Getting ready for JAMB Economics 2025? You’re in the right place. This short guide features 10 likely questions and answers designed to help you master essential topics quickly. Moreover, the explanations are simplified for easy recall during the exam.
Question 1: Marginal Cost
What is marginal cost?
A. Total cost divided by total product
B. Total cost minus fixed cost
C. Average variable cost minus fixed cost
D. Addition to total cost from producing one extra unit
Answer: D. Addition to total cost from producing one extra unit
Explanation:
Marginal cost is the extra cost incurred in producing one more unit of output. Essentially, it measures additional production expenses.
Question 2: Shift in Supply Curve
The supply curve of a locally produced good may shift to the right if:
A. The cost of production rises
B. Import duties increase
C. Production technology improves
D. Government imposes more taxes
Answer: C. Production technology improves
Explanation:
When technology improves, producers can make more goods at lower cost. Therefore, supply increases and the curve shifts rightward.
Question 3: Law of Diminishing Returns
The law of diminishing returns applies only in the:
A. Long run
B. Short run
C. Equilibrium stage
D. Market period
Answer: B. Short run
Explanation:
This law operates when at least one factor of production is fixed. Consequently, each additional input yields less output.
Question 4: Types of Unemployment
Frictional unemployment arises when:
A. Workers are unwilling to work
B. There is a mismatch between jobs and skills
C. Workers are changing jobs
D. The economy is in depression
Answer: C. Workers are changing jobs
Explanation:
Frictional unemployment occurs temporarily as workers transition between jobs or search for better positions.
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Question 5: Demand and Price Relationship
According to the law of demand, price and quantity demanded are:
A. Directly related
B. Inversely related
C. Not related
D. Constant
Answer: B. Inversely related
Explanation:
As prices rise, consumers buy less; when prices fall, they buy more. Hence, demand and price move in opposite directions.
Question 6: Inflation
Which of the following best defines inflation?
A. A general rise in prices
B. A fall in purchasing power
C. A rise in wages
D. An increase in production
Answer: A. A general rise in prices
Explanation:
Inflation refers to a persistent increase in the overall price level of goods and services within an economy.
Question 7: Money and Its Functions
Which of the following is NOT a function of money?
A. Medium of exchange
B. Store of value
C. Unit of account
D. Source of income
Answer: D. Source of income
Explanation:
Money serves as a tool for exchange, value storage, and accounting. However, income comes from productive activities, not from money itself.
Question 8: Opportunity Cost
Opportunity cost refers to:
A. The cost of production
B. The next best alternative forgone
C. The value of all goods produced
D. Total revenue minus total cost
✅ Answer: B. The next best alternative forgone
Explanation:
It represents what you give up when choosing one option over another. Thus, it highlights decision-making trade-offs.
Question 9: Demand Curve Movement
A movement along the demand curve indicates:
A. Change in demand
B. Change in quantity demanded
C. Change in income
D. Change in taste
✅ Answer: B. Change in quantity demanded
Explanation:
A change in price leads to movement along the same demand curve, not a shift. Therefore, price is the driving factor.
Question 10: Economic Growth
Which of the following best indicates economic growth?
A. Increase in the unemployment rate
B. Rise in national income
C. Increase in imports
D. Decline in productivity
✅ Answer: B. Rise in national income
Explanation:
Growth occurs when national income or output increases consistently over time. It shows progress in production and living standards.
Conclusion
To succeed in JAMB Economics, focus on understanding key ideas like cost, demand, inflation, and opportunity cost. Additionally, consistent revision and mock testing improve both confidence and accuracy before the real exam.
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