All 50 questions from the West African Examinations Council (WAEC) Economics 2015 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.
B. uses scientific method to explain human behaviourCorrect
C. makes use of controlled experiments to explain human behaviour
D. makes use of machines to study human behaviour
Explanation
Economics is a science because it follows a regular procedure/method (the scientific method) to establish facts and knowledge about human behaviour, applying this method to study economic laws and theories.
Which of the following cannot be described as land?
A. Forest
B. Diamond
C. RoadsCorrect
D. Crude oil
Explanation
Land as a factor of production refers to all free gifts of nature (forests, minerals like diamond, crude oil), while roads are man-made and therefore capital, not land.
An outward shift of the production possibility curve shows that
A. production is shifting to the right
B. resources are underutilized
C. economic growth has taken placeCorrect
D. factors of production are moving outward
Explanation
An outward shift of the PPC means output can increase without incurring any opportunity cost, due to improvement in technology or discovery of new resources - this outward shift is called economic growth.
The following constitute the criteria for identifying an economic system except
A. ownership of resources
B. scarcity of resourcesCorrect
C. method of decision making
D. motivation for production
Explanation
Economic systems are classified based on resource ownership, decision-making methods, and motivation for production; scarcity of resources is a universal economic problem, not a criterion for identifying which system a country operates.
If the price of flour rises, then bread's supply curve will shift to the
A. left, demand curve shifts right
B. right, demand curve shifts left
C. left, demand curve remains unchangedCorrect
D. right, demand curve remains unchanged
Explanation
A rise in the price of flour (an input) increases the cost of producing bread, shifting bread's supply curve to the left (a decrease in supply), while the demand curve for bread itself remains unchanged in position.
Which of the following is not a reason for abnormal demand?
A. Price of the commodityCorrect
B. Goods of ostentation
C. Giffen goods
D. Rare commodity
Explanation
Abnormal demand (where demand doesn't fall as price rises) arises due to goods of ostentation, Giffen goods, and rare/speculative commodities - the price of the commodity itself is the normal determinant of demand, not a special reason for abnormal demand.
Government revenue will increase if taxes are levied on goods with a
A. perfectly elastic demand
B. fairly elastic demand
C. perfectly inelastic demandCorrect
D. unitary elastic demand
Explanation
When demand is perfectly inelastic, quantity demanded doesn't fall when tax raises the price, so government can maximize tax revenue without losing sales volume.
If a given change in price brings about a proportionately larger change in quantity demanded, then demand is
A. relatively price elasticCorrect
B. relatively price inelastic
C. price elasticity of demand is unitary
D. price elasticity of demand is constant
Explanation
When the percentage change in quantity demanded exceeds the percentage change in price, demand is relatively price elastic (elasticity coefficient greater than one).
Which of the following will not affect the market price of a commodity?
A. Increase in demand
B. Change in tastes
C. Intersection of demand and supplyCorrect
D. Increase in supply
Explanation
The intersection of demand and supply determines the equilibrium price itself; it is not an external factor that causes price to change - changes in demand, supply, or tastes are what shift the curves and change price.
All the following are methods of determining prices except
A. maximum pricing
B. rationingCorrect
C. minimum pricing
D. auctioning
Explanation
Rationing is a method of allocating/distributing a scarce good (typically used alongside price controls), not itself a method of price determination like maximum/minimum pricing or auctioning.
The law of diminishing marginal returns states that as more units of a variable input are added (holding other inputs fixed), the marginal product of that input eventually declines.
Which of the following cost curves is not U-shaped?
A. marginal cost curve
B. average fixed cost curveCorrect
C. average total cost curve
D. average variable cost curve
Explanation
The average fixed cost (AFC) curve is not U-shaped; it is a continuously falling rectangular hyperbola since fixed costs are spread over increasing output, unlike marginal, average variable and average total cost curves which are U-shaped.
Which of the following is not a method of controlling monopoly?
A. Preventing mergers
B. Indigenization
C. PrivatizationCorrect
D. Imposing high profit tax
Explanation
Privatization (transferring government-owned firms to private individuals) is not a method of controlling monopoly - it does not necessarily prevent or reduce market monopoly power, unlike preventing mergers, indigenization policy, or high profit taxes.
Which of the following features distinguishes a public limited company from a private limited company?
A. Perpetual existence
B. Limited liability
C. Legal entity
D. Sale of shares to the publicCorrect
Explanation
A key distinguishing feature is that a public limited company can sell/offer its shares to members of the public, whereas a private limited company cannot.
