Economics Elesson notes – Edudelight.com

SUBJECT: ECONOMICS                                                                             

CLASS:  SSS 2

ECONOMICS SCHEME OF WORK SECOND TERM SSS 2

WEEKS            TOPICS

1-2                   Revision of theory of demand

                        Theory of supply

                        –  Definition of supply

                        – Explain the law of supply with tables and graphs.

                        Types of supply composite, complimentary and competitive)

3                      Abnormal Supply Curve

4                      Price determination in a free market

5                      Price system

6                      Public finance

7                      Taxation

8                      Uses of taxation

9                      Budget, Revenue allocation in Nigeria, National Debt.

10                    Agriculture Policies in Nigeria and Marketing of agricultural commodities prospects of agriculture.

11                    Revision

12                    Examination

WEEK 1                        DATE………………

TOPIC –  SUPPLY

i.          Revision of theory of demand

ii.         Theory of supply

iii.        Definition of supply

iv.        Explain the law of supply with tables and graphs

v.         Types of Supply

vi.        Factor determine supply

vii.       Change in quantity supply

viii.      Shift in Supply Curve

DEFINITION OF SUPPLY

Supply may be defined as the quantity of goods and services which sellers are willing and able to offer for sale at a particular price, and at a particular period of time.

Supply does not mean the entire stock of a commodity in existence or the total quantity of that commodity produced but rather it means only the amount that is put into the market or offered for sale at a given price.

EXPLANATION OF LAW OF SUPPLY WITH GRAPH AND TABLE

1.         Law of supply

2.         Supply schedule

3.         Supply curve

LAW OF SUPPLY

The law of supply states that, all things being equal, the higher the price, the higher the quantity

of a commodity that will be supplied or the lower the price, the lower the quantity of the

commodity that will be supplied.

SUPPLY SCHEDULE

Supply schedule is the table showing the relationship between the quantity supplied and price of

a commodity.  Supply schedule is divided into two:

1.         Individual Supply Schedule

2.         Market Supply Schedule

The table below shows the supply schedule for bags of wheat.

Price per bag (N)	Quantity supplied (No. of bag of wheat)
100	50
80	40
60	30
40	20
20	10

An Individual Supply Schedule	Quantity Supplied by	Quantity supplied by	Quantity supplied by	Total Quantity
Price per bag N	Mr. Segun	Mrs. Jolaoso	Mr. Ade	Supplied
100	50	80	70	200
80	40	70	50	160
60	30	60	30	120
40	20	50	20	90
	10	40	10	60

MARKET SUPPLY SCHEDULE

SUPPLY CURVE

Supply curve is a graph showing the relationship between price and quantity of that commodity

supplied. 

The diagram below shows the supply curve of the individual supply schedule.

SUPPLY SCHEDULE

Supply schedule is defined as a table that shows various quantities of goods which producers or sellers are willing and able to place for sale in the market at different prices. For example Mrs. Bello’s Supply schedule for yams.

Price per tuber (N)                  Quantity of Supplied  (tubers)

•                                                   15

15                                                            20

18                                                            22

20                                                            25

22                                                            27

25                                                            35

From the table above, it is clear that the supplier (Mrs. Bello) supplied more at a higher price. This implies that the higher the price, the higher the quantity supplied.

SUPPLY CURVE

The supply curve is the graphical representation of the supply schedule

Unlike the demand curve, the supply curve slopes upward from left to right. Both the supply curve and the supply schedule illustrate the law of supply, which states “the higher the price of a commodity, the higher the quantity supplied and vice versa.

FACTORS INFLUENCING THE SUPPLY OF A COMMODITY

1. Price of the commodity: This is the most important factor influencing supply. The higher the price of the commodity, the higher the quantity supplied and vice versa.

2. Cost of production: If the cost of producing a commodity falls, then ore of that commodity could be supplied at the existing price. It therefore means that a producer will be able to produce more commodities with the existing raw materials, hence increase in supply.
3. Technological development: An improvement in the level of technology will equate to improvement in the methods or techniques of production. This will encourage large scale production at lower costs which in turn increases supply e.g. the use of modern farming techniques and equipment.
4. Season:- The prevailing seasons will influence the supply of a particular commodity. E.g. More umbrellas will be supplied during the rainy season and this also applies to agricultural products.
5. Government Policies: Government policies such as subsidies, restriction on importation affect the supply of goods both in the long and short run.
6. Expectation of future change in prices: The expectation of suppliers about the future of the prices of some goods may affect supply. E.g. If the supplier suspects reduction in prices in future, he or she will reduce the quantity supplied of the commodity, so as to enjoy higher prices.
7. Taxation: Increased taxation on goods will raise the producer’s cost of production and by extension affect the supply of the product.
8. The prices of other commodities: When the prices of some commodities are high, some producers may switch over to the production of such commodities and stop producing the commodities with lower prices.

CHANGES IN QUANTITY SUPPLIED

Change in quantity supplied is only influenced by price. It involves movement along the same supply curve.

                                                                                    S

                    Price

                        P₂

P₁

                                       S

Q₁            Q₂          Quantity

            Change in Quantity Supplied

CHANGE IN SUPPLY

Change in supply is caused by factors other than the price of the commodity. It involves a bodily shift of the supply curve either to the right (increase in supply) or to the left (decrease in supply)

     Price                                                               Price

              P                                                                 P

                                    Q₁         Q₂         Quantity                     Q₂           Q₁         Quantity

(i)         Increase in supply                                             (ii)        Decrease in supply

TYPES OF SUPPLY

1.         Joint Supply: Some commodities are often produced together.  Such commodities come from the same source and are said to be in joint supply.  Examples are petrol and kerosene, which are refined from petroleum: beef and hides from oxen.

When two commodities are in joint supply one may be a by-product of the other which means that you cannot increase the supply of one without increasing at the same time, the supply of the other.

2.         Composite supply: A group of commodities may provide a composite supply to satisfy demand.  For example, tea, coffee, cocoa, milk, sugar etc.  provide a composite supply of beverages.  This is the total supply for beverages.

3.         Competitive supply: This is the supply for goods that are competitively supplied.  To expand the production of one commodity generally requires a reduction in the output of another.  That is, the supply of commodity A.  Affects the supply of commodity B. For instance, factors of production can be used for various purposes.  If a piece of land is used for growing maize, it cannot be used for building a hospital at the same time.

EVALUATION QUESTIONS

1. What is a supply schedule?
2. Itemize and explain the factors influencing the supply of candle.
3. Differentiate between change in quantity supplied and change in supply.

