FIRST TERM E-LEARNING NOTE

SUBJECT: ECONOMICS CLASS: SSS 2

SCHEME OF WORK

WEEK TOPIC
1 Measure of Central Tendency of Group Data
2. Measure of Dispersion of Variation of Grouped Data
3 Theory of Consumer Behaviour
4 Demand And Supply
5 Elasticity of Demand
6 Elasticity of Supply
7 Income Elasticity of Demand
8 Cross Elasticity of Demand
9 Price Control / Legislation
10 Rationing & Hoarding
11 Revision
12 Examination

REFERENCE BOOKS
 Amplified and Simplified Economics for Senior Secondary School by Femi Longe
 Comprehensive Economics for Senior Secondary School by J.V. Anyaele
 Fundamentals of Economics for SSS By. R.A.I. Anyanwuocha

WEEK ONE
MEASURES OF CENTRAL TENDENCY
CONTENT
 MEAN
 MODE
 MEDIAN
MEASURES OF CENTRAL TENDENCY: are the values which show the degree to which a
given data or any given set of values will converge toward the central point of the data.
Measures of central tendency, also called measures of location, is the statistical information that
gives the middle or centre or average of a set of data. Measures of central tendency include
arithmetic mean, median and mode.

MR OSHO/1ST TERM/ECONOMICS/SS2 Page 1

MEAN: This is the average of variables obtained in a study. It is the most common kind of
average. For group data the formula for calculating the mean is ∑fx.
∑f
Where, Ʃ =Summation
F=frequency
X=observation

MEDIAN: It is the middle number in any given distribution. The formula is

Median = L + (N\2-Fb)c
f
Where; L = Lower class limit.
N = Summation 0f the frequency.
Fb = Cumulative frequency before the median class.
f = frequency of the median class.
c= Class size.

MODE: It is the number that appears most in any given distribution, i.e the number with the
greatest frequency. When a series has more than one mode,say two,it is said to be bi-modal or
tri-modal for three.
Mode= L + D1
D1+D2
Where, M=mode
L=the lower class boundary of the modal class.
D1=the frequency of the modal class minus the frequency of the class before the modal
class.
D2=the frequency of the modal class minus the frequency of the class after it.
C=the width of the modal class.

Example: The table below shows the marks of students of JSS 3 mathematics.
1-5 6-10 11-15 16-20 21-25 26-30
Marks
Frequency 2 3 4 5 6 7
Use the information above to calculate the following:
A. the mean
B. the median
C. the mode

Solution
mark frequency mid-point fx
1-5 2 3 6
6-10 3 8 24
11-15 4 13 52
16-20 5 18 90
21-25 6 23 138
26-30 7 28 196

27
506
A. Mean= ∑fx = 506\27
Ʃf =18.7
B. median
Mark F Cf
1-5 2 2
6-10 3 5
11-15 4 9
16-20 5 14
21-25 6 20
26-30 7 27

MR OSHO/1ST TERM/ECONOMICS/SS2 Page 2

L1= 15.5
N\2 =27\2=13.5
Fb =9
F =5
C= 5
M=15.5+ (13.5-9)5
5
M=20

C. mode= L+ D1
D1+D2
L1=20.5
D1=7-6=1
D2=7-0=7
C=5
M=25.5+ (1\1+7)5
M=26.125.

EVALUATION
The table below shows the weekly profit in naira from a mini-market.
You are required to calculate:
A. The mean.
B. The median.
C. The mode.
Weekly 1-10 11-20 21-30 31-40 41-50 51-60
profit(#)
Frequency 6 6 12 11 10 5

READING ASSIGNMENT
1. Amplified and Simplified Economics for SSS by Femi Alonge page 29-30.
2. Further Mathematics Scholastics Series page 265-265.

GENERAL EVALUATION QUESTIONS

1. Outline the merits of a Joint Stock Company.
2. Describe the problems facing Agriculture in Nigeria.
3. Outline the main features of Malthusian theory of Population.
4. What is money?
5. List five characteristics of money.
WEEKEND ASSIGNMENT
1. Which of the following is not a set of measure of central tendency? (a) mode and mean
(b) mean and median (c) mean and percentile (d) mode and median
2. The most frequently occurring value in a give data is (a) mean ( b ) mode (c ) range (d)
median.
3. The formula (n+1)th is for calculating (a ) median (b ) mode (c ) mean (d) range.
2
4. The L1 in the formula for the calculation of measures of location represents......... (a)
lower class boundary of the median class (b) actual frequency of the modal class (c)
upper class boundary of the median class (d) frequency of the class just after the median
class
5. The formation of cumulative frequency is necessary for the calculation of............ (a)
mean (b) range (c) median (d) mode

SECTION B
The following table shows the distribution of marks scored by a class of students in a promotion
examination.
Marks Number of students
10-29 6
30-39 5
40-49 7
50-59 10

MR OSHO/1ST TERM/ECONOMICS/SS2 Page 3

60-69 5
70-79 4
80-89 3
1. Calculate the mean mark.
2. Find the mode.

WEEK TWO
MEASURES OF DISPERSION OF A GROUPED FREQUENCY DISTRIBUTION
CONTENT
 Range
 Mean Deviation
 Variance
 Standard Deviation
MEASURES OF DISPERSION: also known as measures of spread or variation describes how
the data given in any distribution are spread about the ‘Mean’, or the overall spread of the data.
These measures are the range, mean – deviation, standard deviation, variance, coefficient of
variation, etc.

