WAEC Economics 1998 past questions and answers

The study of Economics enables the individual to

1. A.be misserly inthe spending of his money
2. B.derive maximum satisfaction from the money he spends
3. C.determine the right market to visit
4. D.avoid the purchase of luxurious items
5. E.derive solutions to all problems

One way of solving the problem of scaricity that faces individuals is for

1. A.the government to import goods massively so that the citizens can get all they want
2. B.them to work very hard so that they are able to buy all their wants
3. C.them to choose between alternatives since they cannot meet all their wants
4. D.the government to study people's behaviour in order to know their wants
5. E.them to use their resources as they want

Use the table below to answer questions 3 and 4.
Scores (X): 0, 2, 4, 5, 6, 7, 8
Frequency (f): 7, 11, 6, 7, 7, 4, 3
In the distribution above, the mode is

1. A.2
2. B.3
3. C.4
4. D.5
5. E.6

Use the table below to answer questions 3 and 4.
Scores (X): 0, 2, 4, 5, 6, 7, 8
Frequency (f): 7, 11, 6, 7, 7, 4, 3
The median is

1. A.2
2. B.3
3. C.4
4. D.5
5. E.6

At what price will a trader be ready to sell 6 oranges using the equation below: p = ½q + 2. Where p is price and q is quantity?

1. A.N3.00
2. B.N4.00
3. C.N5.00
4. D.N6.00
5. E.N8.00

If the last Naira spent on each commodity by a consumer gave him equal satisfaction, it means the consumer has been able to

1. A.cut cost
2. B.maximize costs
3. C.increase profits
4. D.maximize utility
5. E.manage scarce resources

Which of the following will shift the demand curve for Milo to the right?

1. A.an increase in consumer's income
2. B.A rise in the price of Milo
3. C.a tax on cocoa producers
4. D.a fall in the quantity demanded of Milo
5. E.A fall in the price of Milo

An exceptional demand is one in which the

1. A.supplier sells all that he takes to the market
2. B.consumers do not buy from the market
3. C.quantity demanded falls as price falls
4. D.purchase of services and not products is considered
5. E.quantity demanded and price move in opposite directions

The equilibrium price of mangoes is N1.00. If the price falls to 50k, there will be

1. A.an excess demand
2. B.an excess supply
3. C.a surplus in the market
4. D.many sellers in the market
5. E.no seller in the market

The introduction of division of labour in a firm will lead to

1. A.a fall in output
2. B.a decline in the efficiency of labour
3. C.an increase output
4. D.the separation of ownership from management
5. E.an increase in unit cost

Total cost is the addition of

1. A.real cost and money cost
2. B.price and taxes
3. C.fixed cost and variable cost
4. D.average cost and marginal cost
5. E.cost of raw materials and wages

To the economist, efficiency of resource use means

1. A.the maximum use of resources to achieve minimum objective
2. B.the reduction of cost for adequate output
3. C.relating value of input to that of output
4. D.using appropriate resources for desired wants
5. E.maximizing output from a given amount of resources

The shape of the average cost (AC) curve shows that as production increases

1. A.total cost decreases
2. B.average cost decreases and then increases
3. C.average cost increases
4. D.marginal cost steadily increases
5. E.total cost remains constant

One of the advantages of localization of industry is that firms

1. A.make abnormal profits
2. B.are given tax holidays
3. C.are united under one management
4. D.pay high wages
5. E.can have a large pool of skilled labour

Which of the following is not a type of industry?

1. A.Export
2. B.Construction
3. C.Mining
4. D.Manufacturing
5. E.Transport

In a Joint-Stock Company shareholders are the

1. A.owners
2. B.managers
3. C.chief executives
4. D.company advisers
5. E.day-to-day decision makers

The distribution of goods by the price system is distorted when

1. A.there is a high degree of competition among producers
2. B.producers and consumers operate freely
3. C.factors of production are mobile
4. D.no allowance is made for social costs and social benefits
5. E.there is price control measure in the system

An appropriate industrialization strategy in an under-populated country is

1. A.import substitution
2. B.capital intensive
3. C.the contract method
4. D.the use of foreigners in factories
5. E.labour intensive

The power of trade unions may be weakened when there is

1. A.optimum population
2. B.a weak government in power
3. C.over-population
4. D.a civilian government in power
5. E.under-population

Malthus' major contention is that

1. A.population increased in arithmetic progression while food production increased in geometric progression
2. B.population increased in geometric progression while food production increased in arithmetic progression
3. C.population and food growth rate will, in future, be at par
4. D.nations have to get enough manpower to cultivate available land for food
5. E.output from agriculture decreased as more and more of the poorer lands were brought into cultivation

The problem of small markets in West Africa can be solved through

1. A.separate planning among the West African countries
2. B.meaningful co-operation among the West African countries
3. C.political stability in West Africa
4. D.imposition of high tariffs on West African exports
5. E.the central banks of West African countries

An imperfect competitor is in equilibrium when

1. A.Marginal Cost (MC) is equal to Marginal Revenue (MR)
2. B.Marginal Revenue (MR) is equal to Price (P)
3. C.Average Revenue (AR) is equal to Average Cost (AC)
4. D.Output (Q) is equal to Average Revenue (AR)
5. E.Average Revenue (AR) is equal to Marginal Revenue (MR)

Which of the following is used to measure inflation?

