WAEC Economics 2014 past questions and answers

Human wants are unlimited because

1. A.production is inadequate.
2. B.resources have alternative uses.
3. C.new wants always arise.
4. D.resources are limited.

A basic economic problem of any society is

1. A.high level of illiteracy.
2. B.irregular power supply.
3. C.population growth.
4. D.resource allocation.

In a centrally planned economy, what to produce is

1. A.determined by the forces of demand and supply.
2. B.driven by profit motive.
3. C.determined by consumers.
4. D.the responsibility of state's bureaucrats.

Which of the following is not a feature of socialism?

1. A.Collective ownership of productive resources
2. B.Freedom of enterprise
3. C.Production is not based on the profit motive
4. D.Maximization of public welfare.

Households make economic decisions because they want to

1. A.make more profit.
2. B.increase their salaries and wages.
3. C.increase their purchases.
4. D.maximize their satisfaction.

State owned enterprises are more common in

1. A.centrally planned economies.
2. B.mixed economies.
3. C.capitalist economies.
4. D.developed economies.

A normal supply curve has a positive slope which indicates that

1. A.sellers are willing to sell more at a lower price.
2. B.sellers are indifferent to prices.
3. C.sellers are willing to sell more at a higher price.
4. D.there is always a fixed supply.

To control inflation, the central bank of a country may adopt

1. A.an expansionary monetary policy.
2. B.a restrictive monetary policy.
3. C.an increased wage policy.
4. D.a deficit financing policy.

Disposable income is the income earned

1. A.by the nationals of a country resident within the country.
2. B.from productive activities of nationals of a country both at home and abroad.
3. C.when personal income tax is deducted from personal income.
4. D.when the gross income of an individual is added to person income tax.

Livestock production in West Africa is hindered mainly by

1. A.inadequate demand.
2. B.use of traditional implements.
3. C.land tenure system.
4. D.pests and diseases.

The components of a three-sector economy are

1. A.banks, schools and hospitals.
2. B.workers, producers and marketers.
3. C.households, firms and the government.
4. D.producers, retailers and wholesalers.

A declining population is one in which the population is

1. A.experiencing a high rate of emigration.
2. B.made up of large number of old people.
3. C.not producing enough goods.
4. D.not contributing enough to the national income.

Which of the following agencies help to stabilize farmers' income?

1. A.Local government authorities
2. B.Trade unions
3. C.Marketing boards
4. D.Co-operative organizations.

Other things being equal, an increase in supply will lead to

1. A.a fall in price and an increase in quantity bought and sold.
2. B.an increase in price and increase in quantity bought and sold.
3. C.a fall in price and a fall in quantity bought and sold.
4. D.an increase in quantity supplied and demanded only.

Examples of joint stock banks are

1. A.commercial banks.
2. B.co-operative credit societies.
3. C.central banks.
4. D.development banks.

Which of the following is not a characteristic of a developing country? High

1. A.real per capita income.
2. B.level of primary production.
3. C.population growth rate.
4. D.level of illiteracy.

Goods consumed out of habit have

1. A.elastic demand.
2. B.perfectly elastic demand.
3. C.inelastic demand.
4. D.unitary elastic demand.

Which of the following items is not a recurrent expenditure?

1. A.Building of schools and colleges
2. B.Maintenance of school buildings
3. C.Payment of teachers' salaries
4. D.Purchase of stationery for examinations.

If the coefficient of price elasticity of demand is 0.1, demand is

1. A.elastic.
2. B.inelastic.
3. C.zero elastic.
4. D.unitary elastic.

The profit of a producer is the difference between

1. A.total cost and marginal cost.
2. B.total revenue and total cost.
3. C.average cost and total cost.
4. D.price and total cost.

The rate of increase in utility is

1. A.average utility.
2. B.increasing utility.
3. C.total utility.
4. D.marginal utility.

The supply of tea is linearly presented as P = 0.2Q, where P is the price and Q is the quantity. What is P when Q = 25?

