2011 Economics WAEC SSCE (School Candidates) May/June

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Economics 1 - Objective

1. Human wants are
   1. limited
   2. scarce
   3. unlimited
   4. in grades
2. The difference between money cost and real cost of any item is that
   1. the real cost is the opportunity cost, while the money cost is the actual amount paid for buying the item
   2. the real cost is the opportunity cost while the money cost is the marginal cost
   3. money cost is the opportunity cost, while real cost is the actual cost
   4. money cost is always greater than real cost
3. The Production Possibility Curve (PPC) indicates that as more of one good is produced
   1. less of the other good is produced
   2. the same quantity of the other good is produced
   3. more of the other good is produced
   4. none of the other good is produced
4. An arrangement of data in rows and columns is referred to as a
   1. graph
   2. bar chart
   3. pie chart
   4. table
5. A normal demand curve slopes
   1. downward from left to right
   2. upward from right to left
   3. downwards from right to left
   4. upwards from left to right
6. The co-efficient of income elasticity of demand for inferior goods is
   1. positive
   2. equal to one
   3. less than one
   4. negative
7. A 20% rise in the price of Whisky leads to a 30% increase in quantity demanded of schnapps, the cross elasticity of demand is
   1. 3.0
   2. 2.5
   3. 2.3
   4. 1.5
8. Palm oil and palm kernel have
   1. competitive supply
   2. excess supply
   3. joint supply
   4. composite supply
9. A supply curve which ts vertical has elasticity co-efficient of
   1. 0
   2. 0.5
   3. 1.5
   4. 2
10. If the current price of an apple is twice that of last year, it implies that the value of money is
    1. stable
    2. failing
    3. rising
    4. getting stronger
11. Price fixed above the equilibrium is to
    1. protect agricultural producers.
    2. discourage agricultural producers.
    3. lower the price of agricultural produce
    4. favour consumers
12. A consumer purchasing a commodity x will maximize his satisfaction if
    1. Px=MUx
    2. Px=MUx
    3. Px>MUx
    4. Px<MUx
13. When total utility is constant it means marginal utitlity is
    1. increasing
    2. zero
    3. decreasing
    4. one
14. A rational consumer is one
    1. spends his income to maximize satisfaction
    2. s not influenced by advertisement
    3. behaves in a particular way all the time
    4. knows the prices of all goods and buys the cheapest
15. Which of the following is not true about land
    1. the supply is fixed
    2. land is mobile
    3. it is subject to diminishing returns
    4. land is heterogenous
16. The type of production that involves the tapping and harnessing of natural resources is
    1. primary production
    2. secondary production
    3. tertiary production
    4. industrial production
17. Which of the following does not change in the short run
    1. variable cost
    2. marginal cost
    3. total cost
    4. fixed cost
18. The resources used in production are called
    1. variable inputs
    2. factors of production
    3. capital for production
    4. fixed inputs
19. A firm will shut down in the long run if its earning is
    1. less than normal profit
    2. greater than normal profit
    3. equal to supernormal profit
    4. less than supernormal profit
20. A market structure where profit is maximized when marginal revenue, marginal cost and price are equal is known as
    1. perfect competition
    2. monopoly
    3. Oligopoly
    4. imperfect competition
21. In which of the following markets does a firm have the power to make supernormal profits both in short run and long run
    1. monopoly
    2. duopoly
    3. Oligopoly
    4. monopsony
22. If there are no barriers to entering a market, it means that
    1. anyone can become a buyer or seller
    2. unwanted goods can always enter the market
    3. the market becomes a dumping ground
    4. the goods are not inspected
23. A firms main aim is to
    1. survive in business
    2. maximize profits
    3. increase its market share
    4. satisfy the ambitions of its manager
24. One reason for the elimination of middlemen is that they
    1. cause increase in price
    2. help in price stability
    3. grade and blend goods
    4. are too many
25. The increase in population growth of big cities is referred to as
    1. settlement
    2. migration
    3. industrialization
    4. urbanization
26. Frictional unemployment can be reduced by
    1. encouraging the use of restraining scheme
    2. removing barrier to labour mobility
    3. restricting the introduction of new technology
    4. lowering the level of wages paid to young people
27. If the labour force of a country is 2.5 million and 2 million are employed, what is the unemployment rate?
    1. 0.2%
    2. 20%
    3. 200%
    4. 250%
28. The grouping of population according to the economic activities people engage in is
    1. age distribution
    2. geographical distribution
    3. geographical distribution
    4. occupational distribution
29. Natural growth rate of population can be defined as the
    1. difference between birth rate and death rate
    2. number of births in a year
    3. increase in the population growths in a year
    4. difference between the total population and the death rate
30. Which of the following is not a consequence of increased unemployment
    1. a fall in the tax revenue for the government
    2. a reduction in trade unions influence
    3. a fall in the rate
    4. an increase in the labour force
31. The following are features of substance agriculture except
    1. little capital
    2. processing of raw materials
    3. small allotments of land
    4. use of crude implements
32. Which of the following is not true of small companies? They
    1. cannot benefit from economies of scale.
    2. are a good source of small jobs
    3. can satisfy demand in specialist markets
    4. have a good record of technical innovation
33. The effect of privatization on the industrial sector of a country is that it
    1. ensures efficiency
    2. discourages efficiency
    3. leads to decrease in output
    4. leads to liquidation
34. The production strategy used in an over populated country is
    1. import substitution
    2. capital intensive
    3. labour intensive
    4. first come first employed
35. National income is used to measure
    1. a country's population size
    2. a country’s economic growth
    3. the human level of human development
    4. The flow of imports to a country
36. . A tax is regressive if the
    1. rate
    2. tax is constant at all income levels
    3. rate of tax increases as income increases
    4. tax is direct rather than indirect
37. When a country’s net income from abroad is added to its total output, the result is
    1. gross domestic product
    2. net national product.
    3. gross national product
    4. net domestic product.
38. A fall in national output will necessitate
    1. a rise in expenditure on imports
    2. a rise in the level of savings
    3. an increase in consumption expenditure
    4. a rise in the standard of living
39. The demand for money to take advantage of changes in bond prices is the
    1. unforeseen motive
    2. transaction motive
    3. speculative motive
    4. precautionary motive
40. cost push inflation is caused by a
    1. rise in the cost of production
    2. decrease in the transportation cost
    3. rise in the demand for goods
    4. decrease in the cost of production
41. . Deposits held in a commercial bank are part of
    1. money supply
    2. transfer payment
    3. ordinary shares
    4. treasury bills
42. One profitable form of business undertaken by the commercial banks is
    1. the issuing of cheques
    2. the payment of standing order
    3. lending money to harrowers
    4. accepting cheques from customers.
43. When governments want to discourage, consumption, they tax goods whose demand is
    1. price inelastic
    2. abnormal in nature
    3. price elastic
    4. normal in nature
44. Arise in government expenditure can lead to
    1. higher inflation
    2. higher unemployment
    3. lower profit for industries
    4. lower importation of raw materials by industries
45. Tariff is used to protect domestic industries by making foreign goods relatively
    1. cheaper in the domestic market
    2. more expensive in the domestic market.
    3. more expensive in the international market
    4. cheaper in the international market.
46. The process of increasing the real per capita income and effecting changes !n various sectors of the economy is known as
    1. economic acceleration
    2. economic development.
    3. economic integration
    4. economic growth
47. Development plans in the West Africa tend to deviate from their targets mainly due to
    1. political instability
    2. lack of manpower
    3. high population growth rate
    4. low level of production
48. The balance of trade is
    1. an annual statement showing transactions within a country
    2. the relationship between a country's visible exports and imports.
    3. the relationship between a country s receipt from visible and invisible trade.
    4. an account that shows a country's payments to other countries
49. As one of the instruments of commercial policy, quota is
    1. a qualitative restriction on imports
    2. a normal restriction on imports.
    3. a quantitative restriction on imports.
    4. an outright prohibition of imports
50. The full meaning of the IMF is
    1. International Military Force
    2. International Monetary Fund
    3. International Mortgage Fund
    4. International Monetary Financing

