Back to Course

WAEC: ECONOMICS

0% Complete
0/0 Steps
  1. Economics 2023 WAEC (WASSCE) Past Questions
    1 Topic
    |
    1 Quiz
  2. Economics 2022 WAEC (WASSCE) Past Questions
    1 Topic
    |
    1 Quiz
  3. Economics 2021 WAEC (WASSCE) Past Questions
    1 Topic
    |
    1 Quiz
  4. Economics 2020 WAEC (WASSCE) Past Questions
    1 Topic
    |
    1 Quiz
  5. Economics 2019 WAEC (WASSCE) Past Questions
    1 Topic
    |
    1 Quiz
  6. Economics 2018 WAEC (WASSCE) Past Questions
    1 Topic
    |
    1 Quiz
  7. Economics 2017 WAEC (WASSCE) Past Questions
    1 Topic
    |
    1 Quiz
  8. Economics 2016 WAEC (WASSCE) Past Questions
    1 Topic
    |
    1 Quiz
  9. Economics 2015 WAEC (WASSCE) Past Questions
    1 Topic
    |
    1 Quiz
  10. Economics 2014 WAEC (WASSCE) Past Questions
    1 Topic
    |
    1 Quiz
  • excellence

  • Follow

WAEC: ECONOMICS Economics 2021 WAEC (WASSCE) Past Questions 2021 Economics WAEC (WASSCE) Theory Past Questions (Paper 2)
Lesson 3, Topic 1
In Progress

2021 Economics WAEC (WASSCE) Theory Past Questions (Paper 2)

Lesson Progress
0% Complete

Content:

  • 2021 Economics WAEC (WASSCE) Theory Past Questions (Paper 2)
  • SECTION A (1 – 2) – Consists of two data-response questions and candidates will be required to answer one of them.
  • SECTION B (3 – 8) – Consists of six questions and candidates will be required to answer any three of them.
  • Duration – 2 hours

SECTION A (1 – 2)

Answer any one (1)

Question 1:

Table 1 below shows the distribution of the population of a country in various occupations.

Study it and answer the questions that follow.

Table 1

OccupationTotal
Shoe Production30 Million
Banking37 Million
Fish Processing19 Million
Warehousing12.2 Million
Mining16.1 Million
Fish Farming10.8 Million
Food Crop Production15.6 Million
Baking19 Million
Laundry10.3 Million

(a)  Calculate the size of the entire labour force in the country.

(b)  What percentage of the labour force is engaged in the:

(i)  Primary sector;

(ii)  Secondary sector;

(iii)  Tertiary sector?

(c)  Calculate the ratio of the workers in mining to the workers in shoe production.

(d)  Calculate the percentage of the people engaged in warehousing.

(e)  (i) Identify the type of economy depicted in the table.

(ii) Give a reason for your answer in e(i).

View Answers

Question 2:

Table 2 below shows the unit prices and quantities of hats produced by a firm. Study it and answer the questions that follow.

Table 2

QuantityUnit Price ($)Total RevenueMarginal RevenueAverage Revenue
101801,800–180
201503,000120X
30U3,60060120
40100VWY
50804,000080
60603,600-4060

(a)  Compute the values of U, V, W, X and Y.

(b)  In what type of market is the firm operating? Explain your answer.

(c)  If the firm’s marginal cost is $60.00 at all levels of output, at what level of output will it be in equilibrium? Explain your answer.

(d)  If a total cost of $600.00 is incurred when 50 units of hats are produced, determine the margin of profit or loss made.

(e)  What is another name for marginal cost?

View Answers

SECTION B (3 – 8)

Answer any three (3)

Question 3:

(a)  What is economies of scale?

(b)  Outline three internal economies of scale a firm can enjoy.

(c)  State three factors that can influence where a firm is sited.

View Answers

Question 4:

(a)  Define product retailing.

(b)  Outline any three roles performed by the wholesaler to the manufacturer.

