Economics 2nd Term Notes SSS 2 Class with Scheme of Work

ECONONMICS SECOND TERM NOTES:

SCHEME OF WORK

  1. LABOUR MARKET
  2. ELEMENTARY TREATMENT OF UTILITY THEORY
  3. PRICE DETERMINATION
  4. MARKET STRUCTURE
  5. INDUSTRIES IN NIGERIA
  6. AGRICULTURE

 

 

TOPIC: LABOUR MARKET

UNEMPLOYMENT

Unemployment is defined as a situation in which persons of working age, able and willing to work are unable to find paid employment.

Unemployment of labour occurs in the economy if there are people who are capable of working and who are qualified by age, law, custom, and other factors to work, but who cannot find jobs.

Unemployment rate = Number of unemployed persons / Total number of working population × 100/1

Example: A country has a working population or labour force of 4.8 million of which 3.6 million people are employed, calculate the unemployment rate of the country.

Solution:

Labour force = 4.8 million

No of employed = 3.6 million

No of unemployed = 4.8m – 3.6m = 1.2m

Unemployment rate = Number of unemployed persons / Total number of working population × 100/1

= 1.2/4.8 x 100/1 = 25%

 

TYPES OF UNEMPLOYMENT

  1. Structural Unemployment: This is the type of unemployment which arises as a result of changes in the pattern of demand of certain commodity.  If the demand is low, it could lead to industries reducing their workforce and this eventually results in structure unemployment.
  2. Seasonal Unemployment: This type of unemployment occurs in industries whose production is subject to seasonal variations.
  3. Voluntary Unemployment: Voluntary unemployment arises from the deliberate refusal of labour to work, even though employment opportunities exist (and such people are fit to work).
  4. Technological Unemployment: This is a type of unemployment which results when industries introduce capital intensive technique of production.
  5. Frictional Unemployment: It is associated with switching from one job to another.  Frictional unemployment occurs in the process of search for new jobs.  The time it takes to find new jobs will cause frictional unemployment.
  6. Casual Unemployment: It usually occurs with jobs of an unsettled nature or jobs which are not permanent
  7. Residual Unemployment: This type of unemployment includes all these who cannot work due to physical or mental disabilities.
  8. Cyclical Unemployment: This type of unemployment occurs during the depression or recession stage of the businessor trade cycle.
  9. Disguised Unemployment: Disguised unemployment occurs if workers are not efficiently utilized in production or if they are underemployed.

CAUSES OF UNEMPLOYMENT

  1. Economic recession
  2. Changes in the pattern of demand
  3. Seasonal changes in agriculturaland other forms of production
  4. Economic reform policies
  5. Inadequate educational curricular and poor educational planning
  6. Use of capital intensive methods of production
  7. Rapid population growth and slow rate of economic growth
  8. Physical and mental disability.

CONSEQUENCES OF UNEMPLOYMENT

  1. Increase in crime rate
  2. Threat to peace and stability
  3. Waste of human resources
  4. High rate of dependency
  5. Migration

SOLUTIONS TO PROBLEMS OF UNEMPLOYMENT

  1. Industrialization
  2. Population control
  3. Redesigning educational system
  4. Proper development plans
  5. Provision of social amenities

SELF EMPLOYMENT, JOB CREATION AND DIGNITY OF LABOUR

What is Self Employment?

Self-employment refers to working for oneself rather than working for a specific employer who pays them a salary. Self-employed individuals often act as independent contractors by collaborating with other businesses.

Self-employed persons may be involved in a variety of occupations but generally are highly skilled at a particular kind of work. Writers, tradespeople, freelancers, traders/investors, lawyers, salespeople, and insurance agents all may be self-employed persons.

Types of Self-Employment

The three types of self-employed individuals include:

 

  1. Independent contractors or Freelancers

Independent contractors are individuals hired to perform specific jobs for clients, meaning that they are only paid for their jobs. Since they are not considered employees, they are not subject to workers’ compensation.

Some examples of independent contractors include doctors, lawyers, journalists, accountants, and blue-collar occupations, such as plumbers, electricians, and handymen.

 

  1. Sole proprietors

Sole proprietorships refer to a type of enterprise that is owned and operated by a single individual. However, it does not mean that a sole proprietor works individually; often, they may choose to hire a few employees to help them.

