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The second stage of production is characterized by diminishing marginal returns. In this stage, the total product is still increasing but at a decreasing rate, and both the marginal product and average product are declining, though they remain positive. The firm will aim to operate in this stage to maximize efficiency.

Open market operations, which involve the buying and selling of government securities, are a key tool of monetary policy. When the central bank wants to reduce the money supply, it sells securities to commercial banks. The banks pay for these securities with their reserves, which reduces the amount of money they have available to lend out, thereby contracting the money supply and curbing inflation.

Inelastic demand means that a change in price leads to a proportionately smaller change in quantity demanded. Since fuel is a necessity for transportation and generators, people will continue to buy it even if the price increases, though perhaps in slightly smaller quantities.

Privatization is the process of transferring ownership and control of a public enterprise from the government to private individuals or firms. The goal is often to improve efficiency, reduce government expenditure, and attract private investment. This is distinct from commercialization, where a public enterprise is restructured to operate on a commercial basis, but its ownership remains with the government.

Competitive demand exists between goods that serve as substitutes for each other. When the price of one good (Indomie) increases, consumers substitute it with a cheaper alternative (other noodle brands), leading to a decrease in demand for the first good and an increase in demand for the substitute.

A sole proprietorship is a business owned and run by one individual. Its key advantage is the ease and low cost of setting it up, as well as the owner having full control over all decisions. However, a major disadvantage is unlimited liability, where the owner is personally responsible for all business debts.

A subsidy lowers the cost of production for firms. This encourages producers to supply more at every price level, causing the supply curve to shift to the right. As a result, the new market equilibrium will be at a lower price and a higher quantity.

Localization of industry refers to the tendency for firms in the same or related industries to cluster in a particular area. This happens when they benefit from shared infrastructure, a common pool of skilled labor, and easy access to suppliers and customers. This concentration leads to external economies of scale for the firms.

The law of diminishing returns (also known as the law of variable proportions) states that as successive units of a variable input (labor) are added to a fixed input (factory size), the marginal product will eventually decline. This affects the total, average, and marginal products as the firm's output increases in the short run. Returns to scale, on the other hand, describes the long-run relationship between a proportional change in all inputs and the resulting change in output.

A mixed economy is a system that combines elements of both a free enterprise system and a centrally planned economy. This means that economic problems are solved through both the price mechanism of the market and government intervention or planning. Nigeria's economy exemplifies this, with both private businesses and government agencies playing key roles in resource allocation and production

Elastic demand occurs when the percentage change in quantity demanded is greater than the percentage change in price. In this case, a 10% price increase leads to a 20% drop in quantity demanded, meaning the demand is responsive to price changes.

An exchange rate depreciation occurs when the value of a currency falls against other currencies in a floating exchange rate system. The Naira has depreciated, which means you get fewer dollars for one Naira. This makes Nigerian goods cheaper for people in the US to buy and US goods more expensive for Nigerians. This is distinct from devaluation, which is a deliberate reduction in the value of a currency by a country's government in a fixed exchange rate system.

A tariff is a tax imposed by a government on imported goods. The purpose of a tariff is to increase the price of imports, making them less competitive compared to domestically produced goods, thereby protecting local industries.

Opportunity cost is the value of the next best alternative that is forgone when a choice is made. In this case, the student chooses to study, and the opportunity cost is the value of the leisure time they give up. While the choice is influenced by their scale of preference, and they are acting with rationality, the direct economic concept illustrated by the sacrifice of leisure is opportunity cost.

Mechanized farming involves the use of modern machinery and technology to increase farm productivity and output. Governments promote it as a way to transition from small-scale subsistence farming to commercial agriculture, which can significantly boost food production and lead to national food security.

Gross Domestic Product (GDP) measures the total market value of all final goods and services produced within a country's geographical boundaries during a specific period. It is a key indicator of a nation's economic health and is different from GNP, which includes income earned by citizens abroad.

Scarcity is a core economic problem that arises because human wants are unlimited, but the resources available to satisfy them are limited. This forces individuals and societies to make choices about which wants to satisfy and which to forgo. The decision of what to consume is a direct consequence of this scarcity.

The Dutch disease is an economic concept that describes a phenomenon where the rapid development of one sector (in Nigeria's case, the oil sector) leads to a decline in other sectors, particularly the non-oil sector like agriculture and manufacturing. This occurs because the booming resource sector causes the country's currency to appreciate, making its non-oil exports less competitive internationally and its imports cheaper.

Non-tax revenue consists of government income from sources other than taxes. These include fees, fines, licenses, and, in Nigeria's case, royalties and rents from oil and gas exploitation. The other options are all forms of tax revenue.

The International Monetary Fund (IMF) is an international organization that provides financial assistance and advice to countries facing balance of payments problems or seeking to implement economic reforms. Its relevance to Nigeria lies in its role in helping to stabilize the country's economy and manage its foreign exchange challenges, although this assistance often comes with conditions for policy changes.