WAEC Economics 2018 past questions and answers

Economic problems arise in all societies because

1. A.resources are mismanaged by leaders.
2. B.there is no proper planning.
3. C.resources are not in adequate supply.
4. D.the services of economists are not employed.

The organization of productive factors is the responsibility of the

1. A.management.
2. B.entrepreneur.
3. C.production manager.
4. D.labour union.

Producers operating in a free market economy are more efficient as a result of

1. A.the existence of competition.
2. B.the very few number of participants.
3. C.the commitment of the shareholders.
4. D.government's regulation of their activities.

In a pie chart, the population of a city is represented by a sector 45°. If the country has a population of 10 million people, then the city's population is

1. A.0.0045 million.
2. B.4.5 million.
3. C.1.25 million.
4. D.16 million.

A downward sloping demand curve means that

1. A.total revenue declines as price is lowered.
2. B.demand falls as output rises.
3. C.demand falls as output falls.
4. D.price must be lowered to sell more.

If the price of commodity X rises and consumers shift to commodity Y, then commodities X and Y are

1. A.substitutes.
2. B.complements.
3. C.inferior goods.
4. D.bought together.

Goods whose demand vary directly with money income are called

1. A.inferior goods.
2. B.complementary goods.
3. C.substitute goods.
4. D.normal goods.

An exceptional demand curve can result from

1. A.increase in price of raw materials.
2. B.increase in the size of the population.
3. C.expectation of future price increase.
4. D.change in taste of the consumer.

Palm oil and palm kernel are in

1. A.joint supply.
2. B.competitive demand.
3. C.competitive supply.
4. D.complementary demand.

Which of the following is true about the supply of land? It

1. A.is higher in the urban than rural areas.
2. B.varies with time.
3. C.rises with demand.
4. D.is fixed.

The backward bending supply curve of labour indicates

1. A.an abnormal supply situation.
2. B.the law of supply.
3. C.that labour supply and wage rate are directly related.
4. D.that the elasticity of supply is uniform.

A supply curve parallel to the X-axis indicates

1. A.fairly elastic supply.
2. B.infinitely elastic supply.
3. C.fairly inelastic supply.
4. D.perfectly inelastic supply.

If the marginal utility of a commodity is equal to its price, then

1. A.the consumer is in equilibrium.
2. B.more of the commodity can be consumed.
3. C.total utility is also equal to its price.
4. D.the market is not in equilibrium.

A price floor is usually fixed

1. A.at the equilibrium and causes no shortage.
2. B.above the equilibrium and causes shortage.
3. C.below the equilibrium and causes surpluses.
4. D.above the equilibrium and causes surpluses.

A market is in equilibrium when

1. A.there is no government intervention.
2. B.the demand is the same as the supply.
3. C.buyers and sellers are free to sell more goods.
4. D.there is no free entry and exit.

A firm's average cost decreases in the long-run because of

1. A.increasing returns to scale.
2. B.diminishing supply.
3. C.decreasing marginal returns.
4. D.decreasing average fixed cost.

"The larger a firm, the lower its cost of production". This statement explains the

1. A.law of diminishing average returns.
2. B.concept of economics of scale.
3. C.law of comparative cost advantage.
4. D.theory of division of labour.

Use the table below to answer the question.
Quantity | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7
Total Cost | 20 | 25 | 28 | 30 | 38 | 55 | 92 | 135
The total fixed cost is

1. A.$7.00
2. B.$30.00
3. C.$20.00
4. D.$135.00

Use the table below to answer the question.
Quantity | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7
Total Cost | 20 | 25 | 28 | 30 | 38 | 55 | 92 | 135
At output level 5, the total variable cost is

1. A.$5.00
2. B.$20.00
3. C.$55.00
4. D.$35.00

In the long-run, a firm must shut down if its average revenue is

1. A.greater than average cost.
2. B.less than average variable cost.
3. C.equal to the minimum average cost.
4. D.equal to the average cost.

Public limited liability companies are democratic in nature because

1. A.government appointees are members of the board.
2. B.they are run by elected public officers.
3. C.electoral principles are adopted in the day-to-day management.
4. D.shareholders elect the board of directors.

In the event of bankruptcy, owners of joint-stock companies lose

1. A.their private properties.
2. B.both company and private assets.
3. C.only the capital invested.
4. D.only their dividends.

Wholesalers play an important role in the distribution of goods and services because they

1. A.are located very close to consumers.
2. B.finance both producers and retailers.
3. C.pass information on from retailers to consumers.
4. D.sell in small units to consumers.

If workers at the school canteen cannot sell during the holidays, this is an example of

1. A.structural unemployment.
2. B.frictional unemployment.
3. C.seasonal unemployment.
4. D.residual unemployment.

Positive checks as envisaged by Thomas Malthus can be prevented if

1. A.death rate is reduced.
2. B.marriage is abolished.
3. C.more hospitals are built.
4. D.moral restraint is adopted.

Which of the following factors is not a reason for farmers' unstable incomes?

1. A.Dependence on too many crops
2. B.Poor storage facilities
3. C.Adverse weather conditions
4. D.Recession in the world economy

Local firms can help in reducing unemployment in a country when

1. A.land acquisition becomes centralized.
2. B.imports of substitutes are reduced.
3. C.waste in the firm is eliminated.
4. D.subsidies to firms are decreased.

An industry is described as a group of firms

1. A.that provides jobs for many people.
2. B.which uses advance technology in production.
3. C.which produces similar products.
4. D.that provides jobs for few people.

A baker bought flour and other ingredients for $250.00, spent $52.00 on distribution, sold the bread for $320.00. The value added by the baker

1. A.$302.00
2. B.$52.00
3. C.$18.00
4. D.$622.00

In a country with large population of full-time housewives, national income

1. A.will be composed of goods produced by women.
2. B.figures will be grossly over-stated.
3. C.statistics will be difficult to calculate.
4. D.figures will be grossly under-estimated.

