Wednesday, December 22, 2010



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 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 : or


First Baptist Church Group of Schools Marcory – Abidjan

Côte d'Ivoire.



Table of contents




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







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

  1. Judicious allocation of resources
  2. Development of beneficial programs
  1. For making relational decisions
  2. Assists in preparation of budgets



  1. For solution to economic problem
  2. For production purposes
  1. For maximization of profits
  2. For provision of basic tools


Branches of Economics

  1. Main branches
  1. Macro-economics: Deal with larger units or aggregate of the economics
  2. Micro-economics: Deal with smaller units or aggregate of the economics


    1. Other Branches of Economics
  3. Pure economics
  4. Applied economics
  5. Mathematical economics
  6. Monetary economics
  7. Business economics
  8. Development economics

Basic Economics Problems

  1. What to produce
  2. When to produce
  3. How to produce
  4. 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

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







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

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

  1. A table must be very simple
  2. It must be easy to understand
  3. It must have a title or heading
  4. The unit of measurement used in the table must be stated
  5. 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).







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

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

  1. A table must be very simple
  1. It must be easy to understand
  2. It must have a title or heading
  3. The unit of measurement used in the table must be stated
  4. 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

  1. All graphs must be properly labeled
  2. The units of measured must be indicated
  3. Graphs must show the source of the data presented
  4. All graphs must have title
  1. Graphs must possess appropriate scales
  2. 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.

  1. 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.

Formulae 1: x =

This formulae is used when the figures are small and ungrouped


Formula 2: x =



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


Formula 3: x =


This formular is suitable for grouped data.




Advantages of Arithmetic Mean:

  1. It is very easy to calculate
  2. It gives an exact value
  1. 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.


    Formula 1:


    This formular is used when the number involved are add numbers.


    Formular 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) =


    2. Harmonic mean (H) =

      Ε 1/x



    1. Quadratic mean or RMS = N



              ε ( x – x)

    d- Mean deviation (M.D) =




    ε ( x – x)2

    e- Variance (V) =




    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













    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

  2. 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

  3. Fixed capital: These are assets which are not used up in the course of production. Examples are land, building, plants, etc.
  4. Circulatory or working capital: These are assets which are used up in the course of production. Examples are water, fuel, raw materials.
  5. Liquid or current capital: These capitals are required for the day-to-day running of productive activities. Examples are finished goods, money.
  6. 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:




    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.

    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


    Formular 2: AP =



             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)





























    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.




    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.
  7. 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.
  8. Specialisation by product: This is when a firm, goverment or individual concentrates on production of a particular commodity.
  9. 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








    5.1. 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)


  10. Average variable cost (AVC): This is the cost per unit of a variable cost of output.

    Total cost (TC)

    AVC =

    Total output (TQ)


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

    Total fixed cost (TFC)

    AFC =

    Total output (TQ)


    1. 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


    1. Total cost
    2. Average cost
    3. Average fixed
    4. Average variable cost



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


      TC     520 000

    2. AC = =         = N5 200

      TQ     100


      TFC 400 000

    3. AFC =      =         = N4 000

      TQ 100


      TVC     120 000

    4. 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

















































    Possible examination questions

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






    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.

    1. 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.
    2. 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.
    3. Characteristics of private and public enterprise in tabular form:




    Private enterprises

    Public enterprises


    Owned by individuals

    Owned by government


    Provided by individuals

    Provided by the government


    Tomaximise profit

    To provided social service


    By elected BOD

    By appointed BOD


    No monopoly

    Enjoys monopoly


    More efficient

    Less efficient

    Risk bearer

    By the owners

    By tax payers


    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

    1. It involves small capital

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


    Disadvantages of sole proprietorship

    1. There is problem of continuity
    2. Problem of raising enough capital
    3. The owner bears the risk alone
    4. It has unlimited liability
    5. It lacks specialization
    6. There is limit to expansion


  12. 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

    1. Limited partnership
    2. General or ordinary partnership


    Type of partners

    1. General partner (GP)
    2. Limited partner (LP)
    3. Active partner (AP)
    4. Nominal or quasi-partner (NP)
    5. Sleeping or domant partner (SP)


    Types of partners and their features in tabulation.


