enwaececonomics2016

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THEORY QUESTIONS

WAEC SYLLABUS

1. Human wants are insatiable because wants are

A. limited while means are scarce

B. unlimited and means are also unlimited

C. limited and means are also limited

D. unlimited while means are scarce

2. Scale of preference is important for the following reasons except in

A. satisfying wants

B. making rational choice

C. making optimum allocation of resources

D. using scarce resources efficiently

3. In a socialist economy, prices of commodities are determined by

A. forces of demand and supply

B. producers of the commodities

C. the central planning authority

D. consumers who are sovereign

4. Which of the following cannot be classified as land in economics?

A. Bauxite deposit in the ground

B. a lake used for irrigation

C. A bulldozer for clearing farm land

D. Grazing field for cattle

A country's budget allocation to various sectors of the economy is shown in the pie chart below. Use it to answer questions 5 and 6

ANSWERS

6. What is the ratio of expenditure on health to Agriculture?

A. 2 : 3

B. 3 : 4

C. 4 : 3

D. 5 : 4

7. The demand curve for a necessity is usually

A. vertical

B. backward bending

C. horizontal

D. negatively sloped

8. What effect will an increase in price have on the total revenue of a firm whose product has inelastic demand? Total revenue will

A. increase

B. - fall

C. fluctuate

D. remain unchanged

9. If the quantity of men's hat demanded per week is represented by the function Qd = 20 -1/3P, where P is price, how many Hats are demanded when the price is $9.00?

A. 11

B. 17

C. 23

D. 47

10. The demand for torch and batteries is an example of

A. competitive demand

B. composite demand

C. complementary demand

D. derived demand

ANSWERS

11. Price elasticity of supply measures how responsive

A. consumers are to a change in price

B. sellers are to a change in buyers' income

C. sellers are to a change in price

D. buyers are to a change in income

12. The tendency for workers to value their leisure hours more than hours of work as wage rate increases gives rise to

A. positively sloping supply curve

B. perfectly elastic supply curve

C. backward bending supply curve

D. perfectly inelastic supply curve

13. The supply of rice in tons is given by the function: Qs - 80 - 0.7P = 0 Where Qs = quantity supplied P = price in Dollars ($) Find Qs, when P = $40

