All 50 questions from the West African Examinations Council (WAEC) Economics 2016 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.
Advertisement
Human wants are insatiable because wants are
Human wants are unlimited but the resources (money) to satisfy the wants are scarce (limited).
Scale of preference is important for the following except in
A scale of preference does not satisfy wants but is helpful in making efficient decisions.
In a socialist economy, prices of commodities are determined by
A socialist economy is an economy in which the means of production is owned and controlled by the government. The central planning authority decides the prices of goods.
Which of the following cannot be classified as land in economics?
Bulldozer is a machine, thus, can be classified as capital in factors of production.
A country's budget allocation to various sectors of the economy is shown in the pie chart below. Use it to answer questions 5 and 6. If the budget of the country was $7,200.00, how much was allocated to Education?
Education's degree = 100°/360° x 7200 = $2,400 (Total budget = $7,200.00; Education's allocation = 100°/360° × 7200 = $2,400).
What is the ratio of expenditure on health to Agriculture?
Degree of Agriculture = 80°(should be 100° per chart), degree of health = 60°; ratio of health to agriculture = 60:80 = 3:4.
The demand curve for a necessity is usually
Demand curve for a necessity is unlike demand curve for a normal good. Since a necessity must be bought no matter what, thus, the demand is vertical.
What effect will an increase in price have on the total revenue of a firm whose product has inelastic demand? Total revenue will
An increase in the price of a firm whose product has an inelastic demand will increase its total revenue because only very little buyers will stop or reduce their purchase.
If the quantity of men's hat demanded per week is represented by the function Qd = 20 - (1/3)P, where P is price, how many hats are demanded when the price is $9.00?
Qd = 20 - (1/3)(9) = 20 - 3 = 17 units.
The demand for torch and batteries is an example of
Battery is needed to use a torch; they are therefore complementary.
Price elasticity of supply measures how responsive
Price elasticity of supply is the degree of responsiveness of quantity supplied to changes in price.
The tendency for workers to value their leisure hours more than hours of work as wage rate increases gives rise to
If the wage rate increases to a certain level, workers will prefer to play than to work. This will result in a backward sloping labour supply curve.
The supply of rice in tons is given by the function Qs - 80 - 0.7P = 0 Where Qs = quantity supplied P = price in Dollars ($) Find Qs, when P = $40
Qs = 80 + 0.7P; when P=40, Qs = 80 + 0.7(40) = 80 + 28 = 108 tons.
How does producers' expectation of a price fall affect the supply curve of a product? There will be
Producer's expectation of price fall will cause the supply curve to shift from S0S0 to S1S1. This will result in a decrease in quantity supplied.
One relationship between marginal utility and total utility is that when total utility is
When total utility is falling, marginal utility is negative.
A shift in the supply curve to the right while demand curve remains the same will cause equilibrium price
A rightward shift of supply with demand constant causes equilibrium price to fall while equilibrium quantity rises (p̄ falls while q̄ rises).
A price floor results in
A price floor set above equilibrium price causes quantity supplied to exceed quantity demanded, resulting in excess supply.
An entrepreneur is encouraged to adopt division of labour in production because it
The essence of division of labour is to improve the level of output at a reduced cost.
The long run is a period when
Short-term is a period of time in which at least one factor is fixed while long run is a period of time in which all factors are variable.
The necessary condition for a firm to be in equilibrium is that marginal revenue is
The equilibrium condition of a firm is achieved where MR = MC.
At which stage of production should a firm shut down? When
A firm will shut down when it is unable to cover its variable cost i.e. value AVC < Price. Thus a firm shuts down when AVC > Price.
Charging different prices for the same commodity is a feature of
A discriminating monopoly is the monopoly which charges different prices in different markets.
In a partnership, the conduct of members is guided by
The articles of partnership guide the operation of partners in partnership business.