Demand-pull inflation is likely to be caused by

1. A.an increase in the cost of factor inputs.
2. B.increase in the income tax rate.
3. C.increase in bank lending rates.
4. D.increasingly large budget deficit.

Holding money to take care of contingencies is

1. A.a speculative motive.
2. B.a transactions motive.
3. C.a precautionary motive.
4. D.an expansionary motive.

If a housewife has meat and wants tomatoes, she must find someone who has tomatoes to give and wants meat. This concept is described as

1. A.scale of preference.
2. B.opportunity cost.
3. C.complementary demand.
4. D.double coincidence of wants.

The stock exchange is an example of the

1. A.labour market.
2. B.money market.
3. C.commodity market.
4. D.capital market.

What happens when the central bank increases the bank rate in an economy?

1. A.Borrowing is discouraged
2. B.Customers increase their borrowing
3. C.Banks can increase their lending
4. D.Money supply increases

Income is redistributed when the rich are progressively taxed and

1. A.more private schools are established.
2. B.subsidy is provided on petroleum products.
3. C.more public goods are provided.
4. D.farmers are given guaranteed prices.

In order to increase revenue, government should tax commodities for which demand is

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

Which of the following activities will not lead to economic growth?

1. A.Massive importation of capital goods
2. B.Intensive capital formation locally
3. C.Use of modern technology
4. D.Massive importation of consumer goods

The poorer the country, the larger the percentage of labour force engaged in

1. A.agriculture.
2. B.mining.
3. C.trading.
4. D.manufacturing.

Which of the following measures can be adopted to stabilize the external value of the local currency?

1. A.Reduce the volume of exports
2. B.Increase the demand for imports
3. C.Increase domestic money supply
4. D.Reduce the demand for imports

Which of the following is not a measure for reducing balance of payments deficits?

1. A.Export drive
2. B.Reducing tariffs
3. C.Adding value to export goods
4. D.Increasing local production

Nations engage in external trade because of differences in

1. A.comparative cost.
2. B.absolute cost.
3. C.fixed cost.
4. D.variable cost.

One advantage of international trade is that

1. A.prices of goods become stable.
2. B.countries become self-sufficient.
3. C.goods consumed are produced at a very high cost.
4. D.it makes possible the consumption of a variety of goods.

Which of the following forms of economic integration is a member nation free to impose duty against non-members?

1. A.Customs union
2. B.Free trade area
3. C.Common market
4. D.Economic community

The International Bank for Reconstruction and Development (IBRD) performs the following functions except

1. A.granting long-term loans.
2. B.assisting with technical expertise.
3. C.reducing tariff among members.
4. D.developing human resource.

An electrical engineer who is teaching Physics in a secondary school is said to be

1. A.underemployed.
2. B.unemployed.
3. C.fully employed.
4. D.technologically unemployed.

One benefit a country can derive from the extraction of crude oil is increase in

1. A.population.
2. B.employment.
3. C.money supply.
4. D.demand for imports.

Which of the following cannot be classified as a natural resource?

1. A.Iron rod
2. B.Wild life
3. C.Solar energy
4. D.Gold

The table below shows the composition of exports and imports of a hypothetical country. Use the information in the table to answer the questions that follow.
Exports | Amount ($) | Imports | Amount ($)
Crude oil | 120,000,000 | Rice and flour | 140,000,000
Groundnuts | 40,000,000 | Petroleum product | 80,000,000
Tourism | 45,000,000 | Vehicles and accessories | 50,000,000
Shipping & Insurance | 60,000,000 | Banking services | 60,000,000
Bauxite | 80,000,000 | Freight and insurance | 40,000,000
(a) Calculate the value of visible exports.
(b) Calculate the balance of trade for the country.
(c) List the items of invisible exports and imports.
(d) Calculate the current account balance of the country.
(e) Is the country developed or developing? Give one reason for your answer.

The cost and output schedule of a firm is shown in the table below.
Output (kg) | 0 | 15 | 35 | 60 | 85
Variable cost ($) | 0 | 30 | 55 | 75 | 90
Total cost ($) | 15 | 45 | 70 | 90 | 105
Total revenue ($) | 0 | 30 | 70 | 120 | 170
(a) Using the data in the table, at each level of output, calculate the firm's: (i) marginal revenue; (ii) marginal cost.
(b) At what output level did the firm: (i) break even; (ii) make the highest profit; (iii) attain equilibrium?
(c) Identify the market structure in which the firm operates.

(a) Define optimum population.
(b) In what three ways can rapid population growth slow down the rate of economic development?
(c) Describe any three measures that can be adopted to control rapid population growth.

(a) What are state-owned enterprises?
(b) State any three reasons for the establishment of state-owned enterprises.
(c) Highlight any four problems associated with state-owned enterprises.

(a) Differentiate between unemployment and underemployment.
(b) With one example each, explain the following: (i) seasonal unemployment; (ii) structural unemployment; (iii) frictional unemployment; (iv) cyclical unemployment.

(a) What is commodity money?
(b) Identify any three problems associated with trade by barter.
(c) Explain any three ways by which the advent of money has solved the problems of the barter system.

(a) What is a demand schedule?
(b) State the law of demand.
(c) Using appropriate examples, explain the following types of demand: (i) competitive demand; (ii) derived demand; (iii) joint demand; (iv) composite demand.

(a) What is a tax?
(b) Describe the following rates of taxation: (i) progressive tax; (ii) proportional tax; (iii) regressive tax.
(c) Explain the following principles of a good tax system: (i) equity; (ii) convenience; (iii) economy.