1988 Economics WAEC SSCE (School Candidates) May/June

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Economics 1 - Objective

1. "Economics is a science which studies human behaviour as a relationship between ends and scarce means which have alternative uses." Ends here refers to
   1. resources.
   2. wants.
   3. choice
   4. output
   5. Factors.
2. A review of occupational distribution of population from time to time helps us to know the
   1. rate at which the population grows.
   2. number of people that make up the labour force.
   3. efficiency of the working population.
   4. industries which are becoming less important.
   5. number of people that are not employed.
3. The price of a commodity is determined by the
   1. supplier.
   2. consumer.
   3. quantity of goods demanded
   4. quantity of goods supplied.
   5. interaction of demand and supply.
4. In which of the following economic system is the consumer referred to as. "The king"?
   1. Planned economy.
   2. Mixed economy.
   3. Traditional economy
   4. Free Market economy.
   5. Socialist economy.
5. Into which of these organisations would you classify the International Monetary Fund (IMF)?
   1. Political Organisation.
   2. Trade Organisations.
   3. Financial Organisation.
   4. Social Organisation
   5. Commercial Organisation.
6. A normal demand curve
   1. is concave to the point of origin
   2. is convex to the point of origin.
   3. is parallel to X axis.
   4. is parallel to Y axis.
   5. slopes upwards from left to right.
7. A demand schedule is
   1. a table containing the price of goods.
   2. a table showing the relationship between price and quantity demanded of a commodity.
   3. a table showing the consumer demand in order of importance
   4. the quantity of goods the consumer is prepared to buy.
   5. the market demand.
8. P = Population , GNP = Gross National product, GDP = Gross Domestic product, NI = National Income. From the above, the formula for calculating Real per Capital income is
   1. NI/P
   2. GDP/P
   3. P/GDP
   4. GNP/P
   5. P/GNP
9. Age Distribution Table:

   10 - 15	16 - 35	36 - 60	61 and above
   10,000	3,000	5,000	2,000

   The above table shows the age distribution of a town in Nigeria. What is the dependency ratio of the town?