The Range: The range of a data is the difference between the highest and the lowest value in
the data. The formula for calculation of range is:
Range = Highest value – Lowest value

The Mean Deviation: This measures the dispersions around the arithmetic mean. It tells us
how far, on the average, the individual observations are from the mean. For a grouped
frequency distribution
Mean Deviation = ∑f/x- x/
∑f
Variance: This is the average of the square about the deviations of the measurement about
their mean.
Variance = ∑f(X – X)2
∑f

Standard Deviation: This is the square root of the average of the square of the deviations of
the measurement about their mean.
Standard Deviation =
∑f(X – X )2
Ʃf
Example:
The data below shows the weight of 50 students to the nearest kg.
65 58 51 36 23 40 53 59 70 51 46 59 50 67 46 39 61 62 73 60 71 51 47 32 48 40 40 51 58 67
60 69 43 52 37 26 38 50 59 40 44 54 42 68 74 45 39 48 55.
a. Prepare a grouped frequency table
b. Calculate:
i. The range
ii. The mean deviation
iii. The variance
iv. The standard deviation
NB: Note that the standard Deviation is the positive square root of the variance.
_ _ _ _
Class F Mid- FX /X- F/X- (X-X )2 F(X-X)2
point X/ X/
X
21-30 2 25.5 51 25.5 50.4 635.04 1270.08
31-40 10 35.5 355 15.2 152 231.04 2310.40
41-40 12 45.5 546 5.2 62.4 27.04 324.48
51-60 15 55.5 832.5 4.8 72 23.04 345.60
61-70 8 65.5 524 14.8 118.4 219.04 1752.32
71-80 3 75.5 226.5 24.8 74.4 615.04 1845.12
50 2535 529.60 7848

MR OSHO/1ST TERM/ECONOMICS/SS2 Page 4

 ∑fx = 2535 = 50.7
∑f 50
(i) Range = Highest score –Lowest score
= 74 - 23
= 51kg
(ii) Mean Deviation
=∑f/ X –X/ = 529.60 = 10.59kg
∑f 50
(iii) Variance = ∑f/X – X /2
∑f
= 7848 = 156.9kg
50
(iv) Standard Deviation

∑f/X – X /2 156.96
∑f = =12.53kg
EVALUATION QUESTION
1) How is the mid-point (X) ascertained in a grouped frequency table?
2) State two advantages of the mean over other measures of central tendency (i.e
median and mode)
3) The table below shows the income of forty Workers in a factory in N
61 78 70 83 92 67 66 83
76 68 79 84 82 86 81 60
78 77 86 77 81 92 80 70
70 40 75 60 74 82 77 87
63 94 76 87 81 77 87 84.
Using a class interval of 40-49, 50-59 etc
A. Construct a grouped frequency table of the distribution.
B. Calculate the mean of the distribution.

READING ASSIGNMENT
1. Fundamentals of Economics for SSS by R.A I. Ayanwuocha Page 97-101
2. Comprehensive Economics for SSS by J.U Anyaele page 36 –38

GENERAL EVALUATION QUESTIONS

1. Give five reasons why government participates in business enterprises.
2. Define ageing population.
3. Explain the sources of finance available to a public limited liability business.
4. Explain any three weapons that can be used by a trade union during trade dispute.
5. What is occupational mobility?

WEEKEND ASSIGNMET
1. In a class of 5 students the following scores were obtained in a mathematics test
10,2,6,7,12. What is the median score (A) 2 (B) 4(C) 6 (D) 7
2. Which measure of central tendency can be applied to find the highest goal scorer in a
football match (A) mean (b) Mode (C) Median (D) range
3. If the following scores 2, 4, 6, and 10 with frequencies 3,5,7, and 10 respectively makes
up a distribution, then the mean score is (A) 5.7 (B) 6.7 (C) 7.5 (D) 5.4
4. In the formula X = ∑fx
∑f
∑fX stands for (A) total number of observations (B) Sum of frequencies times
observations (C) Sum of frequencies (D) number of elements times frequencies
5. The most reliable measure of central tendency is (a) Mode (b) median (c) Histogram (d)
mean

SECTION B
1. Give the definition of the mean deviation and the standard deviation
2. Explain the difference between continuous data and discrete data.

MR OSHO/1ST TERM/ECONOMICS/SS2 Page 5

 WEEK THREE
THEORY OF CONSUMER BEHAVIOUR
CONTENT
 Definition of Utility
 Cardinal school of thought/Assumption
 Concept of Total, Average and Marginal Utility
 The law of Diminishing Marginal Utility.

THEORY OF CONSUMER BEHAVIOUR

The theory of consumer behaviour is also known as the theory of household behaviour. It is
primarily concerned with how the consumer or household tries to satisfy his/her wants by
dividing his/her limited amount of income between the various commodities that give him equal
amount of satisfaction.

WHAT IS UTILITY?
Utility can be defined as the satisfaction derived from the consumption of a given commodity.
Hence, when a consumer derives satisfaction from the consumption of a commodity, it can be
said that the commodity or service possesses utility.
Utility therefore, is relative to a consumer, depending on the time, place, form, etc.
A commodity that can satisfy a consumer’s want at a particular point in time and place may not
satisfy another’s want.

EVALUATION
1. Define utility.
2. What is consumer behaviour?

There are basically two schools of thought in the analysis of utility and they are as
follows:
1. Cardinal school of thought
2. Ordinal school of thought.

CARDINAL SCHOOL OF THOUGHT: This approach emphasizes that utility is measurable.

That is, after consuming a given quantity of a commodity the consumer can simply evaluate his
satisfaction through the use of figures which range from zero to infinity.

ASSUMPTIONS OF CARDINAL APPROACH

i. Utility is measurable
ii. The consumer is rational
iii. There is diminishing marginal utility
iv. Total utility (TU) depends on the quantity consumed.
v. Money income of the consumer is held constant

CONCEPT OF TOTAL, AVERAGE AND MARGINAL UTILITY

TOTAL UTILITY: This is the total amount of satisfaction a consumer derives from the
consumption of a particular commodity at a point in time. Consumers’ utility increases as the
quantity consumed increases but not at equal rate because consumer has a saturation point in
the consumption of particular commodity at a given time.
 y
Units of 40
Utility  
30  TU
 
 
  20
 

  10
X
1 2 3 4 5
Qty of goods
AVERAGE UTILITY: This derived by dividing total utility by the units of the commodity
consumed. That is, it is the satisfaction which a consumer derives per unit of a commodity
consumed. AU = TU/Q
y

MR OSHO/1ST TERM/ECONOMICS/SS2 Page 6

 Utility

AU
x
Qty

MARGINAL UTILITY: This means the additional satisfaction a consumer derives from the
consumption of additional unit of a particular commodity. It is then the change in the total utility
as a result of the consumption of additional unit of a commodity. MU = ∆TU/∆Q

y
Utility

x
Qty
MU
UTILITY SCHEDULE
Quantity of Goods Total Utility Average Utility Marginal Utility
consumed
1 4 4 -
2 7 3.5 3
3 9 3 2
4 10 2.5 1
5 10 2.0 0