1. A.Open market operation
2. B.Cash-Deposit ratio
3. C.Price index
4. D.Multiplier
5. E.Fiscal policy

If a government which owed a company N10,000 in 1976 paid the debt fully in 1985 when the value of money had depreciated by 20 percent, such a government had

1. A.lost
2. B.been placed at par with the company
3. C.gained
4. D.stabilized the value of the money
5. E.increased the value of the money

Banks create money by

1. A.giving drafts to customers
2. B.printing more money
3. C.lending out deposits to borrowers
4. D.issuing cheques
5. E.depositing excess cash in the tills

The West African Clearing House was established to

1. A.finance development projects in Africa
2. B.enhance financial transaction among member countries
3. C.provide technical assistance to member countries
4. D.stabilize price in developing countries
5. E.service the debts of the Africa countries

Which of the following is a factor affecting the size of national income?

1. A.size of the active population
2. B.Taste of the consumers
3. C.Number of registered trade unions
4. D.Credit-worthiness of the neighbouring countries
5. E.Regularity of payment of national debt

The expenditure of a firm on goods and services for the expansion of its productive capacity is known as

1. A.income
2. B.investment
3. C.savings
4. D.profits
5. E.interest

An increase in marginal propensity to save will lead to

1. A.an increase in marginal propensity to consume
2. B.a decrease in the level of consumption
3. C.an immediate decrease in the net national income
4. D.an increase in the level of consumption
5. E.a decrease in the level of savings

Progressive system of taxation implies that the

1. A.poor pay relatively more
2. B.tax rate falls as the tax base increases
3. C.tax rate increases as the tax base increases
4. D.average and marginal rate of tax will be the same
5. E.rich and the poor pay the same amount as tax

Development plans in Nigeria have deviated from their targets due to

1. A.lack of manpower
2. B.political instability
3. C.high population growth rate
4. D.brain drain in the country
5. E.inadequate land

The level economic development is low in Nigeria because

1. A.planning has no practical relevance
2. B.of the pattern of consumers' spending
3. C.the country is too large
4. D.of ineffective plan implementation
5. E.there is no unique planning model

The stability of the Nigerian economy depends mainly on the export price of

1. A.groundnut
2. B.cotton
3. C.cocoa
4. D.mineral oil
5. E.palm kernel

Which of the following countries is a major trading partner of Nigeria?

1. A.Britain
2. B.Canada
3. C.Japan
4. D.Germany
5. E.China

The instruments used in many countries to restrict imports include

1. A.high tariffs
2. B.price index
3. C.excise duties
4. D.bank rate
5. E.subsidies

One of the major objectives of the African Development Bank (ADB) is the mobilization of

1. A.blacks in developed countries to assist Africa
2. B.qualified manpower for member states
3. C.foreigners to assist Africa
4. D.women for economic development
5. E.Africans towards economic progress

Which of the following constitutes the largest exports of the developing countries to the developed ones?

1. A.Raw materials
2. B.Finished consumer goods
3. C.Labour services
4. D.Arms and ammunition
5. E.Automobiles

The economic system in which the decisions about what to produce, how to produce and for whom to produce are made by private firms is called

1. A.socialism
2. B.welfarism
3. C.communism
4. D.capitalism
5. E.traditionalism

A major setback in any mixed economy is

1. A.that is combines both the capitalist and socialist systems
2. B.the freedom of choice in the production and consumption of goods and services
3. C.that government intervenes to secure full utilization of resources
4. D.that economic decisions are determined by market forces
5. E.that the absence of profit motive in the public sector may reduce incentive for hard work

Section A: answer one question only from this section.
(a) Define cross elasticity of demand (b) The table shows the response of quantity demanded to changes in price for three pairs of commodities. Use the table to answer the questions that follow.
Changes in price: Bread: original price N15, new price N20; Beef: original price N25, new price N40; Butter: original price N100, new price N150
Changes in quantity demanded: Yam: original quantity 150 kg, new quantity 200 kg; Fish: original quantity 1,000 kg, new quantity 3,000 kg; Margarine: original quantity 250 kg, new quantity 400 kg
Calculate the cross elasticities of demand for (i) Bread and yam; (ii) Beef and fish; (iii) Butter and margarine.

Section A: answer one question only from this section.
The table below shows the sectoral allocation of a country's budget. Illustrate the data accurately with a pie-chart. Show your workings clearly.
Health: N30 million
Education: N25 million
Housing: N15 million
Manufacturing: N10 million
Agriculture: N20 million

Section B: answer three questions only from this section.
(a) What is meant by production? (b) Explain with examples, the following types of production: (i) Primary (ii) Secondary (iii) Tertiary

Section B: answer three questions only from this section.
Give any five reasons why public corporations are established in Nigeria.

Section B: answer three questions only from this section.
Account for the decline in the contribution of agriculture to the Gross Domestic Product (GDP) of Nigeria.

Section B: answer three questions only from this section.
(a) What is Labour Force? (b) Explain four factors affecting the size of the labour force.

Section B: answer three questions only from this section.
State any five reasons why the use of money has replaced the barter system in modern economic transactions.

Section B: answer three questions only from this section.
Describe any five functions of the Central Bank of Nigeria (CBN)

Section B: answer three questions only from this section.
Why does a country restrict her international trade?

Section B: answer three questions only from this section.
Outline the role of industrialization in the economic development of Nigeria.