2021 Economics WAEC SSCE (School Candidates) May/June

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Economics 1 - Objective

The study of economics is important to every society because it
1. enables individuals to satisfy all their wants.
2. help in the utilization of scarce resources.
3. helps producers to know what to produce.
4. restores equilibrium between producers and consumers.
A consumer with S10 needs a dress, a pair of shoes, a handbag and jewelry costing $20, $10, $7 and $3 respectively. The opportunity cost of buying the pair of shoes is the
1. dress.
2. jewelry.
3. handbag and jewelry.
4. dress and jewelry.
The distinguishing function of an entrepreneur is
1. planning.
2. control.
3. risk-bearing.
4. management.
When a commodity market operates without governmental interference, commodities are distributed through
1. government distribution agencies.
2. the operation of price mechanics.
3. a central planning committee .
4. retailers only.
One way of obtaining the medium of a given data is to
1. sum the value and divide by the number of items
2. arrange the data in ascending order and subtract each item from the mean.
3. arrange the data in descending order and add each item to the least
4. arrange the data in either ascending or descending order and find what item divides the set in two equal parts.
An increase in rice harvest, all things being equal, may cause
1. price to increase substantially.
2. price to fall substantially.
3. demand to fall substantially.
4. farmer's incomes to be more than doubled
The demand for wood and labour is an example of A
1. effective demand.
2. complementary demand.
3. derived demand.
4. competitive demand
What will be the reaction of consumers in a market if there is a fall in the price of the substitute of commodity X ?
1. Price of commodity X will increase
2. Demand for the substitute of commodity X will decrease
3. Demand for commodity X will decrease
4. Supply of both commodity X and its substitute will increase
An increase in market supply is caused by the following factors except
1. an improvement in innovation and technology.
2. an increase in the price of the commodity.
3. a reduction in the cost of raw materials.
4. a favorable weather condition.
The coefficient of price elasticity of supply of land is usually
1. one.
2. greater than one.
3. zero.
4. lesser than one.
The price of soap rose from $10 to $20, causing a trader to increase her supply from 50 to 120 boxes per week. This makes supply:
1. Unitary elastic.
2. Perfectly elastic.
3. Fairly elastic.
4. Inelastic.
A leftward shift in the supply curve for a commodity indicates
1. an increase in quantity supplied.
2. a decrease in supply.
3. a reduction in quantity supplied.
4. an increase in supply.
Market supply may increase if there is an increase in the
1. price of the product.
2. prices of the factors of production.
3. tax paid on raw materials
4. subsidies on raw materials.
Governments can increase farmers incomes by
1. fixing maximum prices.
2. fixing minimum prices.
3. encouraging them to produce surplus output.
4. increasing taxes on inputs.
When market supply increases, the equilibrium price
1. rises and quantity falls.
2. falls and quantity rises.
3. and quantity increases.
4. and quantity fall.
The supply of mangoes is represented as P = 0.30, where P is the price (S) and Q is the quantity. What is I when Q is 50?
1. $1.50
2. $15.00
3. $150.03
4. $166.67
The output of an extra unit of an input is referred to as
1. output of the input.
2. marginal product of the input.
3. average product of the input.
4. utility of the input employed.

The law of diminishing returns is applicable to the

fixed inputs of production.
variable factors of production.
plants and machinery of the firm.

equipment and other capital.

A firm incurred the following costs in production. Use the information in the table to answer questions 19 and 20.
Outputs (bags of rice)	0	10	20	30	40	50	60
Total cost ($)	100	200	300	380	440	520	600

