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All questions of Natural Resources and the Nigerian Economy for JAMB Exam

Downstream activities in the oil sector include:
  • a)
    Exploration and production of crude oil
  • b)
    Refining and processing crude oil
  • c)
    Transportation and distribution of petroleum products
  • d)
    Marketing and sales of petroleum products
Correct answer is option 'C'. Can you explain this answer?

Funke Ogunjimi answered
Downstream activities in the oil sector include transportation and distribution of petroleum products.

Transportation:
- Transporting petroleum products from refineries to storage facilities and distribution centers is a crucial downstream activity.
- Various modes of transportation are utilized, including pipelines, tankers, trucks, and railroads.
- Pipelines are the most common method of transporting petroleum products over long distances due to their cost-effectiveness and efficiency.
- Tankers are used for transporting large quantities of petroleum products across oceans and other bodies of water.
- Trucks and railroads are used for shorter distances and to reach areas not accessible by pipelines or tankers.

Distribution:
- Once the petroleum products reach storage facilities or distribution centers, they are distributed to different markets and customers.
- Distribution networks are established to ensure that the products reach their intended destinations efficiently and in a timely manner.
- Distribution centers play a crucial role in managing inventory, coordinating deliveries, and ensuring optimal supply chain operations.
- Retail outlets, such as gas stations, are key points of distribution where consumers can access petroleum products for their vehicles or other uses.

Importance of Transportation and Distribution:
- Transportation and distribution are essential for meeting the demand for petroleum products, which are used in various industries and for daily activities.
- Efficient transportation and distribution systems ensure a steady supply of petroleum products, preventing shortages and disruptions in the market.
- These activities also contribute to the economic development of regions by enabling access to energy resources and facilitating trade.

Conclusion:
- Transportation and distribution are critical downstream activities in the oil sector, ensuring that petroleum products are transported from refineries to storage facilities and distribution centers, and then distributed to various markets and customers.
- These activities play a vital role in meeting the demand for petroleum products and supporting economic development.

Which of the following is a major challenge facing natural resource exploitation?
  • a)
    High demand for natural resources
  • b)
    Limited availability of resources
  • c)
    Environmental degradation
  • d)
    Technological advancements
Correct answer is option 'C'. Can you explain this answer?

Adaobi Eze answered
Understanding the Challenge of Environmental Degradation
Natural resource exploitation is a complex issue that encompasses various challenges, with environmental degradation being a major concern. Here's why it stands out:
Impact on Ecosystems
- Environmental degradation refers to the deterioration of the environment through the depletion of resources such as air, water, and soil, as well as the destruction of ecosystems.
- Exploiting natural resources often leads to habitat destruction, loss of biodiversity, and disruptions in the ecological balance.
Pollution and Climate Change
- Resource extraction processes, such as mining and drilling, can result in significant pollution. This includes water contamination, air pollution, and soil degradation, which adversely affect both human health and wildlife.
- Increased carbon emissions from resource exploitation contribute to climate change, resulting in severe weather patterns, rising sea levels, and other global challenges.
Unsustainable Practices
- Many methods of resource extraction are not sustainable in the long term. Over-exploitation can lead to resource depletion, making it difficult for future generations to meet their needs.
- This unsustainable approach not only affects the environment but also compromises economic stability and social equity.
Regulatory and Ethical Concerns
- The exploitation of natural resources raises ethical concerns regarding the rights of indigenous populations and local communities. Environmental degradation often disproportionately affects these groups.
- Regulatory frameworks are often inadequate, leading to poor management and oversight of resource extraction activities.
In summary, while high demand, limited availability, and technological advancements pose challenges, the most pressing issue is environmental degradation. It encompasses the long-term impacts on ecosystems, health, and sustainability, making it a crucial challenge that needs to be addressed for responsible natural resource management.

Upstream activities in the oil sector involve:
  • a)
    Refining and processing crude oil
  • b)
    Transportation and distribution of petroleum products
  • c)
    Exploration and production of crude oil
  • d)
    Marketing and sales of petroleum products
Correct answer is option 'C'. Can you explain this answer?

Deepak Iyer answered
Upstream activities in the oil sector involve exploration and production of crude oil. This includes activities such as surveying potential oil fields, drilling wells, extracting crude oil from reservoirs, and conducting initial processing before transportation. Upstream activities are focused on the early stages of the oil supply chain.