READING ASSIGNMENT

Comprehensive Economics by Anyaele Page 130-132

Fundamentals of Economics by Anyawuocha Page 222-226.

WEEKEND ASSIGNMENT

1. Given the supply function Qs = 2p +1, the quantity supplied Q at the price of N 4 is _______ units (a) 7 (b) 8 (c) 9 (d) 10
2. The major reason for change in quantity supplied is (a) Government policy (b) Season (c) taxation (d) Price
3. The quantity of goods offered to the market at respective prices and presented in a table is called (a) Price Schedule (b) Supply Schedule (c) Scale preference (d) Demand schedule 
4. An inferior good is one (a) Whose price is lower than the prices of other goods (b) That is too bad for consumption (c) That is easily perishable (d) Whose demand falls when the income of its consumer increases
5. Which of the following is a luxury item (a) Petrol (b) Text book (c) Pencil (d) Gold

THEORY

Mention four factors that influence the supply of a commodity?

List four factors that are responsible for change in supply?

Economics Elesson notes – Edudelight.com

WEEK 3                                              DATE……………..

TOPIC – ELASTICITY OF SUPPLY

CONTENT

i.          Meaning of Elasticity of supply.

ii.         Formula for calculating Elasticity of supply.

iii.        Graphical illustration of Elasticity of supply.

i.          DEFINITION – Elasticity of supply can be defined as the degree of responsiveness change in quantity supplied as a result of change in price.  Elasticity of supply measures the extent to which the quantity of a commodity supplied by a producer changes as a result of a little change in the price of the commodity.

ii.         MEASUREMENT OF ELASTICITY OF SUPPLY – Elasticity of supply can be measured or calculated by using the co-efficient of price elasticity of supply.  The formula used in calculating the elasticity of supply is :

            Elasticity of supply (ES)  = % change in supply

                                                     % change in price

            =          % QS   –  where

                        % ∆P    ∆       =  change

                                    QS    = Quantity supplied

                                     P    =  Price     

                                    %  =  Percentage

The table below shows the relationship between prices of goods and the unit of commodity

supplied.

   Price  (N)                     Quantity Supplied

       9                                 850

    10                              1000

    11                              1,150

1.         Calculate the elasticity of supply when price falls from N10.00 to N9.00 State whether the supply in (iii) above is elastic or inelastic (WASSCE 1994)

                                    Old Qty   –   New Qty      x    100

                                                        Old Qty                 1

                                    1000 – 850   =  150

                                            150

                                    Old Quantity  =  1000

                                    New  Quantity   =  850

                                    Old – New    x  100

                                         Old                1

                                    1000  –  850   x   100

                                          1000              1

                                    150   x   100   =  15%

                                   1000         1

Old price  =  N10

New price   =  N9

Old – New   x  100

    Old               1

10 – 9    x   100   =  1    x    100   =   10%

    10             1        10           1

Elasticity of Supply  =  15   =  1.5

                                    10

Elasticity is Elastic

1.

                                                            COEFFICIENT

                                                            Zero Elasticity of supply.

                                                            ES  =  O

2.                                                         Infinite elasticity of supply

                                                            ES  =  oo

3.                                                         Unitary elasticity of supply.

                                                            ES  =  1

4.                                                         Elastic supply

                                                            oo  > ES > 1

Inelastic or fairly inelastic supply curve.

EXCEPTIONAL (ABNORMAL) SUPPLY CURVE

As a general rule, supply curve slopes upwards from left to right showing that at higher prices more of the

commodity will be supplied.  A normal supply curve has a positive slope.

However there are cases when this normal condition does not hold.  In such cases, the supply curve will

slope downwards from left to right.

Abnormal or exceptional supply curves otherwise known as regressive supply curves are manifested in the

following cases.

1.         The fixed supply: Some goods or productive factors are completely fixed in amount regardless of their prices.  An example is land.

2.         Backward-sloping supply: This is a situation where a portion of the supply curve will slope backward from left to right.  This is usually associated with the supply of labour.

Number of hours worked

DERIVATION OF EQUILIBRIUM QUANTITY AND PRICE FROM DEMAND AND SUPPLY

FUNCTIONS

Given the demand and supply function

Qd = 42 -2p and Qs = 12 + 4p

1.         Calculate Qd and Qs at price N1, N3 N6, N7 and N8

2.         From the result obtained in (1) above, construct a combined Demand and supply curve

3.         Draw the demand curve and supply curve (combined) on a single graph sheet

SOLUTION

1.         Qd  =  42 – 2p                          Qs = 12 + 4 (3)

            When p = N1

            Qd – 42 – 2(1)                          Qs = 12 + 4 (1)

            = 42 – 2                                    = 12 + 4

            = 40 units                                 = 16 units

When p = N3                                        Qs = 12 + 4

Qd = 42 – 2 (3)                                     = 12 + 12

= 42 – 6                                                = 24 units

36 units

When p = N6                                        Qs = 12 + 4 96)

Qd = 42 – 2(6)                                      = 12 + 24

=  42 – 12                                             = 36 units

=  30units

When p = N7                                        Qs = 12 + 4 (7)

Qd = 42 – 2 (7)                                     = 12 + 28

=  42 – 14                                             = 40 units

28 units

When p = N8                                        Qs = 12 + 4(8)

Qd = 42 – 2 (8)                                     = 12 + 32

= 42 – 16                                              = 44 units

= 26 units

2.         Combined Demand and Supply Schedule          

                        Price                Qd (unity)                    Qs units

                        1                      40                                16

                        3                      36                                24

                        6                      30                                36

                        7                      28                                40

                        8                      26                                44

EVALUATION

1.         List two factors that can account for a regressive supply curve.

2.         With the aid of a diagram, explain what is meant by exceptional supply curve.

3.         Explain the following types of supply (a) Joint supply    (b) Competitive supply

READING ASSIGNMENT

1.         Fundamentals of Economics by Anyawuocha page 222 – 226

2.         Comprehensive Economics by J.U. Anyaele page 130-134

WEEKEND ASSIGNMENT

1.         The willingness of an individual to buy a commodity backed up with price at a give time is known as _______ demand.

            (a) Joint            (b) Derived       (c) Effective      (d)  Composite

2.         Given that D & i/p when P N2; D = 5000 units.

Calculate the quantity demanded when price increases to N4.

