Explanation

(a) Money is anything that is generally accepted as a medium of exchange and used in the settlement of debts.

(b) i. The value of money is the number of goods and services a given monetary unit can buy. The greater the number of goods and services that can be purchased with a given unit of money, the greater the value of money and vice versa.

ii. The demand for money is a derived demand. It is the desire to hold money in liquid form rather than investing it in stocks and bonds. People hold money for transactions, precautionary and speculative motives

(c) i. Level of income: The higher the amount of income one earns, the higher the amount of money that would be held to meet day-to-day expenses.

ii. Interval between paydays: The shorter the interval between paydays, the lower the amount of money to be held while the longer the amount of money to be held while the lul the interval, the more the amount to be held

iii. The rate of interest: The higher the rate of interest, the lower the amount held for transactions and vice versa.

iv. The price level: If the price level is high, more money has to be held to meet daily transactions and vice versä.

v. Status in society: A well-placed man in society is expected to hold a large sum of money tO maintain his status.

vi. The size of one's family: A person with a large family is expected to hold more money and vice versa.

(vii) Personal tastes: A person with a high taste for goods will normally hold more money.

viii. Availability of credit facilities reduces the tendency to hold more money for transactions.

ix. Advancement in technology in the banking sector, e.g.e-banking. debit card, etc. reduces the amount of money held for transactions.

Correct Answer: A. the two variables change in opposite directions

Correct Answer: B. The scarcity of productive resources relative to society's unlimited wants

Explanation

The fundamental problem of Economics is Scarcity. Scarcity explains the basic economic problem that the world has limited or scarce resources to meet seemingly unlimited wants, and this reality forces people to make decisions about how to allocate resources in the most efficient way.

Correct Answer: C. elastic

Correct Answer: D. price inelastic

Explanation

If the demand for a commodity remains constant as price increases, the commodity is said to be perfectly price inelastic. This means that the quantity demanded of the commodity does not change at all in response to changes in price.

Price elasticity of demand is a measure of how responsive the demand for a good or service is to changes in its price. It is calculated as the percentage change in quantity demanded divided by the percentage change in price.

A perfectly price inelastic good has an elasticity of demand of 0. This means that the quantity demanded does not change at all in response to changes in price.

Correct Answer: B. increase the demand for locally made goods

Explanation

One of the main reasons for the introduction of tariffs and quotas is to support local industries and discourage imports. When goods are imported at a high cost, they would be exchanged for high prices as well. With this, local industries can easily sell locally produced goods are cheaper rates thereby increasing the market and demand for it.

Correct Answer: D. an increase in quantity supplied

Explanation

There is an increase in the quantity supplied if the quantity supplied increases as a result of an increase in price of the commodity. From the graph, an increase in the price of the commodity from p1 to p2 brought about a corresponding increase in quantity supplied from q1 to q2.

Correct Answer: B. Abnormal Profit

Explanation

Short-run is a period where at least one input is fixed while others are variable. The short-run monopoly sells OM output at MP (OB) price. The total monopoly profits are AP × CA = CAPB is shaded in the diagram. CAPB indicates an abnormal profit of the monopolist

Explanation

(a)(i) Public limited company can be formed by a minimum of seven members with no maximum while a private limited company can be formed by a minimum of two members and a maximum of fifty members.

(ii) Public limited company publishes its accounts to the public while a private limited company is not obliged to do so.

(iii) Shareholders can freely transfer their shares in public limited company while shareholders cannot freely transfer their shares without the consent of other shareholders in a private limited company.

(iv) Public limited company can obtain loans more easily from financial institutions than private limited company.

(v) Members of the public can be invited to subscribe to shares in a public limited company while members of the public cannot be invited to subscribe to shares in a private limited company.

(b)(i)Limited liability: The maximum loss of a shareholder cannot exceed his contribution to the share capital.

(ii)Greater degree of continuity: Death or withdrawal of a shareholder does not affect the existence of the business.

(iii)Greater access to capital: A limited liability company can easily access more capital through loans, issuance and sale of shares.

(iv)Ownership is separated from control: It is owned by shareholders but controlled and managed by board of directors.

(v) Usually large size and employs more people.

(vi)It is a legal entity: It can sue and be sued in its own name.

(vii) Experts can be employed to manage the business. The best hands can be employed as a result of its huge resources.

Correct Answer: A. 11:9