WAEC Economics 2012 Past Questions

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Which of the following problems arises where are more than one technically possible methods of production

A.Wher to produce
B.for whom to produce
C.how to produce
D.what to produce

The diagram below represents the cost and revenue situation of a firm. Use the information in the diagram to
answer the questions that follow.

(a) Why would the firm not produce at (i) Q\(\_1\) (ii) Q\(\_3\) ? [6 marks]

(b) How much profit does the firm make at P\(\_1\)? [4 marks]

(c) If price falls to P\(\_1\)
(i) What quantity would the firm produce? [2 marks]
(ii) What type of profit does the firm make? [2 marks]
(iii) Explain your answer in c(ii). [4 marks]

(d) In which type of market s the firm operating?[2 marks]

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Visible balance is also known as

A.terms of trade
B.balance of payments
C.balance of trade
D.capital balance

The tables below show the expected revenues and projected expenditures from the budget of a hypothetical country in 1998. Use the information in the tables to answer the questions that follow.
EXPECTED REVENUE

ITEM	AMOUNT ($ millions)
Rents, royalties and profits	75.00
Company income tax	150.00
Customs and excise duties	300.20
Personal income tax	80.00
Fees specific charges	60.80
Value added tax	100.00

PROJECTED EXPENDITURE

ITEM	AMOUNT ($ millions)
General administration	220.10
Maintenance of foreign missions	50.00
Transfer payments	65.00
Building of schools and hospitals	200.00
Road construction	180.90

(a) Calculate the total revenue from
(i) direct taxes [3 marks]
(ii) indirect taxes [3 marks]
(iii) non-tax sources [3 marks]

(b) Determine the total
(i) capital expenditure [3 marks]
(ii) recurrent expenditure [3 marks]

(c) Determine whether the budget is a surplus or deficit. [5 marks]

A shift in the demand curve indicates

A.exceptional demand
B.change in demand
C.change in quantity demanded
D.elasticity of demand

Explain how the following factors will affect the demand for a commodity X:

(a) a decrease in the price of a implement Y; [5 marks]

(b) an increase in consumers' disposable income; [5 marks]

(c) a decrease in the apply of a substitute P; [5 marks]

(d) an increase in income tax. [5 marks] )

If a 6% decrease in price results in more than 6% decrease in quantity supplied, supply can be regarded as

A.elastic
B.unitary elastic
C.perfectly inelastic
D.perfectly elastic

(a) State and explain the law of comparative cost advantage. [12 marks]

(b) Give two limitations of the law as a theory of international trade. [8 marks]

A condition for consumer utility maximization is

A.equality of the ratio of marginal utilities and the ratio of prices
B.equality of the ratio of average utilities and the ratio of prices
C.equality of the marginal utility to total utility ratio for both commodities
D.total utility and marginal utility must be zero

(a) Define money. [2 marks]

(b) State the three motives for holding money. [6 marks]

(c) Mention two determinants each of the motives for holding money. [12 marks

Which of the following best describes the mode? the

A.observation with the highest frequency
B.average of two middle numbers
C.item that occupies the middle position
D.difference of two extreme values

(a) Distinguish between economic activities and an economic system. [5 marks]

(b) Explain the following terms:
(i) production; [5 marks]
(ii) distribution; [5 marks]
(iii) consumption15 marks]

Where a commodity takes an insignificant proportion of the consumer's income, demand for it will be

A.unitary elastic
B.price inelastic
C.fairly elatic
D.income inelastic

(a) Define:
(i) elasticity of demand; [2 marks]
(ii) price elasticity of demand. [2 marks]

(b) State any four determinants price elasticity of demand. [12 marks]

(c) Draw curves illustrating
(i) fairly elastic demand; [2 marks]
(ii) perfectly inelastic demand. [2 marks]

A demand schedule shows the quantities of goods that are

A.bought at given price at a time
B.supplied at given prices at a time
C.produced at given prices at a time
D.reserved for future consumption

(a) Define market in economics. [2 marks]

(b) State any three features of a monopoly. [9 marks]

(c) Outline any ee sources of monopoly power. [9 marks]

The demand curve for a commodity is downward sloping because the consumer will pay

A.less as the marginal utility falls
B.more as the marginal utility falls
C.less as the total utility falls
D.more as the average utility falls

(a) With the aid of a diagram, explain a minimum price. [5 marks]

(b) State any five measures by which a minimum price for an agricultural produce can be made effective. [15 marks]

A decrease in the demand for a product X resulted in a decrease in a decrease in the demand for another product Y. The demand for X and Y is

A.derived
B.composite
C.joint
D.competitive

(a) What is a supply schedule? [2 marks]

(b) Using an example, show how a market supply schedule of a product is obtained from individual supply schedules. [12 marks]