(a) 2500 units     (b) 3500 units    (c) 5000 units    (d) 6000 units

3.         What is the price when D = 3000 units

            (a) N1.3     (b) N3.33       (c)  N13.3           (d)  N33.33

4.         Beef and hides could be said to exhibit  ______ supply

            (a) Derived       (b) Joint    (c) Composite      (d) Competitive

5.         Price and Quantity supply normally shows _____ relationship.

            (a) Direct          (b) Inverse    (c) Unrelated     (d) probability

THEORY

1.         State the law of supply.

2.         State two circumstances that can lead to existence of abnormal supply curve.

EVALUATION

1.         Given the figures below:

            Price of commodity x in 2004  =  N10

            Price of commodity  x 2005  =  N14

            Quantity of  x Supplied in 2004  =  20kg

            Quantity of  x Supplied in 2005 = 24kg

(a)  Calculate  (i) percentage change in quantity supplied (%).  (ii) percentage change in price (%)

                        (iii)  Co-efficient of price elasticity of supply (ES)

(b)        From your answer in (i) is the supply elastic or inelastic     (ii) How do you know this:

READING ASSIGNMENT

1.         Essential Economics C. E. Ande page 196-198.

WEEK 4                                 DATE……………

TOPIC: PRICE DETERMINATION  IN A FREE MARKET ECONOMY

CONTENTS

i.          Free market economy

ii.         Determination of price in a free market

iii         Equilibrium point, equilibrium price and equilibrium quantity.

iv.        Derivation of equilibrium price and quantity from demand and supply functions.

v.         Effects of changes in demand and supply on equilibrium price and quantity

FREE MARKET ECONOMY

A free market is a market in which prices of goods and services are regulated by market forces. This means      that prices of commodities in a free market economy are fixed by the interaction (i.e. joint actions) of demand and supply.

DETERMINATION OF PRICES IN A FREE MARKET

It is possible to compare demand with supply by drawing a schedule showing the quantity of goods demanded and supplied.  An example of a combined demand and supply schedule is shown below.

Price N                        Quantity demanded (units)                 Quantity supplied (units)

7                                              100                                                      900

6                                              200                                                      700

5                                              300                                                      650

4                                              400                                                      400

3                                              500                                                      300

2                                              600                                                      250

1                                              700                                                      200

The schedule above can be graphically represented by the curve below.

Price

EQUILIBRIUM POINT, EQUILIBRIUM PRICE AND EQUILIBRIUM QUANTITY

Given a downward sloping demand curve and an upward sloping supply curve as in the diagram above, there would occur a unique point of intersection indicating a price level at which quantity supplied will be equal to the quantity demanded. Such point of intersection is called an equilibrium point and when such point is traced to the price and quantity axis of the graph, we shall obtain the equilibrium price and equilibrium quantity bought and sold respectively.

From the graph above, the equilibrium point was established at point A and when traced to the price and quantity axis, it showed the market equilibrium price and equilibrium quantity bought and sold of N4 and 400 units respectively.

The equilibrium price is the price at which the quantity of goods demanded is equal to the quantity supplied. This price is determined by the interaction of supply and demand

At a price lower than the equilibrium price (say N2) demand will be greater than supply. This will lead to shortage of goods in the market that is, excess demand.  On the other hand, at a higher price than the equilibrium price (say N6), producers will supply more than the consumers are willing to buy and this will lead to an excess supply – i.e surplus of goods in the market.

Derivation of equilibrium price and quantity from demand and supply functions

Given the Demand and supply functions:

            Qd = 42-2p and Qs =12+4p

Determine the equilibrium price and equilibrium quantity

Solution

At equilibrium price

Qd = Qs

i.e. 42- 2p = 12+4p

42-12 = 4p +2p

30 = 6p

P= 30/6 = 5

Equilibrium  price = N5

To obtain the equilibrium quantity

Substitute for p in

Qd = 42 –2p

Qd = 42 – 2 (5)

= 42 –10

32

Equilibrium Quantity = 32units

EFFECTS OF CHANGES IN DEMAND AND SUPPLY ON EQUILIBRIUM PRICE AND QUANTITY

Changes in demand and supply lead to a change in the equilibrium price. Once there is any change in either demand or supply, the initial equilibrium will be disrupted and a new equilibrium will be created. The market equilibrium price can be affected in the following ways.

Increase in Demand

Effects of increase in demand

1. Increase in the equilibrium price from P₁to P₂
2. Increase in the equilibrium quantity from Q₁ toQ₂

2.   Decrease in demand

Effects of Decrease in demand

1. Decrease in the equilibrium price from P₁ to P₂
2. Decrease in the equilibrium quantity from Q₁to Q₂

3.         Increase in Supply

1. Decrease in the equilibrium price from P₁ to P₂
2. Increase in the equilibrium quantity from Q₁to Q₂

Effects of Decrease in Supply

a.         Increase in the equilibrium price from P₁ to P₂

b.         Decrease in the equilibrium quantity from Q₁to Q₂

EVALUATION QUESTION

1. What is the equilibrium quantity?
2. Illustrate with a diagrammatic sketch the market situation at a price lower than the equilibrium price
3. Explain the term “market forces”
4. “Prices are determined by the forces of demand and supply”. Explain and illustrate with a diagram.
5. Explain with the aid of diagrams how the market equilibrium price is affected by the combined effects of
6. Increase in demand and increase in supply

b.       Decrease in demand and decrease in supply

3. Increase in demand and decrease in supply

READING ASSIGNMENT

1. Comprehensive Economic by J.U Anyaele page 132-136
2. Fundamentals of Economics by Anyawuocha page 166-168

WEEKEND ASSIGNMENT

1. At the equilibrium price, quantity demanded is (a) Greater than quantity supplied (b) Equal to quantity supplied (c) less than quantity supplied (d) Equal to excess supply
   1. If the government fixes a price of a commodity above the equilibrium price, the quantity supplied will be (a) les that the quantity demanded (b) Equal to the quantity demanded (c) Greater than the quantity   demanded (d) Equal to zero
   1. The market price of a commodity is normally determined by the (a) law of demand (b) Interaction of the forces of demand and supply (c) total number of people in the market (d) total quantity of the commodity in the market
   1. The gap between demand and supply curves below the equilibrium price indicates (a) Excess demand (b) Excess supply (c) Equilibrium quantity (d) Equilibrium price
   1. If prices fall below the equilibrium (a) demand will equal supply (b) Demand will be greater than supply  (c) Supply will be greater than demand (d) Quantity supplied will be zero

THEORY

Given the demand and supply function for a crate of eggs as follows:

Qd = 12 –2p;      Q = 3+1p

Determine the equilibrium price and quantity

What is the excess supply at the price of N3.50? 