    Table 4







    Contributing capital




    Management role





    Limited liability






    Business running





    Share of profit / loss


    Taking salary






    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

    1. Has more financial resources than sole proprietorship
    2. Decision can be jointly made
    3. There is large production
    4. There is sharing of risk and liabilities
    5. There is privacy on the financial position of the business
    6. There is better chance of continuity
    7. No legal formalities is required
    8. Possibility of loan facilities
    9. Specialization in management
    10. Greater possibility of expansion


    Disadvantages of partnership

    1. Business is not a legal entity
    2. There is limited growth of the business
    3. Difficulty in management
    4. It can not be quoted on the stock exchange
    5. 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

    1. 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)
    2. 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

    1. Companies limited by guarantees: This type of companies is principally formed not for the purpose of business, but to promote and develop certain interests.
    2. 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

    1. Private limited liability company
    2. Public liability company


    Similarities between private and public limited liability companies:

    1. Both companies have legal entity or status


    1. 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





    Not easily transferrable

    Easily transferable

    Stock exchange

    Shares are not quoted

    Share are quoted


    2- 50



    Not issuable


    Name title

    "Ltd" (limitted)



    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:



  13. 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:

    1. Loans and overdraft
    2. Sales of shares
    3. Sales of debentures (plc only)
    4. Equipment leasing
    5. Ploughing back of profit
    6. Access to trade credit
    7. Access to hire purchase



    Fig 9:

    Chart of business organizations



    Sole proprietorship Partnership Companies



    Limited General unlimited limited



    Private Public



    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:

    1. 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:

    1. Cumulative preference share
    2. Participating preference shares
    3. Redeemable preference shares
    4. Non-cumulative preference shares
    5. 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

    1. Deferred or founder's shares
    2. Preferred ordinary shares




    Chart of shares


    Fig : 10          Deferred shares




                 Prefered ordinary shares



    Cumulative shares

    Preference Participating shares

    shares Redeemable shares

    Non-cumulative shares






    Characteristics of ordinary shares and preference shares in tabulated form

    Table 6


    Preference shares

    Ordinary shares

    Rates of interest


    Not fixed

    Receiving dividient

    Receive first

    Receive after

    At liquidation

    Receive back

    Their capital first

    Receive back

    Their capital after

    AGM voting


    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

    1. Mortgage debentures
    2. Simple or naked debentures
    3. Redeemable debentures
    4. Irredeemable debentures
    5. Secured debentures


    Tabulated differences between debenture and shareholder

    Table 7





    A debenture is a certificate of


    A share is a unit of capital


    It is a loan

    It is not a loan


    Holder is a creditor

    Holder is one of the owners of the company


    Holders receive interest

    Holders receive dividend


    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 :

    1. Nigerian National Petroleum Corporation (NNPC).

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

    Features of public corporation

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

    Specific problems of public corporation

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




    Sources of finance to public corporations

    1. Loans and overdraft
    2. Internally generated revenue
    3. Grant from government
    4. Grant from international financial institutions e.g IMF
    5. 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

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





    Types of co-operative societies

    1. Producers co-operative society
    2. Consumers co-operative society
    3. Wholesale co-operative society
    4. Retail co-operative society
    5. Credit and thrift society

    6. Multipurpose co-operative society

    Advantages of co-operative society

    1. Encouragement of saving
    2. There is financial assistance to members
    3. Improving member's standard of living
    4. Opportunity for loan facilities
    5. Strong inter-personal relationship
    6. Educating their members
    7. Encouragement of hardworking
    8. Strong inter-personal relationship

    Disadvantages of co-operative society

    1. Problem of loan recovery from members
    2. High level of illiteracy among members
    3. Lack of initiative
    4. The society evde payment of tax
    5. 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.






