All 50 questions from the West African Examinations Council (WAEC) Economics 2024 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.
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1. There is scarcity when
Scarcity occurs when demand is greater than supply; you meet something (i.e. demand) but there are no means to satisfy it (scarcity).
2. Points within a Production Possibilities Curve (PPC) indicate
Any point within the PPC curve represents under-utilization. It is attainable because, if the economy shrinks, it gets to it.
3. Which of the following is NOT a feature of labour?
The efficiency of labour does not depend on its size but on the expertise/skill relevant to the job assigned to the worker.
4. The pursuit of private profits is a feature of
Capitalist economies look for profit from both public and private means. After making publicly obtainable profit, operators explore any available private profit.
5. A major feature of the socialist economic system is
In a socialist economy, the government determines what will be produced and consumed within the economy.
6. If the budget on education is $50m out of an annual national budget of $300m, the sector of a pie chart representing education is
Angle = 50/300 x 360° = 60°.
7. Price elasticity of demand is the responsiveness of quantity demanded to a change in
Price elasticity of demand is the responsiveness of quantity demanded to a change in the price of the commodity.
8. When total revenue increases as price falls, the coefficient of price elasticity of demand is
If a fall in price results in an increase in revenue, the good is price elastic; when demand is price elastic, the price elasticity of demand must be greater than one.
9. If the quantity demanded of rice decreased from 150 bags to 100 bags, the percentage change in quantity demanded is
% change in quantity demanded = (QD0 - QDn)/QD0 x 100% = (150-100)/150 x 100% = 33.3%.
10. The law of demand will not hold when
The law of demand applies to normal commodities; it is not applicable to rare (e.g. prestige/Giffen-type) commodities.
11. The diagram below shows the demand for milk. The movement from points x to z might have been caused by
A movement along a demand curve can only be caused by a change in the price of the commodity itself. The movement from x to z is caused by a decrease in the price of milk.
12. If demand for postal services declines as a result of increased use of e-mails, then the two services are in
Since one service substitutes for the other, the demand relationship between them is referred to as competitive demand.
13. Other things being equal, an increase in the demand for land in the short-run will cause an increase in the
The initial demand curve is D0D0 with equilibrium e0. When demand increases, ceteris paribus, the demand curve shifts to D1D1, moving equilibrium to e1. This causes price to rise from P0 to P1, while quantity supplied only moves along the fixed short-run supply curve from q0 to q1 (supply itself does not shift).
14. If the coefficient of price elasticity of supply of a commodity is 0.8, then supply is
A coefficient below one indicates an inelastic response; since the coefficient (0.8) is not zero or infinite, supply is classified as fairly elastic/inelastic in degree, per the WAEC key, answer B.
15. The negative slope of the demand curve is best explained by
The law of diminishing marginal utility explains why quantity and price are negatively related; as price falls, quantity demanded rises, giving the downward-sloping demand curve.
16. Minimum price legislation is used to protect the interests of (use the table showing the demand and supply schedule for apples to answer this question)
A minimum price is set above the equilibrium price, used mainly to protect the interests of small-scale producers.
17. At what price is excess supply equal to 25? (use the table showing the demand and supply schedule for apples)
At a price of $30, quantity demanded is 20 units and quantity supplied is 45 units, giving an excess supply of 25 units (45-20).
18. Which of the following best explains diseconomies of scale? Increase in output causes
When average cost rises as output is increased, diseconomies of scale have set in.
19. In the short-run, a firm can increase output by
In the short run, only variable inputs (such as raw materials) can be increased to raise output; other factors are fixed in the short-run.
20. The fixed cost of producing 100 units of a good is $600. If the variable cost is $400, the average total cost of one unit of the good is
Average total cost = (Total fixed cost + Total variable cost)/Quantity = ($600 + $400)/100 = $10.
21. Firms in perfect competition break even in the long-run because
In the long run, attractive profits draw new entrants until the market is filled and no further firms enter; the market then reaches equilibrium and firms break even.
22. The government policy that encourages public corporations to operate profitably is
When the government commercializes a public enterprise, it turns it into a profit-making organization.
23. Separation of ownership from control is more pronounced in a
In a joint-stock company, ownership is spread among many shareholders, so experts are hired to manage the business to avoid conflicting interests.
