enwaececonomics2015

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THEORY QUESTIONS

WAEC SYLLABUS

1. Economics is regarded as a science because it

A. Studies laws that govern human behavior

B. Uses scientific method to explain human behavior

C. Makes use of controlled experiments o explain human behavior

D. Makes use of machines to study human behavior

2. Which of the following cannot be described as land?

A. Forest

B. Diamond

C. Roads

D. Crude oil

3. 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 place

D. Factors of production are moving outward

4. The following constitute the criteria for identifying an economic system except

A. Ownership of resources

B. Scarcity of resources

C. Method of decision making

D. Motivation for production

5. A disadvantage of the mean as a measure of central tendency is that, it

A. Is affected by extreme values

B. Can only be used for continuous data

C. Cannot be used to measure the qualities of a population

D. Cannot be determined in grouped data

ANSWERS

6. Which of the following is not an effect of many middlemen in the chain of distribution?

A. Shortage of commodities

B. Low retail prices

C. Hoarding of goods

D. High retail prices

7. If the prices of flour rises, then bread’s

A. Demand curve will shift to the left while supply curve will shift to the right

B. Supply curve will shift to the left

C. Supply curve will shift to the right

D. Demand curve will shift to the right while supply curve remains unchanged

8. Which of the following is not a reason for abnormal demand?

A. Prices of the commodity

B. Goods of ostentation

C. Giffen goods

D. Rare commodity

9. Increase in production subsidies will shift

A. The demand curve to the left

B. Te supply curve to the right

C. Both the supply curve and demand curves to the left

D. The supply curve to the left, demand curve to the right

10. The market supply curve slopes upwards from left to right indicating that

A. Producers pay high taxes

B. Two commodities can be supplied at the same time

C. At a lower price, less is supplied

D. At a lower price, more is supplied and demanded

ANSWERS

11. Government revenue will increase if taxes are levied on goods with

A. Perfectly elastic demand

B. Fairly elastic demand

C. Perfectly inelastic demand

D. Unitary elastic demand

12. If a given change in price brings about a proportionately larger change in quantity demanded, then

A. Demand is relatively price elastic

B. Demand is relatively price inelastic

C. Price elasticity of demand is unitary

D. Price elasticity of demand is constant

13. If the price of a commodity Z falls and a consumer buys less of it, then commodity Z is a

A. Necessity

B. Good of ostentation

C. Giffen good

D. Normal good

14. In order to calculate total utility (TU) from given levels of marginal utility (MU), one has to

A. Subtract MU and TU

B. Add MU from the various levels

C. Multiply Mu by the initial TU

D. Divide current MU by previous MU

15. Which of the following will not affect the market price of a commodity?

A. Increase in demand

B. Changes in tastes

C. Intersection of demand and supply

D. Increase in supply

ANSWERS

16. All of the following are methods of determining prices except

A. Maximum pricing

B. Rationing

C. Minimum pricing

D. Auctioning

17. The law of diminishing returns relates to

A. Total utility

B. Average utility

C. Total product

D. Marginal product

18. By adding all the marginal products at each level of employment of the variable input, we obtain a value equal to

A. Average product

B. Total product

C. Average variable cost

D. Total cost

19. Total cost is obtained by

A. Adding up the marginal cost at each level

B. Dividing the total cost by output at each level

C. Adding up the average variable cost at each level

D. Adding up the average variable cost at each level

20. Which of the following cost curves is not U-shaped? The

A. Marginal cost curve

B. Average fixed cost curve

C. Average total cost curve

D. Average variable cost curve

ANSWERS

21. Which of the following business organizations is likely to experience disagreements between management and shareholders?

A. Co-operative society

B. Sole trader

C. Partnership

D. Joint-stock company

22. Which of the following is not a method of controlling monopoly?

A. Preventing mergers

B. Indigenization

C. Privatization

D. Imposing high profit tax

23. 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 public

24. Inflation may occur if there is

A. Excess supply over demand

B. Increase in productivity

C. Excessive demand with limited supply

D. Increased government spending in a depressed economy

25. Frictional unemployment occurs when

A. There is a change in the technique of production

B. Job seekers lack information where jobs exist

C. Bad weather prevent work form progressing

D. Job seekers have disabilities

ANSWERS

26. Which of the following will increase the demand for labour?

A. Increased wage rate

B. Labour’s demand for output

C. Low wage rate

D. Low marginal productivity of labour

27. 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 form financial institutions

D. It is not the only source of raw materials for agro-based industries

28. 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 mobility

D. Geographical mobility

29. Ten bags of wheat bought for $50 by a flour miller were sold for $65. What is the Value Added Tax payable by the flour miller if the tax rate is 5%?

A. $7.50

B. $3.25

C. $2.25

D. $0.75

30. Which of the following is not a strong basis for trade union’s demand for higher wages? The

A. Company is making higher profit

B. Productivity of the workers has increased

C. Members of the union have high qualifications

D. Commodity produced by the workers is very essential

ANSWERS

31. The difference between the gross domestic product (GDP) and gross national product (GNP) is

A. Depreciation

B. Transfer payment

C. Net income from abroad

D. Direct taxes

32. 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 supply

D. Government policy

33. In national income accounting, the term net is used to indicate that a value

A. Includes income of foreigners

B. Excludes income of citizens

C. Includes depreciation

D. Excludes depreciation

34. Which of the following best describes token money?

A. Money in the vaults of commercial banks

B. Currency and coins in circulation

C. Money with face value higher than is material content

D. Coins and notes made of poor quality materials

35. An industry is best described as

A. Firms 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 products

D. Industrial concern that is into production and selling of goods

ANSWERS

36. In developing countries, a larger percentage of the labour force is employed in the

A. Trade sector

B. Tertiary sector

C. Primary sector

D. Secondary sector

37. The main item traded on a stock exchange market is

A. Treasury bills

B. Travellers’ cheques

C. Foreign currencies

D. New shares

38. The proportion of commercial banks’ total assets kept in the form of highly liquid assets is known as

A. Demand deposit

B. Fixed deposit

C. Cash ratio

D. Moral suasion

Use the information contained in the table beside to answer questions 39 and 40.

ANSWERS

41. Which of the following is not an objective of economic planning?

A. Need to direct economic development of the country towards the desired direction

B. Desire to ensure a sustained structural development of the country

C. Desire to widen the gap between developing countries and the developed worlds

D. Management of scarce resources in the face of unlimited wants of the citizens

42. In order to control inflation, the government should

A. Reduce the cost of borrowing

B. Bur securities in the open market

C. Adopt restrictive monetary policy

D. Discourage savings

43. When the demand for foreign exchange exceeds its supply, the value of the domestic currency

A. Appreciates

B. Depreciates

C. Remains unchanged

D. Expands

44. The exports of West African countries are mainly composed of

A. Services

B. Raw materials

C. Manufactured goods D. Consumer goods

45. A conscious effort of government to achieve a specific set of goals is

A. Economic planning

B. Economic development

C. Economic growth

D. Economic target

ANSWERS

46. A country has favourable terms of trade when the prices of her

A. Exports rise relative o the prices of imports

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

47. 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

B. Customs union

C. Common market

D. Economic union

48. In order o correct adverse balance of payments problems, government should

A. Reduce tariffs

B. Increase subsidies on exports

C. Increase tax on local industries

D. Reduce personal income tax

49. Which of the following is a benefit to a member country of the World Bank?

A. Easy access to long term loans

B. Management of foreign exchange