RELATIONSHIP BETWEEN TOTAL UTILITY AND MARGINAL UTILITY

1. The MU begins to fall right after the first unit of the commodity has been consumed and
continues to diminish until it reaches zero level on x – axis and below.
2. At the point where the MU reaches zero level on the x – axis, TU reaches its maximum
point.
3. When the MU cuts the x – axis, TU begins to fall from its peak.
4. When the MU descends below the x – axis and becomes negative, the TU curve begins
to slope downward

MR OSHO/1ST TERM/ECONOMICS/SS2 Page 7

TOTAL AND MARGINAL UTILITY CURVES
Utility y

TU

MU x
Qty
EVALUATION
1 Calculate the missing value from the table below.
Quantity of goods consumed Total utility Marginal utility
1 10 -
2 16 A
3 B 4
4 20 C

THE LAW OF DIMINISHING MARGINAL UTILITY

The law of diminishing marginal utility states that, other things being equal, the marginal utility
of a commodity to an individual decreases with extra unit of that commodity he consumes. In
other words, the law states that if a consumer goes on consuming successive equal increments
in the quantity of a commodity, then the increase in total utility resulting will become smaller and
smaller, that is, satisfaction per extra unit will start falling. For instance, a beer drinker may
derive maximum satisfaction in the first three bottles, after which decrease in satisfaction may
set in as more and more bottles of beer are consumed until he may be unable to consume
anymore.

UTILITY MAXIMIZATION
Utility maximization is also known as equilibrium of the consumer. A point where a consumer
derives maximum satisfaction when his marginal utility equates the price of the commodity
consumed. That is, the additional utility derived from the consumption of additional commodity
is equal to price of the commodity.
In the case of one commodity, a consumer will maximize his satisfaction in the consumption of a
particular commodity when the MU of that commodity equals the price of that commodity, eg
MUx = Px

In the case of two or more commodities, a consumer is said to be in equilibrium or maximizes

his utility when the ratio of MU of the last unit of the commodities consumed should be equal to
the ratio of the price. Alternatively, a consumer’s utility is maximized when the MU per amount
spent on a product is equal to the MU per amount spent on any other product, as stated below:
MUx MUy MUz
Px = Py = Pz.
where MUx = MU of commodity X
Px = Price of commodity X
MUy = MU of commodity Y
Py = Price of commodity Y
MUz = MU of commodity Z
Pz = Price of commodity Z

CONSUMER SURPLUS
Consumer surplus is define as the difference between the amount a consumer budgeted to pay
for a commodity based on the anticipated level of satisfaction, and the amount he actually paid
to have it. When he consumed the first unit, he was willing to pay as much as #50, but the
commodity’s price was #30. Thus, he saved #20.Therefore any amount above the market price
of #30 represents the consumer’s surplus. 
 
50  
40 Consumer  
30
MR20OSHO/1STsurplus
TERM/ECONOMICS/SS2 Page 8
10 Total expenditure
1 2 3 4 5 6 MU
 
  
 

 
 
 
 
EVALUATION
1. Define consumer surplus.
2. State the law of diminishing marginal utility.
3. Use the tale below to answer the following questions:

PLATE OF RICE CONSUMED TU MU

0 0 0
1 100 100
2 160 ?
3 ? 40
4 ? 10
5 230 ?
6 230 ?
7 200 ?

3(a). Complete the above utility schedule

(b). Draw the MU curve
(c)i At what quantity does MU equal TU?
ii What happens to the values of TU as quantity consumed increases?
iii What is the value of MU when TU is maximized?
Iv What happens to MU as the quantity consume increases?

READING ASSIGNMENT
1. Fundamental Principles of Economics for SS by S. A. Akande, J. A. Azike Pages 86 –
95.
2. Amplified and Simplified Economics for SSS by Femi Alonge page 29-30.

GENERAL EVALUATION QUESTIONS

1. Why is scarcity a fundamental problem?
2. Define labour.
3. Differentiate between implicit cost and explicit cost.
4. What is mobility of labour?
5. List four advantages of the mean

WEEKEND ASSIGNMENT
1. Which one of these assumptions do economists always make about consumers?
(a) That they are all wage earners (b) That they make rational decisions in the market
(c) That they cannot spend more than their incomes (d) That they can measure utility
derived from consumption
2. The aim of the consumer in allocating his income is (a) to maximize his marginal utility
(b) to buy goods he wants most whatever the price. (c) to maximize his total utility (d)
to buy those goods which fallen in price.
3. ........................takes place when the ratio MU of a commodity consumed is equal to the
ratio of its price (a) consumer surplus (b) law of diminishing marginal utility (c) consumer
behaviour (d) utility maximization
4. Total utility (TU) attains its peak when the Marginal utility (MU) is ..... (a) zero on x- axis
(b) above x- axis (c) close to x – axis (d) under x- axis
5. The difference between the amount of money a consumer planned to pay for a
commodity and the actual amount of money he paid is.......... (a) commodity price (b)
consumer surplus (c) marginal cost (d) producer surplus

THEORY
1. With the use of table, explain the concept of diminishing marginal utility

MR OSHO/1ST TERM/ECONOMICS/SS2 Page 9

2. Explain how utility is maximized

WEEK FOUR
DEMAND AND SUPPLY
CONTENT
 Change in Quantity Demanded
 Change in Demand
 Change in Quantity Supplied
 Change in Supply
 Effects of change in demand and supply on equilibrium price and quant
CHANGE IN QUANTITY DEMANDED
A change in quantity demanded, is otherwise known as movement along a particular demand
curve that is only influenced by price. When there is a change in the quantity demanded, the
demand curve does not shift. This is because the price of the commodity is the only cause of a
change in the quantity demanded while other factors remain unchanged.
Y Price
D

10

5
D
x
0 20 30
Quantity
Change in Quantity Demanded
From the above diagram, as the price falls from #50 to #30, the quantity demanded increases
from 60 to 80 units,
Hence movement along the same demand curve took place from A to B.
Further decrease or increase in price will also affect the movement along the same
demand curve.
CHANGES IN DEMAND
When different quantities of goods and services are demanded at a particular price, it is called a
change in demand. It is caused by those factors that generally affect the demand of a
commodity other than the price of the commodity; For example changes in taste and fashion,
changes in income etc Change in demand shows a shift of the demand curve to an entirely new
position. A shift of the demand curve to the right is termed an increase in demand while a shift
of the demand curve to the left is a decrease in demand.

