1995 Economics WAEC SSCE (School Candidates) May/June

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Economics 1 - Objective

1. Economics is a social science which studies how
   1. to redistribute income.
   2. human beings behave.
   3. the market price is fixed.
   4. scarce resources are allocated to satisfy human wants.
   5. wasteful spending is eliminated.
2. Scarcity in Economics means
   1. shortage of a commodity.
   2. unlimited demand for consumer goods.
   3. limited supply of goods and services.
   4. total absence of a commodity in the market.
   5. high cost of a commodity.
3. The decision on what to produce is a problem in
   1. all economic systems.
   2. a mixed economic system only.
   3. a democratic socialist economy only.
   4. a free enterprise system only.
   5. a planned economic system only.
4. The law of demand states that
   1. as price increases, quantity demanded remains constant.
   2. demand increases as price increases.
   3. as price falls, quantity demanded also falls.
   4. as price falls, quantity demanded increases.
   5. demand and supply remain constant whether price falls or increases.
5. Which of the following is an important limiting factor in the application of division of labour?
   1. Market size
   2. Availability of infrastructure
   3. Wage Rate
   4. Raw materials
   5. Availability of land
6. Which of the following factors does not encourage the location of industries?
   1. Nearness to the market
   2. Availability of infrastructural facilities
   3. Government influence in siting industries
   4. Political instability
   5. Abundance of cheap labour
7. All the underlisted factors directly affect the supply of a commodity except
   1. price.
   2. improved production method.
   3. access to capital.
   4. demand for the commodity.
   5. level of income.
8. Which of the following economic systems is in operation in Nigeria?
   1. Capitalist economy
   2. Socialist cum Marxist economy
   3. Socialist economy
   4. Capitalist and free economy
   5. Mixed economy
9. Giffen commodities are those commodities
   1. which give rise to a cobweb situation.
   2. for which demand increases as price increases.
   3. which have a low price elasticity of demand.
   4. which are in short supply.
   5. which have a high income elasticity of demand.
10. Effective demand in Economics means
    1. the desire for a commodity.
    2. a proposal to purchase a good on credit.
    3. the desire for a commodity or service backed by purchasing power.
    4. an irrevocable instruction to the seller to meet up the needs of the buyers.
    5. the propensity to consume goods produced by manufacturers.
11. Government can influence aggregate demand through all the following measures except
    1. reduction in personal income tax.
    2. retirement of Directors General in the Public Service.
    3. creation of employment opportunities.
    4. compulsory deductions from salaries of all categories of workers.
    5. upward revision of workers' fringe benefits.
12. The term production in Economics means
    1. the manufacturing of goods.
    2. the creation of utilities.
    3. giving birth to children.
    4. the distribution of goods and services.
    5. using labour in creating something.
13. Under the socialist economy, the decision on what to produce is determined by the
    1. producers.
    2. level of expected profit.
    3. price.
    4. government.
    5. preferences of consumers.
14. Credit creation by banks is limited by
    1. an increase in bank deposits.
    2. the establishment of specialised banks.
    3. the non-availability of collateral security.
    4. the use of cheques for all transactions of the banks.
    5. abolishing the reserve ratio.
15. Which of the following explains marginal cost?
    1. Overhead costs plus variable costs resulting from production
    2. The average cost of producing more units of the product
    3. The extra cost of producing more units of the product
    4. Overhead cost minus variable costs
    5. The addition to total cost resulting from the production of an additional unit
16. The effect of an increase in price on the demand for a commodity with elastic demand will be
    1. an increase in the demand for the commodity.
    2. a decrease in the demand for the commodity.
    3. a further increase in the price of the commodity.
    4. reduction in the number of distributors of the commodity.
    5. a general increase in the cost of production.
17. If AC = Average cost of production, FC = Fixed cost of production, VC = Variable cost of production, and TC = Total cost of production, then
    1. VC = ${\frac {TC}{FC}}$.
    2. VC = FC + AC.
    3. VC = TC - AC
    4. VC = TC - FC.
    5. VC = ${\frac {TC-FC}{VC}}$.
18. In perfect competition, the marginal cost curve intersects the average cost curve
    1. from below at its lowest point.
    2. from above at its lowest point.
    3. from below before the lowest point.
    4. at the zero point
    5. from below after the lowest point.
19. Which of the following does not require the use of information from census?
    1. Allocating central government revenue among states or regions
    2. Planning for development in the states or regions
    3. Demarcating constituencies for elections in the states or regions
    4. Providing adequate social amenities and services in the states or regions
    5. Controlling geographical mobility of labour among the states or regions
20. Which of the following is not a function of an insurance company?
    1. Mobilisation of funds through premiums collected
    2. Encouragement of savings habit through life assurances
    3. Collection of deposits from the public
    4. Granting of loans on long-term basis for investment
    5. Encouragement of investment by security of capital
21. Malthus observed in his theory that population was growing
    1. at a regular rate.
    2. in arithmetical progression
    3. in geometrical progression.
    4. in mathematical progression.
    5. in trigonometrical progression.
22. At optimum population level, a country has its
    1. maximum population.
    2. ageing population.
    3. highest birth rate.
    4. highest output per head.
    5. lowest death rate.
23. Which of the following does not give a characteristic of money?
    1. Durable
    2. Portable
    3. Divisible into small units
    4. Generally acceptable
    5. Medium of exchange
24. Which of the following constitute the major component of money supply in a developed economy?
    1. Demand deposits
    2. Paper money
    3. Bank drafts
    4. Coins
    5. Time deposits
25. A point along a consumer's indifference curve shows
    1. the different commodities he can consume.
    2. a combination of all commodities he is willing to buy.
    3. a combination of two commodities from which he derives the same satisfaction.
    4. the quantities of commodities demanded by him.
    5. the difference between quantity supplied and quantity demanded.
26. If a monopolist is attempting to maximize profit, which of the following should be attempt to do?
    1. Equate average cost to average revenue
    2. Equate marginal cost to marginal revenue
    3. Equate marginal cost to average revenue
    4. Fix price and output
    5. Equate price to total cost
27. The greatest foreign exchange earner for Nigeria before the advent of petroleum was
    1. mining.
    2. handicraft.
    3. agriculture
    4. manufacturing
    5. tourism
28. A budget is defined as a
    1. summary of expected expenditure by individuals and governments.
    2. summary of expected income.
    3. record of value of services rendered in a year.
    4. record of goods produced in a year
    5. summary of expected income and expenditure.
29. The real value of money is
    1. its face value
    2. what it can buy at a particular time.
    3. its rate of exchange with other currencies.
    4. its intrinsic worth.
    5. its rate of circulation.
30. A tax whose rate increase as income increases is
    1. an indirect tax.
    2. a progressive tax.
    3. a regressive tax.
    4. a direct tax
    5. a proportional tax
31. Which of the following best describes the multiplier?
    1. Product of income and expenditure
    2. Curves of saving and expenditure
    3. Ratio of change in income to the expenditure that brought it about
    4. Constant level of income
    5. Equality of marginal propensities to consume and save
32. Net National Product (NNP) is equal to the
    1. Gross Domestic Product (GDP) less depreciation
    2. Gross National Product (GNP) less depreciation.
    3. Gross Domestic Product (GDP) plus depreciation.
    4. Gross National Production (GNP) plus depreciation.
    5. Gross National Income plus Taxation
33. Terms of trade simply means the price
    1. ratio of import to export.
    2. ratio of export multiplied by import
    3. ratio of export to import.
    4. ratio of export multiplied by price ratio of import.
    5. of export minus price of import
34. Balance of trade can be defined as
    1. the value of imports in relation to the value of a country's exports.
    2. the price ratio of imports as against that of exports.
    3. equality in the total receipts and payments of a country in a year.
    4. percentage value of imports over percentage value of exports.
    5. prices of exports versus prices of imports
35. Which of the following is not a feature of a perfect market?
    1. Large number of buyers and sellers
    2. Homogeneity of products
    3. Preferential treatment
    4. Absence of transport cost
    5. Perfect knowledge of market situation
36. Which of the following is not a source of raising funds for a public limited liability company in West Africa?
    1. Bank loans
    2. Issue of shares
    3. Issue of debentures
    4. Ploughing back profits
    5. Sale of bonds
37. Which of the following is not an objective of the Indigenisation Policy in Nigeria? To
    1. make Nigerians dominate their economy.
    2. increase Nigeria participation in the economy.
    3. prevent foreign monopoly of the economy.
    4. eliminate foreign participation in the Nigerian economy.
    5. protect the national interest and security
38. Where was oil first discovered in commercial quantities in Nigeria?
    1. Oioibiri
    2. Warri
    3. Elesa Eleme
    4. Onisha
    5. Port Harcourt
39. Where is the Headquarters of the African Development Bank (ADB) located?
    1. Lome
    2. Adis Ababa
    3. Accra
    4. Lagos
    5. Abidjan
40. International trade takes place because of differences in
    1. production cost
    2. language.
    3. government policy.
    4. currency.
    5. international boundary

