2013 Economics WAEC SSCE (School Candidates) May/June

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Economics 1 - Objective

  1. The action of government to forgo road construction in order to provide more health facilities denotes
    1. sound economic decision
    2. opportunity cost
    3. practicable government policy
    4. scale of preference
  2. In Economics, a market is define as any
    1. agreement made for consumers to buy all they need
    2. agreement to sell commodities at low prices.
    3. arrangement made for producers to sell all their goods
    4. arrangement whereby the buyers and sellers are in contact
  3. Which of the following is not a function of an insurance company?
    1. Pooling resources together against risks
    2. Mobilization of funds through premiums collected
    3. Encouragement of investment by security of capital
    4. Collection of deposits from the public for investment
  4. A debenture holder earns
    1. commission
    2. profits
    3. fixed interest
    4. quasi rent
  5. All economic systems must decide what to produce because
    1. resources are not available
    2. consumers want maximum satisfaction
    3. resources are limited in supply
    4. producers want maximum profit
  6. Trade between two countries is known as
    1. bilateral trade
    2. unilateral trade
    3. multilateral trade
    4. internal trade.
  7. In the balance of payments of a country, tourism is classified under
    1. capital account
    2. invisible trade
    3. merchandise trade
    4. official reserves.
  8. General rise in the price level induced by increased price of inputs is referred to as
    1. run-away inflation
    2. cost-push inflation
    3. demand-pull inflation
    4. imported inflation
  9. Which of the following is a function of merchant banks?
    1. Acting as bankers’ bank
    2. Lending to the commercial banks as a last resort
    3. Controlling inflation in the economy
    4. Underwriting and issuing of shares.
  10. Demand is elastic when percentage change in
    1. quantity demanded is greater than percentage change in price.
    2. price is greater than percentage change In quantity demanded
    3. price is equal to one
    4. quantity demanded is zero
  11. A budget is balanced when expected total revenue is
    1. greater than expected expenditure
    2. less than total expenditure
    3. equal to expected expenditure
    4. greater than total expenditure.
  12. A co-operative society is a
    1. finance house
    2. self-help business organization
    3. public corporation
    4. non democratic business organization
  13. The value of money 1s affected by the
    1. speculative motive
    2. price level
    3. precautionary motive.
    4. intervention of development banks
  14. Which the following is a funciton of money
    1. Medium of communication
    2. Measure of securities
    3. Store of wealth
    4. Discounting bill of exchange
  15. Which ot re ielowitia is an acest ol a commercial bank?
    1. Reserve funds
    2. Shareholders’ capital
    3. Customer's depost
    4. Treasury bill
  16. An inrease in the supply of a commodity X automatically results in an increase in an increase in the supply of another commodity Y. This is a case of A. elastic supply
    1. elastic supply
    2. joint supply
    3. exceptional supply
    4. competitive supply
  17. Why would an individual increase his level of consumption during inflationary period?
    1. the real value of any amount saved falls over time
    2. interest rates are generally low
    3. There are varieties of goods to buy.
    4. Wages andsalaries stagnate during inflation
  18. The type of monopoly that develops as a result of uneven distribution of resources is called
    1. legal monopoly
    2. natural monopoly
    3. state monopoly
    4. international monopoly
  19. A major disadvantage of partnership form of business is that
    1. every partner has to be consulted during decision
    2. partners could be too friendly with their customers.
    3. affairs can be kept private
    4. partners could take long holidays
  20. Goods which have been paid for are known as
    1. physical goods
    2. economic goods.
    3. free goods
    4. intangible goods
  21. Goods are said to be in competitive demand when they are
    1. substitute
    2. complmentary
    3. jointly demanded
    4. identical
  22. In the long run, factors of production are considered to be
    1. at maximum
    2. fixed
    3. variable
    4. increasing
  23. Which of the following will shift the demand curve for coca to the right?
    1. An increase in consumers' income
    2. A rise in the price of cocoa
    3. A tax on cocoa farmers
    4. A fall in the quantity deemand of cocoa
  24. An agricultural production process that uses more machinery relative to labor is known as
    1. a large scale farming
    2. capital intensive farming
    3. commercial farming
    4. land inensive farming
  25. Which of the following will enhance productivity in an economy?
    1. The use of obsolete capital
    2. Technological change