    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

    1. It must be conducted by the governments
    2. It must be done simultaneously throughout the country
    3. It must involve physical counting of the citizens
    4. It must involve population census experts


    Types of population census

    1. Defacto population census
    2. De jure population census


    Importance or reasons for population census

    1. To determine the population size
    2. To owns the accordable revenue
    3. To forecasts future economic needs
    4. Determines employment rate
    5. Determines the citizen's standard of living
    6. For proper distribution of resources
    7. For provision of social amenities
    8. 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

    1. High level of illiteracy
    2. High cost of conducting the census
    3. Persistence political and economical problems
    4. Lack of adequate trained professionals
    5. Inadequate infrastructural facilities
    6. Poor regional planning
    7. Wrong religious and moral beliefs


    Determinants of population size and growth

    1. 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



    Factor affecting birth rate

    1. Early or late marriage
    2. Desire for large or small families
    3. Religion beliefs
    4. Improved standard of living
    5. Government aid to the people


    1. 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

    1. Ratio of male to female
    2. Poor medical services
    3. High rate of infant mortality
    4. Rate of poverty
    5. Natural disasters
    6. 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

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


    Forms of migration

    1. Rural to urban migration
    2. Rural to rural migration
    3. Urban to rural migration
    4. Urban to urban migration
    5. International migration
    6. Seasonal migration


    Factors affecting migration

    1. The occurrence of natural disasters
    2. Physical and climate conditions




    3. Insecurity and political instability

    4. Differences in economic opportunity

    5. Differences in social amenities


    Advantage of migration

    1. It reduces population density
    2. It boosts market at the receiving region
    3. It promotes cultural integration
    4. It supplies migrant labour at the receiving end
    5. It reduces pressure on social amenities


    Disadvantages of migration

    1. It increases high cost of living at the receiving end
    2. It breeds social vices
    3. It leads to unemployment at the receiving end
    4. It leads to pressure on social amenities at the receiving region
    5. 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

    1. 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

    1. Family planning
    2. Discouragement of early marriage
    3. Increase in food and infrastructural facilities.
    4. Sex and mass education
    5. 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:

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


    1. 0-17
    2. 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

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







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


    Importance of agriculture

    1. Provision of food
    2. Employment opportunities
    3. Sources of foreign exchange
    4. Development of towns
    5. Provision of raw materials for industries


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

    1. Crop production
    2. Livestock production
    3. Forestry
    4. Fish farming


    Systems of agriculture are:

    1. Peasant farming or subsistence farming
    2. Plantation farming
    3. Mechanized farming (Commercial)
    4. Co-operative farming


    Problems of agricultural development in West Africa:

    1. 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

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


    Possible examination questions

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







    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

    1. Problems of double coincidence of wants
    2. No fixed rate of exchange
    3. There is wastage of time and effort
    4. Difficulty in storing wealth
    5. There is problem of indivisibility
    6. It discourages borrowing and lending
    7. 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:

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

    Characteristics of money

  14. It must be generally acceptable
  15. It must be easily portable
  16. It must be relatively scarce
  17. It must have the same quality (size and colour)
  18. It must have long durability
  19. The value of money must be stable



    It must be easily recognizable

    8- It must be easily divisible

    9- It must have intrinsic value

    Function of money

  20. It serves as a medium of exchange
  21. It serves as a standard of deferred payment
  22. It serves as a unit of account
  23. It serves as a store of value
  24. It serves as a measure of value

    Forms or types of money

  25. Coins (5K, 10K or 50CFA)
  26. Commodity money (gold, diamond, beads)
  27. Banks notes(N50, N100, 1000CFA)
  28. Partial money (petrol vouchers, cheques, tickets)
  29. 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



    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

  30. 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
  31. 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
  32. 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.

  33. 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







    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


    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







    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



    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



    = = =



    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






























    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







    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

  34. 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.
  35. The third law of demand and supply: This states that the equilibrium price is that price which equates demand with supply.
  36. 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".
  37. 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

    1. Articles of ostentation e.g jewellery, luxury cars
    2. Articles of necessity: e.g inferior goods
    3. Expectation changes in price
    4. 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:


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


    Types of price elasticity of demand:



    1. Elastic demand i.e fairly elastic demand

    Fig. 16












    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:

    1. Positive income elasticity of demand
    2. Negative income elasticity of demand
    3. 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

    1. The income of the consumer
    2. Close substitute of a commodity
    3. Nature of commodity
    4. Habit
    5. 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.




