WEEK 5                                             DATE:………………

TOPIC: PRICE SYSTEM OR PRICE MECHANISM

CONTENTS:

1.         The concept of price system or price mechanism

2.         Factors that determine price of commodities

3.         Government interventions in the market

4.         Price control

NOTES:

PRICE SYSTEM OR PRICE MECHANISM

In a free market economy prices of goods and services affect the behaviour of both the consumer and the producer (supplier) Price system maybe defined as a system whereby prices of goods and services are determined by the free interaction of the forces of demand and supply in a free market economy.

FUNCTIONS/IMPORTANCE OF THE PRICE SYSTEM

1.         The price system operates to allocate scarce resources

2.         It regulates the flow of goods and services from producers to the consumer.

3.         It determines the extent of demand and supply of goods and services.

4.         It is used to encourage or discourage consumption of certain goods and services.

5.         It helps to determine how the factors of production will be rewarded.

FACTORS THAT DETERMINE PRICE OF COMMODITIES

a.         The cost of production of the product

b.         The level of profit desired by the seller

c.         The level of competition in the market

d.         Government policies e.g subsidies, taxation etc.

e.         The activities of Trade Unions

f.          The cost incurred on advertisement

g.         Changes in demand and supply

GOVERNMENT INTERVENTIONS IN THE MARKET

Sometimes government intervenes in the market through subsidies and direct price control.

a.         SUBSIDIES: Government may pay a part of the cost of certain products on behalf of the consumer.  This is usually in the form of granting concessions to the producers to assist them in cutting production costs e.g through the reduction of import duties on inputs – machinery or raw materials.

b.         PRICE CONTROL: Price control defines a situation where the government uses the instrument of law to fix the price of certain commodities.  It can be in the form of maximum or minimum price control.

i.          Maximum price control: This is practiced when government wants to protect consumers against suppliers (sellers).  The government will set a maximum price below the market equilibrium price of the commodity.

Effects of a maximum price control policy

a)         Hoarding of goods

b)         Stimulation of demand i.e. excess demand, which cannot be satisfied.

c)         Shortages of goods in the market

d)         Queues for the good concerned

e)         Black market dealing/under –counter sales

f)         Reduction in supply

g)         Rationing of the good

h)         Favoritism, bribery and corruption

ii)         Minimum price control:  This happens when the government wants to protect infant industries or inefficient home producers against outside competition.  The government will set a minimum high price above the market equilibrium price for the good and in addition may also saddle importers with a high duty.

The increase in price will however reduce demand and create a surplus in the market.  The government will then step in again to buy up the surplus goods and store them to meet the shortages in supply in the future

OBJECTIVES OF PRICE CONTROL POLICY

1.         To prevent exploitation of consumers by producers and sellers

2.         To avoid or control inflation

3.         To help low income earners e.g the minimum wage policy

4.         To control the profits of companies –especially monopoly.

5.         To prevent fluctuations of prices of some products e.g agricultural produce.

6.         To stabilize the income of some producers e.g. farmers.

7.         To enhance possible planning for future output.

EVALUATION QUESTIONS

1.         List two importance of the price system.

2.         Explain how government policy and taxation can affect price determination.

3.         What is the effect of maximum price control on the equilibrium price of a commodity.     Explain with a diagram.

 READING ASSIGNMENT

1.         Comprehensive Economics for SSS by J. U. Anyaele Page 178 – 183

 WEEKEND ASSIGNMENT

1.         The gap between demand and supply curves below the equilibrium price indicates

(a) excess demand (b) excess supply (c) equilibrium quantity (d) equilibrium price.

2.         Which of the following is not an advantage of price control (a) control of inflation

(b) distortion of price mechanism (c) prevention of exploitation

(d) control of producer’s profit especially monopoly.

3.         The price system refers to the system by which (a) the government control prices in the economy (b) prices tend to rise to a general level (c) price allocates resources between consumer and producer goods (d) the producers fix the price of their products.

4.         When the price of a commodity is fixed by law either below or above the equilibrium the mechanism is known as (a) price discrimination (b) equilibrium price (c) free market (d) price control.

5.         The price system is (a) the market price of commodities (b) a system of price allocation to the products of the same firm (c) a system of resources allocation through supply and demand interactions (d) a market where a single price rules.

THEORY

1.         State three factors that determine the price of commodities.

2.         List three objectives of price control.

WEEK 6                                 DATE…………………

TOPIC:  PUBLIC FINANCE

CONTENTS

1. Definition and Scope of public finance
2. Functions or objectives of public finance
3. Sources of government revenue
4. Items of government expenditure
5. Classification of government revenue and expenditure
6. Reasons for increase in government expenditure.

Public finance is the management and control of government income and expenditure to achieve government’s policy objectives.

It involves a detailed analysis of the various sources from which the government derives its income (revenue), the items on which the government spends its money and the impact of such government expenditure on different aspects of the economy.

FUNCTIONS / OBJECTUIVES OF PUBLIC FINANCE

1. It performs equitable distribution of resources among individual, tiers of government and the various sectors of the economy.
2. It is use to achieve and maintain favourable balance of payments and economic development.
3. It provides a general parameter for monitoring the economy in terms of growth and stability.
4. It is used to achieve the economic objectives of the government.
5. It provide fund for transfer payments e.g pension fund, unemployment benefits, subsidies etc.

SORCES OF GOVERNMENT REVENUE

            The main sources of government revenue are

1. Taxes: This forms a major source of revenue to governments all over the world. These taxes may be direct or indirect taxes.
2. Royalties – This is the money paid by companies engaged in mining activities to the government for rights to explore and exploit mineral resources deposits
3. Earning (income) from government investments e.g. interest, rent, dividends, profits from government owned business property.
4. Grants and aids from individuals and institutions at home and from foreign governments and international organizations.
5. Borrowing:- This could be internal or external borrowing e.g sale of government securities or loans from African Development Bank, IMF, World Bank, Pars Club etc
6. Fees, licenses and charges, fines etc eg vehicle licence fees, liquor licence fees, fire arms licence fees, international passport fees, court fines, Road Safety Commission fines etc
7. Other sources e.g. Tolls, rates etc.

GOVERNMENT EXPENDITURE

            The main items of government expenditure are

1. Defence or National Security: The government provides for the Army, Air force, Navy and the Police to maintain law and order and defend the country from external aggression.
2. General Administration: The government spends money in maintaining the Civil Service and the various officers of the government in the ministries, agencies, corporations, parastatals and departments
3. Social, educational facilities, water supply pipe borne water etc and pension benefits for retires.
4. Economic Infrastructure e.g roads, bridges ports, agriculture telecommunication, power and electricity etc.
5. Servicing of the National Debt: i.e. the repayment of the principal and interest of both external debts
6. Direct Productive Service: Government sometimes participate directly by organizing productions of some commodities.