Price
D2
D1

D2

D1

Q1 Q2
Quantity
(i) Increase in Demand

D1 D2
Price

MR OSHO/1ST TERM/ECONOMICS/SS2 Page 10

N10

D2
D1

Q1 Q2
Quantity
(ii) Decrease in Demand

EVALUTION
1. State three factors responsible for the change in demand.
2. What is change in quantity demand?

CHANGES IN QUANTITY SUPPLIED

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

P2

P1
S
x
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 So S1 Price S2 S0
1
P

S2
So
So
S1
Q2 Q0 Qty
Qo Q1 Qty (ii) Decrease in supply
(i)Increase in supply

EVALUATION
1. What is change in quantity supplied?
2. State the factors responsible for change in supply.

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.

MR OSHO/1ST TERM/ECONOMICS/SS2 Page 11

1. Increase in Demand
Price
D2
S
D1
P2

P1

S D2

D1
Q1 Q2 Quantity

Effects of increase in demand

a. Increase in the equilibrium price from P1to P2
b. Increase in the equilibrium quantity from Q1 toQ2

2. Decrease in Demand
D1
Price S
D2

P1

P2

S D1
D2
Q2 Q1 Qty

Effects of Decrease in Demand

a. Decrease in the equilibrium price from P1 to P2
b. Decrease in the equilibrium quantity from Q1to Q2

3. Increase in Supply
S1 S2
Price
D
P1

P2
S1 D
S2
Q1 Q2
Quantity
Effects of Increase in Supply
a. Decrease in the equilibrium price from P1 to P2
b. Increase in the equilibrium quantity from Q1to Q2

4. Decrease in supply
S2
D S1

Price

MR OSHO/1ST TERM/ECONOMICS/SS2 Page 12

D
 P2
S2
P1
S1
Q2 Q1
Quantity
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 with the aid of diagrams how the market equilibrium price is affected by the
combined effects of:
a. Increase in demand and increase in supply.
b. Decrease in demand and decrease in supply.
c. Increase in demand and decrease in supply.

READING ASSIGNMENT
Amplified and Simplified Economic for SSS by Femi Longe page 290--296
Fundamentals of Economics by Anyawuocha page 166-168

GENERAL EVALUATION QUESTIONS

1. Distinguish between fixed cost and variable cost.
2. Under what condition will a perfectly competitive firm maximize profit.
3. Describe each of the following;
(a) abnormal demand ( b) Effective demand
4. What is a public corporation.
5. Explain the causes of a declining population.

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
2. If the government fixes a price of a commodity above the equilibrium price, the quantity
supplied will be (a) less than the quantity demanded (b) equal to the quantity demanded
(c) greater than the quantity demanded (d) equal to zero
3. 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
4. The gap between demand and supply curves below the equilibrium price indicates (a)
excess demand (b) excess supply (c) equilibrium quantity (d) equilibrium price
5. 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

SECTION B
1. 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
2. What is the excess supply at the price of N3.50?

WEEK FIVE
ELASTICITY OF DEMAND
CONTENT
 Definition of Elasticity of Demand
 Types of Elasticity of Demand
 Price Elasticity of Demand
 Types of price elasticity of demand and graphical representation

MR OSHO/1ST TERM/ECONOMICS/SS2 Page 13

  Factors affecting elasticity of demand
DEFINITION OF ELASTICITY OF DEMAND
Elasticity of demand may be defined as the degree of responsiveness of demand as changes in
price, income, prices of other commodities etc.

Types of Elasticity of Demand

1. Price elasticity of demand
2. Income elasticity of demand
3. Cross elasticity of demand

EVALUATION
1. Define Elasticity.
2. State three types of Elasticity of demand.

PRICE ELASTICITY OF DEMAND

Price elasticity of demand is the degree of responsiveness of demand for a particular commodity
to changes in its price. It is the rate at which the quantity demanded changes as its price
changes.
To measure price elasticity of demand we use the formula:
% change in Quantity Demanded
% change in price
This formula can be broken down or simplified as:

Old Quantity – New Quantity X 100

Old quantity
E= Old Price – New Price X 100
Old Price

MR OSHO/1ST TERM/ECONOMICS/SS2 Page 14

Illustration
When the price of a given product is reduced from N90 to N80, the quantity demanded increases
from 50 to 60 units. Deduce the co-efficient of elasticity of demand.
Solution
Old price = N90, New price = N80
Change in price = 80 – 90 = -10
= 10 x 100
90 1 = 11.1%
Old quantity = 50, New quantity = 60
Change in quantity = 60 – 50 = 10
= 10 x 100
50 1 = 20%
PE = 20
11.1 = 1.8%

TYPES OF PRICE ELASTICITY OF DEMAND

The types of elasticity of demand and their graphical representation can be shown as follows:
1. Perfectly Elastic (or Infinitely Elastic) Demand.
Consumers react sharply to changes in price. They are willing to buy all the goods available at a
particular price and none at all at a slightly higher price. The co-efficient of elasticity tends to
infinity.
Price

Quantity
2. Perfectly Inelastic (or Zero Elasticity) Demand
When the quantity demanded remains the same regardless of the change in price. The demand
is said to be perfectly inelastic. The co-efficient of elasticity is zero
Price
D

Quantity
3. Unitary (or Unity) Elasticity of Demand
This is the situation where a change in price or income brings about the same percentage
change in the quantity demanded. The co-efficient of elasticity of demand is equal to 1
Price
D
P1

P2
D
Q1 Q2
Quantity Quantity
4. Fairly Elastic Demand
In this case a small percentage change in price gives rise to more than proportionate change in
the quantity demanded. For example where a 20% fall in price leads to 50% rise in demand,
the co-efficient of elasticity is greater than 1 but less than infinity.

