Practice waec model questions vol1 economics 2022 Past Questions

Question 1 View Details

The government collects revenue from two sources: (i) an income tax that is levied at 5 % on the low‑income group, 10 % on the middle‑income group and 15 % on the high‑income group; (ii) a value‑added tax (VAT) on consumption. The population consists of three income groups: low (30 % of the population, average income ₦200,000), middle (50 % of the population, average income ₦500,000) and high (20 % of the population, average income ₦1,200,000). Consumption is assumed to be 60 % of each group's income. Government spending this year is ₦150 billion. After a 20 % increase in spending the government wants to achieve a balanced budget by adjusting only the VAT rate (the income‑tax rates remain unchanged). What VAT rate (as a percentage, rounded to one decimal place) is required to balance the budget?

A. 30.0 %

Correct B. 35.2 %

C. 40.5 %

D. 25.3 %

Correct Answer: B

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Question 2 View Details

The price of a good rises from ₦200 to ₦250 and its quantity demanded falls from 5,000 units to 4,000 units. Calculate the price elasticity of demand (using the midpoint formula) and state whether demand is elastic, inelastic or unitary.

A. -0.5 (inelastic)

B. -1.2 (elastic)

C. -0.8 (inelastic)

Correct D. -1.0 (unitary)

Correct Answer: D

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Question 3 View Details

In an economy the labour force is 20 million and the number of unemployed is 1.2 million. Of the unemployed, 30 % are frictionally unemployed and the rest are structurally unemployed. The government introduces a training programme that reduces structural unemployment by 20 % (relative reduction). Assuming the labour force remains unchanged, calculate the new unemployment rate (to two decimal places) and the change in the natural rate of unemployment (in percentage points).

A. 5.28 % unemployment rate; natural rate falls by 0.66 percentage points

Correct B. 5.16 % unemployment rate; natural rate falls by 0.84 percentage points

C. 4.80 % unemployment rate; natural rate falls by 1.00 percentage points

D. 5.40 % unemployment rate; natural rate falls by 0.72 percentage points

Correct Answer: B

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Question 4 View Details

A firm's total product (TP) of labour (L) is given by TP = -L³ + 12L² for 0 ≤ L ≤ 12. Determine (a) the quantity of labour at which average product (AP) is maximised and the maximum AP value, and (b) the quantity of labour at which marginal product (MP) equals average product.

A. L = 4 workers; maximum AP = 24 units per worker; MP = AP also at L = 4

B. L = 5 workers; maximum AP = 30 units per worker; MP = AP also at L = 5

Correct C. L = 6 workers; maximum AP = 36 units per worker; MP = AP also at L = 6

D. L = 8 workers; maximum AP = 32 units per worker; MP = AP also at L = 8

Correct Answer: C

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Question 5 View Details

In an economy the public holds currency equal to 30 % of their total deposits (currency‑deposit ratio c = 0.30). Banks keep required reserves equal to 10 % of deposits (reserve‑deposit ratio r = 0.10) and hold excess reserves equal to 5 % of deposits (e = 0.05). If the central bank purchases securities worth ₦500 million, calculate the total increase in the money supply (M1) that results, using the appropriate money multiplier. Express your answer in billions of naira, rounded to two decimal places.

A. ₦1.60 billion

Correct B. ₦1.44 billion

C. ₦1.20 billion

D. ₦0.96 billion

Correct Answer: B

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Question 6 View Details

A firm has fixed cost of ₦120,000 and a variable cost of ₦150 per unit. It sells its product at a price that depends on the quantity sold. For the first 800 units the price is ₦300 per unit. For any quantity above 800, the price per unit falls by ₦5 for each additional 100 units sold (i.e., price = 300 - 5·(Q‑800)/100). What is the smallest whole number of units the firm must sell to earn a profit?

A. 800

Correct B. 801

C. 850

D. 802

Correct Answer: B

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Question 7 View Details

The market demand for a good is given by Qd = 500 - 2P and the market supply by Qs = 3P - 150, where Q is quantity and P is price in naira. Find the equilibrium price.

A. 150

Correct B. 130

C. 140

D. 120

Correct Answer: B

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Question 8 View Details

The demand for a product is Qd = 800 - 4P and the original supply is Qs = 2P. The government imposes a specific tax of ₦20 per unit on sellers. Assuming the tax is fully borne by sellers, the supply curve shifts to Qs = 2(P - 20). What is the new equilibrium quantity?

A. 260

B. 280

C. 200

Correct D. 240

Correct Answer: D

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Question 9 View Details

Country X's real GDP rose from ₦2.5 trillion in 2015 to ₦3.2 trillion in 2020. Its population grew from 150 million to 170 million over the same period. (a) Calculate the average annual real GDP growth rate (compound) for the five‑year period. (b) Calculate the average annual per‑capita real GDP growth rate. (c) The government's development target is a per‑capita growth of 3 % per year. Did the country meet this target?