 

It should be noted that there is no legal distinction between the owner and the business entity in sole proprietorships, meaning that while the sole proprietor receives all the profits from the business, they face unlimited responsibility for all losses.

 

  1. Partnerships

Partnerships are an arrangement between two or more individuals to manage and operate a business together and share in its profits and losses. It is somewhat similar to sole proprietorships, except that there is now more than one person with operational control.

 

There are different types of partnerships, ranging from general partnerships that enable all members to share profits and liabilities equally to other forms of partnerships where some partners might face limited liability. Sometimes, partners can also be “silent partners,” which means that a partner is not involved in the day-to-day operations of the business but contributes capital to the business instead.

Advantages of Self Employment

  1. You are independent.
  2. You are not fixed on a certain role.
  3. There are no financial limits.
  4. Success belongs to you alone.
  5. You decide how you plan your life.
  6. You decide how much you work.
  7. Work where you want
  8. Work when you want
  9. You decide who you work with
  10. You can do work thats better suited to your personality

 

Disadvantages of Self Employment

  1. You usually have an inconsistent income.
  2. You may have difficulties finding clients.
  3. You may have difficulties in separating your personal life from your professional one.
  4. You don’t have any paid leaves.
  5. You may have to pay more taxes.
  6. Your stress levels may be higher.
  7. You bear all the loses.
  8. You carter for any unforeseen issues alone.

 

What is JOB CREATION?

Job creation refers to the process of providing new jobs, especially for people who were previously unemployed or inactive.

 

There should be a focus on creating better and more productive jobs, particularly those that can absorb the high concentrations of working poor. Among the necessary elements for creating such jobs are investing in labour-intensive industries, especially agriculture, encouraging a shift in the structure of employment to higher productivity occupations and sectors, and upgrading job quality in the informal economy.

In addition, there should also be a focus on providing poor people with the necessary skills and assets that will enable them to take full advantage of any expansion in employment potential.

What is DIGNITY OF LABOUR?

Dignity of labour means that all occupations, whether involving intellect or physical labour, deserves equal respect and dignity. No job should be considered superior or inferior. Every job that is dutifully done with honesty and sincerity deserves appreciation.

All forms of work, manual or intellectual, are called labour. A clerk works in the office. A teacher teaches students at school. A doctor practises medicine. A lawyer practises law. The work of all these men is mainly brain work. A cultivator works in the field. A miner works in the mine. An artisan works in a factory. Their work requires bodily labour. When we say that the work of the cultivators, miners, artisans, etc, is as respectable as the work of the clerk, the teacher, the doctor, and the lawyer, we mean there is dignity of labour.

 

ASSIGNMENT: In your own words, explain any 3 solutions to unemployment that you have learnt.

 

TOPIC: ELEMENTARY TREATMENT OF UTILITY THEORY

The Theory of Consumer Behavior AND Concept OF Utility

The theory of consumer behavior is primarily concerned with how the consumer or household tries to satisfy his or her wants by dividing his or her limited amount of income between the various commodities that gives him or her the amount of satisfaction.

The Concepts of Utility

The term utility refers to the amount of satisfaction derived from the consumption of a commodity at a particular time.

Types of Utility

  1. Form Utility: This utility is derived when you change a form of something into a thing which satisfies your want.
  2. Place Utility: Place utility involves the changing of location of a commodity from one geographical area where it has little utility to another area where its utility is higher.
  3. Time Utility: This is the ability of a commodity or service to satisfy a consumer’s wants at a particular time, whether in the present or in the future.

Concepts of total utility, marginal utility and average utility

  1. Total Utility: this refers to the total amount of satisfaction derived from all the units of a commodity consumed at a particular time.

 

 

 

 

 

 

Schedule of Total, Marginal and Average utility.

Find the value of the unknowns below and hence plot TU, MU and AU on the same graph. What do you notice about TU and MU?

Quantity of Goods consumed Total Utility (TU) Marginal Utility (MU) Average Utility (AU)
0 0 – 0
1 15 15 15
2 25 A G
3 C D 10.7
4 K 6 H
5 41 3 8.2
6 43 E 7.2
7 F 0 J
8 42 -1 5.3

 

What is Law of Diminishing Marginal Utility?