Price D

P1

P2
D

MR OSHO/1ST TERM/ECONOMICS/SS2 Page 15

 Q1 Q2
Quantity

5. Inelastic Demand (Fairly Inelastic Demand)

When a change in price of a commodity leads to a less than proportionate change in the quantity
demanded then demand is inelastic e g a 15% increase in price bringing about 10% decrease in
quantity demanded.
The co-efficient of elasticity is less than 1 but greater than zero
Price D

P2

P1
D

Q1 Q2
Quantity

FACTORS AFFECTING (OR DETERMINING) ELASTICITY OF DEMAND

1. Availability of Close Substitutes: A commodity that has close substitutes is likely to
have an elastic demand
2. Degree of Necessity of the Goods: If a commodity is a necessity or a near-necessity,
increase or
decrease of its price are not likely to affect its demand
3. Proportion of Consumer’s Income that Is Spent on that Commodity: Generally
the higher a persons income, the more inelastic his demand for commodities
4. Habit: If a consumer has become addicted to a commodity, his demand for the good
will tend to be monastic. An increase in the price of the commodity may therefore not
affect (reduce) his quantity demanded.
5. The Level of Consumer’s Income: The larger the income of the consumer the more
inelastic is his demand for commodities. On the other hand, the demand of consumers
with low income tends to be elastic.
6. Cheap Commodities: The cost of some commodities are relatively insignificant and as
such consumers demand for them will be inelastic.

EVALUATION
1. Define price elasticity of demand.
2. The figure below was-extracted from the demand schedule of Kingsley Nanta, a
consumer of bread.
Price in naira Quantity Demanded

Old New Old New

50 70 200 160

You are required to calculate:

i. Percentage change in quantity demanded
ii. Percentage change in price
iii. Co-efficient of price elasticity of demand
iv. From your answer in i-iii above state whether demand is elastic or inelastic.
v. Explain your answer in (c) above.
3. With the aid of sketch diagrams explain the following types of elasticity demand (a) Unity
(b) Inelastic (c) Elastic (d) Zero (e) Infinitely.

READING ASSIGNMENT
1. Comprehensive Economics by J.U Anyaele page 124-127
2. Fundamentals of Economics by Anyanwuocha page 227-236

MR OSHO/1ST TERM/ECONOMICS/SS2 Page 16

GENERAL EVALUATION QUESTIONS
1. What is abnormal demand?
2. High the importance of opportunity cost to the government.
3. Explain three differences between public corporation and public limited liability company.
4. Distinguish between peasant farming and commercial farming.
5. Why is scarcity a fundamental problem in Economics?

WEEKEND ASSIGNMENT
1. If elasticity of supply is greater than 1 supply is (a) Unitary elastic (B) Inelastic (c) Elastic
(d) Infinitely elastic
2. When the demand curve is a straight line parallel to x axis, demand is (a) fairly elastic
(b) fairly inelastic(c) Perfectly elastic (d) Perfectly inelastic
3. If elasticity of demand for a commodity is less than 1, demand is (a) Unitary elastic (b)
Inelastic (c) Infinitely elastic (d) Zero elastic
4. If the price of a commodity rises from N2 o N4 and its demand decrease from 125 to 100
then the co-efficient of elastic of demand is (a) 0.02 (b) 0.20 (c) 0.25 (d) 5
5. For a good having close substitutes the price elasticity of demand is likely to be (a) Zero
(b) negative (c) more than (d) less than

SECTION B
1. Define elasticity of demand.
2. State three factors that determine the elasticity of demand for goods.

MR OSHO/1ST TERM/ECONOMICS/SS2 Page 17

 WEEK SIX
ELASTICITY OF SUPPLY
CONTENT
 Meaning of Elasticity of Supply.
 Formula for Calculating Elasticity of Supply.
 Graphical Illustration of Elasticity of Supply.
DEFINITION - Elasticity of supply can be defined as the degree of responsiveness of 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.

MEASUREMENT OF ELASTICITY OF SUPPLY – Elasticity of supply can be measured or

calculate 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
% ∆P where ∆ =
Ändern Sie
QS =
Quantity supplied
P=
Price
%=
Prozentualer Anteil

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)
New Qty - Old Qty x 100
Old Qty 1
Old Quantity = 1000
New Quantity = 850
New – Old x 100
Old 1
850 - 1000 x 100
1000 1
150 x 100 = 15%
1000 1
Old Price = N10
New Price = N9
New Price – Old Price x 100
Old Price 1
9 – 10 x 100 = 1 x 100 = 10%
10 1 10 1
Elasticity of Supply = 15 = 1.5
10
EVALUATION
1. Define elasticity.
2. State the formula for calculating price elasticity

TYPES OF ELASTICITY OF SUPPLY

MR OSHO/1ST TERM/ECONOMICS/SS2 Page 18

 1. Perfectly (Zero) Inelastic Supply: Supply is said to be perfectly inelastic if a
change in price has no effect whatsoever on the quantity of commodity supplied. In this
case, elasticity is equal to zero, E = 0

Price s

10

O q1 Qty

2. Fairly Inelastic Supply: Supply is said to be inelastic, if a change in price leads to a

smaller or slight change in the quantity of goods supplied. In this case, elasticity is less
than one but greater than zero, E > 0 < 1 s
Price
10

O 10 12 Qty
3. Unity or Unitary Elastic Supply: Supply is said to be unitary when a change in price
leads to an equal change in the quantity of goods supplied. In other words, a 5% change
in price will equally lead to a 5% change in supply. In this case, elasticity of supply is
equal to one, E = 1.
s
Price
10

O 10 15 Qty

MR OSHO/1ST TERM/ECONOMICS/SS2 Page 19

 4. Fairly Elastic Supply: Supply is said to be fairly elastic if a small change in price leads
to a greater change in the quantity of commodity supply. In this case, elasticity is greater
than one but less than infinity, E > 1 < o0.
Price s

10

O 25 30 Qty

5. Perfectly ( Infinitely ) Elastic Supply: Supply is said to be perfectly elastic when a

change in price brings about an infinite effect on the quantity of goods supplied. In other
words, a slight increase in price can make producer to increase the supply of the
commodity, while a slight decrease in price will make producer to stop the supply of the
commodity. In this case, elasticity is equal to infinity, E = o0.
Price