(c)  Identify any three problems associated with distribution of products.

View Answers

Question 5:

(a)  Define price elasticity of demand.

(b)  Distinguish between elastic demand and inelastic demand.

(c)  Using diagrams, explain what happens to a trader’s total revenue when his price falls, given that demand for his product is:

(i) Elastic

(ii) Inelastic

View Answers

Question 6:

(a)  State three characteristics of perfect competition.

(b)  With the aid of diagrams, explain the equilibrium positions of a perfectly competitive firm in the:

(i) Short-run

(ii)  Long-run

View Answers

Question 7:

(a)  Explain how the central bank controls money supply through the use of:

(i)  Open market operations;

(ii)  Bank rate.

(b)  Outline four functions performed by the central Bank of your country.

View Answers

Question 8:

(a)  Distinguish between domestic trade and external trade.

(b)  Distinguish between terms of trade and balance of trade.

(c)  Outline four causes of balance deficit in a country.

View Answers

Subscribe
Notify of
guest
0 Comments
Oldest
Newest
Inline Feedbacks
View all comments

2021 WAEC Economics Theory Question 1

Table 1 below shows the distribution of the population of a country in various occupations. Study it and answer the questions that follow.

Table 1

Occupation Total
Shoe Production 30 Million
Banking 37 Million
Fish Processing 19 Million
Warehousing 12.2 Million
Mining 16.1 Million
Fish Farming 10.8 Million
Food Crop Production 15.6 Million
Baking 19 Million
Laundry 10.3 Million

 

(a)  Calculate the size of the entire labour force in the country.

Solution

Size of the labour force = (30 + 37 + 19 + 12.2 + 16.1 + 10.8 + 15.6 + 19 + 10.3) Million = 170 Million.

 

(b)  What percentage of the labour force is engaged in the:

(i)  Primary sector;

Solution

Primary sector = \( \frac{(16.1 \: + \: 10.8 \: + \: 15.6)\: million}{170 \: million} \: \times \: \frac{100}{1} \\ = \frac{42.5}{170} \: \times \: \frac{100}{1} \\ = \scriptsize 25\% \)

 

(ii)  Secondary sector;

Solution

= \( \frac{(30 \: + \: 19 \: + \: 15.6) \: million}{170 \: million} \: \times \: \frac{100}{1} \\ = \frac{68}{170} \: \times \: \frac{100}{1} \\ = \scriptsize 40 \% \)

 

(iii)  Tertiary sector;

Solution

= \( \frac{(37 \: + \: 12.2 \: + \: 10.3) \: million}{170 \: million} \: \times \: \frac{100}{1} \\ = \frac{59.5}{170} \: \times \: \frac{100}{1} \\ = \scriptsize 35 \% \)

 

(c)  Calculate the ratio of the workers in mining to the workers in shoe production.

Solution

Ratio of workers in mining to workers in Shoe Production

= Mining : Shoe Production

= 16.1 : 30

or

⇒ \( \frac{16.1}{30} \)

 

(d)  Calculate the percentage of the people engaged in warehousing.

Solution

Percentage of workers engaged in warehousing =

⇒ \( \frac{Workers \: in \: warehousing}{Size\:of\:the\:entire\:labour\:force} \: \times \: \frac{100}{1} \\ = \frac{12.2\:million}{170 \: million} \: \times \: \frac{100}{1} \\ = \scriptsize 7.18 \% \: or \: 7.2 \% \)

 

(e)  (i) Identify the type of economy depicted in the table.

Explanation

The type of economy depicted in the table is an advanced/developed/industrialized economy.

(ii) Give a reason for your answer in e(i).

Explanation

The reason is that majority of the labour force is engaged in the secondary (40%) sector.

2021 WAEC Economics Theory Question 2

Table 2 below shows the unit prices and quantities of hats produced by a firm. Study it and answer the questions that follow.

