2014 - WAEC Economics Past Questions and Answers - page 1

1

Human want are unlimited because

A
production is inadequate
B
resources have alternative uses
C
new wants always rise
D
resources are limited
correct option: c

It means that people never get enough, that there's always something else that they would want or need. Unlimited wants and needs are one half of the fundamental problem of scarcity that has plagued humanity since the beginning of time. The other half of the scarcity problem is limited resources.

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2

A basic economic problem of any society is

A
high level of illiteracy
B
irregular power supply
C
population growth
D
resource allocation
correct option: d

The fundamental economic problem is the issue of scarcity and how best to produce and distribute these scare resources. Scarcity means there is a finite supply of goods and raw materials. Finite resources means they are limited and can run out

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3

In a centrally planned economy, what to produce is

A
determined by the forces of demand and spply
B
driven by profit motive
C
determined by consumers
D
the responsibility of state's bureaucrats
correct option: d

 A centrally planned economy is an economic system in which a single authority, such as a government, makes economic decisions regarding the manufacturing and the distribution of products. 

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4

Which of following is not a feature of socialism?

A
Collective ownership of productive resources
B
Freedom of enterprise
C
production is not based on the profit motive
D
Maximization of public welfare
correct option: a

The main feature of socialism is the common ownership of means of production and distribution. 

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5

Households make economic decisions because they want to

A
make more profit
B
increase their salaries and wages
C
increase their purchases
D
maximize their satisfaction
correct option: d

Households make consumption decisions and own factors of production. Economic decisions are those decisions in which people (or families or countries) have to choose what to do in a condition of scarcity. This means that people have to make economic decisions because they want more things than they can actually get. Therefore, they have to choose between various options and they do this by deciding on how to maximize their untility

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6

A normal supply curve has a positive slope which indicates that

A
sellers are willing to sell more at a lower price
B
sellers are indifferent to prices
C
sellers are willing to sell more at a higher price
D
there is always a fixed supply
correct option: c

A supply curve will normally slope upwards (positive) because sellers like it when they're selling at higher prices than lower ones. So they're more willing to sell at higher prices than lower ones.

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7

To control inflation, the central bank of a country may adopt

A
an expansionary monetary policy
B
a restrictive monetary policy
C
an increased wage policy
D
a deficit financing policy
correct option: b

The purpose of restrictive monetary policy is to ward off inflation. It's called restrictive because the banks restrict liquidity. It reduces the amount of money and credit that banks can lend. It lowers the money supply by making loans, credit cards and mortgages more expensive.

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8

Disposable income is the income earned

A
by the nationals of a country resident within the country
B
from prouctive activities of nationals of a country both at home and abroad
C
when personal income tax is deducted from personal income
D
when the gross income of an individual is added to person income tax
correct option: c

Disposable income; income remaining after deduction of taxes and social security charges, available to be spent or saved as one wishes.

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9

Livestock production in West Africa is hindered mainly by

A
inadequate demand
B
use of traditional implements
C
land tenure system
D
pests and diseases
correct option: d

Livestock diseases, low productivity, water scarcity and predators are major constraints to livestock farming in west Africa

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10

The components of a three-sector economy are

A
banks, schools and hospitals
B
workers, producers and marketers
C
households, firms and the government
D
producers, retailers and wholesalers
correct option: c

The three-sector economy involves three sectors namely, households, business, and government.  The addition of the government in an economy results in bringing two variables in an economy. These variables are government expenditure (act as injections to income) and taxation (act as leakage or withdrawals from income).

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