How can the establishment of linkages between sectors contribute to economic development?
  • a)
    By reducing employment opportunities in the interconnected sectors.
  • b)
    By isolating sectors from external shocks and influences.
  • c)
    By promoting specialization and increasing efficiency.
  • d)
    By limiting technological advancements within sectors.
Correct answer is option 'C'. Can you explain this answer?

Deepak Iyer answered
The establishment of linkages between sectors promotes specialization and increases efficiency. It allows sectors to focus on their strengths and benefit from each other's resources and expertise. Options A, B, and D do not accurately describe the positive impacts of linkages on economic development.

Which of the following is an example of a backward linkage in an economy?
  • a)
    Increased demand for automobiles leading to higher production of steel.
  • b)
    The use of computer technology in the healthcare industry.
  • c)
    Rising consumer spending leading to increased retail sales.
  • d)
    The impact of changes in exchange rates on international trade.
Correct answer is option 'A'. Can you explain this answer?

Deepak Iyer answered
Increased demand for automobiles leads to higher production of steel, which is an example of a backward linkage. The production of automobiles depends on the availability of steel, making the steel industry an upstream sector. Options B, C, and D describe different types of linkages but not backward linkages.

The primary sector of the Nigerian economy is mainly involved in:
  • a)
    Manufacturing activities
  • b)
    Agricultural activities
  • c)
    Financial services
  • d)
    Transportation services
Correct answer is option 'B'. Can you explain this answer?

Deepak Iyer answered
The primary sector of the Nigerian economy is primarily engaged in agricultural activities such as farming, fishing, livestock rearing, and forestry. It involves the extraction or cultivation of natural resources.

OPEC aims to stabilize oil prices by:
  • a)
    Increasing oil production during times of low prices
  • b)
    Restricting oil production during times of low prices
  • c)
    Encouraging member countries to increase oil exports
  • d)
    Promoting competition among oil-producing nations
Correct answer is option 'B'. Can you explain this answer?

Deepak Iyer answered
OPEC aims to stabilize oil prices by restricting oil production during times of low prices. When oil prices fall, OPEC member countries often agree to reduce their production levels collectively. By limiting supply, OPEC seeks to reduce the oversupply in the market and maintain more stable and higher oil prices.

Which of the following is an example of a sector that heavily relies on natural resources?
  • a)
    Information technology.
  • b)
    Banking and finance.
  • c)
    Tourism and hospitality.
  • d)
    Agriculture and farming.
Correct answer is option 'D'. Can you explain this answer?

Deepak Iyer answered
Agriculture and farming heavily rely on natural resources such as land, water, and climate conditions. Options A, B, and C are not directly dependent on natural resources for their operations.

Which of the following statements best describes the forward linkage effect?
  • a)
    The impact of changes in government regulations on business activities.
  • b)
    The connection between the service sector and the manufacturing sector.
  • c)
    The influence of changes in investment on the financial sector.
  • d)
    The relationship between the primary sector and the secondary sector.
Correct answer is option 'B'. Can you explain this answer?

Deepak Iyer answered
The forward linkage effect refers to the connection between a sector that provides inputs (e.g., manufacturing) and a sector that utilizes those inputs (e.g., services). It emphasizes how the performance of one sector affects the performance of the sector(s) it supports. Options A, C, and D do not accurately describe forward linkage.

In the context of the linkage effect, what does backward linkage refer to?
  • a)
    The influence of foreign markets on domestic industries.
  • b)
    The impact of changes in consumer spending on businesses.
  • c)
    The connection between the manufacturing sector and the agricultural sector.
  • d)
    The effect of changes in technology on the overall productivity of an economy.
Correct answer is option 'C'. Can you explain this answer?

Deepak Iyer answered
Backward linkage refers to the connection between a downstream sector (e.g., manufacturing) and an upstream sector (e.g., agriculture), where changes in the upstream sector can affect the downstream sector. It signifies how the performance of one sector influences the performance of the sector(s) it depends on. Options A, B, and D do not accurately describe backward linkage.

Which sector has traditionally contributed the most to Nigeria's GDP?
  • a)
    Oil sector
  • b)
    Agricultural sector
  • c)
    Manufacturing sector
  • d)
    Service sector
Correct answer is option 'A'. Can you explain this answer?

Deepak Iyer answered
The oil sector has traditionally contributed the most to Nigeria's Gross Domestic Product (GDP). Nigeria is one of the largest oil-producing countries in the world, and oil exports have been a significant source of revenue for the country.

