2017 - WAEC Economics Past Questions & Answers - page 1

1

Economics is regarded as a science because?

A
its issues can be easily verified by reference to facts
B
it adopts scientific methods in making its analysis
C
its issues are relevant for national development
D
its subject matter studies human behaviour
CORRECT OPTION: d

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

2

the opportunity cost of a worker going to the university  is

A
tuition, fees and books
B
boarding and lodging
C
the wages given up to attend the university
D
transportation and entertainment
CORRECT OPTION: c

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.

3

which of the following items is not an example of circulating capital

A
raw material
B
money
C
fuel
D
machinery
CORRECT OPTION: d

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.

4

in a market economy, the problem of what goods to produced is solved primarily by

A
directives of the government
B
the pattern of consumers spending
C
producers of consumer goods
D
people producing what they want
CORRECT OPTION: b

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.

5

if the weight of five puppies in kilograms are 3.5, 3.0, 4.2, 5.0 and 4.3, then mean weight of the puppies is?

A
3.5 kg
B
4.0 kg
C
4.2 kg
D
5.0 kg
CORRECT OPTION: b

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

6

if the coefficient of cross elasticity of demand for goods Y and Z is positive, the two goods are?

A
complements
B
substitutes
C
luxurious
D
inferior
CORRECT OPTION: b

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. 

7

the difference between demand and wants is in the

A
desire for the commodity
B
significance of the commodity
C
ability to pay for the commodity
D
economic value of the commodity
CORRECT OPTION: a

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.

8

A demand curve parallel to the Y-axis indicates

A
fairly elastic demand
B
perfectly elastic demand
C
perfectly inelastic
D
fairly inelastic demand
CORRECT OPTION: c

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.

9

which of the following is an example of derived demand

A
textbook
B
labour
C
staple food
D
mobile phone
CORRECT OPTION: b

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 exampledemand 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.

10

A rightward shift in the supply curve of a commodity is brought about by an increase in?

A
the level of technology
B
the price of the commodity
C
cost of production
D
taxation
CORRECT OPTION: c

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.

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