8°

26. Dividing the total figures items by the number of items, we have (a) Table (b) Pie (c) Arithmetic mean (d) Total mean

Answer questions 27-29 with the following information: Omo-Aje has N1.000 with him he wished to buy shin costing N800 shoe N900. He ended up buying Shirt.

27. The money cost of buying the shirt is (a) N800 (b) N900 (c) N1700 (d) N1000

28. If he had bought the shoes, the opportunity cost of the shoe would have been (a) The shoe (b) The shirt (c) N900

(d) N100

29. Human wants, desires or needs are referred to as ………

(a) Ends (b) scarcity (c) economics (d) means

30. An expression of cost in term of forgone alternatives is referred to as (a) Ends (b) opportunity cost (c) scarcity

(d) means.

31. A branch of economies which deals with larger units or aggregate of the economy is (a) opportunity cost

(b) macro-economics (c) micro-economics

(d) applied economics.

32. If the score of eight students in a clash are= 14 18 24 16 30 12 20 and 10. Calculate the arithmetic mean

(a) 25 (b) 20 (c) 40 (d) 18

33. How many factor of production do we have?

(a) three (b)Four (c) Five (d)Six

34 One of the characteristics of land is (a)it is homogenous

(b) it increases in length (c) it in immobile (d) it is mobile

35. One of these is not a characteristic of sale proprietorship business. (a) The owners ranges from two to twenty (b) it in owned by one person (c) it has unlimited liability (c) its lifespan depends on the owner

36. The total number of people living within a country or a geographical area of a particular time in (a) Distribution (b)Census (c) Population (d) Over-population

37. Over-population is defined as a situation when

(a) Too much people are living witching a geographical area (b) The available resources are less than the population (c) A country has more people than its physical and human resources can support with adequate living thunders (d) Critic of utility is maximized

38. A country has a working population of 4.8 million of which 3.6 million are employed. The unemployment rate of the country is (a) 25 % (b) 20 % (c) 30 % (d) 40 %

39. A form a trading in which goods are exchanges directly for ether goods without the use of money as a medium of exchange (a) money (b) Capitalism (c) Socialism

(d) Trade by barter

40. Examples of commodities that served as money in olden days does not include (a) Cattle (b) Money's (c) Salt (d) Shells

41. All of the following are qualities of money except (a) General acceptability (b) Portability (c) Durability (d) Must be in paper form

42. One of the functions of money include (a) Store of value (b) Increase in prices (c) Causing inflation

(d) Causing deflation

43. A persistent rise in the general price level of goods and services is (a) Inflation (b) Deflation (c) Money

(d) Over-population

44. Price index is defined as (a) Anything that is generally acceptable as a means of payment (b) Relationship between two variables (c) Insatiable desire is need by human being to own grade and service (d) a single number which measures

changes in price of goods and service over a given period of time

45. Money in circulation of a particular country is measured as (a) Notes and coins (b) Nets, coins and bank rates (c) notes, coins and current account deposits (d) natural resources

46. Cash reserve in also known as (a) Cash ratio (b) Bank rate (c) Inflation (d) Excess reserve

47. If the price of a tin of milk is sold for N200 in 2003 and N250 in 2004. Calculate the price index

(a) 125 (b) 100 (c) 25 (d) 50

48. One of the causes of inflation is (a) Price index (b) war (c) value of money (d) legal tender

49. Inflation can be controlled through (a) Use of fiscal measures (b) Hoarding (c) War (d) Increase in demand

50. Which of these is NOT an effect of deflation?

(a) Increase in profit (b) Decrease in profit (c) Fall in price of goods (d) Reduction in investment

51. A persistence rise in the general prise level of goods and service is called (a) Inflation (b) Deflation

52. One of the factors influencing the location of an industry is (a) Money (b) Inflation (c) deflation

(d) Availability of labour

53. One of the examples of power and energy industry is (a) Trader (b) Virgin Nigeria (c) Tonad motors

(d) Power holding company plc

54. Localisation of industries means (a) Location of industry (b) Concentration of firm or industries producing similar products in on area (c) Non-existing of industries in a particular region (d) Attraction of many industries