Table 2

Quantity Unit Price ($) Total Revenue Marginal Revenue Average Revenue
10 180 1,800 – 180
20 150 3,000 120 X
30 U 3,600 60 120
40 100 V W Y
50 80 4,000 0 80
60 60 3,600 -40 60

 

(a)  Compute the values of U, V, W, X and Y.

Solution

U = \( \frac{TR}{Q} \\ = \frac{$3,600}{30} \\ = \scriptsize $120 \)

V = \( \scriptsize TR_{40} \\ = \scriptsize $100 \: \times \: 40 \\ = \scriptsize $4,000 \)

W = \( \scriptsize MR_{40} \\ = \frac{TR_{40} \: – \: TR_{30}}{40 \: – \: 30} \\ = \frac{$4,000 \: – \: $3600}{10} \\ = \frac{$400}{10} \\ = \scriptsize $40 \)

X = \( \scriptsize AR_{20}\\ = \frac{TR_{20}}{20}\\ = \frac{$3,000}{20} \\ = \scriptsize $150 \)

Y = \( \scriptsize AR_{40} \\= \frac{TR_{40}}{40}\\ = \frac{$4,000}{40} \\ = \scriptsize $100 \)

 

(b)  In what type of market is the firm operating? Explain your answer.

Explanation

The firm is operating in a monopolistic competition/an imperfect market. This is because, at each level, the price is greater than marginal revenue or the seller has to reduce the price in order to sell more. The price is not fixed.

 

(c)  If the firm’s marginal cost is $60.00 at all levels of output, at what level of output will it be in equilibrium? Explain your answer.

Explanation

The firm will be in equilibrium at output level 30. At that point MR = MC = $60.

 

(d)  If a total cost of $600.00 is incurred when 50 units of hats are produced, determine the margin of profit or loss made.

Solution

Profit50 = TR50 – TC50

= $4,000 – $600

= $3,400

 

(e)  What is another name for marginal cost?

Explanation

Another name for marginal cost is incremental cost or differential cost.

2021 WAEC Economics Theory Question 3

(a)  What is economies of scale?

Explanation

Economies of scale refer to the benefits a firm derives as a result of expanding its productive capacity or the concentration of firms of an industry in an area which lead to an increase in output and a fall in production cost per unit of output.

 

(b)  Outline three internal economies of scale a firm can enjoy.

Explanation

(i) Financial Economies: Large businesses are better able to raise funds from other sources by selling shares or borrowing from banks and can negotiate for lower interest rates or loans.

(ii) Technical Economies: A firm that is large can apply mechanized/modern technology to increase its output.

(iii) Marketing Economies: Large firms can buy raw materials in bulk at good discounts, afford to advertise often, can package their goods better and reduce transport costs considerably.

(iv) Risk-Bearing: Large firms can deal with the risks of trading by diversifying their products and market base to international markets as well.

(v) Research: Large firms can carry out research into new areas to improve production by employing experts and setting up laboratories.

(vi) Administrative/Managerial: Because of its sound financial base, a large firm can employ competent managers to oversee the affairs of the company.

(vii) Welfare: Large firms can motivate their staff with better packages like accommodation, scholarships for children, opportunities for training, etc.

 

(c)  State three factors that can influence where a firm is sited.

Explanation

Availability and cost of raw materials/availability of natural resources e.g. gold, diamond, etc.

  • Access to the source of power/regular power supply.
  • Proximity to the market (due to fragility perishability or bulkiness of the final product)
  • Access to specialized transport e.g. rail services, etc.
  • Availability of labour (skilled and unskilled)
  • External economies to be derived from other firms e.g. internet, road network, etc.
  • Government policy/political influence affect the location of firms in specific places.
  • Climate factors/conditions.

2021 WAEC Economics Theory Question 4

(a)  Define product retailing.

Explanation

Product retailing are those activities involved in product distribution from either the producer or the wholesaler/retailer to final consumers.