    3. Expansion of land uncer water cultivation
    4. An increase in labor force
  26. Post harvest losses in West African countries can be reduced if
    1. the land tenure system could be reformed
    2. more irrigation schemes could be provided
    3. better storage facilities could be provided
    4. errosion is controlled
  27. Which of the following best explains what to produce?
    1. how much goods are to be produced
    2. the combination of resouces to be used
    3. which goods andservices to be produced
    4. how many wants are to be satisfied
  28. The demands fpr money is described as a
    1. competitive demand
    2. joint demand
    3. derived demand
    4. composite demand
  29. Which of the following is the main oucome of a trade union's interference with wage rate? Wages are
    1. lowered but more employment opportunities are created.
    2. lowered but the employment level remains Unchanged
    3. increased and employment levels are unchanged
    4. increased but employment levels are reduced
  30. The introduction of tariffs and quotas
    1. reduce the price of import
    2. increase the demand for locally made goods
    3. discourage domestic indusries from becoming more efficient
    4. reduce the prices of locally made goods
  31. A government that wants to get more revenue will increase the tax on comodities with a
    1. high price of elasticity of demand
    2. low price elasticity of demand
    3. high-income elasticity of demand
    4. low-income elasticity of demand
  32. Which of the following is involved in the money market
    1. Building society
    2. Development banks
    3. Commercial banks
    4. Stock exchange
  33. Demand-pull inflation can aptly be described as
    1. inflation induced by rising costs of production
    2. reduction in government expenditure
    3. persistent rise in prices due to an increase in expenditure
    4. massive importation of goods from a country with hyperinflation
  34. In order to develop the banking habit of rural dwellers, the traditional money lenders should be
    1. proscribed
    2. legalized
    3. subsidized
    4. heavily taxed
  35. All rates of interest in a country are influenced by the
    1. bank rate
    2. population growth rtae
    3. wage rate
    4. mortgage rate
  36. Exchange control is a weapon used in regulating
    1. barter trade
    2. stock trade
    3. foreign trade
    4. internal trade
  37. When the marginal product is negative, the total product will be
    1. constant
    2. at a maximum
    3. increasing
    4. decreasing
  38. Physical productivity is affected by all the underlisted factors except the
    1. state of technology
    2. quantity of inputs
    3. quality of inputs
    4. price of output
  39. If a commodity has a high marginal utility, its market price will be
    1. stable
    2. high
    3. zero
    4. constant
  40. Price flunctuation is a feature of
    1. common market
    2. imperfect market
    3. supermarket
    4. market failure
  41. Which of the following statements is not a feature of a monopoly?
    1. seller is allowed to fix his own price
    2. buyers and seller are price-takers
    3. New entrances are restricted
    4. there is only one seller of the commodity
  42. The following are advantages of sole proprietorship except
    1. quick and easy decision-making
    2. keep his business affairs private
    3. assurance of raising huge capital for expansion
    4. high level of commitment
  43. Which of the following controls a limited liability company
    1. the general manager
    2. the managing director
    3. pax payers
    4. the board of directors
  44. Given that Qd= 80-2p where Qd is quantity demanded and P is the price, what quantity would be when the price (P) is $3?
    1. 86 units
    2. 80 units
    3. 76 units
    4. 74 units
  45. Which of the following can be used to calculate the price elasticity of demand
  46. The main advantage of large scale production is that
    1. unit cost of production falls
    2. decision making is quick
    3. worker-management relationship is improved
    4. the quality of the products increases
  47. Which of the following itmens is not included in measuring national income by the income approach?
    1. Pofits of companies
    2. Rents of property
    3. Students' grants and scholarship
    4. Wages and salaries of public servants
  48. Gold, diamond, iron ore and limestone are collectively referrred to as
    1. human resources
    2. mineral resources
    3. artificial resources
    4. forest resources
  49. Points outsdie a production possibity curve indicate
    1. unattainable production levels
    2. attainable production levels
    3. inefficient, but attainable production levels
    4. optimum production levels
  50. The International Bank for Reconstruction and Development (IBRD) is important to developing countries because
    1. gives aid for defence
    2. offers loans for public projects
    3. offers aid to finance private projects
    4. give loans for legal proceedings

Economics 2 - Essay

Section A

Answer one question only from this section.

