All 50 questions from the West African Examinations Council (WAEC) Economics 2011 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.
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The following are examples of economic goods except
Economic goods are scarce and therefore command prices. Air is not scarce and does not command a price, so it is not an economic good.
A tent-making factory offers
A tent is a fabric-made shelter which is used for outdoor events. A tent-making company produces tents for tent users, or rents it out to tent users who, in return, rent it out to tent users. Tent-makers do not have to be available when the tent is to be used; therefore, the service of a tent-making factory is indirect.
In which of the following economic systems do we have mostly private ownership of resources and individual decision making?
A capitalist economy is the one in which the ownership and control of means of production are dominated by private individuals.
The sum of items divided by the number of items is the
Mean of a distribution is the sum of all observations divided by the number of observations: x̄ = Σfx/Σf.
Find the median of the following set of scores: 8,9,6,5,10
The median is the middle value after a set of data has been arranged in ascending or descending order. Rearranged in ascending order: 5,6,8,9,10. The middle value is 8. Therefore, median = 8.
Which of the following causes the demand curve to shift to the right?
An increase in consumer's income is capable of shifting the demand curve to the right. This is an increase in demand.
Goods for which demand rises as income rises are
Normal goods are the goods that have positive relationship with consumer's income. They increase as income increases and decrease as income falls.
The slope of a supply curve is
The slope of supply curve is positive because supply curve slopes upward showing the relationships between price and quantity to be positive.
Equilibrium price is the price at which quantity
Equilibrium price is the price that equates demand with supply.
A decrease in supply with demand remaining unchanged will cause the equilibrium price for a good to
Decrease in supply, which is a leftward shift in the supply curve, will lead to increase in price and decrease in quantity supplied if demand does not change.
At the highest level of total utility, marginal utility is
The marginal utility is zero when the Total utility is at the peak.
The law of diminishing marginal utility states that the more a commodity is consumed the
Law of diminishing marginal utility explains that total utility increases at a decreasing rate as more units are consumed. This means additional satisfaction from each additional unit falls.
Greater inter-dependence among workers in production is associated with
Division of labour is the breaking down of job or production into different stages, which creates interdependence among workers.
If TC, FC and VC represent total cost, fixed cost and variable cost respectively, which of the following is correct?
The total cost of production is the sum of the fixed costs and the variable costs.
The reward to land as a factor of production is
The reward to land as a factor of production is rent.
A firm is said to be a public joint stock company when it
A public joint stock company can raise its capital by selling its shares to members of the public. These shareholders jointly own the business.
All the following are sources of finance to a joint stock company except
A joint stock company can raise its shares through shares, debentures and bank loans but not cooperative loans.
The public sector of an economy includes
Nationalized industries belong to the government which is referred to as the public sector.
One advantage of the Sole proprietorship over other forms of business organisations is that it can
A major advantage of a sole proprietorship is the privacy it enjoys about its affairs and operations.
Which of the following is obtainable in a perfect market?
In a perfect market price, marginal revenue and average revenue of firms are all equal. At equilibrium MC = MR = P, since MR = P, we can write MC = P.
The wholesaler performs the following functions except
Offering credit facility to consumers is the function of retailers, not wholesalers.
[Table: Age Group 0-15: 30%, 16-40: 27%, 41-60: 25%, 61 and above: 18%] The table above shows the age distribution of country A in 1983. Using the data in the table, calculate the percentage of working population in 1983.
The working population is the people between the age of 16 and 60. The percentage of this population = 27% + 25% = 52%.
A country whose population size is too small relative to its resources is
Under-populated countries have fewer populations that can effectively exploit its resources.
An efficient weapon used in resolving disputes between employers and employees is
Collective bargaining is an effective weapon, though not the only one used, in resolving disputes between employers and employees.
Which of the following does not explain why a school principal earns more salary than a school messenger?
Length and cost of training and demand and supply will determine the wage. Messenger being non-teaching staff is not one of the reasons for income discrimination among labours.