    Types of supply

    1. Composite supply
    2. Joint or complementary supply
    3. Composite supply


    Factors affecting supply

    1. Price of the commodity
    2. Level of technology
    3. Cost of production
    4. Government policy
    5. Weather and climatic condition
    6. Taxation/ policy of government
    7. Price of other commodities
    8. Number of producers of such product
    9. 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:

    1. Increase in quantity supplied
    2. Increase in quantity supplied


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

    1. Increase in supply
    2. Decrease in supply



    1. Market discrimination
    2. 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

    1. Increase in demand
    2. Decrease in demand
    3. Increase in supply
    4. 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

    1. Minimum price control policy
    2. Maximum price control policy


    Objectives of price control policy

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


    Likely examination questions

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








    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

    1. Banking financial institutions:
      1. Commercial banks
      2. Central bank
      3. Merchant banks
      4. Mortgage banks
      5. Development banks
      6. Saving banks
    2. 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:

    1. Current account
    2. Saving account
    3. Fixed deposit account




    Credit facilities provided by commercial bank

    1. Loan
    2. Overdraft
    3. Discounting bill of exchange

    Table 9

    Tabulated differences between loan and 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

    1. Banks concentration in urban centres
    2. Low savings culture
    3. High level of corruption
    4. High level of illiteracy
    5. 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

    1. Banker to the government
    2. Issuance and control of currency
    3. 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:

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


    Tabulated differences between central bank and commercial bank
    table 10

    Central bank

    Commercial bank

  38. Does not accept deposit from the public
  39. Accepts deposit from the public

  40. Owned by government
  41. Owned by the public or government

  42. Formulates and executed monetary policies
  43. Do not formulate and execute monetary policies

  44. Accountable to the federal government
  45. Accountable to shareholders

  46. Only one central bank
  47. Many commercial banks

  48. Not for profit making
  49. As profit making

  50. As banker to the banks and government
  51. As banker to individuals and institutions

  52. Establishment by act of parliaments
  53. 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

    1. It is highly convenient
    2. A safe means of payment
    3. An evidence for payment
    4. Saves time and energy
    5. It is use for record purposes


      Parties to a cheque

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


      Types of cheque

    9. Order cheque
    10. Bearer cheque
    11. Dishonoured cheque
    12. Crossed cheque
    13. Stale cheque
    14. Post-dated cheque


      Forms of crossed cheque

    15. General crossing
    16. Special crossing





    Forms of special crossing

    1. Non-negotiable crossing
    2. Account payee only



    Fig. 22


    Order                      Stale

    Bearer         Cheque Post-dated

    Open                      Dishonoured






    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

    1. An avenue for raising capital
    2. Provision of information to investors
    3. It facilitates transfer of investment
    4. Provision of employment opportunities
    5. A market to make investment
    6. It provides yardsticks for measuring companies' performance


      Possible examination questions

    7. Enumerate the problems of commercial bank in west Africa
    8. State the advantages of crossed cheques
    9. Tabulated five differences between the Central bank and commercial banks
    10. What are the roles of commercial banks to economic development of a nation







    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

    1. Homogeneous goods must be sold
    2. There should be free entry and free exit
    3. Large buyers and sellers are involved
    4. There should be perfect knowledge about the goods
    5. The goods must be portable ones
    6. 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

    1. Monopoly
    2. Monopolistic competition
    3. Duopoly
    4. Oligopoly
    5. Monopsony


    1. 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

    1. By act of parliament
    2. Patent law
    3. Level of technology
    4. Merging of producers
    5. Natural cause


    Advantages of monopoly

    1. There is tendency for standardisation
    2. Centralised management
    3. Economies of large scale production
    4. There is greatest efficiency
    5. Avoidance of duplication
    6. Increase in supply


    Disadvantages of monopoly

    1. Loss of freedom of choice
    2. Danger of exploitation
    3. It leads to hoarding
    4. Possibility of overproduction and waste
    5. Decline in efficiency