The law of diminishing marginal utility holds that as we consume more of an item, the amount of satisfaction produced by each additional unit of that item declines.

The law states that the more we have of a commodity, the less we want to have more of it as the utility derived from every success unit of the commodity keeps on declining when more is consumed.

John, for example, is starving and hasn’t consumed anything for a while. When he eventually starts to consume, the very first piece will provide him with a considerable measure of satisfaction. As he continues to eat even more meals, his hunger will wane to the extent that he no longer wants to eat.

Assumptions of the Law:

  1. Units of commodities consumed should be identical or homogeneous, that is, the same in all respects.
  2. Units should be consumed in quick succession with minimal breaks in between.
  3. Units should be of a standard size, that is, neither too big nor too small.
  4. The taste of the consumers should be constant.
  5. There should be no change in the price of substitute goods. If the prices of substitute goods change, it may become difficult to have an idea about the utility that the consumer might get from the main commodity.
  6. The utility is measurable.
  7. The consumer is rational while making consumption decisions.

Relationship between Marginal Utility and Total Utility:

  1. When marginal utility falls but is positive, total utility increases in a diminishing manner.
  2. When marginal utility is zero, total utility is maximum.
  3. When marginal utility is negative, total utility declines.

 

 

ASSIGNMENT: Fill in the values of the unknown alphabets below. Hence plot TU, MU and AU on the same graph. At what value is TU maximum?

Quantity of Indomie Consumed Total Utility (TU) Marginal Utility (MU) Average Utility (AU)
0 0 – 0 
1 6 6 6
2 11 C D
3 A 3 B
4 15 1 3.8
5 15 E 3
6 G F 2.2

 

 

 

TOPIC: PRICE DETERMINATION

Price is the worth that buys a finite amount, weight, or goods or services. In other words, it also expresses the value of the goods produced and the services rendered by factors of production such as land, labor, and capital. Thus, the determination of prices is of great significance in an economy.

Introduction to Determination of Prices

Determination of Prices means to determine the cost of goods sold and services rendered in the free market. In a free market, the forces of demand and supply determine the prices.

The Government does not interfere in the determination of the prices. However, in some cases, the Government may intervene in determining the prices. For example, the Government has fixed the minimum selling price for the wheat.

Factors affecting Determination of Prices

The factors which affect the price determination of the product are:

1] Product Cost:

It includes the total of fixed costs, variable costs and semi-variable costs incurred through the production, distribution, and selling of the product.

2] The Utility and Demand:

Habitually, end user demands more units of a product when its price is low and vice versa. On the other hand, when the demand for a product is elastic, little variation in the price may result in large changes in quantity demanded.

While, when it is inelastic a change in the prices does not affect the demand significantly. In addition, the buyer is ready to pay up to that point where he perceives utility from the product to be at least equal to the price paid.

3] The extent of Competition in the Market

The next consistent factor affecting the price of manufactured goods is the nature and degree of competition in the market. A firm can fix any price for its product if the degree of competition is low. However, when there is competition in the market, the price is fixed after keeping in mind the price of the substitute goods.

4] Government and Legal Regulations

The firms which have a monopoly in the market, habitually charge a high price for their products. In order to protect the interest of the public, the government intervenes and regulates the prices of the commodities. For this purpose, it declares some products as indispensable products. For example, Life-saving drugs, etc.

5] Pricing Objectives

Another consistent factor, affecting the price of an item for consumption or service is the pricing objectives. If the pricing of a goods remains at a particular range, the manufacturers might be forced to change their prices.

6] Marketing Methods Used

A range of marketing methods such as circulation system, quality of salesmen, marketing, type of wrapping, patron services, etc. also affects the price of manufactured goods. For instance, an organization will charge sky-scraping revenue if it is using the classy material for wrapping its product.

EQUILIBRIUM PRICE:

This is the price at which demand equals supply. It is the price at which the quantity of a commodity that consumers are willing to buy equals the quantity of that commodity that suppliers are willing to sell. Therefore,

At Equilibrium,

Demand = Supply.

Equilibrium Price can be illustrated using the demand and supply schedules below:

The Equilibrium Point, Point E on the graph, is the point at which demand equals supply. At this point, Equilibrium price is #20, while quantity demanded and quantity supplied equals 40 unit.