1. A.$0.08
2. B.$5.00
3. C.$25.02
4. D.$125.

Increase in supply due to changes in plant size will take place only in the

1. A.normal time.
2. B.long run.
3. C.market period.
4. D.short run.

The long-run average cost curve is made up of several short-run

1. A.marginal and average cost curves.
2. B.average cost curves.
3. C.average variable cost curves.
4. D.average variable and total cost curves.

Use the table below to answer the question.
X | 2 | 3 | 4 | 5
F | 2 | 5 | 2 | 1
From the table, the mean of the distribution is

1. A.2.2.
2. B.2.5.
3. C.3.2.
4. D.4.5.

Use the table below to answer the question.
X | 2 | 3 | 4 | 5
F | 2 | 5 | 2 | 1
What is the median of the distribution?

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

Co-operative societies formed to market the output of their members are called

1. A.Consumers' co-operative societies.
2. B.Wholesale co-operative societies.
3. C.Credit and thrift co-operative societies.
4. D.Producers' co-operative societies.

Money will serve as a standard of deferred payment if it is

1. A.homogeneous.
2. B.durable.
3. C.easily recognized.
4. D.stable in value.

Due to an increase in price, a seller increases the quantity offered for sale from 400 units to 450 units. What is the percentage change in quantity supplied?

1. A.1%
2. B.7.5%
3. C.12.5%
4. D.20%.

Which of the following will increase the nominal value of national income?

1. A.High rate of inflation
2. B.Increase in the value of money
3. C.Increase in import
4. D.High rate of subsistence production.

Cyclical unemployment is one associated with

1. A.inadequate information.
2. B.trade fluctuations.
3. C.structural changes.
4. D.seasonal changes.

Which of the following best defines inflation?

1. A.Cyclical increase in prices
2. B.Periodic increase in prices
3. C.Persistent increase in prices
4. D.Occasional increase in prices.

Perfect knowledge of events in a perfect market will be made possible by the existence of

1. A.many buyers and sellers.
2. B.homogeneous products.
3. C.means of communication.
4. D.large number of traders.

An increase in the price of a commodity from $10 to $15 leads to an increase in the quantity supplied from 10 units to 15 units. The price elasticity of supply is

1. A.0.
2. B.0.5.
3. C.1.
4. D.5.

Economic development may be hindered if there is

1. A.a high pool of skilled labour.
2. B.a high rate of economic growth.
3. C.political stability.
4. D.rapid population growth.

Which of the following types of unemployment results from changes in the pattern of aggregate demand?

1. A.Technological unemployment
2. B.Structural unemployment
3. C.Frictional unemployment
4. D.Seasonal unemployment.

Which of the following is not a reason countries import goods?

1. A.Differences in natural endowments
2. B.The law of absolute advantage
3. C.Differences in tastes
4. D.The love for other nations.

Provision of short-term loans to solve balance of payments problems is done by the

1. A.International Finance Corporation.
2. B.International Monetary Fund.
3. C.International Bank for Reconstruction and Development.
4. D.African Development Bank.

West African countries are experiencing worsening terms of trade because

1. A.they are primary producers.
2. B.their currencies are overvalued.
3. C.they import less machines.
4. D.they are tertiary producers.

Which of the following statements is correct?

1. A.As total utility increases, the marginal utility also increases
2. B.The marginal utility is always zero whenever the total utility reaches the maximum
3. C.The total utility is at maximum whenever marginal utility is at it's maximum
4. D.There is no relationship between total utility and the marginal utility.

A change in the quantity demanded of a given commodity is determined by the

1. A.size of the population.
2. B.income of the consumer.
3. C.price of the commodity.
4. D.taste and fashion.

The likely implication of the devaluation of a country's currency is that

1. A.exports of such a country become cheaper.
2. B.importation of goods into such a country becomes cheaper.
3. C.the value of such a country's currency rises.
4. D.foreign goods are attracted into the country.

