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WAEC Economics Questions and Answers for 2021 (Essay & Objectives)

The Waec economics answers 2021 exam questions can be viewed here. The West African Examination Council (WAEC) Economics paper for SSCE will now be written on Wednesday, 19th August.

The Waec Economics (Essay) paper will start by 9:30am and will last for 2hrs while the WAEC Econs (Objective) exam will commence 11:30am and will last for 1hr. Read below.

In this post, we will be giving out the samples of waec economics questions for candidates that will participate in the examination from past questions.

WAEC Economics 2021 Questions:

PAPER 2 [Essay]
Answer any FIVE questions.

1. The table below represents a traveler’s consumption of bottles of Pepsi. Study the table carefully and answer the questions that follow.

a) Complete the missing figures D, E, F, G and H.
(b) Draw the demand curve for the traveler’s consumption of Coca-Cola. (The use of a graph sheet is essential).
(C) Explain the law of diminishing marginal utility as the basis for the slope of the traveler’s demand curve.

ANS: (C) According to the law, marginal utility falls when quantity consumed increases. In equilibrium MU= P. therefore, for MU to Call, price must Call to encourage the consumer to consume more. In other words, it is as price falls that quantity demanded increases as shown in the demand curve.

2. (a) State and explain the law of comparative cost advantage.
(b) Give two limitations of the law as a theory of international trade.
ANS: (a)
(b) Some limitations of the law are:
– It assumes that there are no transport costs.
– It assumes free mobility of factors of production.
– It assumes that production conditions (technology and the resource base of countries) will remain the same over time.

3. (a) Why is scarcity a fundamental problem in Economics?
(b) Give a reason why Economics is a;
(i) Science;
(ii) Social Science.

ANS: (a) Economics seeks to study the relationship between ends and means. Ends are unlimited while the means are limited. Scarcity means resources are limited in relation to the ends. Economics is therefore concerned with allocating the limited resources among the competing and unlimited wants.
(b) (i) Economics is a science because it adopts the scientific method.
(ii) Economics is a social science because it studies human behaviour. e.g. If the price of a commodity rises, people will buy less, other things equal.

4. (a) What is a centrally planned economy?
(b) Outline any four features of a capitalist economy?

ANS: (a) A centrally planned economy is one in which there is public ownership of the means of production and in which the decisions as to what to produce, how to produce and for whom to produce are made by the government.
(b) Features of capitalist economy;
i. there is private ownership of resources;
ii. production decisions are taken mainly by  private individuals and organizations;
iii. capital is provided by private individuals and organizations;
iv. there is the profit motive;
v. there is very limited government participation in economic activity.

5. (a) Define mobility of labour.
(b) Describe any four factors influencing the supply of labour.

ANS: (b) i. the size of the population;
ii. age distribution of the population;
iii. working hours;
iv. certain beliefs /practices;
v. level of wages;
vi. number of public holidays;
vii. official retirement age.

6. (a) Define money.
(b) State the three motives for holding money.
(c) Mention two determinants of each of the motives for holding money.

ANS: Transactions motive
(i) size of income;
(ii) interval between wage payments;
(iii) availability of credit;
(iv) family size.
Precautionary motive
(i) size of income;
(ii) interval between wage payments;
(iii) availability of credit;
(iv) perception of risks.
Speculative motive
(i) the rate of interest;
(ii) the degree of risk aversion.

7. (a) With the aid of a diagram, explain a minimum price.
(b) State any five measures by which a minimum price for an agricultural  produce can be made effective.

8. (a) What is a supply schedule?
(b) Using an example, show how a market supply schedule of a product is obtained from individual supply schedules.
(c) State three examples of exceptional demand.

ANS: (c) Exceptional demand:
i. Fixed demand or perfectly inelastic demand e.g. salt
ii. Perfectly elastic demand
iii. Expectation of future increase in price.
iv. Articles of ostentation.
v. Giffen goods.

9. (a) With examples, distinguish between  direct and indirect tax.
(b) Explain any four problems of tax collection in any West African Country.

ANS: (a) A direct tax is a tax on incomes and properties.  Examples include persona income tax, company tax, death duties, inheritance tax, capital gains taxes, etc.
Whereas, an indirect tax is tax on goods and services.  Examples include sales tax, import and export duties, excise tax, purchase tax, value added tax, etc.
(b) (i) absence of reliable records of business activities and revenues collected.
(ii) the prevalence of subsistence production.
(iii) corruption on the part of tax officials.
(iv) high level of tax evasion and tax avoidance  etc.

10. (a) What is demographic transition theory ?
(b) Explain the three stages of the theory.

ANS: (a) Demographic Transition Theory is concerned with the historical population growth of society. It explains the relationship between fertility and mortality on population growth and how developed countries in contemporary times have passed through three identical stages of population history.
(b) Stages of the Theory;
stage 1 (pre-transition phase/ stage)
stage 2 (transition phase/ stage)
stage 3 (post transition phase /stage)

11. (a) Differentiate between shares and debentures.
(b) Identify any four problems encountered by farmers in raising capital

ANS: (a) A share is the smallest unit into which the capital of a company is divided. It is a unit of ownership of a business concern while a debenture is a loan capital or corporate bond. A debenture holder is a creditor to a company.
(b) (i) low level of loanable funds;
(ii) inability of firms to produce the required collateral facilities;
(iii) under-developed money and capital markets;
(iv) high cost of loans;
(v) fluctuation of share prices;
(vi) Government financial regulation.

