Practice waec model questions vol1 economics 2020 Past Questions

Question 1 View Details

In the year 2000 the population of Country X was 20 million. From 2000 to 2010 it grew at an annual rate of 2.5%. From 2010 to 2015 the growth rate fell to 1.8% per year. From 2015 to 2020 the population declined at 0.5% per year because of an epidemic. (a) Calculate the population in 2020 (rounded to two decimal places in millions). (b) If 60% of the 2020 population is aged 15‑64, 20% is under 15 and 20% is 65 or older, compute the dependency ratio (dependents per 100 workers) to one decimal place.

A. Population ≈ 26.10 million; Dependency ratio ≈ 70.2 %

B. Population ≈ 28.45 million; Dependency ratio ≈ 62.5 %

Correct C. Population ≈ 27.28 million; Dependency ratio ≈ 66.7 %

D. Population ≈ 27.28 million; Dependency ratio ≈ 58.3 %

Correct Answer: C

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Question 2 View Details

The price elasticity of demand for a commodity is -1.5. If the market price is increased by 10%, what is the percentage change in total revenue? State whether total revenue rises or falls and by how many percent (to one decimal place).

A. Total revenue falls by 2.5 %

Correct B. Total revenue falls by 5.0 %

C. Total revenue falls by 15.0 %

D. Total revenue rises by 5.0 %

Correct Answer: B

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Question 3 View Details

The demand for a good is given by Qd = 500 - 4P and the supply by Qs = 2P - 20, where P is the price per unit in naira and Q is quantity. Find the equilibrium price and quantity (round to one decimal place).

A. P = 90.0 naira; Q = 160.0 units

Correct B. P = 86.7 naira; Q = 153.3 units

C. P = 80.0 naira; Q = 140.0 units

D. P = 75.5 naira; Q = 120.5 units

Correct Answer: B

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Question 4 View Details

In a closed economy the marginal propensity to consume (MPC) is 0.75 and the proportional income tax rate is 20 %. Autonomous consumption is ₦200 million, autonomous investment is ₦150 million and autonomous government spending is ₦100 million. (a) Compute the equilibrium aggregate income (Y) in million naira. (b) If government spending is increased by ₦50 million, by how much will equilibrium income change? Give your answers to one decimal place.

A. Y = 1000.0 million naira; ΔY = 100.0 million naira

B. Y = 1062.5 million naira; ΔY = 112.5 million naira

Correct C. Y = 1125.0 million naira; ΔY = 125.0 million naira

D. Y = 1200.0 million naira; ΔY = 150.0 million naira

Correct Answer: C

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Question 5 View Details

In 2015 Country Y had a total population of 40 million, of which 30 % lived in urban Region A and 70 % in rural Region B. Region A's population grows at 3 % per year and Region B's at 1.2 % per year. Assuming these rates remain constant, (a) estimate the total population in 2025 (rounded to one decimal place in millions). (b) Determine the average annual growth rate of the whole country over the 10‑year period (to two decimal places).

A. Population in 2025 ≈ 48.3 million; Average annual growth rate ≈ 1.90 %

B. Population in 2025 ≈ 45.2 million; Average annual growth rate ≈ 1.55 %

C. Population in 2025 ≈ 46.0 million; Average annual growth rate ≈ 1.68 %

Correct D. Population in 2025 ≈ 47.7 million; Average annual growth rate ≈ 1.77 %

Correct Answer: D

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Question 6 View Details

A firm records the following total product (TP) for successive units of labour employed: Labour (workers): 1, 2, 3, 4, 5, 6 Total product (units): 20, 45, 66, 82, 93, 99 (a) At which unit of labour does the marginal product (MP) first start to decline? (b) How many workers should the firm employ to obtain the highest average product (AP)?

Correct A. a) 3 workers; b) 2 workers

B. a) 5 workers; b) 4 workers

C. a) 4 workers; b) 3 workers

D. a) 2 workers; b) 1 workers

Correct Answer: A

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Question 7 View Details

A manufacturing firm incurs the following total costs (TC) at different output levels (Q): Q (units): 0, 100, 200, 300, 400, 500 TC (₦): 100, 180, 260, 350, 460, 590 Using the data, determine the output level at which the firm first experiences diseconomies of scale. (Hint: compare average cost across output levels.)

Correct A. 500 units

B. 400 units

C. 600 units

D. 300 units

Correct Answer: A

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Question 8 View Details

In a country the total labour force is 10 million. The number of unemployed persons is 1.2 million, of which 0.4 million are frictionally unemployed and 0.3 million are structurally unemployed. Calculate: (i) the overall unemployment rate, (ii) the natural rate of unemployment and its percentage, (iii) the amount and percentage of cyclical unemployment.