    Likely examination question

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




    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

    1. Bilateral international trade
    2. 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

    1. Language differences
    2. Problem of distance
    3. High level of bureaucracy
    4. Differences in currencies and their valves
    5. Imposition of tariff
    6. Trade imbalance among countries
    7. Policies of each country
    8. Weights and measurement standard
    9. Culture / Religion
    10. Transportation / Communication problems


    Advantages of international trade

    1. Sources of revenue to the exporting country
    2. Promotion of economic development
    3. 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

    1. Likely room for dumping
    2. It affects infant industries
    3. Destruction of cultural values of importation countries
    4. Importation of dangerous goods
    5. Creation of deficit balance of payment
    6. Causing unemployment for importing country
    7. It leads to exploitation


    Divisions of International trade

    1. Import trade
      1. Visible imports
      2. Invisible imports
    2. Export trade
    3. 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

    1. Positive balance of trade
    2. 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:

    1. Current account
    2. Capital account
    3. 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

    1. To protect infant industries
    2. To generate revenues
    3. To prevent dumping
    4. To have favourable balance of payments
    5. To prevent importation of substandard goods
    6. For employment generation
    7. To promote self sufficiency
    8. To control consumption pattern
    9. To protect strategic industries
    10. 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

    1. Reduction of export duties
    2. Subsidy for export based industries
    3. Setting up of export promotion agencies
    4. Granting of tax incentives
    5. Infrastructural development
    6. Granting of credit facilities
    7. Reduction of freight rate
    8. Devaluation of local currency
    9. Organising / attending international trade fairs
    10. 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:

    1. Economic Commodity of West African States (ECOWAS)
    2. African Union (AU)


    Types of regional economics integration

    1. Free trade area
    2. Common market
    3. Economic union
    4. Customs union




    1. Old forms of money


        Cowries used as money


               Shell used as money





    Old gold currencies (coins)

    2- Old notes and coins

    1. India's old currencies


    ten pounds



    c) Nigeria's old currencies





    d) Ghana old currencies (1970)

















    United States













































    Congo, Democratic Republic of the







    source :






    Carlos Slim Helu & family (Mexico)



    Bill Gates (United States)



    Lakshmi Mittal (India)



    Mukesh Ambani (India)



    Anil Ambani (India)



    Ingvar Kamprad & family (Sweden)



    KP Singh (India)



    Oleg Deripaska (Russia)



    Karl Albrecht (Germany)



    Li Ka-shing (Hong Kong)



    Sheldon Adelson (United States)



    Bernard Arnault (France)



    Lawrence Ellison (United States)



    Roman Abramovich (Russia)



    Theo Albrecht (Germany)



    Liliane Bettencourt (France)



    Alexei Mordashov (Russia)



    Prince Alwaleed Bin Talal Alsaud (Saudi Arabia)



    Mikhail Fridman (Russia)
















































    Richest People in the World




    Liliane Bettencourt (France)



    Alexei Mordashov (Russia)



    Prince Alwaleed Bin Talal Alsaud (Saudi Arabia)



    Mikhail Fridman (Russia)






    20 Richest People in the World


    Name (nationality)

    Net worth ($Billion)


    Warren Buffett (United States)



    Carlos Slim Helu & family(Mexico)



    Bill Gates (United States)



    Lakshmi Mittal (India)



    Mukesh Ambani (India)



    Anil Ambani (India)



    Ingvar Kamprad & family (Sweden)



    KP Singh (India)



    Oleg Deripaska (Russia)



    Karl Albrecht (Germany)



    Li Ka-shing (Hong Kong)



    Sheldon Adelson (United States)



    Bernard Arnault (France).



    Lawrence Ellison (United States)



    Roman Abramovich (Russia)



    Theo Albrecht (Germany)












































    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

    (c) to be a scientist (d) production.


    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

    (c) rectangle (d) cuboids.


    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

    (c) Price control (d) Hyper-inflation


    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

    (a) 1970 (b) 1971 (c) 1972 (d) 1992


    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

    (c) Profit (d) Gift


    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      Εfx Εfx

    1. (b) (c) (d) All of above

      2      n EX




    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

    (c) Partners (d) Debentures


    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





    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





    OTUNBA S.A. is the author

    of the Book "ASSIMILATION


    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: or call + 225 66315720

    or + 225 55305961
























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