WAEC Economics Objective Questions 2020:

PAPER 1 [Objective]
Answer ALL questions in this section.

1. Scarcity in economics means that _______
A. human wants are limitless
B. the economy has very few resources
C. the economy can scarcely produce anything
D. resources are limited.

2. Air is essential to life but commands no price! But Diamond is not essential to life but commands a high price! This is the paradox of ______
A. thrift    B. value        C. abundance         D. scarcity.

3. Economics of scale operate only when ______
A. marginal cost is falling with input
B. average cost is falling with input
C. fixed cost is variable
D. variable cost is less than the fixed cost.

4. Efficiency in production involves _______
A. reducing the size of the workforce
B. producing a given output with the lowest cost combination of factors of production
D. increasing the quantity of the fixed factor of production.

5. An effect of inflation is that it ___________
A. discourages trade by barter
B. favours debtors at the expense of creditors
C. increases the real income of salary earners
D. increases the value of a country’s exports.

6. What could be the opportunity cost of a nuclear power station?
A. the running costs of the power station
B. a coal-fired power station
C. the current value of the power station
D. the cost of building the power station.

7. The diagram below shows a production possibility curve for maize and cotton.

Bad weather causes a poor harvest for both crops. Which movement could be used to represent this change?
A. P to R     B. Q to R          C. S to Q         D. S to R.

8. The market for a good was in equilibrium. A change occurred which resulted in a new equilibrium with a higher price for the good and a lower quantity traded.
What change would have caused this?
A. the demand curve moved to the left
B. the demand curve moved to the right
C. the supply curve moved to the left
D. the supply curve moved to the right.

9. A demand curve shows the relationship between the quantity demanded and ________
A. a change in income
B. consumer tastes
C. the supply of the product
D. the price of the product.

10. A government subsidises the production of pineapples. This is likely to _______
A. increase the price of pineapples
B. raise the costs of supplying pineapples
C. raise revenue for the government
D. cause the supply of pineapples to increase at every price.

11. What indicates the existence of external costs in an economy?
A. An international trade deficit has caused the country to be in debt.
B. National companies have borrowed from foreign investors.
C. Private costs of production are less than social costs.
D. Private costs of production are more than social benefits.

12. What might be a disadvantage to a trade union when arguing for an increase in its members’ pay?
A. an increase in imports of a cheaper, similar product
B. the closure of a local training college resulting in fewer potential workers
C. the development of a new and profitable brand of the company’s product
D. the development of new techniques that increase productivity.

13. A German car manufacturer decided to produce its cars in a factory in China. What would not be a reason why they might have chosen to do this?
A. cheaper wage costs in China
B. the availability of raw materials
C. to gain external economies from skilled labour in China
D. to increase Germany self-sufficiency.

14. A government removed the quota on goods imported into the country.
What is the most likely result of this?
A. a decrease in demand for domestic production
B. a decrease in domestic unemployment
C. a decrease in exports
D. a decrease in the balance of trade deficit.

15. A modern corporation is owned by ________
A. debenture holders      B. ordinary shareholders        C. preference shareholders       D. creditors.

16. One of the most important factors that should be considered in the location of an industry is _________
A. nearness to the financial centre
B. assured patronage by government functionaries
C. availability of inputs and market
D. availability of adequate security.

17. What is the term used to describe a policy aimed at promoting the local production of goods which are usually imported?
A. deregulation    B. import substitution     C. tariff reduction    D. backward integration.

18. Progressive tax structure is designed to ___________
A. take more from the income of the poor
B. take more from the income of the rich
C. take equal proportion of income from both the rich and the poor
D. reduce the problems emanating from tax imposition.

19. Which of the following best describes the production function?
A. it indicates the best output to produce
B. it relates naira inputs to naira outputs
C. it relates physical outputs to physical inputs
D. it indicates the best way to combine factors to produce any given output.

20. Which of the following reward is associated with entrepreneurship as a factor of production?
A. salaries      B. profits     C. interest     D. rents.

21. In a market economy, the question of what, how and for whom to produce are solved by the ________
A. elected representative of the people
B. planning committee
C. price mechanism
D. government.

22. At any given level of output, a firm’s total variable cost equals ________
A. total cost less marginal cost
B. total cost less total fixed cost
C. total cost less average cost
D. average variable cost and marginal variable cost.

Age groups (years)    Distribution (%)
Above 60                              30
15 – 60                                  45
0 – 14                                     25
23. From the above, the estimated dependency ratio of the population shown above is _______ A. 11: 9        B.9: 11       C. 7: 3     D. 3: 7

23. Which of the following factors is NOT responsible for the rural /urban drift in Nigeria?
A. the infrastructural facilities in the cities
B. declining fertility of rural farmlands
C. rural electrification programme
D. higher living standards in urban areas.

24. The necessity of choice is due to the fact that _______
A. human wants are inelastic
B. customers like to maximize satisfaction
C. resources are abundant
D. consumers are selective.

25. What is meant by labour supply?
A. number of people in working population
B. number of men and hours they work
C. number of hours during which the middle-aged persons work
D. number of workforce multiplied by the hours they worked .

26. Any payment to a factor of production in excess of what is necessary to keep its present employment is known as ________
A. real income       B. profit       C. economic rent        D. real wage

27. The market where there are many differentiated products is called ______
A. monopoly       B. perfect competition    C. monopolistic competition         D. Oligopoly.

NOTE: That there is nothing like Waec Economics expo online. Do not be deceived by fraudsters posing with fake Waec answers on the internet.