Economics 2021 Past Questions | WAEC
- The study of economics is important to every society because it______
- A. Enables individuals to satisfy all their wants
- B. Helps in the utilization of scarce resources.
- C. Helps producers to know what to produce.
- D. Restores equilibrium between producers and consumers
Correct Option: Answer is B
The study of economics helps people understand the world around them. It enables people to understand people, businesses, markets and governments, utilization of scarce resources and therefore better respond to the threats and opportunities that emerge when things change
2. A consumer with $10 needs a dress, a pair of shoes, a handbag and jewelry costing $20, $10, $7 and $3 respectively. The opportunity cost of buying the pair of shoes Is the________
- A. Dress.
- B. Jewelry.
- C. Handbag and Jewelry.
- D. Dress and Jewelry
Correct Option: Answer is C
- Opportunity cost is the forgone benefit that would have been derived from an option not chosen. To properly evaluate opportunity costs, the costs and benefits of every option available must be considered and weighed against the others.
- Therefore, the opportunity cost here is the Handbag and Jewelry not bought.
3. The distinguishing function of an entrepreneur is_______
- A. Planning.
- B. Control.
- C. Risk-bearing.
- D. Management.
Correct Option: Answer is C
- An entrepreneur is a visionary that converts an idea into a business. He is the owner of the business, so he bears all the financial and other risks.
4. When a commodity market operates without government interference, commodities are distributed through_______
- A. A government distribution agencies.
- B. The operation of price mechanism.
- C. A central planning committee
- D. Retailers only.
Correct Option: Answer is B
Price mechanism refers to the system where the forces of demand and supply determine the prices of commodities and the changes therein. It is the buyers and sellers who actually determine the price of a commodity. Under a price mechanism, if demand increases, prices will rise, causing a movement along the supply curve.
5. One way of obtaining the median of a given data is to__________
- A. Sum the value and divide by the number of items.
- B. Arrange the data in ascending order and subtract each item from the mean.
- C. Arrange the data in descending order and add each item to the least.
- D. Arrange the data in either ascending or descending order and find what item divides the set in two equal
Correct Option: Answer is D
Median is the middle number in a sorted list of numbers. To determine the median value in a sequence of numbers, the numbers must first be sorted, or arranged, in value order from lowest to highest or highest to lowest.
6. An increase in the rice harvest, all things being equal, may cause____________
- A. Price to increase substantially.
- B. Price to fall substantially.
- C. Demand to fall substantially.
- D. Farmer’s incomes to be more than doubled
Correct Option: Answer is B
If there is an increase in supply for goods and services while demand remains the same, prices tend to fall to a lower equilibrium price and a higher equilibrium quantity of goods and services
7. The demand for wood and labour is an example of______
- A. Effective demand.
- B. Complementary demand
- C. Derived demand
- D. Competitive demand
Correct Option: Answer is C
- Derived demand is an economic term that refers to the demand for a good or service that results from the demand for a different, or related, good or service.
- derived demand is demand for a factor of production or intermediate good that occurs as a result of the demand for another intermediate or final good.
8. What will be the reaction of consumers in a market if there is a fall in the price of the substitute commodity X?
- A. Price of commodity X will increase
- B. Demand for the substitute of commodity X will decrease
- C. Demand for commodity X will decrease
- D. Supply of both commodity X and its substitute will increase.
Correct Option: Answer is C
When the price of a substitute good decreases, the quantity demanded for that good increases, but the demand for the good that it is being substituted for decreases.
9. An increase in market supply is caused by the following factors except_________
- A. An improvement in innovation and technology.
- B. An increase in the price of the commodity
- C. A reduction in the cost of raw materials.
- D. A favourable weather condition.
Correct Option: Answer is C
10. The coefficient of price elasticity of supply of land is usually____________
- A. One
- B. Greater than one
- C. Zero
- D. Less than one.
Correct Option: Answer is C
11. The price of soap rose from $10 to $20 causing a trader to increase her supply from 50 to 120 boxes per week. This makes supply_________
- A. Unitary elastic.
- B. Perfectly inelastic.
- C. Fairly elastic.
- D. Inelastic.
Correct Option: Answer is C
12. The leftward shift in the supply curve for a commodity indicates_________
- A. An increase in quantity supplied
- B. A decrease in supply.
- C. A reduction in quantity supplied.
- D. An increase in supply.
Correct Option: Answer is C
- The shift to the left shows that, when supply decreases, firms produce and sell a smaller quantity at each price. The upward shift represents the fact that supply often decreases when the costs of production increase, so producers need to get a higher price than before in order to supply a given quantity of output.
13. Market supply may increase if there is an increase in the________
- A. Price of the product
- B. Prices of factors of production.
- C. Tax paid on raw materials
- D. Subsidies on raw materials.
Correct Option: Answer is A
The market supply curve slopes up for two reasons: As the price increases, more firms decide to enter the market—that is, these firms produce some positive quantity other than zero. As the price increases, firms increase the quantity that they wish to produce
14. Government can increase farmers’ incomes by__________
- A. Fixing maximum prices.
- B. Fixing minimum prices.
- C. Encouraging them to produce surplus output.
- D. Increasing taxes on inputs.
Correct Option: Answer is B
15. When market supply increases, the equilibrium price_________
- A. Rises and quantity falls.
- B. Falls and quantity rises.
- C. And quantity increase
- D. And quantity fall
Correct Option: Answer is B
An increase in supply, all other things unchanged, will cause the equilibrium price to fall; quantity demanded will increase. A decrease in supply will cause the equilibrium price to rise; quantity demanded will decrease.