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ECONOMICS


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THEORY QUESTIONS
WAEC SYLLABUS

WASSCE 2007

Objectives



1. The three principal economic units in any system are

A. Trade, industry and banking

B. Workers, consumers and share holders

C. Households, firms and government

D. Companies, industry and plant


2. The satisfaction derived from the use of a commodity is its

A. Demand.

B. wage

C. wealth

D. utility


3. The reward which accrues to labour for participating in production is

A. Interest

B. wage

C. bonus

D. profit


4. The Malthusian theory of population does not concern itself with

A. Growth of food production in arithmetical progression.

B. Growth of population in geometric progression.

C. Positive checks to population growth

D. Development and growth of manpower


5. One characteristics of labour is that It is

A. Fixed in demand

B. fixed in supply

C. mobile

D. untrainable


ANSWERS

6. A country where labour is not sufficient to make proper use of the natural resources is said to Have an

A. Active population

B. optimum population

C. over-population

D. under-population


7. When population is classified according to professions it is called

A. Geographical distribution of population

B. Age distribution of population

C. Sex distribution of population

D. Occupation distribution of population


8. What must be added to variable cost to give total cost?

A. Average total cost

B. Average variable cost

C. fixed cost

D. Marginal cost


9. Revenue is the

A. Total profit made after sales

B. Amount spent on purchases

C. Amount of goods produced

D. Total money realize from sales.


10. Given that TR is total revenue, then TRn -TR (n-1) can be used to find the

A. Marginal revenue

B. marginal cost

C. average cost

D. average revenue


ANSWERS

11. The lower the price of a commodity, the greater the quantity demanded. This is based on The assumption that consumer’s

A. Income is diminished

B. income remains the same

C. utility is diminished.

D. population is high


12. The demand for beans in bags is given by the function Q – 36 + 0.4P = O. Where P is price in Naira and Q is quantity , find Q when P = 20

A. 12 bags

B. 24 bags

C. 28 bags

D. 30 bags


13. If the price of goods X rises and the quantity demanded of good Y increase then the two goods X and Y Must be

A. Inferior goods

B. substitute

C. compliments.

D. free goods


Use the following demand schedule to answer question 14





14. The percentage change in quantity demanded is

A. 12.7%

B. 15.7%

C. 16.7%

D. 19.7%


15. In a situation where demand is perfectly elastic imposition of tax on a commodity to raise Its price will result in

A. Consumers increasing their demand for the product

B. Consumers demand for the product remaining unchanged

C. Consumers shifting completely to substitute products

D. Suppliers increasing the supply of the product


ANSWERS

16. Patents are examples of

A. Natural barriers to entry

B. legal barriers to entry

C. illegal barriers to entry

D. unnatural barriers to entry


17. Which of the following is a characteristics of monopoly?

A. Many seller

B. homogenous commodity

C. single seller

D. perfect knowledge


18. When a firm is nationalized.

A. Former owner are removed without compensation

B. It has the right to draw on state fund for capital investment

C. It must break even within a specific period

D. Workers take control of the firm


19. The practice whereby a business is owned by two or more independent firms is termed

A. Indigenization

B. joint venture

C. commercialization

D. foreign investment


20. The main objective of privatizing a government business is to

A. Create additional employment

B. Increase expenditure

C. Sources for new fund

D. Increase the level of efficiency


ANSWERS

21. The return on investment that is just sufficient to satisfy the owner of the business is called

A. Economic profit

B. business profit

C. normal profit

D. excess profit


22. Which of the following is a middle name in the chain of distribution

A. An entrepreneur

B. a producer

C. a banker

D. a retailer


23. A negative effect of the presence of a large number of middlemen in the distributive network is

A. Greater variety of goods

B. Greater quality of goods

C. Lower price of goods

D. Higher price of goods


24. An example of a producer good is a

A. Tin of milk

B. hammer

C. loaf of bread

D. shirt


25. To promote the development of the agriculture sector the governments of West Africa countries should

A. Encourage rural-urban drift

B. Discourage foreign investment in agriculture

C. Support the marketing of farm produce

D. Reduce tariffs on food imports


ANSWERS

26. The most important quality of money is that it must be

A. Relatively scarce

B. generally accepted

C. portable

D. durable


27. A certain amount of money is needed for every day expenditure like buying of goods, transportation and others. This is