Economics 2 - Essay

Section A

Answer one question only from this section.

Table of Input and Output

Variable Units of labour	Fixed Factors (Hectares of Land)	Total Product (kg)	Average Product (kg)	Marginal Product (kg)
1	3	8	8	-
2	3	18	9	10
3	3	36	P	18
4	3	48	12	12
5	3	55	11	7
6	3	60	Q	5
7	3	60	8.6	S
8	3	56	7	T

1. Use the table to answer the following questions:
   1. Complete table by calculating the missing figures P, Q, R, S, T.
   2. Draw the Total Product (TP) and Marginal Product (MP) curve in one diagram. (No graph sheet is required).
   3. Explain the relationship between TP and MP.

SUPPLY AND DEMAND SCHEDULE

Price Per Unit (N)	Quantity Demanded Per Week	Quantity Supplied Per Week
5	500	60
6	400	150
7	300	300
8	250	400
9	150	500
10	50	600

2. Use the schedule to answer the following questions:
   1. At what price and quantity does the market attain equilibrium and why?
   2. At what prices does the market exhibit excess demand and by how many units?
   3. At what prices does the market exhibit excess supply and by how many units?
   4. At what price will the supplier be willing to sell most? What quantity will he be willing to sell at that price?

Section B

Answer three questions only from this section.

3. 1. What is meant by the supply of commodity?
   2. What are the probable factors that can bring about changes in the supply of beans?
4. Describe the effects of inflation on the economy of a country.
5. 1. What is a tax?
   2. Highlight the various tax systems.
6. Give five reasons why Government participates in business enterprises
7. 1. Define tariffs
   2. What are the reasons for imposing tariffs?
8. In what ways will the efficient functioning of the Economic Community of West African States (ECOWAS) hasten the economic growth of its member states?
9. Why are West African countries referred to as under-developed?
10. Identify the likely problems that can be encountered in the compilation of National Income Account in Nigeria.