Indigenization policy is a measure aimed at
Indigenization of policy is a deliberate effort by the government to encourage citizens' participation in the economy so as to reduce foreign dominance.
Which of the following measures will hinder efficient distribution of goods in West Africa?
Price control will hinder distribution because if the minimum price is not reached then the goods cannot be sold; also if maximum price is not reached, the goods cannot be sold.
The type of unemployment that occurs as a result of physical or mental disability of labour is known as
Residual unemployment is caused by the fact that some people are willing to work but are unable to do so due to mental or physical illness.
One feature of a growing population is
An increasing population will result in a high number of young people in the economy.
Efficiency of labour in a country is determined by the following factors except the
Total population does not determine efficiency rather will determine labour force.
Which of the following will encourage cash intensive farming?
If equipment are subsidized, then the farmers can access the machines and this may lead to capital intensive farming.
Which of the following best explains why more foreign investments are not attracted to West Africa?
The instability in politics affects business operation. Thus, the foreigners will not be encouraged to come in.
Location of firms in rural areas may
If firms are located in rural areas there will be balanced development in the country as people will move to rural areas again.
In national income accounting, double counting occurs when
Intermediate goods are like raw materials, so if counted along with final goods, double counting has occurred.
The difference between GDP and GNP is
GNP = GDP + FIFAn, where FIFAn = Net factor income from abroad.
Which of the following items is not included in the measurement of the national income using the income approach?
Government purchases is included in the expenditure approach, not the income approach; also, dividend is a transfer payment whose inclusion would cause double counting, but among the listed options Government purchases is the correct exclusion from the income approach.
A bank note is said to have a legal tender because it is
A bank note is said to have a legal tender because it is backed by law.
During inflation, interest rate will
Interest rates and inflation usually work in tandem. Interest rates tend to rise when inflation goes up and vice versa.
Cost-push inflation is likely to arise when
When demand for higher wages is granted, the cost of production will increase and this will lead to cost-push inflation.
Which of the following financial institutions cannot be found on the capital market of a country?
Commercial banks are a part of the money market, not the capital market.
The stock market is a market for
The stock market is the market where new and old (untold) stocks and shares are traded.
Indirect taxes are generally
Indirect tax is regressive because the rate paid as tax, by consumers, decreases as income increases; the poor pay a higher proportion of income in tax than the rich.
Fiscal policy that can control inflation will include the use of
Budget surplus is a situation in which expenditure is less than revenue. This means the government withdraws more money from the economy than it injects, reducing inflation.
Which of the following is a cause of under-development in West Africa?
The increasing population makes development plans quickly go out of data, affecting development in West African countries.
Which of the following is not a major problem of development planning?
Projects are poorly identified and are not properly executed is a listed problem, but 'Poor identification of projects' as phrased overlaps with option (b); per the answer key the correct response is (d).
The principle of comparative cost advantage was propounded by
The principle of comparative cost advantage was propounded by David Ricardo.
The rate at which a country's exports is exchanged for her imports is
Terms of trade = Index price of exports / Index price of imports.
Balance of payments surplus implies that receipts for exports are
Balance of payments is the equality of receipts on exports and payments for imports. If receipts are greater than payment, then it is favourable or surplus.
When the international value of a country's currency rises, other things being equal, the country's
When the value of a country's currency rises (appreciates), exports become more expensive while imports become cheaper. This results in a decrease in net exports.
One of the physical measures that can be used to reduce the volume of imports is the
If the government wishes to regulate import, foreign exchange can be regulated. For instance, they determine which product gets forex and which gets not.
When a number of countries agree to remove all trade barriers among themselves and at the same time charge a common tariff against non-member countries, it is known as
A customs union is a union of countries who decide to remove all barriers among members and charge non-members tariffs.
Which of the following international organizations is concerned with the stabilization of the balance of payments? The
One of the functions of IMF is to help finance balance of payments problems.
Advertisement
…and/or go further with premium services and No Ads.