CLASSIFICATION OF PUBLIC REVENUE

            Government revenue can be classified as

1. Recurrent Revenue:/ This is the total amount of revenue collected by the government of a country from their regular or yearly basic e.g taxation, fees, licences, fines etc.
2. Capital Revenue:- These are revenue from irregular or extraordinary sources. They are sources of revenue used for meeting expenditure on heavy capital projects e.g grants or loans collected by the government for the purpose of building a project e.g railway line.

CLASSIFICATION OF PUBLIC EXPENDITURE

Government expenditure can be classified as:

1.         Recurrent Expenditure: – These are expenditure incurred in the running of the day to day activities of the government. They are expenses that re-occur within a fiscal year i.e. items / expenses that last for less than a year e.g wages, salaries, stationery, fuel for official cars, cost of maintaining roads, repairs expenses on dams etc.

2.         Capital Expenditure:- These are expenditure (investments) on project that last for more that one year. They are used to acquire assets that are of permanent nature e.g construction of roads, bridges, government buildings, purchase of cars etc.

In most cases, recurrent expenditure is spent in maintaining capital projects.

REASONS FOR INCREASE IN GOVERNMENT EXPENDITURE

There has been an astronomical increase in the magnitude of government expenditure. Some of the reasons for this include:

1. Increase in population leading top higher administration costs
2. The effect of inflation (general increase in price level) on the cost of projects undertaken by the government.
3. The effect of devaluation (depreciation) of the Naira on a largely import dependent economy of Nigeria.
4. The increasing cost of maintaining democratic institutions and large number of political structures i.e. states, local governments and their officials.
5. Greater demand for social and economic infrastructures and the cost of maintaining existing ones.
6. The developmental / industrialization programmes of the government requires a lot of capital outlay to import the needed equipment / machines
7. The cost of servicing the country’s huge stock of internal and external debt which has kept increasing because of interest capitalization
8. The high prevalence of corruption and over invoicing of the cost of projects by government officials and politicians.

FISCAL POLICY

A fiscal policy may be defined as a government plan of action concerning the raising of revenue through taxation and other means and deciding the pattern of expenditure to be applied.

Fiscal policy therefore involves the use of government income and expenditure instrument to regulate the economy with the aim of achieving some set economic objectives

The economic objectives of the government on fiscal policy includes.

1.         Maintenance of stable prices / control of inflation and deflation.

2.         Equitable distribution of wealth

3.         Efficient allocation of resources

4.         Provision of full employment

5.         Stability in the exchange rate of the national currency

6.         Maintenance of favorable balance of payments

EVALUATION QUESTIONS

1.         Explain any two items of government expenditure

2.         Distinguish between capital Expenditure and Recurrent Expenditure.

WEEKEND ASSIGNMENT

1. Which of the following is not an item of capital expenditure (a) Building of dams (b) Supply of electricity (c) Payment of interest on loans (d) Building of harbours.
2. Public expenditure on education and health is known as expenditure of (a) general services (b) social services (c) commercial services (d) economics services.
3. Which of the following is an item of recurrent expenditure (a) construction of highways (b) building of dams (c) payment of salaries and wages (d) building of a new university.
4. Which of the following items cannot be classified as essential government expenditure (a) construction of roads (b) servicing of external debts (c) maintenance of public hospitals (d) importation of luxury consumer goods.
5. Which policy is used to adjust government revenue and expenditure so as to produce a desirable effect on the economy (a) monetary (b) business (c) physical  (d) fiscal.

THEORY

1.         Define Public finance

2.         State five factors responsible for the increase in government expenditure in Nigeria. 

READING ASSIGNMENT

1.         Comprehensive Economics for SSS by J. u.

            Anyaele Page 148 – 150.

WEEK 7                                             DATE…………

TOPIC: TAXATION

CONTENTS

1. Definition
2. Reasons for the imposition of taxes
3. The principles of taxation
4. The concepts of tax base and tax rate
5. Forms (Systems) of income tax
6. Problems associated with tax collection in Nigeria.

A tax is a compulsory payment made by each eligible citizen towards the expenditure of the country. It is a compulsory contribution imposed by a government authority on goods, individuals, corporate bodies (business) without regard to the specific benefits that the taxpayer may receive.

REASON FOR THE IMPOSITION OF TAXES BY THE GOVERNMENT

1. To raise revenue for the government
2. Taxation is used to redistribute income i.e. to lower / reduce the income gap between the rich and the poor.
3. To project infant industries – infant industries are newly formed industries that has to be protected from competition by already established industries.
4. To stop or discourage the importation of dangerous or harmful goods e.g cigarettes
5. Taxation is used as a fiscal device to control the economy i.e. to control inflation, deflation or influence the rate of consumption, investments and savings in the economy
6. To encourage industrialization e.g by tax rebates or tax holidays for industrialists
7. Taxes are also used to promote social services such as social insurance, poor and elderly relief, health insurance etc.

PRINCIPLES OF TAXATION

Adam Smith in his book Wealth of National lays down four canons or attributes of a good tax system. They are

1. Equity: This principles emphasizes that the tax imposed must be in consonance with the tax payer’s ability to pay. In other words, the tax imposed should be in fair proportion to the taxpayer’s income. The progressive tax system reflects this.
2. Certainly: The tax payer must know how much he / she is to pay, in what medium, where, when and how the tax is to be paid.
3. Convenience: The method and time of tax collection should be convenient to the tax payer e.g wage/salary earners at the end of the month, farmers during harvesting period etc.
4. Economy: The cost of collection of taxes should be small relative to the amount collected. It will neither be frugal not prudent to use resources of N10,000 to collect

In addition to the above, the following principles of a good tax system should be noted.

5.         Flexibility: A good tax system should be capable of being changed when conditions and situations warrant such changes.

6.         Neutrality: A good tax system should not be a disincentive to enterprise or productively i.e. it should not interfere unnecessarily with the supply and demand for goods, services and labour.

7.         Simplicity: A good tax system should be simple enough for easy understanding.

8.         Impartiality: There should be no discrimination in the collection of taxes.

9.         Difficult to evade: A good tax system should ensure that tax evasion / tax avoidance are kept at a minimum.

CONCEPT OF TAX BASE AND TAX RATE

The tax base refers to the item of the object which is taxed. i.e.  the amount of the salary wages, income, profits, gains or assets upon which the calculation of tax to be paid is based

The tax rate refers to the percentage that is applied to the tax base in order to calculate the amount of tax payable by the taxpayer.

