All 50 questions from the West African Examinations Council (WAEC) Economics 2017 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.
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Economics is regarded as a science because
Any subject will be regarded as science so long as it adopts systematic ways of finding out its outputs.
The opportunity cost of a worker going to the university is
If a worker chooses to go to school, then his/her opportunity cost will be the wage forgone for school.
Which of the following items is not an example of Circulating capital?
Machinery is a fixed capital. It does not undergo quick circulation, i.e. it is not represented or used up within a single accounting year.
In a market economy, the problem of what goods to produce is solved primarily by
A market economy is a capitalist economy which aims to maximise profit. Thus, what will be produced will depend on what the consumers need (their pattern of spending).
If the weights of five puppies in kilograms are 3.5, 3.0, 4.2, 5.0 and 4.3, then the mean weight of the puppies is
Mean weight = (3.5+3.0+4.2+5.0+4.3)/5 = 20/5 = 4.00 kg.
If the coefficient of cross elasticity of demand for goods Y and Z is positive, the two goods are
If the coefficient of cross elasticity of two goods (say x and 2) is positive, it means that as the price of one increases, the quantity demanded of the other increases. This is a result of decrease in quantity demanded of the one with increased price — indicating the goods are substitutes.
The difference between demand and wants is in the
Wants are desired which is not backed with ability to pay for the goods so wanted. Meanwhile, demand is want backed with the ability to pay for the goods.
A demand curve parallel to the Y-axis indicates
The y-axis is the price axis. If the demand curve is vertical (parallel to it), then the demand curve is perfectly inelastic.
Which of the following is an example of derived demand?
Labour is said to be a derived demand because of what it can offer or contribute in the work place.
A rightward shift in the supply curve of a commodity is brought about by an increase in
A rightward shift in the supply curve indicates an increase in supply, which can be due to many factors, one of which is improvement in technology.
Effective supply is the total amount of a commodity
Effective supply is the total number of goods offered for sale at a market price.
Price elasticity of supply can be influenced by the following factors except
Consumers' income determines demand, not supply.
Increase in the supply of a product can be caused by
Increase in the supply of a product can be caused by many factors such as improvement in technology, decrease in cost of production. It should be noted that an increase in the price of a product can only cause increase in quantity supplied, not an increase in supply itself.
A rational consumer will purchase a commodity whose price is
A rational consumer will consume more of a commodity if MUx>Px and less if MUx<Px. He is at equilibrium when MUx=Px.
Parallel markets are usually the result of
When unwanted price is legislated, producers form parallel markets with some consumers.
Another term for equilibrium price is
At equilibrium, the market is cleared. Thus, another name for equilibrium price is market clearing price.
When a firm is enjoying internal economies of scale, its total cost of production is increasing as output increases because
Internal economies of scale are advantages that accrue to a firm as a result of expansion — its average cost of production decreases as output increases.
The specialisation of labour enhances production because people can
Specialization saves time and this leads to increase in production.
Which of the following can be added to a firm's profit to obtain total revenue?
Since Profit = Total Revenue - Total Cost, then Total Revenue = Profit + Total Cost.
The amount of money that a firm receives from the sale of its output is called
Total Revenue is the revenue received from the sales of a given level of output. While Average Revenue is obtained by selling per unit commodity.
Which of the following is true of the monopolist?
The monopolist has the power to determine either price or output, not both.
Equity shares form the bulk of the capital of a
Equity share is ordinary shares. It is the main source of capital to the public company.
If a state-owned firm is sold through the stock market, the organisation becomes a
When a state-owned enterprise is sold through the stock market, it becomes a public limited company.
The total number of people of working age who are willing and prepared to work at a given wage rate is the
Labour force is the total number of people who are willing, qualified and ready to work.
A civil engineer who accepts to teach elementary science in a primary school because he cannot get a paid engineering job is an example of
Disguised unemployment is also known as hidden unemployment or underemployment. This is when the potentials of workers are under-utilized in the work place.
Which of the following is an implication of a large population?
A large population has the tendency to result in a decrease in standard of living.
The system of agriculture which involves the cultivation of crops and rearing of animals for family consumption only is termed
Subsistence farming involves farming for family consumption. It does not aim at selling in the market.
An industry whose product loses considerable weight after processing must be sited close to
For a product which loses considerable weight after processing, it means the raw material must be of a greater mass. Therefore, the industry must be sited close to the source of the raw material for easy extraction and transportation.
Which of the following is a threat to the existence of middlemen?
Consumers' cooperative society pose great threat to the wholesaler and retailer who form the middleman because they can also perform their factors/functions.
In an industrial area, the location of industries is particularly influenced by
Location is industry is influenced by external economies of scale. External economies of scale are advantages which accrue to a firm for locating close to other related firms.
Which of the following is a transfer income?
Pensions are not worked for; thus, considered as part of transfer income such as gift.
The value-added method used in measuring national income is to
Value added approach avoids multiple counting in National Income (NI) as only value added by the firm will be considered.
Which of the following is most likely to be of benefit to a debtor?
Inflation is beneficial to the debtor because he will be paying back what is worth less than he receives.
The formula Y=C+I+G+(X-M) will be appropriate for measuring national income using the
All the components of the formula consist of expenditures of various agents of the economy — this is the expenditure approach.
A measure of the value of money in an economy is the
General price level is used to determine the value of money in an economy.
One characteristic of money is that it should be
Any good money must stand as standard for determining payment (a widely accepted characteristic of money is general acceptability, matching option D as the distinguishing characteristic among the listed choices).
A financial institution that specializes in giving loans using real assets as collateral security is a
A mortgage bank specializes in giving loans using real assets (property) as collateral security.
The function that distinguishes commercial banks from the central bank is that the former
Commercial banks accept deposit from the general public while the central banks do not.
Direct taxes include
Capital gains tax is a direct tax because it is exacted on the object being taxed.
The control of aggregate demand through changes in government spending and tax rates is referred to as
Fiscal policy is a method or means of managing the economy using governmental tools of tax, spending etc.
Which of the following is not a feature of economic underdevelopment?
An underdeveloped economy seldom has high productivity.
One way of speeding up the economic development of a country is by encouraging
By encouraging savings and investment, capital will be formed and production will be enhanced.
Dumping in international trade occurs when a foreign firm sells
Dumping is an act of selling a foreign market below the cost of production due to supply of substandard goods.
Infant industries can be described as
Infant industries are newly established industries which have not grown competition wing.
Modern international trade is based on the principle of
African countries are unevenly developed, this leaves a huge gap in the economic integration, which is why modern international trade is based on the principle of comparative cost advantage.
Which of the following items is recorded in a country's current account section of the balance of payments?
Investment income is recorded in a country's current account section of the balance of payments (foreign direct investment and capital flows/loans belong in the capital account).
One problem facing the economic integration of countries in West Africa is the
African countries are unevenly developed, this leaves a huge gap in the economic integration.
One objective of the Organisation of Petroleum Exporting Countries (OPEC) is to
The main objective of any cartel such as OPEC is to average price of their product by controlling output of members.
Which of the following resources is renewable?
Coal, iron ore and limestone are non-renewable resources as they take millions of years to form after being used up. Rice is renewable through cultivation by man and photosynthesis by plants.
The negative effects of mining in West Africa does not include
Mining does not lead to re-afforestation; rather it typically causes land degradation, destruction of farmlands and pollution of water bodies.
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