Economics 2 - Essay

Section A

Answer one question only from this section.

1. The supply situation for rice in country X over a period is as shown in the table below. Use the information in the table to answer the questions that follow:

Period	Price$	Quantity supplied (bags)
December 2004	30	100
January 2007	40	150
April 2009	50	160

1. 1. Calculate the co-efficient of price elasticity of supply for rice between December 2004 and January 2007.
   2. Is the supply of rice elastic? Give a reason for your answer.
   3. State any three reasons which may cause an increase in the supply of rice.
2. 1. The following are the loans granted by a commercial bank to different categories of individuals. Use the information to answer the questions that follow: Bankers $8,000, Farmers $8,000, Miners $7,000, Retailers $5,000, Tailors $4,000, Teachers $6,000, Drivers $4,000, Fishermen $3 000. (a) Arrange the information in the form of a table grouping the individuals into: (i) Primary sector; (ii) Secondary sector; (iii) Tertiary sector.
   2. Express the loan to each sector of a ratio of the total loan granted (c) Present the total loans granted to the sectors in a simple bar chart. (Use of graph sheet is essential)

Section B

Answer four questions only from this section.

3. 1. What is centrally planned economy?
   2. Outline any four features of a capitalist economy.
4. 1. Define mobility of labour.
   2. Describe any four factors influencing the supply of labour.
5. 1. What is international trade?
   2. Explain any four advantages of international trade.
6. 1. Outline any five reasons why small scale firms are common in West Africa.
7. 1. Explain with examples the terms competitive demand and complementary demand.
   2. With the aid of diagrams, analyse the effect of a decrease in the import duty on cars on the price and consumption of petrol. transition theory?
8. 1. What is the demographic transition theory?
   2. Explain the three stages of the theory
9. 1. Differentiate between shares and debentures.
   2. Identify any four problems encountered by firms in raising capital
10. 1. Describe the following types of co-operative societies;
       1. consumers: co-operatives;
       2. producers’ co-operatives;
       3. thrift and credit co-operatives.
    2. Highlight any two problems faced by co-operative societies in West Africa.
11. 1. What is economic development?
    2. Outline any five features of a development bank
12. 1. Outline any three objectives of the African Development Bank.
    2. State any two achievements of the African Development bank