(c) State three examples of exceptional demand. [6 marks]

Any price below the equilibrium price will lead to

A.increase in supply
B.excess demand
C.equality of demand and supply
D.decreases in demand

Distinguish between the following:

(a) wants and effective demand; [5 marks]

(b) demand schedule and demand e; [5 marks]

(c) individual demand and market demand, [5 marks]

(d) change in demand and change in quantity demanded. [5 marks]

The allocation of goods and services in a free market economy is performed by

A.the price system
B.the banking system
C.the central planning body
D.government budgets

(a) Describe the output method of measuring the gross domestic product of a country. [6 marks]

(b) How is the net national product at factor cost obtained from gross domestic product? [8 marks]

(c) State two problems associated the output method. [6 marks]

Given the demand function Qd = 20 - ^1/ ₂P. What is Qd when P is $12?

A.6 units
B.10 nits
C.12 units
D.14 units

If a particular consumer derives total utility of 22 units having consumed 4 units of a given product, his average utility will be

A.88 utils
B.18 utils
C.5.5 utils
D.3.5 utils

The law of diminishing marginal utility applies to a

A.firm which minimizes cost
B.consumer who maximizes satisfaction
C.producer who maximizes marginal product
D.consumer who minimizes total utility

why is the law of diminishing returns a short run phenomenon?

A.all inputs are fixed
B.all inputs are variable
C.some outputs are variable
D.some inputs are variable

Which of the following is capable of increasing the population of a country?

A.decrease in death rate
B.increase in death rate
C.poor medical facilities
D.decrease in birth rate

In the firm's production process, marginal cost

A.falls continuously throughout
B.falls and later rises
C.remains unchanged throughout
D.rises and later falls

If a firm's price is less than average cost but more than part of variable cost, the firm is covering

A.all of its fixed cost and variable cost
B.all of its fixed cost and part of variable cost
C.all of its variable cost and part of fixed cost
D.part of its fixed cost and part of varible cost

An arrangement in which the debts of a company can only be paid from its own assets implies

A.unlimited liability
B.transferred liability
C.limited liability
D.capital liability

One reason why small scale businesses are very common in West Africa is that

A.they can easily float shares
B.their management boards are easily formed
C.their initial capital is easy to rise
D.their dividened payments are very regular

A public limited company could finance its operations through

A.government taxes
B.equity shares
C.dividend payments
D.import duties

The factor of production which takes the initiative in combining resources for production is known as

A.capital
B.land
C.entrepreneur
D.labour

The type of monopoly that develops as a result of granting patent right is known as

A.natural monopoly
B.state monopoly
C.legal monopoly
D.discriminating monopoly

Which of the following is a function of a retailer?

A.Banking services
B.Hoarding services
C.Storage services
D.Sales services

`The difference between the number of immigrants and emigrants is

A.natural growth rate
B.natural increase
C.net migration
D.census

All of the following is the features of optimum population except

A.full employment of available resources
B.unlimited amount of unexploited resources
C.maximum per capita production and income
D.high standard of living

The financial institution that specializes in risk spreading is called

A.an investment bank
B.a development bank
C.an insurance company
D.the stockexchange

The following are means of reducing the population of a country except encouraging

A.emigration
B.family planning
C.early marriage
D.sex education

Which of the following features best describes peasant agriculture in West Africa? It

A.specializes in the production of one crop
B.involves the use of small farm holdings
C.is a capital-intensive system of farming
D.is mostly associated with tree crops

One of the problems facing industrial development in West African countries is

A.inadequate large market
B.inadequate infrastructure
C.inadequate supply of labour
D.unavailability of natural resources

In a situation where the finished product of an industry is fragile, buky and perishable, such an industry should be located close to its

A.raw materials
B.market
C.labour supply
D.power supply

If Y = income, C Consumption, I = Investment, X = Export and M = Import, then national income is

A.Y = C - I + (x +m0
B.Y = C + I + (x + m)
C.Y = C +I +(X - M)
D.Y =C + I + (m - x)

The national income is the

A.Gross Domestic Product at market princes
B.Gross National product at factor cost
C.Net National Product at factor cost
D.Net National Product at market prices

When depreciation is deducted from Gross National Product, the result is

A.total national income
B.gross domestic product
C.net national product
D.net domestic product

Mr Okpoti has meat and wants maize, while Mr, Adama has maize and wants meat.transation is possible because of

A.bank deposit
B.joint demand
C.scale of preference
D.double coincidence of wants

Which of the following is not a form of money?

A.coins
B.bank notes
C.bank balance
D.bank deposit

A price index as a statistic, measures

A.how the value of money changes over time
B.the volume of currency in the economy
C.the exchange rate of a country's currency
D.the composition of goods and services