2019 Economics WAEC SSCE (School Candidates) May/June

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Economics 1 - Objective

1. The fundamental economic problem in every society is
   1. the large number of the unemployed
   2. inadequate supply of money
   3. corruption and mismanagement
   4. limited supply of productive resources
2. A point X inside a production possibility curve indicates that
   1. resources are fully utilized
   2. the country is poor
   3. some resources are idle
   4. resources are not available
3. The major employer of labour in developing countries is the
   1. tertiary sector
   2. secondary sector
   3. primary sector
   4. industrial sector
4. The desire for profit is a major feature of
   1. traditional economy
   2. mixed economy
   3. market economy
   4. command economy
5. The wages of a group of workers in dollars are stated below: 40, 30, 70, 20, 60, 10, 10, 80, 30 and 10. What is the mean wage?
   1. $35
   2. $36
   3. $37
   4. $38
6. If the coefficient of price elasticity of demand of a product is zero, then its demand curve will be
   1. parallel to the quantity axis
   2. parallel to the price axis
   3. negatively sloped
   4. positively sloped
7. If the demand function is Qd = — 0.5p + 20, calculate the quantity demanded when price is $ 15.00
   1. -$ 27.50
   2. -$ 12.50
   3. $ 12.50
   4. $ 27.50
8. The interest rate to control the money supply is a
   1. control policy
   2. monetary policy
   3. developmental policy
   4. fiscal policy
9. If less of a good is bought as one’s in- come increases, such good is
   1. a normal good
   2. a luxury
   3. a necessity
   4. an inferior good
10. The demand for coffee and tea is
    1. joint
    2. competitive
    3. composite
    4. derived
11. What effect will an increase in the supply of fish have on the meat market?
    1. a fall in equilibrium price and quantity
    2. An increase in equilibrium price and quantity
    3. an increase in equilibrium price and quantity
    4. Both equilibrium price and quantity remain unchanged
12. Which of the following factors is not a condition for a charge in supply of a commodity?
    1. improved technology
    2. cost of production
    3. the price of the commodity
    4. Government tax policies
13. Supply of agricultural product is likely to be elastic in the
    1. intermediate period
    2. long run
    3. market period
    4. short-run
14. Two commodities X and Y are in joint supply when
    1. X is a by product of Y
    2. X and Y are produced by the same firm
    3. increase in quantity of X leads to decrease in Y
    4. X and Y cannot be produced in the same process

Table 1

Units of quantity consumed	Total Utility	Marginal Utility
0	_	_
1	10	10
2	15	5
3	17	2
4	18	1
5	18	0

15. Table 1 above illustrates the law of
    1. diminishing returns
    2. diminishing marginal productivity
    3. diminishing marginal utility
    4. variable proportion
16. When the price of a good is above the equilibrium, there will be
    1. a shortage
    2. a surplus
    3. unemployment
    4. inflation
17. What happens when a minimum price is imposed in a market?
    1. shortage occurs
    2. surplus occurs
    3. the market maintains its equilibrium
    4. Many firms will close down
18. When an increase in inputs leads to more than a proportionate increase in output, there is
    1. decreasing returns to scale
    2. increase in marginal product
    3. increasing returns to scale
    4. constant returns to scale
19. The short-run in production is the time period when
    1. techniques of production can easily be changed
    2. all factors of production are variable
    3. at least a factor is fixed while others are variable
    4. variable factors cannot be changed
Table II shows the short-run cost of a firm. Use it to answer question 20.

Table II

Quantity (kg)	Fixed costs($)	Variable cost($)	Total cost ($)	Marginal cost($)	Average cost($)
1	750	200	950	_	950
2	750	560	1310	360	655
3	750	900	P	Q	550