55. Government can encourage industrialisation by

(a) Funding all business (b) Closing all banks (c) Development of infrastructures (d) Stopping exportation

56. Which of these is NOT a branch of economies (a) Pure

(b) Statistical (c) Business (d) Development

57. Which of these is NOT a type of chart (a) Simple bar chart (b) Pictogram (c) Histogram (d) Mean

58. Which of these factors determine efficient use of resources (a) Quality of labour (b) Market demand (c) Available of resources (d) Type of economy

59. which of these is true about capital (a) it is skilful (b) It is man-made (c) it is immobile (d) it is perishable

60. One of the disadvantage of division of labour include

(a) Economies in the use of tools (b) Development of technologies (c) Time saving (d) Problem of mobility of labour

61. Which of these statement is true (a) Partnership members ranges from 2-20 (b) Sole proprietorship members Ranger from 2-50 (c) Land is homogeneous (d) Small firms need large sum of capital

62. Which of these is NOT a type of partner (a) Sleeping

(b) General (c) Management (d) Limited

63. A document in which the regulation that govern the internal management of the company's affairs. Duties right and powers of shareholders, is know as

(a) Memorandum of association (b) Business organisation (c) Certificate of incorporation (d) Article of association

64. All of these are public corporations except

(a) NITEL (b) NEPA (c) MNPC (d) COCA COLA PLC

65. Which of these determines the population size (a) Ratio of male to female (b) Birth rate (c) Seasonal migration

(d) Natural disasters

66. The labour force or working population is of which age group (a) 0-5 (b) 6-17 (c) 18-60 (d) 18-30

67. Mr Otunba left Nigeria to work in Abidjan. The type of mobility of labour he engages is (a) Occupation

(b) Geographical (c) Discriminative (d) Accommodative

68. Which of these distribution chains is correct?

(a) Producer-wholesaler-consumer-retailer (b) Wholesaler-retailer-consumer-producer (c) consumer-retailer-producer-wholesaler (d) producer-wholesaler-retailer-consumer

69. Which of these is a type of agriculture (a) Crop production (b) Peasant farming (c) Plantation

(d) Modernisation

70. The rate of interest which the central bank charges the commercial bank for lending money to them is

(a) reserve (b) Tax (c) Price index (d) Bank rate

71. There was civil war in Nigeria in 1966-1970. Which of these is likely to be experienced in Nigeria within these years of war (a) increase in taxation (b) Inflation (c) Deflation

(d) Increase in production

72. GLO mobile a GSM outfit company in Nigeria could be said to be in which of these industries (a) Entertainment

(b) Processing (c) Communication (d) Telecommunication

73. As successive units of a variable factor is applied to given fixed factor, output will increase at first, but it will get to a point at which the addition of one more units of variable factor will result in less additional unit of production. This law of

(a) Production (b) Demand (c) Elasticity of demand

(d) Diminishing return

74. GNP means (a) Gross National product (b) cross Nigeria product (c) goods normally produced (d) God is in Nigeria people

75. one of the problems of industrialisation is West Africa is (a) Good policies (b) low GNP (c) High GNP

(d) political instability

76. A deliberate policy by which government takes over the control and ownership of private enterprise due to

economic, political or strategic reason is (a) Indigenistaion (b) Commercialisation (c) Privatisation (d) Nationalisation

77. Indigenisation in backed up by NEP decree of

78. Which of these is an assumption for the law of demand to hold (a) consumers income keep changing (b) There is change in quality of the product (c) There is change in preference of the consumer (d) There is no close substitute

79. Mr Otunba's salary is increased, all thing being equal his demand will (a) Increase (b) Constant (c) Decrease

(d) Gallop

80. Which of these is correct about supply curve (a) it is always straight line (b) It is always curve (c) It is circular (d) It is from down to up

81. A movement from one point to another on a demand curve is (a) Price elasticity of demand (b) Equilibrium price (c) change in quantity demanded (d) Shift in demand

82. Which of these factors will not affect demand

(a) Taxation (b) Advertisement (c) The price of other commodities (d) none of the above