The role of government in promoting agricultural development includes the following except
Paying the wages of farmers is not realistic except the farmers are working for the government.
Which of the following is an advantage of large scale agriculture except
Large scale farming usually involves the use of sophisticated implements. Simple implements are used in small scale farming.
The following are all factors determining the location of industry except
Minimum wage rate is not a determinant of location of industry.
Which of the following is not a concept in National Income accounting?
There is nothing like Domestic National Product; it is either Gross Domestic Product or Gross National Product and so on.
Which of the following equations is appropriate for determining the Net Domestic Product (NDP)?
Gross Domestic Product is the total output produced in a year in an economy. When we remove the wear and tear which is called depreciation, it remains Net Domestic Product.
Which of the following over-estimates the value of national income?
Double counting occurs when the value of an item included in the calculation of national output is counted twice. This may be as a result of counting it as an intermediate good and again as a final good; it may also result from inclusion of transfer payment on the statistics.
The total stock of money available for use in an economy is
The total stock of money available for use in an economy is the supply of money.
Which of the following is not a reason for holding money?
There are three reasons for holding money, and they are contained in options B to D. Option A is not one of them.
The best way of combating demand-pull inflation is to
Increase in income tax will reduce the disposable income. Since demand pull inflation is as a result of excessive demand, reduction in disposable income will lead to a fall in demand and inflation will be checked.
Which of the following ways has salaries and wages adversely affected your country's economy?
Real income refers to the purchasing power of money. When there is inflation, one of the direct negative effects is that the purchasing power of money falls.
Which of the following is a legal tender?
Legal tender is anything backed by government law or decree to be accepted as a medium of exchange in a community, such as N1000 note, N20 notes etc.
The Central Bank controls money supply through all the following except
Central Bank uses several instruments to control the money supply but it does not include lending to the public. It is the commercial banks that lend to the public.
One of the functions of the Central Bank is
Central Bank is the one that issues new notes and coins after they have been printed.
The function of the Central Bank as lender of last resort means that when all other sources fail
Central Bank is the one that issues new notes and coins after they have been printed. When commercial banks are short of funds, they can borrow from the Central Bank when other sources fail.
One disadvantage of direct taxes is that they
One major disadvantage of direct tax is that it can be evaded, meanwhile indirect taxes cannot be evaded since they are not levied on people's income or property but on goods and services which people pay unconsciously or unaware.
Excise duty is levied on
Excise duty is a form of indirect tax levied on local products or luxury goods.
A component of the national debt of a country is
Treasury bills are government securities sold to borrow from the public. It forms part of the national debt.
When the demand for a good is fairly inelastic, the burden of an indirect tax falls
The burden of indirect tax falls on both the sellers and/or the buyers depending on the elasticity of demand for the good on which the tax is levied. When demand is fairly inelastic, the consumer bears the greater proportion of the burden.
Dumping means the selling of a good in a foreign market at a price that is
Dumping is a term international trade which means selling a commodity in abroad at a priced lower than the price it is sold at home.
Which of the following groups of accounts makes up the balance of payments?
The three accounts that make up the Balance of payments are current, capital and the monetary movement account.
A country's balance of payments is in deficit when for imports of invisible goods are
A country's balance of payments is in deficit when the total payments for visible and invisible imports are greater than the total receipts from her exports of visible and invisible goods.
In order to stabilize oil price in the world market, there is the need for OPEC members to
Production quotas is the quantity each member is given to supply to the market to avoid excess supply of output that can lead to a fall in price.
Which of the following is not a member of the Economic community of West African States (ECOWAS)?
Customs market is not a type of economic integration. (Note: Cameroon is not a member of ECOWAS - it is a Central African country, not West African.)
Which of the following is not an international economic organization?
WHO is an international organisation but not for economic reason directly - it deals with health, not economics.
The full meaning of the IMF is
IMF stands for International Monetary Fund.
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