A. Unemployment rate 12%; natural unemployment 0.8 million (8%); cyclical unemployment 0.4 million (4%)

Correct B. Unemployment rate 12%; natural unemployment 0.7 million (7%); cyclical unemployment 0.5 million (5%)

C. Unemployment rate 11%; natural unemployment 0.7 million (7%); cyclical unemployment 0.4 million (4%)

D. Unemployment rate 13%; natural unemployment 0.6 million (6%); cyclical unemployment 0.6 million (6%)

Correct Answer: B

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Question 9 View Details

A country's export price index is 120 and its import price index is 150. The government imposes a 10% ad‑valorem tariff on all imports. What is the new terms of trade (expressed as a percentage) after the tariff is applied? (Terms of trade = (Export price index ÷ Import price index) × 100.)

A. Approximately 80%

Correct B. Approximately 73%

C. Approximately 68%

D. Approximately 75%

Correct Answer: B

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Question 10 View Details

In year 1 the economy grew at a real GDP growth rate of 4 % and the unemployment rate fell from 10 % to 8 %. Assuming Okun's law holds (ΔU = -k·ΔY), (a) determine the Okun coefficient k from the data of year 1, (b) using this coefficient, estimate the unemployment rate in year 2 if the real GDP growth in year 2 is 2 %.

A. k = 0.4; unemployment rate in year 2 = 8%

B. k = 0.5; unemployment rate in year 2 = 9%

C. k = 0.6; unemployment rate in year 2 = 6%

Correct D. k = 0.5; unemployment rate in year 2 = 7%

Correct Answer: D

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Question 11 View Details

Country X's nominal GDP increased from ₦2.5 trillion to ₦3.0 trillion over a 5‑year period. During the same period the consumer price index (CPI) rose from 120 to 138 and the population grew from 50 million to 55 million. What was the average annual real per‑capita GDP growth rate (compound) over the 5 years? Express your answer as a percentage to two decimal places.

A. -1.15%

B. -0.85%

C. -0.95%

Correct D. -1.05%

Correct Answer: D

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Question 12 View Details

A developing economy receives a foreign direct investment (FDI) inflow of ₦200 million in a year. The marginal propensity to save (MPS) is 0.15, the marginal propensity to import (MPM) is 0.20 and the marginal tax rate (MPT) is 0.25. If each ₦1 million of net injection ultimately creates 0.5 000 jobs, estimate the total number of jobs generated by the FDI after accounting for leakages.

A. 200000

B. 180000

Correct C. 167000

D. 150000

Correct Answer: C

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Question 13 View Details

A country can produce either 100 units of wheat or 200 units of cloth if it devotes all its resources to one product. If it decides to produce 40 units of wheat, how many units of cloth can it produce simultaneously?

A. 140

B. 160

C. 80

Correct D. 120

Correct Answer: D

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Question 14 View Details

Using the income approach, calculate the Gross National Product (GNP) of an economy with the following data (all figures in billion Naira): wages = 500, rent = 120, interest = 80, profits = 300, indirect taxes = 150, subsidies = 30, depreciation = 100, and net factor income from abroad = -20.

A. 1100

B. 1300

Correct C. 1200

D. 1250

Correct Answer: C

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Question 15 View Details

In a given year the components of aggregate expenditure are: Consumption = ₦800 bn, Investment = ₦200 bn, Government spending = ₦300 bn, Exports = ₦150 bn, Imports = ₦250 bn. The nominal GDP calculated from these figures is therefore ₦1 200 bn. If the GDP deflator for the year is 110 (base year = 100) and the economy's potential GDP is ₦1 150 bn, compute the output gap as a percentage of potential GDP. State the result to one decimal place and indicate whether the gap is inflationary or recessionary.

A. -6.2% (recessionary)

B. -5.1% (inflationary)

C. 5.1% (inflationary)

Correct D. -5.1% (recessionary)

Correct Answer: D

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Question 16 View Details

Nigeria's nominal exchange rate changes from ₦360 per US$ to ₦400 per US$. During the same period the domestic consumer price index rises from 120 to 130 (base 100) while the foreign price index falls from 110 to 105. (i) Calculate the percentage change in the real exchange rate. (ii) If the price elasticity of export demand with respect to the real exchange rate is -0.5 and the country's initial export volume is 500,000 US$, estimate the new export volume after the exchange‑rate movement. (iii) Using the new nominal exchange rate, determine the change in Nigeria's export earnings in Naira (rounded to the nearest Naira).

Correct A. -6100000

B. -6800000

C. -5100000

D. -4500000

Correct Answer: A

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Question 17 View Details

A savings account offers a nominal interest rate of 12 % per annum, compounded annually. Expected inflation is 8 % for the first year and 10 % for the second year. If a person deposits ₦100,000 today, what will be the real purchasing power of the deposit after two years, expressed in today's Naira and rounded to the nearest Naira?