83. Another name for circulating capital is……capital

(a) Liquid (b) current (c) Working (d) social

84. The reward of "Enterprise" is (a) Salary (b) Interest

85. As a firm expands, it enjoys some advantages called

(a) Economics of scale (b) Enemy of weight (c) Diminishing returns (d) Variable proportions

86. An entrepreneur is likely to make more profit when

(a) Expenditure is more than revenue (b) competitors charge lower cost (c) Cost per unit output fall

87. A written agreement of partners in forming partnership is called (a) Certificate of trading (b) Certificate of incorporation (c) Prospectus (d) Deed of partnership

88. The world "limited liability" means that (a) The liability of owners are limited to the amount of capital contributed

(b) The liability of owners are not limited to the amount of capital contributed (c) The liability of company is limited

(d) The liability of the workers is limited to their salary

89. The correct formulate to calculate the median of odd numbers of figures is

n +1 Ε_fx Ε_fx

(b) (c) (d) All of above
2 n E_X

90. If 10 workers produce 5,500 tones of rice, while 11 workers produce 6,400 tones. What is the amount of marginal product (a) 550 tones (b) N550 (c) 900 tones

(d) 11,900 tones

91. One major advantage of specialisation is (a) Low productivity (b) Time saving (c) Monotony

(d) Government policy

92. "An individual portion of a company's capital owned by shareholders" is called (a) Shares (b) Company

93. Transfer of ownership and control of business enterprise from foreigners to the indigene is called

(a) Legalisation (b) Nationalisation (c) Indigenisation

(d) Development

94. If the score of eight students in a class are 14, 18, 24, 16, 30, 12, 20 and 10 calculate the mean?

(a) 18 (b) 40 (c) 20 (d) 25

95. One of the advantages of indigenisation is that (a) it kills industries (b) it leads to inflation (c) it develops local technology (d) foreigner are rich

96. Example of commodity money include

(a) gold (b) diamond (c) notes (d) beads

ANSWERS TO THE OBJECTIVE QUESTIONS

1.D 14. C 27. B 40. B 2. B 15. B 28. A 41. B

3. A 16. A 29. A 42. C

4. B 17. C 30. B 43. B

5. A 18. D 31. B 44. C

6. D 19. C 32. D 45. A

7. A 20. D 33. B 46. A

8. B 21. A 34. C 47. C

9. A 22. B 35. A 48. D

10. A 23. C 36. C 49. A

11. A 24. C 37. C 50. A

12. B 25. A 38. A 51. A

13. A 26. C 39. D 52. D

53. D 67. B 81. C 95.C

54. B 68. D 82. D 96. C

55. C 69. A 83. C

56. D 70. D 84. C

57. D 71. B 85. A

58. A 72. D 86. C

59. B 73.D 87. D

60. D 74. A 88. A

61. A 75. D 89. A

62. C 76. D 90. C

63. D 77. C 91. B

64. D 78. D 92. A

65. B 79. A 93. C

66. C 80. D 94.A

ABOUT THE AUTHOR

OTUNBA S.A. is the author

of the Book "ASSIMILATION

KEY POINT ON ECONOMICS".

He is a graduate educationist with

academic and professional

qualifications. He is a qualified economist and accountant.

He is an indigene of Abeokuta Ogun state of Nigeria. He has over fifteen years of teaching experience in both primary and secondary schools, in Nigeria and outside the shore of Nigeria.

He has headed some schools and establishments. He has also written many projects on various topics. May God accept this as one of ways of human development.

For more information, please email to:

otunbashaki@yahoo.com or call + 225 66315720

or + 225 55305961

KEY POINT

ON ECONOMICS

OTUNBA S.A.

CERT., DIP., NCE, AAT (ICAN), ACE (ICEN)

N° of workers	TP (Kg)	AP (Kg)	MP (Kg)
1	100	100	-
2	300	150	200
3	600	200	300
4	1000	250	400
5	1200	240	200
6	1300	217	-100

Qty	TU	AU	MU
0	0	_	0
1	10	_	10
2	16	_	6
3	20	_	4
4	22	5.5	_
5	_	5	_

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