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• # [ended] Economics Tutoring Session (7-8PM Sat Feb 13, 2016)

Economics

Inyang Umoh (tutor)
13-02-2016 17:57:00 +0000

Good day All,

My name is David and I'll be available for the next hour or so to help answer any questions you may have about your economics preparation.

I am the author of the economics lessons on the Jambite app.

As your question as a comment and I'll try to answer as many people as possible.

Thanks This session has ended

Thanks to everyone that participated.

• Inyang Umoh (tutor)

in a separate discussion @micheal Okparaeke asked about brain drain. Brain drain is a situation when the highly training citizens of a country leave the country to live permanently somewhere else.

0 13-02-2016 18:03:00 +0000

• John Effiong

Good evening Sir.. Please help with this (i) relate TP, AP and MP with the law of variable proportion; (ii) compare internal and external economies of scale in production and their effects;

0 13-02-2016 18:22:00 +0000

• Inyang Umoh (tutor)

@john - lets start with internal and external economies of scale. To properly define this term we first have to know what 'economies of scale' are. Economies of scale are the cost advantages (efficiencies) that a companies gains just because it is larger than others in the same industry. For example one could compare the revenue and labor costs of a small shop having 2 employees (a madam and her son) with a supermarket having 10 employees. Assuming they pay their staff the same amount, the labor costs of the supermarket is 5 times that of the shop. If there was no economies of scale (i.e. cost advantage) to having a larger company, then we would expect the supermarket will do exactly 5 times the amount of revenue as the shop. If there are economies of scale to having a larger company, then we would expect the supermarket to be bringing in 6, 8, 10 or even 100 times the amount of revenue as the shop. If there are diseconomies of scale to having a larger companies, then we would expect the supermarket to bring in less than 5 times the amount of revenue that the small shop generates. This brings us to the word 'external'. In this context, external refers to factors outside of the companies control that affect economies of scale. An example of an external diseconomy of scale is if the government changed the law and said that any company with more than 2 employees will pay double the tax rate. Internal refers to factors that the company can control.

0 13-02-2016 18:28:00 +0000

pls help me in calculation of price index

0 13-02-2016 18:33:00 +0000

• Inyang Umoh (tutor)

@john - the second concept you asked about is the Law of Variable Proportions. The law says that if you think about all the things that are needed to product a good (factors of production), and then keep all of them the same while increasing just one factor, the amount of benefit you gain from increasing that one factor will keep diminishing as you increase it. Here's an example. Imagine a yam farmer that has 1 plot of land and 10 workers working the field. On his farm there are only 2 factors of production - labor and land. One year he inherits a lot of money so he decides that he will buy 9 more plots. Because of this he is able to sell 10 times the amount of yams the next year. So he decides he will buy another 40 plots on the 2nd year but he notices that he is only producing 15 times what he originally even though he was expecting that he since he now has 50 plots he would be producing 50 times what he originally did. The reason is that at some point there is a limit to how many plots of land his 10 workers can handle.

0 13-02-2016 18:40:00 +0000

• Inyang Umoh (tutor)

@john so by keeping track of AP, MP and TP the farmer can help decide when to stop buying more land. He should keep buying land until the point where the gain in production (MP) is equal the average production (AP) . After this point the farmer is not using his money efficiently

0 13-02-2016 18:44:00 +0000

• Inyang Umoh (tutor)

@vivian the formula for price index is quite simple. It's CPI = current price / base price * 100. So the challenge with these types of questions is to understand what each of those terms mean. Base price refers to some price measured in the past from which we are comparing more recent prices to. And current price is whatever was measured recently.

0 13-02-2016 18:49:00 +0000

• Inyang Umoh (tutor)

thanks everyone. This session is over

0 13-02-2016 19:00:00 +0000

• gbenga Janet

what are the likely topics that may come out in economics

0 20-02-2016 18:25:00 +0000

• kingsotex patrick

can some help me explain price system

0 06-01-2017 19:52:00 +0000