5 S

O 10 15 20 Qty

FACTORS AFFECTING ELASTICITY OF SUPPLY

1. Cost of Production: The low cost of production normally results in elastic supply, and
while the high cost of production results in inelastic supply.
2. Nature of Goods: While durable goods are inelastic due to their nature, perishable
goods are elastic in supply.
3. Cost of Storage: Producer will supply all their goods to the market if the cost of storage
is very thereby making the supply to be elastic, and vice – versa.
4. Time: This relates mainly to agricultural produces which remain for a long time in the
farm before they are harvested. Before their harvest, their supply is inelastic but after
harvest, it becomes elastics.
5. Market Discrimination: Elasticity of supply of a commodity depends on where it is
sold. When few commodities are sold at a particular location as a result of lower price,
such commodity can be taken to another location where the price are higher. In this
case, supply is elastic and vice – versa.
6. Availability of Storage Facilities: The availability of storage facilities leads to inelastic
supply after harvest, while non – availability of storage facilities leads to elastic supply.

EVALUATION
1. Define price elasticity of supply
2. State the formula for calculating price elasticity

MR OSHO/1ST TERM/ECONOMICS/SS2 Page 20

READING ASSIGNMENT
1. Amplified and Simplified Economics for SSS by Femi Longe Page 284 – 288
2. Comprehensive Economics by J.U. Anyaele page 130 – 134

GENERAL EVALUATION QUESTIONS

1. Explain any five reason why a joint stock company is preferable to a one – man
business.
2. Why is the small scale traders important in West Africa?
3. Distinguish between: (a) want and demand, (b) economic resources and non – economic
resources
4. What is unemployment?
5. Explain any three types of unemployment.

WEEKEND ASSIGNMENT
1. If the co-efficient of elasticity of supply is 0.3, then the supply is........... (a) fairly
inelastic (b) perfectly elastic (c) fairly elastic (d) perfectly inelastic
2. Price elasticity of supply measures the responsiveness of quantity supplied to.... (a)
changes in suppliers’ income (b) changes in prices of other commodities (c) a change in
the price of the commodity (d) a change in the demand for the product
3. The price elasticity co-efficient indicates...... (a) how far business can reduce cost (b)
the degree of competition (c) the extent to which supply curve shifts (d) consumer
responsiveness to price changes
4. The equilibrium price of mangoes is #100. If the price falls to 50k, there will be...........
(a) an excess supply (b) no seller in the market (c) a shortage in supply (d) a surplus in
the market
5. When the price of a given commodity falls from #100 to #90, the quantity supplied
reduces from 60 to 50 units. From this, we can conclude that the product’s......... (a)
supply is elastic (b) supply is inelastic (c) supply is perfectly inelastic (d) supply is
perfectly elastic

SECTION B
1. What is price elasticity of supply?
2. State the formula for the calculation of the coefficient of price elasticity of supply

WEEK SEVEN
INCOME ELASTICITY OF DEMAND
CONTENT
 Definition
 Types (Positive and Negative)
 Measurement of Income Elasticity of Demand
DEFINITION: Income elasticity of demand is the degree of responsiveness of quantity
demanded of a commodity to a little change in consumer’s income. That is, it measures how
changes in income of consumers will affect the quantity of commodities demanded by such
consumers.
Mathematically, income elasticity of demand is expressed as:
% change in Quantity Demanded
% change in Income
When the percentage change in income brings about an equal change in the quantity demanded,
then income elasticity is unit.
When the percentage change in income is greater than the percentage change in quantity
demanded, income elasticity is less than unit, hence income is inelastic.
When the percentage change in quantity demanded is greater than the percentage change in
income, then income elasticity is greater than unit, hence income elasticity is elastic.
TYPES OF INCOME ELASTICITY OF DEMAND
1. Positive Income Elasticity of Demand: is the type of income elasticity of demand in
which an increase in income of consumer will equally lead to an increase in the quantity
of commodity demanded. This is applicable majorly to normal goods.

MR OSHO/1ST TERM/ECONOMICS/SS2 Page 21

 2. Negative Income Elasticity of Demand: is the type in which an increase in income of
consumers will lead to a decrease in the quantity of commodity demanded. This is
applicable to inferior goods.

EVALUATION
1. Define income elasticity of demand.
2. State the formula for calculating income elasticity of demand.

Illustration: The table below shows the various income and demand for different commodities.
Income Quantity Demanded
# Kg
A. 20,000 120
B. 36,000 96
C. 40,000 160
D. 44,000 200
E. 45,000 240
F. 47,000 252 
a) Calculate the income elasticity between (i) A and B (ii) C and D (iii) E and F
b) What kind of good relationship is between (i) A and B (ii) C and D
SOLUTION
Income Elasticity of Demand = % Change in Quantity Demanded
% Change in Income
(a) Income Elasticity of Demand
i Between A and B
= 120– 96 x 100
120 = 0.25
36000 – 20,000 x 1000
20,000
ii Between C and D
200 – 160 x 100
160 = 2.5
44000 – 40,000 x 100
40,000
iii Between E and F
252 – 240 x 100
240
= 1.125
47000 – 45000 x 100
45000
(b) i. Giffen goods or inferior good
ii. Normal goods
It should be re-emphasized that positive income elasticity of demand is for ‘normal’ or ‘superior’
or ‘luxury goods’, whereas Negative income elasticity of demand is for ‘abnormal’, or ‘inferior
goods.

EVALUATION
1. What is income elasticity of demand?
2. Explain two types of income elasticity of demand

READING ASSIGNMENT
1. Comprehensive Economics Page 124 – 127
2. Fundamentals of Economics Page 227 – 236

GENERAL EVALUATION QUESTIONS

1. Explain five reasons why a joint stock company is preferable to a one-man business.
2. State the law of Diminishing returns.
3. Define Labour as a factor of production.
4. What are the factors affecting the size of a firm?
5. Distinguish between fixed and variable cost.