 

(b)  Outline any three roles performed by the wholesaler to the manufacturer.

Explanation

(i) Wholesalers provide warehousing facilities for the manufacturer thereby receiving him of the duty of providing the warehouse.

(ii) Wholesalers finance the manufacturer by paying in advance for the product.

(iii)  They provide information to the manufacturer about the state of demand in the market.

(iv)  They relieve the manufacturer of the costs of transporting the products to the retailers in different locations.

(v)  Packaging, blending and branding of products are done by wholesalers.

(vi)  Advertising and sales promotions are handled by wholesalers.

(vii) Advertising and sales promotions are handled by wholesalers and this relieves the manufacturer of the costs involved.

 

(c)  Identify any three problems associated with distribution of products.

Explanation

(i) Poor or high cost of transportation: Road, rail and air transport networks are poorly developed. It is also very expensive to transport goods from one place to another.

(ii) Poor market information due to inadequate means of communication.

(iii) Numerous middlemen in the channel of distribution make product prices too high.

(iv)  A lot of wholesalers and retailers do not have adequate capital to start or to run the business.

(v) Inadequate warehousing or storage facilities result in damage to products and scarcity of some products during off-seasons.

(vi) Hoarding of goods by middlemen to create artificial scarcity which results in profiteering.

(vii)  Lack of aids to trade: Aids to trade are not well provided e.g. banking, insurance, shipping services, among others are poorly developed.

(viii)  Insecurity on roads due to the bad nature of roads and frequent incidence of armed robbery and thefts.

(ix)  Administrative problems: Official control measures hinder the free movement of goods e.g. road checks, tax officials, etc.

(x) Adulteration of products by wholesalers.

2021 WAEC Economics Theory Question 5

(a)  Define price elasticity of demand.

Explanation

Price elasticity of demand is the degree of responsiveness of quantity demanded of a commodity to a change in Price.

or Price elasticity of demand = \( \frac{\% \: change \: in \: quantity \: demanded}{\% \: change \: in \: price} \)

or Price elasticity of demand = \( \frac{\Delta Q}{\Delta P} \: \times \: \frac{P}{Q} \)

 

(b)  Distinguish between elastic demand and inelastic demand.

Explanation

Demand is said to be elastic when a change in price results in a more than proportionate change in quantity demanded.

On the other hand, demand is said to be inelastic when a change in price results in a less than proportionate change in quantity demanded

 

(c)  Using diagrams, explain what happens to a trader’s total revenue when his price falls, given that demand for his product is:

(i) Elastic

Explanation

If the demand for a trader’s product is elastic, a fall in price will result in a more than proportionate increase in quantity demanded. In such a case, the trader’s total revenue will increase. This is illustrated in the diagram below.

Total revenue before price fall = area of OP1TQ1

Total revenue after fall = area of OP2RQ2

OP2RQ2 > OP1TQ1

 

(ii) Inelastic

Explanation

If demand for a trader’s product is inelastic, a fall in price will result in a less than proportionate increase in quantity demanded. In such a case, the total revenue of the trader will fall as illustrated below.

Total revenue before price fall = area of OP1SQ1

Total revenue after price fall = area of OP2TQ2

OP2TQ2 < OP1SQ1

2021 WAEC Economics Theory Question 6

(a)  State three characteristics of perfect competition.

Explanation

  •  Large numbers of buyers and sellers such that no single buyer or seller can influence the price.
  • Homogenous products i.e. the products are identical.
  • Free entry and exit of firms: Firms are free to enter when profits are made and are free to exist when losses are incurred.
  • Identical cost conditions: There are no differences in the cost of production of firms e.g. no transport cost etc.
  • No governmental control: Forces of demand and supply regulate prices in the market.
  • Perfect knowledge: Producers and consumers have perfect knowledge of market conditions.
  • Firms are price-takers such that a single price rules the market.
  • No preferential treatment in the market since all buyers and sellers are treated equally.
  • Perfect mobility of factors of production.