The fixed cost of production is
1. $ 100
2. $ 200
3. $ 300
4. $ 600
The average cost of producing 40 bags of rice is
1. $ 10
2. $ 11
3. $ 60
4. $ 80
The relationship between the Marginal Revenue (MR) and the Average Revenue (AR) of a monopolist is that the marginal revenue curve
1. is above the average revenue curve.
2. slopes down to the right and is below the AR curve.
3. and the AR curve are downward sloping and are identical.
4. is vertical while the average revenue curve is horizontal.
A major source of finance to the railway Corporation in West African countries is
1. sales of shares.
2. government subvention.
3. trade credit.
4. surplus.
Separation of ownership of resources and their control is mostly found in a
1. sole proprietorship.
2. partnership.
3. joint stock company.
4. consumer co-operative.
By-passing the middlemen in the chain of distribution can lead to
1. a problem of unemployment of labor.
2. the creation of artificial scarcity.
3. high prices of goods and services.
4. an increase in government tax revenue.
Two factors which can improve the efficiency of labor are
1. population size and age of retirement.
2. school leaving age and number of disabled workers.
3. work environment and health status of workers.
4. school leaving age and number of part-time workers.
What is the percentage of the working population?
1. 75%
2. 60%
3. 45%
4. 15%
What is the dependency ratio ?
1. 2:3
2. 3:2
3. 1:2
4. 6:1
The supply of land for agricultural purpose can be increased through
1. the introduction of mechanized farming.
2. reclamation and irrigation.
3. increase in prices of land.
4. conversion of building sites to farmlands.
Non-economic factors that influence the location of firms include
1. the existence of required materials for production.
2. availability of population of buyers.
3. adequate supply of power, good road and rail network.
4. the activities of politicians in deciding location of firms.
Which of the following is not an argument for the policy of privatization in West Africa?
1. to make businesses more profitable.
2. Government is able to participate and control the operation of the privatized businesses
3. Members of the public are able to acquire shares
4. It encourages the inflow of capital and expertise from local and foreign sources
What is the country’s Gross National Product (GNP)?
1. $3,050.
2. $2,680.
3. $2,350.
4. $2,100.
What is the country’s Net National Product (NNP) at factor cost?
1. $3,050.
2. $2,680.
3. $2,230.
4. $2,220.
The standard of living in two countries can be compared using the
1. the number of industries in each countries.
2. size of their arms and ammunitions.
3. size of their national incomes only.
4. gross national product per head.
Government can curb inflation by
1. encouraging banks to lend for any purpose.
2. increasing her own expenditure.
3. buying treasury bills in the open market.
4. selling securities in the open market.
Functions of money does not include
1. store of value.
2. medium of exchange.
3. standard of deferred payment.
4. general acceptability.
Demand-pull inflation can be as a result of
1. increase in the cost of production.
2. excessive supply of foodstuff.
3. deficit financing by the government.
4. increase in import duties.
An increase in cash ratio by the central bank will
1. increase the supply of money.
2. increase banks’ lending.
3. encourage borrowing.
4. reduce the supply of money.
When a government cuts down her expenditure to reduce inflation, she has embarked on
1. a restrictive fiscal policy.
2. an expansionary monetary policy.
3. physical policy.
4. implementing budget deficit.
In order to enable the government of a country to increase its tax revenue. it Will be advisable for it to increase taxes on
1. textile materials with elastic demand.
2. alcoholic beverages with inelastic demand.
3. agricultural products with inelastic supply.
4. luxury goods with clastic supply.
People who dispose off their assets are expected to pay
1. value added tax.
2. capital gain tax.
3. expenditure tax.
4. sales tax.
A floating exchange rate means that} the exchange rate is fixed by the
1. central bank of the country.
2. forces of demand and supply.
3. International Monetary Fund (IMF).
4. Ministry of finance.
A measure that can be adopted to correct a country’s balance of payments deficit is to
1. allow the currency to appreciate to encourage imports.
2. allow the currency to depreciate to encourage imports.
3. adopt import substitution strategy.
4. restrict trade with all countries.
Records of a country’s invisible trade are recorded in her
1. trade account.
2. capital account.
3. current account.
4. financial account.
If a country's import bill is high she can encourage exports by
1. allowing her currency to depreciate.
2. allowing her currency to appreciate.
3. liberalizing importation.
4. increasing taxes on all locally produced goods.
If a country imposes a barrier on trade, the resultant effect will be
1. a halt in buying and selling.
2. high quality goods from local industries.
3. an increase in the demand for locally produced goods.
4. shutdown of infant industries.
A country may be able to earn more from exports if she
1. increases her export duty.
2. devalues her currency.
3. increases her import duty.
4. allows her currency to appreciate.
A customs union is an economic grouping which has
1. free movement of factors of production.
2. common tariffs against non-members.
3. common currency for trading.
4. common military defense.
Balance of payments and trade problems that arose after the world wars were resolved by the
1. International Bank for Reconstruction and Development.
2. International Monetary Fund.
3. African Development Bank.
4. Organization of Petroleum Exporting Countries.
Examples of land that are non-renewable include
1. marshy and water logged land.
2. farmlands already used for many years.
3. Some natural resources such as natural gas.
4. oxygen and carbon dioxide in the atmosphere.
Abundant natural resources do not contribute to economic growth in developing countries because of
1. high rate of inflation.
2. urban congestion.
3. over-reliance on multiple commodities.
4. mismanagement and corruption.

Economics 2 - Essay

Section A

All questions carry equal marks.

Table 1 below shows the distribution of the population of a country in various occupations. Study it and answer the questions that follow
1. Calculate the size of the entire labor force in the country
2. What percentage of labor force is engaged in the :
  1. primary sector?
  2. secondary sector?
  3. tertiary sector?
3. Calculate the ratio of the workers mining to the workers in shoe production.
4. Calculate the percentage of the people engaged in warehousing
5. 1. Identify the type of economy depicted in the table.
  2. Give a reason for your answer in (e) (1).
Table 2 below shows the unit prices and quantities of hats produced by a firm. Study it and answer the questions that follow.
1. Compute the values of U, V, W, X and Y.
2. In what type of market is the firm operating? Explain your answer.
3. If the firm’s marginal cost is $ 60.00 at all levels of output, at what level of output will it be in equilibrium? Explain your answer
4. If a total cost of $ 600.00 is incurred when 50 units of hats are produced determine the margin of profit or loge made.
5. What is another name for marginal cost ?

Section B

Answer three questions only from this section.

1. What is economies of scale?
2. Outline three material economies of scale a firm can enjoy
3. State three factors
1. Define product retailer
2. outline any three roles performed by the wholesaler to the manufacturer.
3. identify any three problems associated with distribution of products.
1. Define price elasticity of demand.
2. Distinguish between elastic demand and inelastic demand.
3. Using diagrams explain what happens to a trader's total revenue when his price falls ,given that demand for his product is
  1. elastic.
  2. inelastic.
1. State three characteristics of perfect competition.
2. With the aid of diagrams, explain the equilibrium positions of a perfectly competitive firm in the
  1. Short run.
  2. Long run.
1. Explain how the Central Bank controls money supply through the use of :
  1. Open market operations.
  2. Bank rate.
2. Outline four functions performed by the Central Bank of your country.
1. Distinguish between domestic trade and external trade.
2. Distinguish between terms of trade and balance of trade.
3. Outline four causes of balance of payments deficit in a country.