MR OSHO/1ST TERM/ECONOMICS/SS2 Page 22

WEEKEND ASSIGNMENT
1. The responsiveness of demand to a change in income is the measurement of_______(a)
arc elasticity of demand (b) cross elasticity of demand (c) income elasticity of demand
(d) Price elasticity of demand
2. Given the income of A and B as________
Income Quantity demanded kg
A 20,000 120
B 36,000 96
The income elasticity between A and B is ________
(a) 0.25 (b) 0.95 (c) 2.3 (d) 2.7
3. What kind of good is between A and B above?
(a) private good (b) public good (c) luxury (d) necessity
4. Given income C and D and quantity demanded as follows:
Income Quantity Demanded
40,000 160
44,000 200
Calculate the coefficient of income elasticity of demand
(a) 2.5 (b) 4.7 (c) 0.44 (d) 6.5
5. When an increase in consumer’s income leads to a decrease in quantity demanded of a
commodity, income elasticity of demand is............? (a) indeterminable (b) positive (c)
constant (d) negative
6. Income elasticity of demand is negative for............... (a) normal goods (b) competitive
goods (c) inferior goods (d) complementary goods

SECTION B
1. Differentiate between normal goods and inferior goods
2. The table below shows the various incomers and demand for different commodities.

MR OSHO/1ST TERM/ECONOMICS/SS2 Page 23

 Income Quantity Demanded (kg)
A 10,000 60
B 18,000 48
C 20,000 80
D 22,000 100
E 22,500 120
F 23,500 126
(b) Calculate the income elasticity between (i) A and B (ii) C and D (iii) E and F
(b) What kind of good is between : (i) A and B (ii) C and D

WEEK EIGHT
CROSS ELASTICITY OF DEMAND
CONTENT
 Definition
 Types (Positive and Negative)
 Measurement of Income Elasticity of Demand
DEFINITION: Cross Elasticity of Demand is the degree of responsiveness of quantity demanded
of commodity X to a little change in the price of commodity Y. Cross elasticity of demand is
applicable mainly to goods that are close substitute as well as complementary goods. For
example the demand for Milo will increase as a result of an increase in the price of Bournvita, all
other things being equal.
Mathematically, cross elasticity of demand can be expressed as
% change in quantity demanded of commodity X
% change in price of commodity Y

TYPES OF CROSS ELASTICITY OF DEMAND

Positive Cross Elasticity of Demand: With substitute goods, the cross elasticity of demand is
always positive, ( ie greater than zero), which means it is Elastic. This positive relationship is
high with close substitutes and low with substitutes not very close.

Negative Cross Elasticity of Demand: With complementary (or jointly demanded goods), eg
car and petrol, the cross elasticity of demand is always negative ( ie less than zero), which
means it is Inelastic. Here, too, a high negative cross elasticity of demand indicates that the
goods involves are highly complementary and, vice versa, i.e, a low negative cross elasticity of
demand means that the goods concerned are not highly complementary.

EVALUATION
1. Briefly explain cross elasticity of demand
2. Differentiate between complementary goods and substitute goods in relation to cross
elasticity of demand

Illustration:
The table below shows the response of quantity demanded to changes in price for two pairs of
commodities. Use the table to answer the questions that follow:
Commodities Changes in Commodities Changes in Quantity
Price Demanded
Old# New# Old kg New kg
Bread 25 40 Yam 1000 3000
Liter of petrol 50 100 Car 400 250
Calculate the cross elasticity of demand for : (i) Bread and Yam, (ii) Petrol and Car.

SOLUTION:
i. Cross elasticity of demand for bread and yam
Let x = yam, y = bread
Old demand = 1000kg, New demand = 3000kg
Change in demand = 3000 – 1000 = 2000kg
2000 x 100
= 1000 1 = 200%
Old price = #25, New price = #40

MR OSHO/1ST TERM/ECONOMICS/SS2 Page 24

Change in price = 40 – 25 = #15
15 x 100
25 1 =60%
CE = 200
60 = 3.3%
ii. Cross elasticity of demand for petrol and car
Let x = car, y = petrol
Old demand = 400, New demand = 250
Change in demand = 400 – 250 = 150cars
150 x 100
400 1 = 37.5%
Old price = #50, New price = #100
Change in price = 100 – 50 = #50
50 x 100
50 1 = 100%
CE = 37.5
100 = 0.4%

EVALUATION
1. How would you deduce complementary goods from a calculation of cross elasticity?
2. WAEC June 2000 Question No 2.

READING ASSIGNMENT
1. Comprehensive Economics Page 124 – 127
2. Fundamentals of Economics Page 227 – 236

GENERAL EVALUATION QUESTIONS

1. What are capital goods
2. Explain five reasons why a joint stock company is preferable to a one-man business.
3. State the law of Diminishing returns.
4. Define Labour as a factor of production.
5. What are the factors affecting the size of a firm?
6. Distinguish between fixed and variable cost

MR OSHO/1ST TERM/ECONOMICS/SS2 Page 25

WEEKEND ASSIGNMENT
1. When the coefficient of cross elasticity of demand is less than zero, it indicates.....? (a)
complementary goods (b) composite goods (c) derived goods (d) competitive goods
2. The proportionate change in quantity demanded of commodity A in response to a change
in price of commodity B is............... (a) arc elasticity of demand (b) price elasticity of
demand (c) cross elasticity of demand (d) income elasticity of demand
3. The cross elasticity of demand for close substitute goods is always....... (a) inelastic (b)
zero (c) elastic (d) indeterminable
4. The numerical value that shows the proportionate change in demand to a change in price
of goods is known as ............. (a) coefficient of multiplier (c) coefficient of elasticity (c)
coefficient of accelerator (d) coefficient of indexation
5. The measurement of cross elasticity of demand for complementary goods is.... (a)
inelastic (b) zero (c) elastic (d) indeterminable

SECTION B
1. How is cross elasticity of demand measured?
2. Shoe the nature of cross elasticity of demand for : (i) substitute goods, (ii)
complementary goods

WEEK NINE
PRICE CONTROL/ LEGISLATION
CONTENT
 Meaning
 Objectives
 Types (Minimum and Maximum)
 Effects of price control policy
PRICE CONTROL POLICY: is defined as a process by which the government or its agency
fixes the price of essential commodities. That is, it is 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. In Nigeria, price regulation or control on essential commodities is being
carried out by the Price Control Board.