A. Transaction demand for money

B. Precautionary demand for money

C. Derived demand foe money

D. Speculative demand for money


28. Long –term loans can be secured from

A. .commercial bank

B. discount house

C. developments bank

D. acceptance house


29. The value of money is generally measured in relation to the

A. Interest rate charged on bank loans

B. General price level

C. Size of country’s gold stock

D. Volume of imports


30. Which of the following is true under rapid inflation? People

A. Demand less foreign exchange

B. Set up business

C. Rush to pay their taxes

D. Hardly want to lend money


ANSWERS

31. Which of the following financial institutions was originally known as a Building Society

A. Development bank

B. insurance company

C. mortgage bank

D. merchant bank


32. A non-bank financial intermediary which is regarded as pool of risk is the

A. Co-operative society

B. stock exchange

C. insurance company

D. post office


33. A foreign exchange market deals in

A. Treasury bill

B. currencies

C. government bonds

D. commodities


34. Which of the following institutions assist the government in managing the national debt?

A. Commercial Banks

B. The Central Bank

C. The Capital Market

D. The World Bank


35. If tax takes a large proportion of the income of people with lower income , the tax is

A. Progressive

B. proportional

C. regressive

D. ad-valorem


ANSWERS

36. Which of the following is an example of direct tax?

A. Import duties

B. income tax

C. export duties

D. purchase tax.


37. Monetary control measures are coordinated by

A. Development banks

B. merchant banks

C. commercial banks

D. the central bank


38. A country whose economy is buoyant is likely to have

A. A weak currency

B. devaluation from time to time

C. A strong currency

D. Balance of payment problems


39. The Net National Product (NNP) is Gross National Product (GNP) less

A. Domestic product

B. foreign product

C. depreciation

D. investment


40. If the population of a country is low and the Gross National Product is high, the per capita income will be

A. High

B. low.

C. average

D. unitary


ANSWERS

41. The population of a country in a certain year was fifty million and the per capita income was $2050. What was the national income?

A. $750,000 million

B. $100,250 million

C. $ 102,500 million

D. $125,050 million


42. One of the advantage of capitalism is that

A. Consumers are exploited

B. Private initiative is discouraged

C. Efficient allocation of resources is assured.

D. Job security is assured


43. Which of the following contributes the highest amount of foreign exchange to the economy of West Africa Nations?

A. Construction, manufacturing and banking

B. Shipping, trading and fishing

C. Power, telecommunications and sports

D. Extraction, farming and tourism


44. International trade depend on the concept of

A. Marginal cost advantage

B. Comparative cost disadvantage

C. Comparative cost advantage

D. Absolute cost


45. One advantage of international trade is that

A. Countries depend on each other

B. It introduces variation in price

C. It increases demand for foreign goods

D. It makes variety of goods available


ANSWERS

46. The practice of selling goods overseas and often below the cost of production is known as

A. Retailing

B. dumping

C. internal trade

D. advertising


47. A summary of all the receipts and payments of a country in international transactions is called

A. Terms of trade

B. balance of payment

C. balance of payment adjustment

D. capital amount


48. Which of the following country export cocoa?

A. Liberia and Gambia

B. Ghana and Sierra Leone

C. Nigeria and Ghana

D. Sierra Leone and Nigeria


49. Which of the following are example of transfer payment?

A. Gifts and donations

B. Rents and rate

C. profits and dividends

D. internal and external debts


50. ECA means

A. Economic Commission for Africa

B. Economic Community for Africa

C. Exporting Countries of Africa

D. Economic Conference on Africa



WASSCE JUNE 2007 ECONOMICS OBJECTIVE TEST

ANSWERS

​1. C 2. D 3 C 4 D 5 C 6 D 7 D 8 C 9 D 10 A 11. B 12 C 13 B 14 C 15 C 16 B 17 C 18 B 19 B

20 D 21 C 22 D 23 D 24 B 25 C 26 B 27 A 28 C 29 B 30 D 31 C 32 C 33 C 34 C 35 C

36 B 37 D 38 D 39 C 40 A 41 C 42 C 43 D 44 C 45 D 46 B 47 B 48 C 49 A 50 A


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