Once the Equilibrium price and quantity are reached, we attain Stable Equilibrium. Stable equilibrium adjusts any disturbance in the demand and supply and restores the original equilibrium.

Other things remaining the same, when the price falls below the equilibrium price, the demand increases and supply decreases. There arises a shortage of goods which in turn increases the price to equilibrium price.

Similarly, when the price rises above the equilibrium price, the demand decreases and supply increases. There arises a surplus of goods which in turn decreases the price to equilibrium price. Thus, the market restores the equilibrium price on its own.

However, the prices are not determined only by the forces of demand and supply. Other factors such as the price of substitute goods, price of related goods, government policies, competition in the market, etc. also play an important role in the determination of the prices.

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

  1. Increase in Demand:

An increase in demand leads to an outward or rightward shift in the demand curve. When this happens supply remains constant, there will be an excess of demand oversupply. The equilibrium price and quantity will increase. See diagram below:

From the diagram above, an increase in demand from DoDo made the equilibrium price to

increase from Po to P2 while the equilibrium quantity increase from qo to q2

 

  1. Decrease in Demand:

A decrease in demand occurs when the demand curve shifts inwardly or into the left. When this happens demand for a commodity decrease while supply remains constant. There will be an excess of supply over demand which will result in the equilibrium price and quantity decreasing or falling.

 

 

 

From the graph above, the original equilibrium price is P2 while the original equilibrium quantity is qo. A decrease in demand from DoDo lead to a fall in equilibrium from price from P2 to Po while the equilibrium quantity fell from qo to q1.

 

  1. Increase in Supply:

When supply increases, the whole curve shifts outward to the right. As a result of this, if supply increases, then demand remains constant. There will be an excess of supply, the equilibrium price decreases while the equilibrium quantity increases.

From the diagram, equilibrium price falls from P2 to P0, while the equilibrium quantity increases from q1 to qo as a result of increase in supply. The new equilibrum position is P0 and quantity is qo.

  1. Decrease in Supply:

 

A decrease in supply results in an inward or leftward shift in the supply curve. A fall in supply without any change in demand will lead to an excess of demand over supply and this makes

the equilibrium price increase while the equilibrium quantity reduces. The diagram below explains it.

 

 

From the diagram above, the equilibrium prices increase from PEO to PE1 while the equilibrium quantity reduces from qEO to qE1 due to decrease in supply.

CONCEPT OF ELASTICITY

Elasticity is a measure of just how much the quantity demanded will be affected by a change in price or income or change in price of related goods.

The quantity demanded of a good is affected mainly by

  1. changes in the price of a good,
  2. changes in price of other goods,
  3. changes in income and c
  4. changes in other relevant factors.

Different elasticities of demand measures the responsiveness of quantity demanded to changes in variables which affect demand so:

  1. Price elasticity of demand- measures the responsiveness of quantity demanded by changes in the price of the good
  2. Income elasticity of demand – measures the responsiveness of quantity demanded by changes in consumer incomes.
  3. Cross elasticity of demand – measures the responsiveness of quantity demanded by changes in price of another good.

Price elasticity of demand:

Price elasticity of demand is calculated using the formula below:

Note:

  1. For Unit or unitary elastic demand, Elasticity of demand (Ed) = 1
  2. For Elastic demand, Ed > 1
  3. For Inelastic demand, Ed < 1
  4. For Perfectly inelastic demand, Ed = 0
  5. For Perfectly elastic demand, Ed = ∞

Example 1:

When the price of a bag of rice is #20, the quantity demanded is 60, when the price increases to #30 per bag, the quantity demanded is 40. Find the elasticity of demand and what type of elasticity occurred?

Solution:

Example 2:

Quantity demanded originally for Cabin Biscuit is 100 at a price of #2000. There is a rise in price to #3000 resulting in a fall in demand to 75.

Calculate the price elasticity of demand.

PRICE CONTROL OR LEGISLATION:

This is the means directed by the government to control inflation where prices are regulated on the laydown rules. It is the implementation of an economic intervention to manage certain goods.

Price control is also called price legislation where the government fixes the price of essential commodities.

The fixing of the price of a commodity in Nigeria is carried out by the Price control board.