OBJECTIVES OF PRICE CONTROL POLICY

1. To prevent exploitation of consumers by producers.
2. To avoid or control inflation.
3. To help low income earners, eg minimum wage earners.
4. To control the profits of companies especially monopolists.
5. To prevent fluctuation of prices of some goods, eg agricultural produces
6. To stabilize the income of some producers, eg farmers.
7. To make possible planning for future output.

TYPES OF PRICE CONTROL POLICY

1. Minimum Price Control Policy: is the lowest price by law, at which goods and services
(labour and agricultural produces) can be bought. Buyers are allowed to offer a higher but
not a lower price. The main purpose is to allow workers a certain level of income, especially
during inflation and to protect agricultural producers against a fall in income due to bumper
harvest.
A minimum price is usually above the equilibrium price and thus supply tends to be greater than
demand, leading to excess supply and thus surplus, that ia increase in unemployment in the case
of labour. It also leads to Black market in which people offer themselves for employment at a
wage below the minimum price.
Wage Rate
D Excess Supply S

P2

P1

MR OSHO/1ST TERM/ECONOMICS/SS2 Page 26

 S D

O q2 q3 Qty of labour

2. Maximum Price Control Policy: is the highest price by law, at which goods and services
can be sold. Sellers can sell at prices below it but not above it. The aim is to protect
consumers, in general, and the poor community, in particular, especially during a period of
rising prices.
A maximum price is usually below the equilibrium market price. Whereas this is agreeable to
consumers, suppliers find it highly unsatisfactory. Therefore, demand for the commodity
tends to be greater than the supply of it. This leads to excess demand and thus shortage of
the commodity in the market. It also leads to Black market in which sales are made secretly,
at higher prices to those who can afford it and, at the fixed price, to relatives and friends.
Also, there will be rationing in which consumers are allowed specified quantities at regulated
period of time.

Price D S

P1

P2
S D
Excess Demand

O q2 q3Qty

Effects of 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) Favouritism, bribery and corruption
.
EVALUATION QUESTIONS
1. Explain how government policy and taxation can affect price determination.
2. What is the effect of maximum price control on the equilibrium price of a commodity?
Explain with a diagram.

READING ASSIGNMENT
Amplified and Simplified Economics for SSS by Femi Longe Page 292-296

GENERAL EVALUATION QUESTIONS

1. Explain the term net migration.
2. Distinguish between a public company and public corporation.
3. What is trade by barter?
4. Identify the functions of money.
5. State the characteristics of money.

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. A minimum price control is usually set ................ the equilibrium price. (a) below (b)
ahead (c) above (d) behind

MR OSHO/1ST TERM/ECONOMICS/SS2 Page 27

3. 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.
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. .................. is when consumers are allowed specified quantities of commodity at regulated
period of time. (a) black market (b) hoarding (c) rationing (d) bargaining

SECTION B
1. Distinguish between minimum price control and maximum price control
2. List three objectives of price control.

WEEK TEN
RATIONING AND HOARDING
CONTENT
 Meaning of Rationing and Hoarding
 Effects of Rationing and Hoarding
 Black Market and its Effects
DEFINITIONS:
RATIONING: is a prevailing economic situation of scarcity of essential commodities in the
market in which consumers are allowed to have access to these commodities at specified
quantities and at regulated period of times. The scarcity of these essential commodities in the
market may be man – made, and which is known as artificial scarcity, created majorly by some
people to make super- normal profits from the sales of their goods.

MR OSHO/1ST TERM/ECONOMICS/SS2 Page 28

Effects of Rationing:
1. It denies some people access to essential commodities
2. It involves struggle and uncertainty
3. Insufficient rationing affects people standard of living

HOARDING: is a situation in which a deliberate effort is made by a seller or a producer of a

particular commodity who decides to create artificial scarcity of such commodity by keeping it
locked up in his store and not releasing it to the market to circulate for sales. Hoarding of
essential goods can be done deliberately to push the selling price of commodities up for the
purpose of making abnormal profits or by refusing to sell at the regulated lower price fixed by
law for essential commodities by the government.

Effects of Hoarding:
1. It leads to artificial scarcity.
2. It makes price to go high.
3. Non-availability of goods through artificial scarcity affects economic and material welfares
of the people.

BLACK MARKET: is a market situation where trading transactions and allocation of resources
are being carried on outside the conventional norm or principle of market forces of demand and
supply or the price fixed by law for essential commodities by the government. This is a market
pattern which does not abide by the simple principle of the market forces of demand and supply,
and thus shrouded in secrecy, where exchange of goods and services cannot be done openly.
Hence, the reason why it is called black market.

Effects of Black Market:

1. It leads to exploitation of consumers.
2. It leads to favouritism, corruption and bribery.
3. It adversely affects the growth and development of the economic.
4. It creates an avenue for abnormal profits for some producers.

EVALUATION:
1. How does black market affect the economic growth and development of a Country?
2. Explain hoarding in relation to people material welfares.

READING ASSIGNMENT
Amplified and Simplified Economics for SSS by Femi Longe Page 292 – 296

GENERAL EVALUATION QUESTIONS

1. Give five reasons why Government participates in business enterprises.
6. Define ageing population.
7. Explain the sources of Finance available to a public limited liability business.
8. Explain any three weapons that can be used by a trade union during trade dispute.
9. What is occupational mobility?

WEEKEND ASSIGNMENT:
1. One of the major effects of hoarding is................. (a) availability of goods (b) struggle
and uncertainty (c) increase in price (d) enjoyment of consumers
2. When the price fixed by law is below the equilibrium price, then the policy is,,,,,,,,,,,, (a)
minimum price control (b) normal price control (c) maximum price control (d) abnormal
price control
3. A deliberate effort to create artificial scarcity of commodities is called....... (a) rationing
(b) black market (c) hoarding (d) bargaining
4. When an exchange of goods and services does not abide by the conventional principle of
market forces of demand and supply or price fixed by law, such an exchange is
termed................ (a) rationing (b) black market (c) hoarding (d) auctioning
5. The practice of favouritism is a common effect in.............. (a) hoarding (b) auctioning
(c) rationing (d) black market

SECTION B

MR OSHO/1ST TERM/ECONOMICS/SS2 Page 29

1. What is black market?
2. State the difference between hoarding and rationing.

MR OSHO/1ST TERM/ECONOMICS/SS2 Page 30