The process of extracting minerals or other geological materials from the earth for economic purposes is called:
  • a)
    Agriculture
  • b)
    Manufacturing
  • c)
    Mining
  • d)
    Trading
Correct answer is option 'C'. Can you explain this answer?

Deepak Iyer answered
Mining is the process of extracting minerals or other geological materials from the earth for economic purposes. It involves activities such as drilling, blasting, and excavation to extract valuable resources.

Which sector of the Nigerian economy is more diversified and less dependent on external factors?
  • a)
    Oil sector
  • b)
    Agricultural sector
  • c)
    Manufacturing sector
  • d)
    Service sector
Correct answer is option 'D'. Can you explain this answer?

Deepak Iyer answered
The service sector of the Nigerian economy is more diversified and less dependent on external factors compared to other sectors like the oil, agricultural, or manufacturing sectors. It includes various industries such as banking, telecommunications, hospitality, and healthcare.

Downstream activities in the oil sector involve:
  • a)
    Exploration and production
  • b)
    Refining and processing
  • c)
    Transportation and distribution
  • d)
    Marketing and sales
Correct answer is option 'B'. Can you explain this answer?

Deepak Iyer answered
Downstream activities in the oil sector refer to refining and processing. This includes converting crude oil into various petroleum products such as gasoline, diesel, jet fuel, and lubricants. Downstream activities also involve the distribution and marketing of these refined products to end-users, such as gas stations and industrial consumers.

To control the effects of natural resource exploitation, it is important to:
  • a)
    Increase resource extraction rates
  • b)
    Encourage unregulated resource use
  • c)
    Promote sustainable development practices
  • d)
    Ignore environmental concerns
Correct answer is option 'C'. Can you explain this answer?

Deepak Iyer answered
Promote sustainable development practices. To control the effects of natural resource exploitation, it is crucial to prioritize sustainable practices that consider long-term environmental, social, and economic impacts. This involves implementing responsible extraction methods, minimizing environmental damage, and ensuring equitable distribution of benefits among stakeholders.

The establishment of linkages between natural resources and other sectors in an economy can result in:
  • a)
    Decreased economic growth.
  • b)
    Increased income inequality.
  • c)
    Improved employment opportunities.
  • d)
    Higher inflation rates.
Correct answer is option 'C'. Can you explain this answer?

Deepak Iyer answered
The establishment of linkages between natural resources and other sectors can create employment opportunities, particularly in sectors that rely on or are connected to natural resources. It can lead to economic diversification and growth. Options A, B, and D do not accurately reflect the outcomes of establishing linkages.

The Nigerian National Petroleum Corporation (NNPC) is primarily responsible for:
  • a)
    Regulating global oil prices
  • b)
    Overseeing oil exploration and production in Nigeria
  • c)
    Managing oil refineries worldwide
  • d)
    Promoting renewable energy sources
Correct answer is option 'B'. Can you explain this answer?

Deepak Iyer answered
NNPC is primarily responsible for overseeing oil exploration and production in Nigeria. It is the state oil corporation in Nigeria and plays a crucial role in managing the country's oil and gas resources, including exploration, production, and ensuring a steady supply of petroleum products within the country.

Which of the following best describes upstream activities in the oil sector?
  • a)
    Exploration and production
  • b)
    Refining and processing
  • c)
    Transportation and distribution
  • d)
    Marketing and sales
Correct answer is option 'A'. Can you explain this answer?

Deepak Iyer answered
Upstream activities in the oil sector involve exploration and production. This includes activities such as locating and drilling oil wells, extracting crude oil from reservoirs, and conducting initial processing before transportation. Upstream activities are focused on the early stages of the oil supply chain, primarily involved in finding and extracting oil.

The primary objective of NNPC is to:
  • a)
    Maximize profit from oil exports
  • b)
    Control global oil prices
  • c)
    Ensure reliable supply of petroleum products in Nigeria
  • d)
    Promote renewable energy sources
Correct answer is option 'C'. Can you explain this answer?

Deepak Iyer answered
The primary objective of NNPC is to ensure a reliable supply of petroleum products in Nigeria. NNPC plays a vital role in managing Nigeria's oil and gas resources to meet domestic demand and maintain stability in the availability of petroleum products within the country.