International trade is desirable because it

1. A.may lead to overproduction.
2. B.brings about over-dependence of countries on one another.
3. C.provides foreign market for local goods.
4. D.brings about unhealthy competition and rivalries.

A financial institution established for the purpose of providing specialized services like acceptance of bills of exchange and equipment leasing is known as

1. A.Merchant Bank.
2. B.Development Bank.
3. C.Central Bank.
4. D.Insurance Company.

Which of the following functions of money is mostly affected during inflation?

1. A.Medium of exchange
2. B.Unit of Account
3. C.Store of value
4. D.Standard of deferred payment.

Precautionary motive for holding money is to

1. A.meet daily and regular transactions.
2. B.take advantage of changes in the prices of goods and services.
3. C.cover unforeseen events.
4. D.cover expenses on house rent.

Which of the following measures will not encourage industrialization in West Africa?

1. A.Taking over of all forms of industries by the government
2. B.Provision of social infrastructure
3. C.Giving tax incentives, especially to infant industries
4. D.Using tariffs to discourage the use of imported items.

The concentration of many firms of a particular industry in a particular area is known as

1. A.location of industry.
2. B.amalgamation of industries.
3. C.localization of industries.
4. D.nationalization of industry.

Which of the following is not an effect of the discovery of mineral resources in an area?

1. A.Increase in wealth
2. B.Overcrowding
3. C.Increase in crime rate
4. D.Under population

The table below shows an extract from balance of payments for country A. Use the table to answer the questions that follow:
Balance of payments Items
Items of transactions | Receipts ($) | Payments ($)
1. Merchandise (Visible trade) | 52,000.00 | 40,000.00
2. Shipping, other transport and travel | 4,000.00 | 8,000.00
3. Investment income | 20,000.00 | 5,000.00
4. Other services | 2,500.00 | 7,500.00
5. Unrequited transfers | 22,800.00 | 7,000.00
6. Direct investment | 50,000.00 | 26,000.00
7. Other long-term capital | 254,000.00 | 289,000.00
8. Short-term capital | 221,000.00 | 238,000.00
Calculate the: (a) balance of trade; (b) balance on current account; (c) balance on capital account; (d) balance of payments.

The table below presents the price and quantity supplied by a palm oil producer. Use the information in the table to answer the following questions.
Price ($) | Quantity Supplied (gallons)
6 | 200
12 | 300
18 | 400
20 | 500
24 | 600
(a) If the price of palm oil falls from $20.00 to $18.00, calculate the price elasticity of supply.
(b) Interpret your answer in question 2(a) above.
(c) Study the extract below and answer the following questions.
The price of palm oil remains at $6.00 per gallon and an increase in the price of a related product causes an increase in the supply of palm oil.
(i) Give a graphical presentation to illustrate this change; (ii) Indicate the type of supply for the two products.
(d) State three reasons that can cause a change in supply.

(a) Define occupational mobility of labour.
(b) Identify any four barriers to occupational mobility of labour.
(c) State any two factors that will make labour efficient.

(a) What is crop farming?
(b) Outline any four measures that can be adopted to increase crop production in your country.
(c) State any two contributions of the industrial sector to agriculture in your country.

(a) Highlight any four differences between a public limited liability company and a private limited liability company.
(b) Explain any four advantages of a limited liability company.

(a) Define gross national income.
(b) Using appropriate examples, distinguish between: (i) Personal income and disposable income; (ii) Nominal income and real income.
(c) Outline any three uses of national income statistics.

(a) What is the normal chain of distribution?
(b) State any three functions of middlemen in the chain of distribution.
(c) Highlight any four problems involved in the distribution of goods in West Africa.

(a) What is a specific tax?
(b) Explain with the aid of diagrams, the effects of specific tax on a commodity that has a: (i) perfectly elastic demand; (ii) perfectly inelastic demand.
(c) State two differences between a direct and an indirect tax.