Price Ceiling and Price Floors:

A price ceiling is the price set on maximum price control while price floors are the prices set on minimum price control.

OBJECTIVES OF PRICE CONTROL OR LEGISLATION

  1. To discourage fluctuation of price of essential goods
  2. To control level of inflation in an economy
  3. To discourage exploitation of consumers by the manufacturers
  4. To help the income of low income earners
  5. To discourage monopoly by some companies
  6. To make planning for future output
  7. To monitor the profit of monopolists.

 

Types of Price control or Legislation:

  1. Maximum price legislation: It is made by the government to guide the people from the effect of inflation. This is where the government fixes prices of goods below the equilibrium price. This is the highest price at which goods and services are to be sold. It is also called Price Ceiling
  2. Minimum price legislation: This is where the price is fixed above the equilibrium. It is normally fixed by the government to protect commodities that have unstable prices.

 

Assignment:

  1. Quantity demanded originally for Hypo is 20 units at a price of #5000. There is a fall in price to #4000 resulting in a rise in demand to 32 units. Calculate the price elasticity of demand and state the type of elasticity that has occurred.
  2. State and explain two types of demand and 2 types of supply.
  3. State two importance of elasticity of demand to the producer and to the government.
  4. What is elasticity of supply?
  5. List and explain three types of elasticity of Supply.

 

 

TOPIC: MARKET STRUCTURE

Concept of Market:

Market can be defined as a place or an arrangement where goods and services are bought and sold. The market is a point of contact where buyers and sellers transact business with one another at a price determined by the market forces.

Classification of Market

There are different classifications of market:

(i) Classification of market on the basis of commodities sold in them e.g. capital market, factor market, commodities market, labour market, money market etc.

(ii) Classification of market on the basis of their relative competition or price e.g. perfect and imperfect market.

Types of Markets According to Commodities Sold/Purchased:

(1) Labour Market: It is a market that brings workers and employers into close contact for the purpose of rendering services.

(2) Factor Market: It is the market for selling and buying of factors of production such as labour, land, capital, and entrepreneur.

(3) Money Market: Money market is the market for short term loans.

(4) Capital Market: Capital market is the market where we obtain medium and long-term loans.

(5) Consumer Market: It is the market for buying and selling different forms of commodities such as maize, rice, cosmetics, shoe, cocoa, electronics, computers, etc.

 

Types of Market According to Relative Competition or Price:

  1. Perfect market/competition
  2. Imperfect market
  3. Perfect Competition:

Perfect competition is a type of market structure where all companies or firms are selling the same product, and because of having no control over their product prices, they tend to be price takers. Buyers and sellers are not price influencers.

Market price in a perfectly competitive market is determined by the interaction of the forces of demand and supply.

In this market, consumers have full or perfect knowledge about the product that is on sale. They know what firm charges what price for a specific product. There is a perfect mobility in terms of resources including labor, and there are no barriers to entry and exit involved for such firms.

  1. Imperfect Market:

An imperfect market may be defined as a market in which prices of goods can easily be influenced or determined by the sellers or buyers. (i.e. sellers or buyers are price dictators).

Examples of imperfect markets are monopoly, monopolistic competition monophony, Oligopoly, and Duopoly.

Type of Imperfect Market:

  1. Monopoly: This is an imperfect market in which there is a single seller of a particular good or service.
  2. Duopoly: This is a market structure in which there are only two producers of the same commodity.
  3. Oligopoly: This is an imperfect market in which there are few producers or sellers of the product with close substitutes.
  4. Monosony: This is a type of market with a single buyer for a product. e.g. Marketing Board of West Africa is the only buyer of cash crops on behalf of the government in order to boost export.
  5. Monopolistic Competition: This is a market, where there is a large number of producers dealing in different products or services such that the number of products of one firm is seen as a perfect substitute for that of another.

Price determination under Perfect Competition is analyzed under three different time periods:

(a) Market Period

(b) Short Run

(c) Long Run

(a) Market Period:

In a market period, the time span is so short that no firm can increase its output. The total stock of the commodity in the market is limited. The market period may be an hour, a day or a few days or even a few weeks depending upon the nature of the product.