 

(b)  With the aid of diagrams, explain the equilibrium positions of a perfectly competitive firm in the:

(i) Short-run

Explanation

In the short run, a perfectly competitive firm attains equilibrium at an output where MC = MR. The firm is able to earn above-normal profits as illustrated below:

Short-run Profit Maximization Under Perfect Competition Market

The firm is at equilibrium at the optimal point E where P = AC = AR = MR = MC. Equilibrium output is Qe.

 

(ii) Long-run

In the long-run, the perfectly competitive firm earns normal profit, where P = AR = AC = MR = MC and produces at the point E as illustrated below:

Equilibrium in the long run

The firm is at equilibrium at the optimal point E where P = AC = AR = MR = MC. Equilibrium output is Q.

2021 WAEC Economics Theory Question 7

(a)  Explain how the central bank controls money supply through the use of:

(i)  Open market operations;

Explanation

Open market operations:

This involves the sale or purchase of securities e.g. Treasury bills through commercial banks. If the central bank wants to increase the money supply, it will purchase securities from the public through commercial banks. This way, the reserves of the commercial banks will increase, thereby increasing their ability to grant more credit and vice versa.

(ii)  Bank rate.

Explanation

Bank rate:

This is the rate at which the central bank lends to the commercial banks and discount bills of exchange so as to influence the money supply. To increase money supply, the central bank will reduce the bank rate. This will in turn lower the lending rates of commercial banks, causing the public to demand for more loans and vice versa.

 

(b)  Outline four functions performed by the central Bank of your country.

Explanation

Functions Performed by the Central Bank

  • It acts as an agent, banker and adviser to the government.
  • It controls money supply/maintains price stability/determines monetary policy.
  • It issues currency.
  • It is a banker to other financial institutions.
  • It operates a clearing house system.
  • It manages the public/national debt
  • It controls foreign currency.
  • It conducts research on the economy.
  • It is the lender of last resort.

2021 WAEC Economics Theory Question 8

(a)  Distinguish between domestic trade and external trade.

Explanation

Domestic trade is the exchange of goods and services within the borders of a country and involves the use of only one currency, etc. while External trade is the exchange of goods and services across the borders of a country and involves the use of different currencies, etc.

 

(b)  Distinguish between terms of trade and balance of trade.

Explanation

Terms of trade is the rate at which a country’s exports is exchanged for its imports.

or Terms of trade = \( \frac{Index \: of \: Export}{Index \: of \: Import} \: \times \: \frac{100}{1} \)

while;

Balance of trade is the difference between the value of a country’s visible exports and its visible imports over a time period.

 

(c)  Outline four causes of balance deficit in a country.

Explanation

Causes of Balance of Payment Deficit

  • Increased demand for foreign consumer goods due to high taste for foreign goods.
  • Demand for foreign capital goods due to rapid industrialization.
  • Unfavourable terms of trade because of falling commodity prices.
  • Export of unprocessed primary products which attract lower prices in the world market.
  • Debt servicing due to borrowing from foreign lenders and inability to raise enough capital for domestic sources.
  • Transfer of capital abroad by foreign investors and citizens which leads to capital flight.
  • Large amounts of payments for foreign invisible items e.g. shipping, insurance, aviation, and tourism.
  • Increased expenditure on foreign missions.
0
Would love your thoughts, please comment.x
()
x

Report

Harassment or bullying behavior
Contains mature or sensitive content
Contains misleading or false information
Contains abusive or derogatory content
Contains spam, fake content or potential malware

Block Member?

Please confirm you want to block this member.

You will no longer be able to:

  • See blocked member's posts
  • Mention this member in posts
  • Invite this member to groups
  • Message this member
  • Add this member as a connection

Please note: This action will also remove this member from your connections and send a report to the site admin. Please allow a few minutes for this process to complete.

Report

You have already reported this .