20. Calculate the value of Q
    1. $350
    2. $340
    3. $360
    4. $370
21. A cost of production that is positively related to output is the
    1. total fixed cost
    2. average fixed cost
    3. variable cost
    4. social cost
22. In perfect competition, the average revenue curve of a firm
    1. below the marginal revenue curve
    2. downward sloping
    3. the marginal revenue curve
    4. convex to the origin
23. Which of the following means of funding a business is a very reliable and cheap?
    1. Bank loans
    2. Loans from friends
    3. Plough back profits
    4. Debentures
24. Government in most cases influences location of a firm to
    1. discourage private investors
    2. ensure equitable distribution
    3. reduce cost of production
    4. make the firms enjoy economies of scale
25. Middlemen are made up of
    1. manufacturers, wholesalers and consumer
    2. manufacturers, wholesalers and retailers
    3. wholesalers, retailers and hawkers
    4. wholesalers, retailers and consumers
26. The Malthusian theory of population was proved wrong because
    1. the practice of subsistence farming was encouraged
    2. developing countries adopted birth control method
    3. new lands and new methods of production were discovered
    4. Malthus’ view was seen as an exaggeration
27. Human development can be improved if
    1. banks give more loans to businessmen
    2. large family sizes are encouraged
    3. general education and training is encouraged.
    4. It is handled by the private sector only.
28. Agricultural productivity may be increased if
    1. educational institutions are established in rural areas
    2. commercial banks are established in rural areas
    3. more infrastructural facilities are provided in rural areas
    4. intensive method of agriculture is encouraged
29. A country is described as industrialized if
    1. the contributions of industries to national income is high
    2. traditional and modern sectors coexist
    3. the country adopts import promotion strategy
    4. primary industries dominate the economy
30. Which of the following is a major advantage of establishing tomato-processing factory in a country?
    1. local consumption will decrease
    2. more unskilled labour will be employed
    3. foreign exchange will be conserved
    4. it will attract more tourists
31. The total value of goods and services are within the borders of a country is
    1. net national product
    2. net domestic product
    3. gross domestic product
    4. gross national product
32. Which of the following items is not considered as a transfer payment?
    1. pension pay
    2. Government subsidy
    3. students grants
    4. Doctor’s salary
33. Which of the following factors will not underestimate the national income?
    1. rapid decrease in prices
    2. increased subsistence production
    3. practice of specialization of labour
    4. increase in value of services not paid for
34. Which of the following is true of the value of money? It
    1. is positively related to the price level
    2. depends on the value people attach to it
    3. is determined by the government
    4. is inversely related to the price level
35. The motive for holding money to meet unforeseen events is termed
    1. precautionary demand
    2. transactions demand
    3. liquidity demand
    4. speculative demand
36. An increase in the prices of factor inputs may result in
    1. demand-pull inflation
    2. stagflation
    3. open inflation
    4. cost-push inflation
37. Insurance companies are similar to commercial banks in that they
    1. compensate their customers for losses
    2. act as lender of last resort
    3. help in maintaining monetary Stability in a nation
    4. help in mobilizing savings for investment
38. What happens when the central bank creases the bank rate?
    1. amount of borrowing increases
    2. amount of borrowing decreases
    3. supply of money money increases
    4. commercial banks are not affected
39. Citizens are protected from government's arbitrariness in taxation by the canon of
    1. elasticity
    2. flexibility
    3. economy
    4. certainty
40. Period of unemployment and falling prices, governments should adopt a
    1. zero-based budget
    2. budget deficit
    3. balanced budget
    4. surplus budget
41. In most developing countries, a large percentage of the labour force is engaged in
    1. trading
    2. mining
    3. agriculture
    4. manufacturing
42. In most underdeveloped countries, development plans do not achieve their objective due to
    1. poor coordination between local and national governments
    2. exportation of more primary products
    3. lack of educational institutions in those countries
    4. Urban-rural migration of citizens
43. Balance of trade involves exchange of
    1. goods only
    2. services only
    3. goods and services
    4. good and capital
44. An improvement in a country’s term of trade means that the
    1. nation can export more services
    2. nation’s receipts on export is equal to payments on imports
    3. value of her imports is lower than her exports
    4. visible exports is less than visible imports
45. Devaluation of currency may not correct a balance of payments deficit if the demand for export is
    1. perfectly inelastic
    2. perfectly elastic
    3. fairly elastic
    4. unitary elastic
46. One measure for financing a country’s balance of payments deficit is thorough
    1. export diversification
    2. import substitution
    3. short term borrowing from IMF
    4. internal borrowing from commercial banks
47. The major achievement of the Economic Community of West African States (ECOWAS) is that it has
    1. made capital more mobile
    2. made possible the use of common currency
    3. increased members allegiance to former colonial masters
    4. widened the market for goods produced
48. Which of the following institutions is concerned with expanding developing countries’ commodity trade?
    1. World Trade Organization (WTO)
    2. United Nations Conference on Trade and Development (UNCTAD)
    3. Economic Commission for Africa (ECA)
    4. African Development Bank (AFDB)
49. Exploitation of forest resources becomes a major problem where
    1. communities fight over ownership
    2. they are not renewed
    3. they are neglected
    4. the supply is fixed in the long-run
50. Natural resources that are renewable are found in the
    1. mining sector
    2. traditional sector
    3. agricultural sector
    4. secondary sector

Economics 2 - Essay

Section A

Answer one question only from this section.

1. The diagram below represents the equilibrium position of a firm in a perfectly competitive industry. Study it carefully and answer the questions that follow cost/price

   

   1. 1. At what level of output and prices is the firm in equilibrium?
      2. Calculate the firm’s profit in equilibrium
      3. What type of profits is it? Explain your answer.
   2. 1. Why is the average revenue (AR) function horizontal?
   3. State any two ways in which marginal cost (MC) and average total cost (ATC) are related.
2. The extract from a country’s balance of payments account is shown below.

   Caption text

   ITEM	IMPORT ($ million )	EXPORT ($ million )
   Agricultural products	_	200
   Mineral products	_	300
   Consumer goods	250	_
   Capital goods	400	_
   Insurance	50	25
   Banking	75	30
   Transportation	85	25
   Loans	150	60

   Using the table above, calculate the
   1. balance of trade
   2. invisible trade balance
   3. balance on current account.

Answer three questions only from this section.

3. 1. 1. Define distribution of goods
      2. illustrate the normal chain or distribution of goods
   2. Describe a consumer’s cooperative society
   3. Outline any four roles performed by a consumers’ cooperative society
4. 1. What is an industry?
   2. Explain the following:
      1. Division of labour
      2. Economies of scale
   3. Outline any four internal economies of scale
5. 1. Define a joint venture
   2. Identify any three merits of a private company over a partnership
   3. State any three sources of finance to a public enterprise
6. 1. Distinguish between the following pairs of concept:
      1. elastic demand and inelastic demand
      2. income elasticity of demand and cross elasticity of demand
   2. Using diagrams, explain how an increase in price will affect the total revenue of a producer if demand for his product is:
      1. Price elastic
      2. price inelastic
7. 1. Distinguish between:
      1. a growing population and a declining population
      2. overpopulation and underpopulation
   2. Explain any four disadvantages of a rapidly growing population in an economy.
8. 1. What is public debt?
   2. Outline any three reasons why countries borrow
   3. Highlight any three effects of a huge national debt on the economy of a country.