For example, in the case of perishable commodities like vegetables, fish, eggs, the period may be a day. Since the supply of perishable commodities is limited by the quantity available or stock in day that neither can be increased nor can be withdrawn for the next period, the whole of it must be sold away on the same day, whatever may be the price.

(b) Pricing in the Short Run- Equilibrium of the Firm:

Short period is the span of time so short that existing plants cannot be extended and new plants cannot be erected to meet increased demand. However, the time is adequate enough for producers to adjust to some extent their output to the increase in demand by overworking their fixed capacity plants. In the short run, therefore, supply curve is elastic.

(c) Pricing in the Long Run:

The long run is a period of time long enough to permit changes in the variable as well as in the fixed factors. In the long run, accordingly, all factors are variable and non- fixed. Thus, in the long run, firms can change their output by increasing their fixed equipment. They can enlarge the old plants or replace them by new plants or add new plants.

Moreover, in the long run, new firms can also enter the industry. On the contrary, if the situation so demands, in the long run, firms can diminish their fixed equipments by allowing them to wear out without replacement and the existing firm can leave the industry.

Thus, the long run equilibrium will refer to a situation where free and full scope for adjustment has been allowed to economic forces. In the long run, it is the long run average and marginal cost curves, which are relevant for making output decisions. Further, in the long run, average variable cost is of no particular relevance. The average total cost is of determining importance, since in the long run all costs are variable and none fixed.

In the short run a firm under perfect competition is in equilibrium at that output at which marginal cost equals price or Marginal Revenue. This is equally valid in the long run. But, in the long run for a perfectly competition firm to be in equilibrium, besides marginal cost being equal to price, price must also be equal to average cost. If the price is greater than the average cost, the firms will be making supernormal profits.

Price and Quantity Determination under Monopoly:

A firm under monopoly faces a downward sloping demand curve or average revenue curve. Further, in monopoly, since average revenue falls as more units of output are sold, the marginal revenue is less than the average revenue. In other words, under monopoly the MR curve lies below the AR curve.

The Equilibrium level in monopoly is that level of output in which marginal revenue equals marginal cost. The producer will continue producer as long as marginal revenue exceeds the marginal cost. At the point where MR is equal to MC the profit will be maximum and beyond this point the producer will stop producing.

In the short run, the monopolist has to keep an eye on the variable cost, otherwise he will stop producing. In the long run, the monopolist can change the size of plant in response to a change in demand. In the long run, he will make adjustment in the amount of the factors, fixed and variable, so that MR equals not only to short run MC but also long run MC.

 

 

ASSIGNMENT: State 3 advantages and disadvantages of MonoPoly.

TOPIC: INDUSTRIES IN NIGERIA

Definitions:

  1. Factory: A factory is a building or buildings where people use machines to produce goods.
  2. Firm: A firm is an organization which sells or produces something or which provides a service which people pay for.
  3. Industry can be defined as a group of firms producing broadly similar goods/commodities. It is the economic activity that involves changing factor inputs into new goods or services.
  4. Plants: This is a place where a firm carries out its productive activities. Tools and other equipment used are found in a plant
  5. Industrialization: This refers to the effort by a country to improve and transform raw materials into finished goods.
  6. Industrial Estate: This refers to an area of land developed as a site for factories and other industrial businesses.

Roles of Industrialisation:

  1. To increase the level of monetary values of an economy
  2. To provide employment opportunities
  3. Increase the standard of living of the people
  4. To discourage over dependency on a particular sector
  5. To increase the country’s foreign earnings
  6. To provide tools and machineries in order to aid production
  7. To ensure effective utilisation of local raw materials of goods
  8. To sustain the existence of other sector in the country.

Problems of industrialisation:

  1. Inadequacy of raw materials in the area of foreign raw materials production.
  2. The size of the market is small compared to the increase in demand of goods.
  3. Unstable political environment
  4. Shortage of capital available
  5. Improper transport networking.

Location of industry:

This refers to the siting of an industry in a particular area or location.

Factors Affecting or Influencing the Location of Industry:

  1. Closeness to the market: This is a situation where the market is located where there is a high demand for goods and services.
  2. Accessibility of good transport network: Is the provision of transport facilities such as good roads, railways lines, etc.
  3. Access to proper power and energy supply
  4. Political stability: The area and environment of the location is secured and conducive.
  5. Provision of adequate capital for financing.