Correct A. 105600

B. 103200

C. 112000

D. 108000

Correct Answer: A

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Question 18 View Details

A monopolist faces the linear demand curve P = 200 - 0.5Q, where P is price in Naira and Q is output in thousand units. Its total cost function is TC = 20Q + 0.02Q² (thousand Naira). Determine the profit‑maximising output (in thousand units) and the corresponding price. Give your answer rounded to the nearest whole unit.

Correct A. Quantity ≈ 173 thousand units; Price ≈ 113 Naira

B. Quantity ≈ 160 thousand units; Price ≈ 120 Naira

C. Quantity ≈ 150 thousand units; Price ≈ 130 Naira

D. Quantity ≈ 180 thousand units; Price ≈ 105 Naira

Correct Answer: A

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Question 19 View Details

A farmer cultivates maize on 10 hectares. Expected yield is 2.5 tonnes per hectare. The market price is ₦120 per kilogram. Variable cost is ₦30 per kilogram produced, and fixed cost for the farm is ₦1,200,000. The government offers a 20 % subsidy on the variable cost per kilogram. What is the minimum market price per kilogram (rounded to the nearest Naira) that the farmer must receive to break even after the subsidy?

A. 75

Correct B. 72

C. 68

D. 80

Correct Answer: B

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Question 20 View Details

The price of rice rises from ₦150 to ₦165 per kilogram and the quantity demanded falls from 800,000 kg to 720,000 kg per month. Using the midpoint (arc) formula, calculate the price elasticity of demand (rounded to two decimal places) and state whether demand is elastic, inelastic, or unit‑elastic.

Correct A. -1.11, elastic

B. -1.33, elastic

C. -0.89, inelastic

D. -1.11, inelastic

Correct Answer: A

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Question 21 View Details

A steel rod manufacturer faces the market demand P = 2000 - 0.2Q (₦ per unit, Q in units). Fixed cost is ₦500,000. The variable cost per unit is ₦1,200 for the first 2,000 units and ₦1,000 for each unit produced beyond 2,000. Determine the output level that maximizes profit and state the maximum profit (in ₦).

A. 2,000 units; ₦300,000

B. 2,500 units; ₦300,000

C. 3,000 units; ₦400,000

Correct D. 2,500 units; ₦350,000

Correct Answer: D

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Question 22 View Details

Country A exports 5,000 tonnes of cocoa at the world price $2.5 per kg and imports 3,000 tonnes of wheat at $1.8 per kg. The government imposes a 10% export tax on cocoa and a 5% import tariff on wheat. At the same time the exchange rate moves from $1 = ₦350 to $1 = ₦380. Assuming quantities remain unchanged, calculate the change in net foreign‑exchange earnings (in ₦) after these policies are implemented.

A. Net foreign‑exchange earnings fall by ₦400,000,000

Correct B. Net foreign‑exchange earnings fall by ₦364,600,000

C. Net foreign‑exchange earnings fall by ₦350,000,000

D. Net foreign‑exchange earnings increase by ₦100,000,000

Correct Answer: B

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Question 23 View Details

A farmer can use all his resources to produce either 40 bags of rice or 20 bags of beans in a week. If he decides to produce 30 bags of rice, how many bags of beans must he give up?

A. 10

B. 15

C. 20

Correct D. 5

Correct Answer: D

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Question 24 View Details

A monopolist faces the demand curve P = 500 - 0.02Q (₦ per unit, Q in units). Its total cost function is TC = 100,000 + 150Q (₦). (a) Determine the profit‑maximising output, price and profit. (b) What output would prevail under perfect competition (where P = MC)?

A. Monopoly: output 8,500 units, price ₦340, profit ₦1,500,000; Perfect competition: output 18,000 units

Correct B. Monopoly: output 8,750 units, price ₦325, profit ₦1,431,250; Perfect competition: output 17,500 units

C. Monopoly: output 8,750 units, price ₦350, profit ₦1,400,000; Perfect competition: output 16,000 units

D. Monopoly: output 9,000 units, price ₦300, profit ₦1,200,000; Perfect competition: output 15,000 units

Correct Answer: B

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Question 25 View Details

A firm produces output Q = L^{0.5} K^{0.5} where L is labour hours and K is units of capital. Input prices are wage w = ₦200 per labour hour and rental rate r = ₦500 per unit of capital. To produce Q = 100 units, find the cost‑minimising quantities of labour and capital and compute the minimum total cost (in ₦).

Correct A. Labour ≈158 hours, Capital ≈63 units, Total cost ≈₦63,246

B. Labour ≈180 hours, Capital ≈55 units, Total cost ≈₦68,500

C. Labour ≈140 hours, Capital ≈70 units, Total cost ≈₦61,200

D. Labour ≈158 hours, Capital ≈63 units, Total cost ≈₦70,000

Correct Answer: A

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