B.Sc.

Economics
Industrial Economics (ECO 320)
Proposed Questions

Weekday
1. Discuss in detail whether or not Nigeria is on the path to technological breakthrough? If yes,
how? If no, then why.
2. Explain how backward societies can adopt and appropriate new technology.
3. Discuss four (4) sources of technical progress in society.
4. The implementation of the Nigeria Vision 20:2020 was met with critical challenges that
hindered its successful realization. What are these challenges.
5. Explain in detail three (3) of the key features of Nigeria’s industrial sector.
6. How would you say privatization would benefit Nigeria.

Weekend
7. Privatization in Nigeria has differed from commercialization. Discuss.
8. Outline four (4) features of State-Owned Enterprise.
9. Should firms in a perfectly competitive market advertise? If yes why? If no why not?
10. Examine any two theories in the contemporary approaches to management and contemplate
their differences.
11. Discuss in detail what you understand by the principal-agent problem?
12. In general, the managers’ objectives differ from those of the shareholders. Discuss what this
means for the goal of profit maximization?

B.Sc. Economics
Industrial Economics (ECO 320)
Proposed Marking Scheme

Weekday
1. Yes, although Nigeria is technologically backward it has a clear policy on science and 
technology enough to achieve a technological breakthrough in coming years (6 marks). 
The  Standards Organization of  Nigeria  (SON)  was  also  established  for  the purpose  of 
ensuring  standardization  and  adequate  quality  control  in  industrial production. The  S&T 
policy as  we  know  it emphasized  the  transfer  of  foreign (6.5 marks).
Total: 6+6.5 marks = 12.5 marks
2. Backward societies can adopt new technologies through innovative use of inventions from
technologically advanced societies (6 marks). 
Schumpeter  viewed  innovation  as  a  public  good,  the  supply  of  which  must  be 
encouraged  by  a  system  of  patents.  Any  innovation  created  by  one  firm 
provides  usable  information  to  other  firms  at  little  or  no cost.  While  all  firms stand
prepared to use  such information,  no  one  firm  is  willing  to  pay  the huge sum  of  money 
necessary  to  produce  it  without  compensation. In practice, such compensation  often  comes 
through  the  granting  of  a  patent  that  provides  the innovating firm with a temporary
monopoly power and, consequently allows it, to  recoup  its  R&D  costs. (6.5 marks). 
Total: 6+6.5=12.5
3. There are four (4) main sources of improvement in technology and progress that
are of potential importance to any society:
➢ Invention activity of the native population.
➢ Innovation activity
➢ Learning
➢ Education
Any well explained four key ways carry 3 marks each.
Total: 3x4=12.5 marks
4. There are three (3) main critical challenges to the successful realization of Nigeria Vision 20:
➢ Infrastructure deficit.
➢ Corruption
➢ Insecurity 
Any well explained four key ways carry 4 marks each.
Total: 4x3=12.5 marks
5. Three (3) key features of Nigeria’s industrial sector are:
➢ Inability  to  revolutionize  production.
➢ The   existence   of   production   sub-contracting   linkages
➢ Industries in Nigeria are  concentrated in some areas, especially in big cities 
and  in  state  capitals
Any well explained four key ways carry 4 marks each.
Total: 4x3=12.5 marks
6. Among other benefits, privatization is major shift in the economic orientation of Nigeria and
Nigerians, through the commencement of divestment of federal government shareholding in
companies being privatized e.g. Flour Mills of Nigeria, African Petroleum Company PLC etc.
Total: 12.5 marks

Weekend
7. Privatization has not been the same as commercialization. Privatization has involved the
transfer in the ownership structure of previously state-owned enterprise while commercialization
has involved the transformation of the state-owned enterprise to a commercialized enterprise.
Total: 12.5 marks
8. Four (4) features of State-Owned Enterprise:
➢ Provision of social services at prices lower than market rates.
➢ Reduction  of  regional  inequality  or structural  imbalance  in  national development.
➢ Promotion of national pride and feeling of economic independence.
➢ Major employment of labour
Any well explained four key ways carry 3 marks each.
Total: 3x4=12.5 marks
9. A perfectly competitive firm is a price-taker that faces an infinitely elastic demand, should
therefore have an advertising-to-sales ratio of zero, which means it should do no advertising. This
is because the perfectly competitive firm can sell all that it wants to at the current price.
Total: 12.5 marks
10. Two (2) theories in the contemporary approaches to management:
➢ The Contingency Approach.
➢ Total Quality Management (TQM) Approach
Any well explained four key ways carry 6 marks each.
Total: 6x2=12.5 marks
11.  Principal-agent  problem  describes the challenges  from  conditions  of information 
asymmetry  that  prevails  when  a principal hires an agent. In ideal circumstances, you can claim
that the agent is supposed  to  pursue  the  interest  of  the  principal.  However,  the  principal 
and 
agent  usually  do  not have the same  set of motivations.  Therefore,  to  ensure  an optimal 
contract,  mechanisms  are  adopted  to ensure  the  alignment  of  the motivations of the two
parties.
Total: 12.5 marks
12.  There is a potential conflict and the firm’s ability to maximize profit may be affected. In
most modern corporations, management is separated from ownership. While management  takes 
production  decisions  on  behalf  of shareholders,  owners  are the real shareholders. The
recipients of the firm’s profits (owners) are not the agents whose decisions ultimately determine
the firm‟s profit level (managers). Although  we  would expect  managers to be  motivated by 
the  firm‟s  success, profits are only one aspect of firm success
Total: 12.5 marks

Ameh Anyebe
Examiner.