OPEC (Organization of the Petroleum Exporting Countries) is an international organization that aims to:
  • a)
    Control global oil prices
  • b)
    Limit oil production to increase prices
  • c)
    Promote cooperation among oil-producing countries
  • d)
    Develop alternative energy sources
Correct answer is option 'C'. Can you explain this answer?

Deepak Iyer answered
OPEC aims to promote cooperation among oil-producing countries. It is an intergovernmental organization consisting of major oil-producing nations. OPEC's primary goal is to coordinate and unify petroleum policies among its member countries to ensure stable oil markets, safeguard their interests, and provide a steady income for member nations.

Which of the following is the most significant non-oil mineral resource in Nigeria?
  • a)
    Limestone
  • b)
    Natural gas
  • c)
    Crude oil
  • d)
    Bitumen
Correct answer is option 'A'. Can you explain this answer?

Deepak Iyer answered
Limestone is the most significant non-oil mineral resource in Nigeria. It is used in various industries, including construction, cement production, and chemical manufacturing.

Which of the following factors contributes to the development of major natural resources in Nigeria?
  • a)
    Technological advancements
  • b)
    Political instability
  • c)
    Lack of skilled labor
  • d)
    Economic recession
Correct answer is option 'A'. Can you explain this answer?

Deepak Iyer answered
Technological advancements play a significant role in the development of major natural resources in Nigeria. Improved technology enhances extraction techniques, efficiency, and cost-effectiveness in industries such as oil exploration and mining.

In an economy, the construction sector heavily relies on the availability of:
  • a)
    Skilled labor.
  • b)
    Natural resources.
  • c)
    Government subsidies.
  • d)
    Foreign investments.
Correct answer is option 'B'. Can you explain this answer?

Deepak Iyer answered
The construction sector heavily relies on natural resources such as cement, steel, timber, and other materials. These resources are essential for building infrastructure and housing. Options A, C, and D may play a role in the construction sector but are not directly related to its primary resource requirements.

The linkage effect in economics refers to:
  • a)
    The relationship between supply and demand.
  • b)
    The interdependence of sectors in an economy.
  • c)
    The impact of inflation on economic growth.
  • d)
    The effect of government policies on unemployment.
Correct answer is option 'B'. Can you explain this answer?

Deepak Iyer answered
The linkage effect refers to the interdependence and interconnectedness of sectors in an economy, where changes in one sector can have an impact on other sectors. It highlights how various sectors rely on each other for economic growth and development. Options A, C, and D are not accurate definitions of the linkage effect.

How can the establishment of linkages between sectors help reduce poverty?
  • a)
    By concentrating economic resources in specific sectors.
  • b)
    By creating opportunities for income generation.
  • c)
    By restricting access to resources for marginalized communities.
  • d)
    By promoting inflationary pressures on essential goods.
Correct answer is option 'B'. Can you explain this answer?

Deepak Iyer answered
The establishment of linkages between sectors creates opportunities for income generation, job creation, and economic growth. This can help lift people out of poverty by providing them with employment and income-earning possibilities. Options A, C, and D do not accurately describe the poverty-reducing effects of linkages between sectors.

Which natural resource is the main source of foreign exchange earnings for Nigeria?
  • a)
    Gold
  • b)
    Timber
  • c)
    Petroleum
  • d)
    Cocoa
Correct answer is option 'C'. Can you explain this answer?

Deepak Iyer answered
Petroleum, also known as crude oil, is the main source of foreign exchange earnings for Nigeria. It accounts for a significant portion of Nigeria's export earnings and plays a vital role in the country's balance of trade.

The exploitation of natural resources in Nigeria has led to:
  • a)
    Environmental degradation
  • b)
    Increase in agricultural productivity
  • c)
    Diversification of the economy
  • d)
    Decrease in unemployment rates
Correct answer is option 'A'. Can you explain this answer?

Deepak Iyer answered
The exploitation of natural resources in Nigeria has led to environmental degradation. Activities such as oil spills, deforestation, and pollution associated with resource extraction have negatively impacted the environment, including land, water, and biodiversity.

Which of the following is NOT considered a major natural resource in Nigeria?
  • a)
    Petroleum
  • b)
    Gold
  • c)
    Diamond
  • d)
    Wheat
Correct answer is option 'D'. Can you explain this answer?

Deepak Iyer answered
Wheat is not considered a major natural resource in Nigeria. Major natural resources in Nigeria include petroleum, gold, diamond, timber, etc. Wheat is predominantly grown in temperate regions.

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