waec model questions vol1 2019 economics | Essay

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Question 1 View Details
A mixed economy seeks to allocate scarce resources among competing uses. The Federal Government of Nigeria has recently allocated ₦1.2 trillion to the health sector and ₦800 billion to the education sector for the current fiscal year.
Question Parts
(a)
Define the term **scarcity** and explain why it is regarded as the fundamental problem of economics.
(b)
Define **opportunity cost** and illustrate the concept using the government’s allocation between health and education.
(c)
Discuss how the concept of **choice** influences the allocation of resources in a mixed economy, referring to the above budgetary decision.
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Question 2 View Details
In a recent drought-affected season, the price of a bag of maize rose from ₦200 to ₦250. The price elasticity of demand for maize in Nigeria is estimated at –0.8. In the previous month, 5,000 bags of maize were sold each month at the original price.
Question Parts
(a)
Using the given price elasticity, calculate the percentage change in the quantity demanded of maize resulting from the price increase.
(b)
Determine the new quantity demanded of maize after the price rise.
(c)
Compute total revenue (price × quantity) before and after the price increase and state whether total revenue has increased or decreased.
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Question 3 View Details
The market for bottled water in Nigeria has been observed over a period during which the price of a 500‑ml bottle increased from ₦150 to ₦180, and the quantity demanded per month fell from 120,000 bottles to 96,000 bottles.
Question Parts
(a)
Define price elasticity of demand and state the formula used to compute it.
(b)
Calculate the price elasticity of demand for bottled water over the period using the midpoint method. Show all steps.
(c)
Based on the computed elasticity, classify the demand as elastic, inelastic or unitary, and discuss two implications for a firm considering a price increase.
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Question 4 View Details
A small‑scale poultry farm records the following data on the number of chickens (in hundreds) employed and the total output of eggs (in thousands) per month.
Question Parts
(a)
Using the data, compute the average product (AP) of labour for each level of labour. Show your calculations.
(b)
Compute the marginal product (MP) of labour for each additional hundred chickens (from 1 to 5). Show the steps.
(c)
Identify the range of labour input where diminishing marginal returns set in, and explain the economic significance for the farm.
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Question 5 View Details
A manufacturing firm incurs costs that can be represented by the total cost function TC = 200 + 5Q, where Q is the quantity of output produced (units). The prevailing market price for the product is ₦12 per unit.
Question Parts
(a)
Define fixed cost and variable cost. Illustrate each with a concrete example that could be relevant to the firm above.
(b)
Using the given cost function, calculate (i) the average total cost (ATC) at Q = 1,000 units, and (ii) the marginal cost (MC) at that output level. Show the steps of your calculation.
(c)
Based on the market price of ₦12 per unit, determine the firm’s profit or loss at the output level of 1,000 units. Comment on the short‑run production decision of the firm.
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Question 6 View Details
In a small town there are only two firms, Firm 1 and Firm 2, that produce a homogeneous product. The market demand is given by P = 100 – 2Q, where Q is the total quantity supplied to the market (Q = q1 + q2). Both firms have identical constant marginal cost of ₦20 per unit.
Question Parts
(a)
Identify the market structure that best describes this industry and justify your choice.
(b)
Assuming the firms compete à la Cournot, derive the reaction function for Firm 1 (express q1 in terms of q2).
(c)
Solve for the Cournot‑Nash equilibrium outputs of the two firms and the corresponding market price.
(d)
Compare the Cournot outcome with the socially optimal (efficient) level of output where price equals marginal cost. Discuss the welfare implications of the difference.
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Question 7 View Details
The following macro‑economic data are for Country X for the year ended 2025 (all figures in ₦ billions).
Question Parts
(a)
Using the expenditure approach, calculate the Gross Domestic Product (GDP) at market prices.
(b)
Given that depreciation (capital consumption allowance) is ₦180 bn and net factor income from abroad is ₦70 bn, compute the Net National Product (NNP) at market prices.
(c)
Explain how depreciation and indirect taxes affect the measurement of NNP and why they are deducted.
(d)
Assume the government decides to increase its expenditure by ₦100 bn, financed entirely by borrowing. Using the Keynesian expenditure multiplier, discuss qualitatively the likely impact on equilibrium national income in a closed economy, mentioning any assumptions you make.
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Question 8 View Details
The Central Bank of Country Y is considering an expansionary monetary policy. The following parameters are observed:
Question Parts
(a)
If the statutory reserve requirement is 10 % and banks hold excess reserves of ₦50 bn, calculate the required reserve ratio (r) and the currency‑to‑deposits ratio (c) given that the public holds ₦30 bn as currency while total deposits are ₦150 bn.
(b)
Using the money multiplier formula m = (1 + c) / (r + c), determine the theoretical money multiplier for Country Y.
(c)
The Central Bank purchases ₦200 bn of government securities in the open market. Estimate the maximum possible increase in the money supply resulting from this operation.
(d)
Critically discuss two limitations of using the money multiplier approach as a guide for monetary policy effectiveness in a developing economy like Country Y.
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