SYSTEMS OF TAXATION / FORMS OF INCOME TAX

1. Proportional Tax: This is a form of income tax in which the same rate of tax is applied to the respective income of taxpayers. for example if government applies a tax rate of 10% on all taxpayer income, a worker earning N15,000 will pay N1500 tax will pay N6000 as tax.
2. Progressive Tax: In this case, the percentage levied (tax rate) increases with the size of one’s income. A progressive tax takes a larger percentages of income from people with larger income. It reduces inequality of income from people with larger income. It reduces inequality of income distribution eg Pay As You Earn (P.A.Y.E.)
3. Regressive Tax: In this case, the proportion removed as tax from one’s income decreases as the person’s income increases i.e. The higher the income, the lower the rate of tax eg Poll tax, indirect tax etc. A regressive tax aggravate inequality of income distribution

PROBLEMS ASSOCIATED WITH TAX COLLECTION IN NIGERIA

1. Corruption and non challant attitudes of revenue officers / tax collectors.
2. Tax evasion and Tax avoidance
3. Lack of proper accounting records by business enterprises
4. Ignorance / illiteracy / mass poverty of the populace
5. Apathy of tax payers as a result of corruption in high places  
6. Government’s inability to provide essential infrastructure and amenities eg electricity does not encourage people to pay tax.

TAX EVASION AND TAX AVOIDANCE

Tax Evasion refers to an illegal attempt not to pay tax or pay less tax. For instance, someone could make false declarations of income or tax could be dodged completely.

Tax Avoidance refers to the efforts of a tax payer not to pay tax by finding a legal 100phone in the tax system. For example, the taxpayer could discover a part of the tax law that is ambiguous. He can therefore take advantage of this and easily defend himself legally if he does not pay tax or if he pays less tax. Tax avoidance is a legal etc.

REVIEW QUESTIONS

1.         Differentiate between tax avoidance and tax evasion.

2.         Plotting a graph of rate of tax paid (%) on the y-axis and income (#) on the x – axis, show the following on the same graph (a) Progressive Tax (b) Regressive Tax (c) Proportional tax.

READING ASSIGNMENT

1.         Comprehensive Economics for SSS by J.U. Anyaele page 150 – 155.

WEEKEND ASSIGNMENT

1.         A tax system in which all the payers are taxed the same percentage of their incomes is referred to as (a) regressive (b) progressive (c) proportional (d) flexible.

2.         Which of the following is Not a principle of taxation (a) certainty (b) convenience (c) economy (d) security.

3.         Mr Bello’s income is $800 per month while that of Mr Jatau is $1200. if messes Bello and Jatau pay $80 and $120 respectively as taxes, the tax system is (a) Progressive (b) regressive (c) proportional (d) ad – valorem.

4.         Government revenue from the groundnut industry is from (a) licences (b) rents (c) royalties (d) taxes.

5.         A worker earns $80,000 per annum. He / she pays $4,000 as tax. What percentages of his/her income does he/she pay as tax (a) 10% (b) 8% (c) 5% (d) 4%.

THEORY

1.         What is a tax

2.         State three problems associated with tax collection in Nigeria.

WEEK 8                                             DATE……………

TOPIC:   TAXATION

CONTENTS

            (1)        Form of tax

            (2)        Advantages and disadvantages of direct and indirect tax

            (3)        Economic effects of taxes

            (4)        Incidence of taxation

(5)        Objectives of taxation

FORMS OF TAX

Taxes are divided into broad categories namely direct taxes and indirect taxes

(i)     Direct tax: This is a tax collected from individuals and profits of companies. The burden of direct tax is borne by the payer.

Examples of direct taxes are (a) income tax (b) Company tax (c) Capital gain tax (d) Poll tax etc.

ADVANTAGES OF DIRECT TAXES

1.         They are progressive in nature

2.         The incidence of direct tax is easy to ascertain

3.         They are easy to calculate

4.         Payers find them convenient to pay

5.         Some specific group of people or business could be granted exemption from payment of direct tax.

DISADVANTAGES OF DIRECT TAXES

1.         They discourage savings

2.         They discourage investments

3.         They are difficult to assess (determined with accuracy) eg company tax.

4.         Cases of tax evasion is high (frequent)

5.         They discourage hard work

6.         It may result to squabbles between taxpayers and tax officials

(ii)        Indirect Tax: This is a tax levied on goods and services. They are initially paid by either the manufacturer or importer of the goods who, as far as possible shifts the burden to the consumers in form of high prices. Examples of indirect taxes are customs duties (import duty and export duty) excise duty, purchase tax etc.

ADVANTAGES OF INDIRECT TAXES

a.         Their collection is less difficult

b.         They cause less squabbles

c.         It yields more revenue to the government than direct taxes.

d.         They are not easy to evade

e.         The burden is shared among all sections of the society.

DISADVANTAGES OF INDIRECT TAXES

1.         It causes inflation i.e. increases in the prices of goods.

2.         It may cause scarcity of goods

3.         They are unreliable sources of revenue

4.         Indirect taxes are regressive in nature

5.         They are non-discriminatory i.e. some group of people cannot be granted exemption from paying.

6.         They restrict free trade between different countries.

DIFFERENCE BETWEEN SPECIFIC TAX AND AD VALOREM TAX.

This reflects the different methods of calculating custom duties.

In Specific Tax, the amount of tax to be paid depends on the quality of goods bought so that the greater the quality of goods bought the greater the tax to be paid.

Ad Valorem Tax: The amount of tax to be paid depends on the value or quality of the commodity. This value or quality is measured in terms of the price of the commodity. This means that goods which have higher prices are supposed to have higher values and are therefore taxed more heavily than goods whose values and thus prices are lower.

ECONOMIC EFFECTS OF DIRECT TAXES

1. Direct taxes lead to a reduction in disposable income and consequently a reduction in consumption.
2. It discourages savings
3. It discourages hard work
4. It discourages investments and this would, in turn cause unemployment.
5. It leads to a redistribution of wealth
6. It reduces capital available for a company in form of retained profits.

ECONOMICS EFFECTS OF INDIRECT TAXES

1. It can lead to inflation
2. It encourages smuggling
3. It reduces production e.g. excise duties thereby causing scarcity of goods.
4. It discourages investment
5. It can lead to changes in the consumption pattern i.e. it alters the demand and supply of goods.