24. Warehousing of goods in the process of distribution is the function of
Wholesalers collect goods from factories and store them before distribution, helping to sustain continuous production of goods.
25. The supply of labour to an occupation will tend to rise when
When the welfare package for a particular job is improved, more labour tends to move to that job.
26. Malthus' predictions did not come to pass mainly because
As people migrated to new lands, agricultural produce increased, invalidating Malthus' theory.
27. In determining the growth of a country's population, infant mortality is a component of
Infant mortality is counted as part of the death rate during population counting.
28. The low productivity per worker in agriculture experienced in West African countries is due to
Agricultural productivity is low in West Africa mainly because most farmers still use simple, traditional tools to farm.
29. What will be the likely effect if agriculture is fully mechanized in West Africa?
When agriculture is mechanized, less labour will be required on the farm.
30. Locating firms in urban areas may
A firm located in urban areas will enjoy the facilities and benefits that are available due to the existence of other firms nearby.
31. An advantage a small firm has over a large firm is that the former can better
Smaller firms can more readily enjoy internal economies of scale because they can add more inputs to produce more output without changing capital components.
32. National income estimates will be understated as a result of the activities of
The activities of subsistence farmers are largely not quantified in monetary terms, leading to under-estimation of national income.
33. (Use the table showing Gross National Product $400m, Depreciation $100m, and Total population 25m) The value of Net National Product is
Net National Product = Gross National Product - Depreciation = $400m - $100m = $300m.
34. (Use the table showing Gross National Product $400m, Depreciation $100m, and Total population 25m) The value of per capita income is
Per capita income = Gross National Product/Population = $400m/25m = $16, which does not correspond to any of the options given; the WAEC key records no valid answer for this item.
35. One effect of inflation is that
Inflation makes each unit of money worth less; thus, the purchasing power of money falls during inflation.
36. The function of money that enables credit purchases of goods and services is
Money acting as a standard for deferred payment makes it possible for payments for goods to be made in the future, enabling credit purchases.
37. Supply of money is best defined as the
The supply of money is the total volume of currency in circulation plus deposits held in banks.
38. Capital market operators deal in the
Operators in the capital market deal in the supply of and demand for long-term loans for investment purposes.
39. Money supply will increase when the Central Bank
When the Central Bank buys securities, it pays people with cash, and this results in an increase in money supply in the economy.
40. Expansionary fiscal policy implies
Expansionary fiscal policy aims to put more money into the economy; one way to do this is by decreasing taxes, leaving people with more money in hand.
41. A commodity with perfectly inelastic demand has the burden of tax borne by
If the price elasticity of demand for a product is perfectly inelastic, the buyers bear the entire burden of the tax alone.
42. An increase in a country's production capacity usually leads to economic
When a country's production capacity increases, there is economic growth; if this growth is sustained, it eventually leads to economic development.
43. One indicator of the low level of capital formation in developing countries is
Low per capita income shows that the level of investment is low; nothing else causes the investment level to be low other than low capital formation.
44. Balance of payments is defined as the
The balance of payments records the financial transactions (both visible and invisible trade) between a country and the rest of the world.
45. Devaluation of currency will help to correct a balance of payments deficit if a country's
Devaluation only helps correct a balance of payments deficit if the elasticity of demand for the country's exports is elastic. Devaluation makes the country's goods cheaper, encouraging more people to buy them.
46. Terms of trade is favourable when the
Terms of trade is the rate at which export prices pay for import prices; it is favourable when export prices are rising faster than (higher than) import prices.
47. Short-term deficits in the current account of the balance of payments can be financed by balancing with the
The visible account balance can help balance a deficit in the invisible (current) account, and vice versa.
48. Harmonised monetary and fiscal policies is a feature of
In a free trade area, there is a tax waiver (fiscal aspect) and more money is imported into the economy (monetary aspect); that is why fiscal and monetary policies are harmonized.
49. One major achievement of the Economic Commission for Africa (ECA) is the
The major achievement of the Economic Commission for Africa (ECA) is the establishment of the African Development Bank (AfDB).
50. Exploitation of solid minerals in developing countries can stabilize their revenue base mainly because it helps in
Exploitation of solid minerals leads to the transfer of technology, as advanced countries bring in sophisticated machinery from which local workers learn.
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