   1. 10:3
   2. 2:1
   3. 3: 2
   4. 4:3
   5. 5:2
10. The equilibrium position of a firm is attained
    1. when MC = AR
    2. when MC = P
    3. when MC= MR.
    4. when AC = AR.
    5. when AR= MR
11. Which of the following is not an advantage of price control?
    1. Control of inflation
    2. Distortion of price mechanism
    3. Prevention of exploitation
    4. Control of producer's profit
    5. Helping low income earners.
12. Which of these factors does not cause a change in demand?
    1. Income
    2. Taste and fashion.
    3. Population
    4. Price of other commodities.
    5. Price of the commodity concerned.
13. Price control can be defined as the fixing by government or maximum of minimum prices of
    1. luxury goods
    2. inferior goods.
    3. imported capital goods.
    4. certain selected goods
    5. goods consumed by low income earners.
14. When the price of commodity A. increases, the demand for commodity B. decreases, then A and B are
    1. close substitutes.
    2. complementary goods.
    3. supplementary goods.
    4. given goods.
    5. luxurious goods.
15. When the demand for a commodity is inelastic, total revenue will fall if
    1. price is increased
    2. price is reduced
    3. price remains constant.
    4. price is not given
    5. the commodity is a luxury.
16. In any economic system, which of the following is not an economic problem?
    1. What goods and services to produce.
    2. For whom to produce goods or services.
    3. What techniques of production to be adopted.
    4. Equal distribution of the goods and services.
    5. How to ensure that the economy grows over time.
17. The major currency used for granting credits to member countries of the International Monetary Fund (I.M.F) is the
    1. US dollar.
    2. Canadian dollar
    3. Pound Sterling.
    4. Deutschmark.
    5. Belgian franc.
18. The two largest producers of crude oil in Nigeria are:
    1. Borno and Ondo States.
    2. Oyo and Bendel States.
    3. Kwara and Benue States.
    4. Rivers and Bendel States
    5. Niger and Rivers States.
19. If a producer sells 1 kg of rice for N2.00 and his marginal product is 100 kg, what is the highest wage he can pay the marginal labourer?
    1. N20.00
    2. N30.00
    3. N50.00
    4. N100.00
    5. N200.00
20. Nigeria indigenization decree was promulgated in order to
    1. allow indigenous to have full participation in the economic activities of the country
    2. drive away foreigners.
    3. give equal chances to indigenous and foreigners in making economic decision in the country.
    4. give industrial training to indigenous.
    5. indigenous expose to the economic activities of the country.
21. An economic system in which most capital goods are owned by individuals and private firms is known as
    1. Mixed economy
    2. Planned economy
    3. Capitalist economy.
    4. Traditional economy.
    5. Civilized economy.
22. Which of the following is not a feature of the Sole proprietorship?
    1. the Sole Proprietor provides the capital to start the business.
    2. the Sole Proprietor is the boss of his business.
    3. there is unlimited liability.
    4. continuity is doubtful at the death of the proprietor.
    5. decision can be taken only by 10 people.
23. The International Bank for Reconstruction and Development ( I. B. R. D. ) is important to the developing nations because it
    1. gives loans to members for legal proceedings.
    2. offers grants and aids for defence.
    3. enhances financial relationship among countries.
    4. offers soft loans for educational and health services.
    5. offers grants and aids to finance private projects.
24. Which of these best explains the Malthusian theory of population?
    1. Increase in population causes hunger and death.
    2. The population increases faster than food supply.
    3. The population grows at arithmetic progression while food production grows at geometric progression.
    4. People could be sent to 'No man's land' when the population increases.
    5. People should produce as many children as they could because passion cannot be controlled.
25. Which of the following is the most liquid asset to a commercial bank?
    1. Money at call and short notice.
    2. Treasury Bills.
    3. Commercial Bills.
    4. Stocks and Shares.
    5. Cash.
26. Which of the following statements is true about terms of trade?
    1. Terms of trade shows the difference between the value of exports and imports.
    2. Terms of trade indicates the rate at which the exports exchange for imports.
    3. It is a ratio of the price index of exports to imports.
    4. It is usually expressed as a percentage.
    5. A rise in the price of exports relative to imports is an improvement.
27. Which of these does not relate to the law of comparative advantage?
    1. The law of comparative advantage was propounded by David Ricardo.
    2. The law stresses the importance of relative efficiency.
    3. In order to specialize a country must have absolute advantage.
    4. The law is based on opportunity cost principle.
    5. The principle if followed, should increase total world output.
28. A condition which adversely affects expansion of production is
    1. effective management.
    2. limited size of the market.
    3. availability of funds
    4. increased profit prospects.
    5. increasing returns to scale.
29. International trade and domestic trade are similar in all aspect except that
    1. transportation by land, water and air is involved.
    2. goods are exchanged.
    3. services are exchanged.
    4. the same currency is used as medium of exchange.
    5. specialisation and increased consumption is encouraged.
30. The drawer of a cheque is the
    1. person who is to be paid the sum of money as written on the cheque.
    2. person who takes the cheque to the bank.
    3. bank on which the cheque is drawn.
    4. person who writes out the cheque.
    5. bank official who certifies the payment.
31. Which of the following is not an item of capital expenditure?
    1. Building of roads and bridges.
    2. Supply of electricity.
    3. Building of Dams.
    4. Building of Harbours.
    5. Payment of interest on loans.
32. Which of the following roles is being played by the Organisation of Petroleum Exporting Countries (OPEC) with regards to Nigeria's crude oil?
    1. Exploiting
    2. Exploring.
    3. Refining.
    4. Marketing.
    5. Exporting.
33. The coefficient of price elasticity of demand is zero when demand is
    1. fairly elastic.
    2. perfectly inelastic.
    3. fairly inelastic.
    4. unitary elastic.
    5. perfectly elastic.
34. External economies occur when
    1. industries are scattered all around.
    2. a firm decides to expand.
    3. industries are producing below capacity.
    4. firms comprising an industry are concentrated in one area.
    5. a firm is located near raw materials.
35. When the demand for a commodity is inelastic, who bears greater burden of the indirect tax?
    1. The producer
    2. The government.
    3. The retailer
    4. The consumer.
    5. The wholesaler.
36. Which of the following crops can be referred to as Nigeria's current export crops
    1. Rubber, Groundnuts, Beniseed, Cotton.
    2. Sheabutter, Sorghum, Onions.
    3. Rubber, Cocoa, Coffee, Palm Kernel.
    4. Palm oil, palm Kernel, Sugarcane.
    5. Soya beans , Rice, Groundnut, Cashew nut.
37. The imposition of high income tax by government to cut down demand is known as
    1. monetary policy.
    2. budgetary policy.
    3. fiscal policy.
    4. internal policy.
    5. development policy.
38. Which of these factors does not affect revenue allocation in Nigeria?
    1. Needs of an area .
    2. Size of the population of an area.
    3. Number of industries and land area.
    4. Revenue derivable from an area.
    5. Development needs of the country.
39. The term marginal propensity to consume can best be explained as the
    1. desire to spend more income on consumption
    2. change in consumption as percentage of the change in income.
    3. average income regularly spent on consumption.
    4. total expenditure on consumption.
    5. inclination to spend only a little on consumption.
40. Subsistence farming means producing food
    1. mainly for the need of our immediate and extended family.
    2. crops for sale mainly.
    3. crops mainly for export.
    4. to feed the community around.
    5. in order to satisfy the government directives.

Economics 2 - Essay

Section A

Answer one question only from this section.

1. Given the figures below:
   Price of commodity A in January = N5.00
   Price of commodity A in February = N7.00
   Quantity of A bought in January = 20 kg
   Quantity of A bought in February = 16 kg
   1. Calculate
      1. Percentage change in quantity bought (%).
      2. Percentage change in price of A (%).
      3. Coefficient of price elasticity of demand (e).
   2. From your answer:
      1. is the demand elastic or inelastic?
      2. How do you know this?
2. From the table below, answer the following questions:
   

   Output of beans (kg)	Total Revenue (N)	Marginal Revenue (N)	Total Cost (N)	Marginal Cost (N)
   10	150	-	250	-
   20	200	5	300	5
   30	350	15	430	13
   40	450	F	500	7
   50	550	5	550	M
   60	600	5	580	3
   70	630	X	700	12

   1. Find the values of F, M and X.
   2. 1. What would be the profit-maximising output of this firm?
      2. If this firm were operating under perfect competition, what would be the price of its product?

Section B

Answer three questions only from this section.

3. Explain the uses of national income figures.
4. 1. Briefly outline the views of Thomas Malthus about population.
   2. How valid are such views about the Nigerian situation today?
6. 1. What is demand-pull inflation?
   2. Why is price control not suitable in checking this type of inflation?
7. What has the government done to encourage industrialization in Nigeria?
8. Write short notes on
   1. Liquidity Ratio.
   2. Fixed Deposits.
   3. Money Market.
9. The bulk of West African foreign trade is directed away from Africa to Europe and America. What are the reasons for this?
10. Discuss the important role played by agriculture in the economy of your country.
11. 1. What are the objectives of the Organisation of Petroleum Exporting Countries (OPEC)?
    2. What are the problems of the OPEC?
    3. What remedies have been adopted to curtail them?