INCIDENCE OF A TAX

The incidence of a tax refers to the burden of tax with reference to where this burden rests. The incidence or burden of taxation lies on the person who finally pays the tax. There are two types of tax incidence

a.         Formal incidence: this refer to where the in initial burden of taxation lies. The payer of a direct tax bears the initial burden of tax. For indirect taxes, the producers or the middlemen bears the initial burden of taxation.

b.         Effective incidence: This refers to who bears the ultimate or final burden of taxation. In the case of direct taxes the payer bears the full burden of taxation. He bears both the formal and effective incidence.

            In the case of indirect taxes, the burden of taxation may be borne by the producer (seller) or the consumer, or it may be shared between the producer (seller) and the consumer. The extent to which the producer (or seller) or the consumer will bear the burden of indirect tax will depend on the elasticity of demand for the commodity which is taxed.

1.         Where the demand for the commodity is perfectly inelastic, the whole tax burden can easily be shifted to the consumer by the seller.

2.         Where the demand for the commodity is perfectly elastic, the seller or producer will bear the whole burden of taxation. This is because any attempt to increase prices will make the demand for the commodity to fell to zero. The tax burden cannot, therefore be passed to the consumer. 

3.         Where the elasticity of demand for the commodity is unitary, tax burden is shared equally between the producer / seller and the consumer.

4.         Where the elasticity of demand for the commodity is moderately elastic or moderately inelastic, the burden of taxation will be shared between the producer (seller) and the consumer depending on the extent of the elasticity.

EVALUATION QUESTIONS

1.         Define the term – formal incidence of tax

2.         Shoe with the aid of a diagram, who bears the incidence of tax of a commodity having inelastic demand.

WEEKEDND ASSIGNMENT

1.         A tax on a commodity whose demand is perfectly inelastic will fall heavily on the (A) Consumer (B) manufacturers (C) wholesalers (D) retailers.

2.         Government revenue will increase if tax is imposed on a good whose demand is (A) elastic  (B) inelastic  (C) unitary elastic  (D) perfectly elastic.

3.         Which of the following is an indirect tax (A) income tax (B) company tax (C) Profit tax (D) Sales tax.

4.         A tax whose rate increases as income increases is (A) an indirect tax (B) a progressive tax (C) a regressive tax  (D) a proportional tax.

5.         The largest part of the revenue of a country is derived from (A) direct taxation  (B) indirect taxation  (C) excise duties (D) company taxes.

THEORY

1.         What is an indirect tax

2.         State three economic effects of taxation.

Economics Elesson notes – Edudelight.com

WEEK 9                                  Date:………………

TOPIC:  BUDGET / NATIONAL DEBT

CONTENTS

(1)        Definition and meaning of budget

(2)        Functions / uses of the budget

(3)        Types of budgets

(4)        Meaning of the National Debt

(5)        Reasons why government borrow

(6)        Effects of huge national debt on the economy.

BUDGET

A budget may be defined as a financial statement of the total estimated revenue and the proposed expenditure of a government in a given period: usually a year.

FUNCTION / USES / IMPORTANCE OF BUDGETS

National budget is used to achieve the following objectives

1. It is used as a means of raising revenue
2. It is used to control inflation
3. It is used to as a remedy a depression (recession) or deflation.
4. It is used to correct a balance of payments deficit
5. It is used as a tool for economic planning
6. It is a means of enhancing public welfare and reducing income inequality in the country
7. Budgets are used to allocate resources between different sectors of the economy
8. It is used to control the economy with the arm of fostering economic growth and development.

TYPES OF BUDGET

1.         Balance Budget: This is when the total estimated revenue is equal to the proposed expenditure of the government. This means that nothing will be left as reserve from the money collected in form of revenue

2.         Surplus Budget: A budget is called surplus budget when the total estimated revenue is more than the proposed expenditure. In this type of budget, not all the estimated revenue is proposed to be spent in that year. That is, there will be reserve.

3.        Deficit Budget: This is when the government total proposed expenditure for the period is more than the total estimated revenue. The shortfall in revenue is sourced through borrowings, printing of more currency, aids and grants etc.

Economic conditions warranting the adoption of the different types of budgets

1.         A budget surplus is desirable in period of inflation because it reduces aggregate demand thereby reducing inflationary pressure in the economy

2.         A deficit budget is used in the following instances

             (a) To reduce unemployment by increasing aggregate demand.

            (b) To finance a national emergency such as war

            (c) To remedy a deflationary trend.

NATIONAL DEBT

National debt or Public Debt refers to the sum total of debts owed by the government of a country both internally and externally.

The debts may or may not be with interest

Reasons why government borrow

1.         To finance deficit budget

2.         To finance a huge capital project

3.         To prosecute a war i.e. for the procurement of ammunitions and other war materials

4.         To service existing loans     

5.         To manage an emergency situation eg Flood, drought, epidemic, famine

6.         To correct an unfavourable balance of payment

INSTRUMENTS OF GOVERNMENT BORROWING IN NIGERIA

1.         Treasury Bills – used for short term borrowing i.e. 90 days

2.         Treasury Certificates:- used for medium term borrowing i.e. 1 – 2 years

3.         Development stocks – used for long above

4.         Stabilization Securities

Effects of huge national debt on the economy of a country

1.         It reduces the availability of foreign exchange

2.         It makes a country to be susceptible to the dictates of external creditors

3.         It makes it difficult for the country to source fresh loans – i.e. it lowers a country’s credit ratings

4.         A large domestic debt will influence the distribution of income in the country

5.         The servicing of an external debt will involve an outflow of resources which can otherwise be used for economic development.

6.         The servicing of a large national debt will limit the government’s ability to provide welfare / social services to the people

REVENUE ALLOCATION

• Meaning of Revenue Allocation
• Parts of Revenue Allocation
• Revenue Allocation formula.

(I)        MEANING OF REVENUE ALLOCATION

Revenue allocation refers to the sharing of the nation’s wealth among various tiers of government or various units that make up the country.  The various units include: Federal, State and local governments.n

PARTS OF REVENUE ALLOCATION

Revenue allocation is grouped to two major parts namely:

1.         Vertical Revenue Allocation

2.         Horizontal Revenue Allocation

1.         Vertical Revenue Allocation – In vertical revenue allocation, revenue accruing to the Federal Account is shared among the three tiers of government – Federal, State and Local government.