Localization of Industry:

Localization of industry is the concentration of many industries or firms at a particular place or location.

Advantages of Localisation of industry:

  1. It helps to reduce the overhead cost in production of goods.
  2. It boosts and encourages expansion in the area of economies of scale.
  3. It encourages increase in employment opportunities.
  4. It helps to provide an adequate market that will take care of the demand for some goods.
  5. It enables the pooling of labour at the area of location of the industry.

Disadvantages of Localisation of industry:

  1. It can lead to an increase in pollution in that particular area where the industries are located.
  2. High level of congestion and overcrowding in areas where many industries are sited.
  3. It can lead to high cost of living of labour or workers in that area.
  4. These areas are the targets for destruction during crises such as war or attacks.
  5. Increase in unemployment maybe experienced by workers in this area during times of economic depression.

 

ASSIGNMENT: List 5 industries in Nigeria that you know.

 

TOPIC: AGRICULTURE

Agricultural Policies in Nigeria:

This refers to instruments used by the government to boost the agricultural sector in order to maximize the desired contribution of the sector to economic development. The reasons for these policies are to increase food and cash production in the country, also to maintain self-sufficiency limiting the importation of food. It is also to revitalize the agricultural sector for foreign exchange earnings.

Objectives of Agricultural Policies

  1. To acquire modern farming implements for farmers
  2. For the government to provide subsidies on pesticides, fertilizers, inputs for farmers 3. To ensure farmers get credit facilities
  3. To intensify research or farming skills and new crops etc
  4. Government generates revenue through the board
  5. The board train farmers and manpower on modern techniques for farming 7. They encourage the growth of co-operative societies like FADAMA
  6. They sometimes give credit facilities to farmers
  7. To attain self-sufficiency in basic food commodities

Agricultural Policies Programmes in Nigeria

  1. Operation feed the nation: This was established by former Military Officer Chief Olusegun Obasanjo. “Operation feed the nation” objective is to mobilize Nigerians to participate in the agriculture sector in order to increase food production
  2. The river basin development authority was established by the federal government under the decree of the country. The objective is to develop land and water resources for the overall development of agriculture in the country
  3. The land use decree: This was aimed at reforming the land tenure system which has been a hindrance to large-scale farming in the country i.e. to remove the land ownership bottleneck
  4. Commodity Boards: This board was made up to supervise and manage cash crops and also encourage the processing of the cash crops e.g Cocoa, Groundnut, Cotton, Rubber, etc
  5. The National Accelerated Food Production Project
  6. Green Revolution Programme
  7. Agricultural credit e.g. Nigerian agricultural and cooperative.

 

Marketing Of Agricultural commodities:

Marketing board has the responsibility to buy, sell, and fix prices for commodities in the country. Marketing board can be defined as an organized body that is responsible for buying and processing crops directly from farmers for export. The boards buy from the farmer through its agent.

Functions of Marketing Board

  1. To market export crops in Nigeria
  2. The board decides how to grade the crops and the price to pay on commodities
  3. The board protect local producer from the effect of price fluctuations in the market
  4. They promote economic growth and developments
  5. They encourage cooperative societies in order to enjoy some benefits

Problems of Marketing Board

  1. The board faced the problem of inadequate finance
  2. Price fluctuation in the world market affect the prices of produce
  3. Dealing with illiterate farmers create a lot of problems for the board
  4. Poor transportation system
  5. Government interference has a negative effect on the board
  6. Poor climate condition affects harvest which affects the board as well

Importance of Marketing Board:

  1. Exportation of cash crops to other countries
  2. They promote rapid economic development
  3. They stabilize price in the country
  4. They encourage cooperative marketing
  5. They encourage the production of high quality crops.

 

Prospects of Agriculture:

  1. Training of farmers to use modern farming techniques, machines, and methods.
  2. Credit facilities can help farmers engage in large scale agricultural production
  3. Provision of subsidies on fertilizers, chemicals, seeds etc.
  4. Effective research can improve outputs
  5. Adjustments of land tenure system can have positive effects on the farming system
  6. Improvement on infrastructures like roads, clams will result in better production
  7. Agricultural promotions like shows, trade fairs can help.

 

ASSIGNMENT: State 5 problems of Agriculture and explain any 2.

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