A. there is a change in the technique of production
B. job seekers lack information on job vacancies that exist in some placesCorrect
C. bad weather prevents work from progressing
D. job seekers have disabilities
Explanation
Frictional unemployment arises when job seekers are between jobs or lack information about available vacancies, even though jobs exist, resulting in a temporary search period.
One reason for low agricultural productivity in most West African countries is that
A. farmers are not capable of cultivating cash crops
B. it does not provide income to farmers with large families
C. farmers find it difficult getting help from financial institutionsCorrect
D. it is not the only source of raw materials for agro-based industries
Explanation
Many farmers face difficulty accessing financial support/credit from financial institutions to expand and improve large-scale farming, limiting agricultural productivity.
The movement of labour from one grade to an entirely different grade is an example of
A. industrial labour mobility
B. horizontal occupational mobility
C. vertical occupational mobilityCorrect
D. geographical mobility
Explanation
Movement from a lower grade/level to a higher (different) grade of work is called vertical occupational mobility, e.g. a class teacher becoming a principal.
Which of the following is not a strong basis for trade union's demand for higher wages?
A. the company is making higher profit
B. productivity of the workers has increased
C. members of the union have high qualificationsCorrect
D. the company produced commodity of very high demand
Explanation
Higher wage demands are typically justified by the company's profitability, increased worker productivity, or strong demand for the company's product; the qualification level of union members alone is not, by itself, a genuine reason for demanding a pay rise.
The difference between the gross domestic product (GDP) and the gross national product (GNP) is (a) depreciation (b) transfer payment (c) net income from abroad (d) direct taxes
A. depreciation
B. transfer payment
C. net income from abroadCorrect
D. direct taxes
Explanation
GNP = GDP + net income from abroad (income earned by citizens abroad minus income earned by foreigners domestically); their difference is this net income from abroad.
Location of firms of an industry is not influenced by
A. availability of raw materials
B. existence of other firms
C. nearness to the source of money supplyCorrect
D. government policy
Explanation
Firms do not need to be physically near a central bank/source of money supply before they can access funds, since money is portable and can easily be moved - unlike raw materials, agglomeration with other firms, or government policy, which do influence location.
A. a firm that sells a set of closely related commodities
B. a factory that produces different lines of products
C. a group of firms that sell a closely related set of productsCorrect
D. industrial concern that is into production and selling of goods
Explanation
An industry consists of a group of firms producing closely related or similar/identical products (e.g. the automobile industry consists of all car-manufacturing firms).
In developing countries, a larger percentage of the labour force is employed in the
A. trade sector
B. tertiary sector
C. primary sectorCorrect
D. secondary sector
Explanation
In developing countries, most of the labour force is employed in the primary sector (agriculture, mining, fishing, etc.) due to underdeveloped secondary and tertiary sectors.
When the demand for foreign exchange exceeds its supply, the value of the domestic currency
A. appreciates
B. depreciatesCorrect
C. remains unchanged
D. expands
Explanation
Excess demand for foreign currency (relative to supply) means more domestic currency is needed to buy foreign currency, so the domestic currency loses value (depreciates).
A country has favourable terms of trade when the prices of her
A. exports rise relative to the prices of importsCorrect
B. exports fall relative to the prices of imports
C. imports rise faster than the prices of exports
D. imports and exports move in the same direction
Explanation
Favourable terms of trade occur when export prices rise relative to import prices, meaning a country can now import more for the same quantity of exports.
The abolition of all forms of trade barriers among member countries while maintaining common external tariffs against non-members is a feature of a
A. free trade area
B. customs unionCorrect
C. common market
D. economic community
Explanation
A customs union removes trade barriers among its members and additionally imposes a common external tariff on non-member countries, distinguishing it from a simple free trade area.
In order to correct adverse balance of payments problem, government should
A. reduce tariffs
B. increase subsidies on exportsCorrect
C. increase tax on local industries
D. reduce personal income tax
Explanation
Increasing subsidies on exports makes them cheaper/more competitive abroad, boosting export earnings and helping correct an adverse (deficit) balance of payments.
A. To prevent fluctuation in prices of all commodities
B. To protect the economic interest of all countries
C. To control the level of output of oilCorrect
D. To discover oil in all countries
Explanation
OPEC's main objective is to coordinate and unify petroleum policies among member countries, which includes regulating (controlling) the level of oil output/production by giving quotas to members.
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