2.         Horizontal Revenue Allocation – Under the Horizontal Revenue Allocation, revenue accruing to federation account is shared among the units within a given level of government.  It involves certain principles based on some factors to be applied in revenue allocation.  These principles include:

1.         Population size

2.         Land mass

3.         Derivation, Oil producing areas.

4.         Ecological problems.

REVENUE ALLOCATION FORMULA

This involves the weight assigned to various principles e.g. Federal government – 40%, State – 20%, Local government – 15%, mineral producing area – 10%, ecological problems – 5%, special fund – 5% others – 7%.  These are just for the short time.  It should be noted that there is no fixed revenue allocation.  It changes from time to time.  The Revenue mobilization Allocation and Fiscal Commission (RMFC) is always at work trying to work out a proposal for a new revenue sharing formula.

EVALUATION QUESTION

1.         Distinguish between Vertical Revenue Allocation and Horizontal Revenue Allocation.

2.         Mention any three principles used in sharing the Revenue accruing to Federation Account.

EVALUATION QUESTIONS

1.         Differentiate between a surplus budget and a deficit budget

2.         State three reasons why the external debt profiles of most West African countries are huge

3.         Mention two ways by which this debt can be reduced.

WEEKEND ASSIGNMENT

1.         Government impose taxes mainly to (a) punish the citizen (b) provide social amenities  (c) donate to poorer countries (d) execute white elephant projects

2.         Budget deficit can be financed by (a) reducing the level of taxation (b) printing more money  (c) lending to financial institutions (d) employing more workers

3.         A continuous fall in the general price level is called (a) recession  (b) depression  (c) deflation  (d) stagflation.

4.         Budget surplus implies that (a) expenditure equals revenue (b) expenditure is less than revenue (c) expenditure is greater than taxation  (d) direct tax is more than indirect tax.

5.         The greatest revenue earning industry in Nigeria is (a) construction (b) agriculture (c) manufacturing (d) mining.

THEORY

1.         What is a balanced budget

2.         State two reasons why a government can adopt a deficit budget

Economics Elesson notes – Edudelight.com

WEEK 10                                DATE………………

CONTENT

TOPIC – AGRICULTURE IN WEST AFRICA

CONTENT

• Agricultural policies in Nigeria.
• Marketing of Agricultural Commodities
• Prospects of Agriculture

Agricultural policies  in Nigeria.

Government of  various   West Africa countries have taken various steps to boost agricultural productivity…  In Nigeria,  the Federal Government had initiated many policies in order to improve the level of agriculture in the country.  These policies were initiated to meet specific objectives so as to boost greater production of crops and livestock in the country.  Some of these agricultural programmes and their objectives are stated below.

1. Operation Feed the Nation (OFN) – 1976
2. Agricultural Development Project (ADP) – 1976
3. Directorate of Food, Roads and Rural Infrastructure (DFRRI) – 1986
4. Farm Settlement Scheme (FSS) – 1959
5. National Agricultural Insurance Scheme
6. Green Revolution – 1979
7. Land Use Decree – 1978

OBJECTIVES OF AGRICULTURAL POLICIES IN NIGERIA

1. To increase food production.
2. To construct rural infrastructures such as feeder roads and earth dam.
3. To provide security against risks, uncertainties and hazards in agriculture for farmers.
4. To streamline and simplify the management of land in the country.
5. To provide employment in agriculture.

MARKETING OF AGRICULTURAL COMMODITIES

The marketing Board was saddled with the responsibility of marketing agricultural produce.  Marketing Board may be defined as a public corporation charged with the responsibility of assisting farmers in purchasing, grading and marketing of various agricultural commodities in the country.  Marketing Board System was set up several years ago and was known as the West African Produce Control Board.

FUNCTIONS OF MARKETING BOARDS

i.          Purchase of produce.

ii.         Sales of produce

iii.        Revenue generation

iv.        Price stabilization – They stabilized the prices of produce by fixing minimum prices for the crops they wanted to buy.

v.         Processing of produce: The marketing boards were also responsible for processing some of the produce for final export to other countries.

vi.        Development of agro-allied industries.

vii.       Economic development

viii.      Growth of co-operative societies.

ix.        Manpower development

x.         Improving the quality of produce.

PROBLEMS OF MARKETING BOARD

1.         Inadequate finance

2.         Problem associated with overproduction

3.         Pricing problems.

4.         Climatic problems

5.         Illiteracy of the farmers

6.         Political interference

PROSPECTS OF AGRICULTURE IN WEST AFRICA.

There is a lot of prospects for agriculture in the West African sub region as the climatic and soil

conditions required to produce abundant food and cash crops both for internal consumption and

for export are quite high.

In West Africa, agriculture could thrive if the following steps are taken by the various

governments.

1.         Granting of subsidies on farm input e.g. fertilizers, seeds, chemicals etc.

2.         Establishment of farm estates – This will encourage graduates of agriculture such as soil scientist, crop scientists animal scientists, fish experts to be involved in agricultural.

3.         Zoning of regions to produce certain commodities e.g. cocoa in the West, oil palm in the east and groundnut in the Northern part of Nigeria.

4.         Importation of farm machine.

5.         Provision of finance.

6.         Recruitment of agricultural graduates.

EVALUATION

1.         Mention five agricultural policies you know.

2.         Describe any five problems facing commodity board.

3.         State any five objectives of agricultural policies.

READING ASSIGNMENT

1.         Comprehensive economics for SSS by J.U. Anyaele.

2.         Fundamental principles of economics for Senior Secondary Schools. S. A. Akande

page 252

3.         Essential Economics C. E. Ande page 128-132.

WEEKEND ASSIGNMENT

1.         Agriculture is important to the economy of West Africa because it is the source of ______

            (a) power (b) equipment supply   (c) industrial input     (d) technological progress

2.         Agriculture plays a dominant role in West Africa economies because _______              

            (a) operation Feed the Nation is agriculture     (b) It supplies all the foodstuff consumed in West Africa    (c) It employs more than 50% of the total labour force in West Africa.

            (d) There are large plantations of cocoa, groundnuts and palm oil in West Africa.

            (e) It is the main source of revenue in Nigeria.

3.         One of the following is not an agricultural policy in Nigeria.

            (a) Operation feed the Nation        (b) Land use Decree  (c) Green revolution     (d) Operation Feed Yourself

4.         One of the following is not a problem of marketing board in Nigeria.

            (a) Inadequate capital      (b) illiteracy    (c) too much crops to sell    (d) political interference

5.         Operation feed the Nations aimed at the following except_________

            (a) increasing food production (b) facilitate agricultural development in all parts of Nigeria.     (c) popularizing agriculture (d) sacking all farmers in Nigeria.

THEORY

1.         Outline the economic activities that are likely to improve the effective distribution and marketing of commodities in Nigeria.

2.         Briefly outline the measures which Nigeria has taken to improve the marketing of her agricultural produce (SSCE Nov. 1989).