2017 - WAEC Economics Past Questions and Answers - page 1

First is Robbins' famous all-encompassing definition of economics that is still used to define the subject today: “Economics is the science which studies human behavior as a relationship between given ends and scarce means which have alternative uses

Opportunity cost is the value of the next best thing you give up whenever you make a decision. It is "the loss of potential gain from other alternatives when onealternative is chosen". it is simply the forgone alternative

If, for example, you spend time and money going to a movie, you cannot spend that time at home reading a book, and you can't spend the money on something else.

Circulating capital can consist of cash, operating expenses, raw materials, inventory in process, finished goods inventory and accounts receivable.

Circulating capital is frequently referred to as working capital or alternatively, revolving capital.

Consumer preferences and resource scarcity determine which goods are produced and in what quantity; the prices in a market economy act as signals to producers and consumers who use these price signals to help make decisions. Governments play a minor role in the direction of economic activity.

The mean is the average of the numbers. It is easy to calculate: add up all the numbers, then divide by how many numbers there are. In other words it is the sum divided by the count. 

thus we have; 

mean = 3.5 + 3.0 + 4.2 + 5.0 + 4.3 = 20 / 5 = 4

A positive cross-price elasticity value indicates that the two goods are substitutes.

Two goods that complement each other have a negative cross elasticity of demand: as the price of goodY rises, the demand for good X falls. 

So, the key difference between wants and demand is desire. Consequently, forpeople, who can afford a desirable product are transforming their wants intodemands. In other words, if a customer is willing and able to buy a need or a want, it means that they have a demand for that need or a want.

When the demand curve is parallel to the vertical axis, it means, that the same amount of goods are demanded at any price level. Which further means that there is no effect of change in price on the quantity demanded. Hence, the product is perfectly Inelastic and quantitatively, elasticity of demand is 0.

Derived demand is an economic term describing the demand for a good/service resulting from the demand for an intermediate or related good/service. It is a  demand for some physical or intangible thing where a market exists for both related goods and services in question.

Examples. Producers have a derived demand for employees.  For another example, demand for steel leads to derived demand for steel workers, as steel workers are necessary for the production of steel. As the demand for steel increases, so does its price.

Supply curve shift: Changes in production cost and related factors can cause an entire supply curve to shift right or left. This causes a higher or lower quantity to be supplied at a given price. The ceteris paribus assumption: Supply curves relate prices and quantities supplied assuming no other factors change.