  1. The output and cost of production of rice (in bags) are presentedd in the table below. Use the information in the table to answer the questions that follow
Output of rice (in bags) 0 1 2 3 4
Total Variable Cost (TVC) $ 0 5 7 10 20
Total Cost (TC) $ 7 12 14 17 27

(a) Calculate the

i. Average Fixed Cost (AFC) at output levels 0.2 and 4 (3 marks)

ii. Marginal Cost (MC) at all levels of output (5 marks)

(b) If the price of a bag of rice wre $10,

i. calcultae the proft/loss at all levels of output (5 marks)

ii. at what output level (s) is the maximum profit made? (2 marks)

(c) Draw the marginal cost curve (the use if grapgh sheet is essential) (5 marks)

    2. The table below shows the scale of preference of a student- Mr Smith whose disposable income is $7.00. Use the information in the table to answer the questions that follow.
    items needed Price ($)
    Textbook 5.00
    Shirt 2.00
    Shoes 3.00
    Trousers 3.00
    Notebook 1.00
    School fees 7.00
    Mattress 10.00
    1. (i)What will Mr Smith spend hi money on? (2 marks)
    (ii) Explain you answer in 2 (a)(i) (2 marks)

    (b) (i) What is the opportunity cost of mr Smith's decision in 2 (a) (i)

    (ii) Explain your answer in 2 (b)(i) (2 marks)

    (c)(i) If Mr. Smith's disposable income incrase to 10$.0, what will he spend it on? (3 marks)

    (ii)What is the opportunity cost of the decidion in 2 (c)(i) (2 marks)

    (d)Define "scale of preference" and "opportunity cost" (4 marks)

    (e) What is the importance of a scale of preferance? (2 marks)

    Section B

    Answer four questions only from this section.

    1. (a) What is:
    1. peasant farming
    2. commercial farming? (5 marks)
    (b)(i) Describe five ways in which Agriculture contributesto the developmentof your country. (15 marks)

    4. (a) Distinguish between small scale production and large scale production (5 marks)

    (b) Describe any five internal ecnomies of large scale production (15 marks)

    5. (a)Explain any four benefits of industrial development in an economy (12 marks)

    (b) Outline any four measures that will encourage industrial growth in your country (8 marks)

    6. (a) Differentiate between direct and indirect taxation (5 marks)

    (b) Highlight any five benefits of indirect taxation to developing countries (15 marks)

    7.(a) What is competitive supply? (2 marks)

    (b) With the aid of illustration, differentiate between a suppy schedule and a suppy curve (8 marks)

    (c) Explain how the supply of a commodity is affected by the following

    (i) an improvement in technology (3 marks)

    (ii)a rise in output prices (3 marks)

    (iii) a rise in the prices of other commodities (3 marks)

    (iv) an increase in government subsidies on production (3 marks)

    8 (a) State two charactersitics of monopolistic competition (6 marks)

    (b) With the aid of diagram (s), explain why a firm in monopolistic competition is unable to earn abnormal profits in the ling run (10 marks)

    (c) Differentiate between natural monopoly and legal monopoly (4 marks)

    9 (a) Highlight the difference between creeping inflation and hyper inflation (4 marks)

    (b) List any four negative effects effects of inflation (4 marks)

    (c) Outline four ways in which the government of your country can control inflation (12 marks)

    10 (a) What is perrfect competition? (2 marks)

    (b) With the aid of daigrams, compare the short run equilibrum positions of a perfect competitor and an imperfect competitor (12 marks)

    (c) State any two features of an imperfect market (6 marks)

    11 (a)Distinguish between cash ratio and special deposits (4 marks)

    (b) Explain how cash ratio are used as instruments of monetary policy (10 marks)

    (c) Describe any two instruments of fiscal policy in West Africa (6 marks)

    12. (a) Outline any four problems of barter economy (12 marks)

    (b) How has the introduction of money solved the problems outlined in 12(a) above? (8 marks)