A. 108 tons

B. 52 tons

C -52 tons

D -108 tons

14. How does producers' expectation of a price fall affect the supply curve of a product? There will be

A. a movement along the curve

B. a leftward shift

C. no shift of the supply curve

D a shift to the right

15. One relationship between marginal utility and total utility is that when total utility is

A. rising, marginal utility is rising

B. falling, marginal utility is negative

C. maximum, marginal utility is maximum

D. falling, marginal utility Is rising

ANSWERS

16. A shift in the supply curve to the right while demand curve remain the same will cause equilibrium price

A. and quantity to fall

B. and quantity to rise

C. to rise and quantity to fall

D. to fall and quantity to rise

17. A price floor results in

A. excess demand

B. excess supply

C. parallel market

D. hoarding of goods

18. An entrepreneur is encouraged to adopt division of labour in production because it

A. provides more employment opportunities

B. leads to increased output and lower cost of production

C. brings about equal cost and employment opportunities

D. leads to increased cost of production and lower output

19. The long run is a period when

A. only the variable factors can be altered

B. all factors become variable

C. the firm will cease to exist

D. only the fixed factors can be altered

20. The necessary condition for a firm to be in equilibrium is that marginal revenue is

A. greater than marginal cost

B. equal to marginal cost

C. less than average revenue

D. equal to average cost

ANSWERS

21. At which stage of production should a firm shut down? When,

A. AVC=ATC

B. AVC < Price

C. AVC > Price

D. AVC = MC

22. Charging different prices for the same commodity is a feature of a

A. perfect competition

B. commodity market

C. monopolistic competition

D. monopoly market

23. In a partnership, the conduct of members is guided by

A. a memorandum of understanding

B. commodity market

C. an article of association

D. a partnership constitution

24. Indigenization policy is a measure aimed at

A. privatizing the existing businesses owned by the state

B. commercializing state - owned businesses

C. reducing foreign economic domination

D. making the indigenes managing directors of businesses

25. Which of the following measures will hinder efficient distribution of goods in West Africa?

A. Improving road networks

B. Provision of adequate storage facilities

C. Instituting price control

D. Formation of producers' co-operative societies

ANSWERS

26. The type of unemployment that occurs as a result of physical or mental disability of labour is known as

A. frictional unemployment

B. structural unemployment

C. cyclical unemployment

D. residual unemployment

27. One feature of a growing population is

A. increase in the number of young people

B. increase in the number of old people

C. decrease in the dependent population

D. decrease in the life expectancy

28. Efficiency of labour in a country is determined by the following factor except the

A. social attitude to work

B. education and training

C. working conditions of workers

D. total population

29. Which of the following will encourage capital intensive farming?

A. Encouraging communal system of land ownership

B. Adopting policies that will encourage rural-urban migration

C. Provision of subsidies on equipment

D. Restrictive lending policies by banks

30. Which of the following best explains why more foreign investments a-e not attracted to West Africa?

A. Small population size

B. Small sizes of market places

C. Instability in political and industrial policies

D. Lack of manpower needed to work in industries

ANSWERS

31. Location of firms in rural areas may

A. enable the firms to enjoy existing infrastructural facilities

B. make finance readily available

C. enhance even or balanced development

D. make such firms enjoy external economies of scale

32. In national income accounting, double counting occurs when

A. intermediate goods are counted twice

B. intermediate goods are counted with the final goods

C. final goods are counted more than once

D. different people count the products

33. The difference between GDP and GNP is

A. consumption of fixed capital

B. indirect business tax

C. net factor income from abroad

D. public transfer payment

34. Which of the following items is not included in the measurement of the national income using the income -approach?

A. Wages and salaries

B. Government purchases

C. Interest

D. Dividend

35. A bank note is said to be a legal tender because it is

A. printed by government

B. a store of value

C. signed by the head of state

D. backed by law

ANSWERS

36. During inflation, interest rate will

A. rise

B. fluctuate

C. remain constant

D. fall

37. Cost - push inflation is likely to arise when

A. there is an increase in bank lending

B. there is an increase in subsidies

C. demand for higher wages is granted

D. there is a decrease in bank lending

38. Which of the following financial institutions cannot be found on the capital market of a country?

A. Commercial bank

B. Mortgage bank

C. Stock exchange

D. Agricultural bank

39. The stock market is a market for

A. new and second hand shares

B. debentures

C. goods and services

D. short-term securities

40. Indirect taxes are generally

A. progressive

B. regressive

C. equitable

D. proportionate

ANSWERS

41. Fiscal policy that can control inflation will include the use of

A. balanced budgeting

B. tax holidays

C. budget deficit

D. budget surplus

42. Which of the following is a cause of under- development in West Africa

A. Availability of manpower

B. Increasing population

C. High rate of capital formation

D. Large size of market places

43. Which of the following is not a major problem of development planning?

A. Shortage of skilled manpower

B. Inadequate data for planning

C. Political instability

D. Poor identification of projects

44. The principles of comparative cost advantage was propounded by

A. David Ricardo

B. Alfred Marshal

C. J. S Mill

D. Adam Smith

45. The rate at which a country's exports is exchanged for her imports is

A. trade balance

B. balance of payments

C. terms of trade

D. balance on current account

ANSWERS

46. Balance of payments surplus implies that receipt for exports are

A. at par with payments for imports

B. greater than payments for imports

C. less than payments for imports

D. proportional to payments for imports

47. When the international value of a country's currency rises, things being equal, the country's

A. net exports tend to increase

B. imports tend to decrease

C. net exports tend to decrease

D. exports tend to be stable

48. One of the physical measures that can be used to reduce the volume of imports is the

A. reduction of personal income tax

B. removal of import duties

C. use of foreign exchange control

D. liberalization of credit for importers

49. When a number of countries agree to remove all trade barriers among themselves and at the same time charge a common tariff non-member countries, it is known as

A. free trade area

B. common market

C. customs union

D. economic community

50. Which of the following international organizations is. concerned with the stabilization of the balance of payments? The

A. International Monetary Fund (IMF)

B. World Bank (IBRD)

C. United Nations Organization (UNO)

D. Economic Commission for Africa (ECA)