A. 1.5

Correct B. 2.5

C. 3.0

D. 2.0

Correct Answer: B

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Question 10 View Details

The following table shows the total product (TP) of a firm at different levels of labor input (L).\n\nL : 1 2 3 4 5 6\nTP: 20 45 66 82 93 99\n\nAt which level of labor does the average product (AP) reach its maximum? State the number of workers.

A. 5

Correct B. 2

C. 3

D. 4

Correct Answer: B

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Question 11 View Details

A firm employs labour while capital is fixed. When 6 workers are employed, the average product of labour is 12 units and the marginal product of the 6th worker is 8 units. The marginal product of the 5th worker is 10 units. What is the total product when 4 workers are employed?

A. 62

Correct B. 54

C. 48

D. 56

Correct Answer: B

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Question 12 View Details

A farmer can use all his resources to produce either 100 kg of rice or 200 kg of beans. Assuming a linear production‑possibility frontier, if the farmer decides to produce 60 kg of rice, what is the maximum quantity of beans he can produce?

A. 100

B. 90

C. 70

Correct D. 80

Correct Answer: D

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Question 13 View Details

A company sells a product at a pre‑tax price of ₦30 per unit. A sales tax of 5 % is levied on the revenue. The fixed cost is ₦80,000 and the variable cost is ₦12 per unit. How many units must be sold to earn a profit of exactly ₦20,000 after tax? Give your answer rounded to the nearest whole unit.

A. 6058

Correct B. 6061

C. 6102

D. 5999

Correct Answer: B

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Question 14 View Details

A logistics firm transports goods from City A to City B using either rail or road. The fixed cost per trip by rail is ₦15,000 and the variable cost is ₦120 per ton. By road the fixed cost per trip is ₦8,000 and the variable cost is ₦200 per ton. The firm must move 500 tons each month and must ship at least 30 % of the tonnage by rail. A rail trip can carry a maximum of 300 tons; any excess requires an additional rail trip with the same fixed and variable costs. If any tonnage is shipped by road, the road fixed cost is incurred. Determine the combination of tons shipped by rail and by road that minimises the total monthly transport cost and state that minimum cost.

A. 100,000

Correct B. 90,000

C. 95,000

D. 85,000

Correct Answer: B

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Question 15 View Details

An automobile manufacturer has the total‑cost function TC(Q) = 200,000 + 50Q + 0.2Q², where Q is the number of cars produced per month. The market price per car is ₦120,000. A new technology reduces the marginal cost of each additional car beyond the first 500 cars by 10 % of the original marginal cost. Determine the range of output (in whole cars) for which the firm should produce to maximise profit, assuming there is no capacity limit.

A. 334208

B. 332208

C. 333000

Correct D. 333208

Correct Answer: D

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Question 16 View Details

The consumer price index (CPI) was 150 at the end of 2020 and 158 at the end of 2021. The nominal interest rate on a government bond is 12% per annum. Assuming the CPI will increase by the same percentage in 2022 as it did from 2020 to 2021, calculate the real interest rate for the bond in 2022 using the Fisher approximation (real ≈ nominal - inflation).

A. 5.67%

B. 6.75%

Correct C. 6.67%

D. 6.30%

Correct Answer: C

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Question 17 View Details

A firm's total cost function for producing Q units of output is TC = 500 + 20Q + 0.5Q² (₦). The product is sold at the price P = 80 - 0.2Q (₦ per unit). Determine the output level that maximizes profit and state the maximum profit.

A. Q≈45 units, Profit≈₦800.00

B. Q≈50 units, Profit≈₦650.00

C. Q≈40 units, Profit≈₦720.00

Correct D. Q≈42.86 units, Profit≈₦785.71

Correct Answer: D

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Question 18 View Details

The demand for a commodity is Qd = 500 - 5P and the supply is Qs = 20P - 100, where Q is quantity and P is price in Naira. Find the equilibrium price and quantity.

Correct A. Price = ₦24, Quantity = 380 units

B. Price = ₦22, Quantity = 390 units

C. Price = ₦30, Quantity = 350 units

D. Price = ₦20, Quantity = 400 units

Correct Answer: A

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Question 19 View Details

A farmer cultivates maize on a 10‑hectare farm. The average yield per hectare (in tonnes) is Y = 2 + 0.5F - 0.05F², where F is the amount of fertilizer applied per hectare (in tonnes). The market price of maize is ₦150 per kilogram. Fertilizer costs ₦30,000 per tonne and other variable costs are ₦20,000 per hectare regardless of fertilizer use. Fixed costs (land rent, machinery) total ₦500,000 for the whole farm. (a) Determine the amount of fertilizer per hectare that maximises the farmer's profit. (b) Compute the maximum profit (in Naira) at that fertilizer level.

A. Fertilizer = 4 tonnes/ha; Maximum profit = ₦2,900,000

Correct B. Fertilizer = 3 tonnes/ha; Maximum profit = ₦2,975,000

C. Fertilizer = 2.5 tonnes/ha; Maximum profit = ₦2,800,000

D. Fertilizer = 3.5 tonnes/ha; Maximum profit = ₦3,000,000

Correct Answer: B

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Question 20 View Details

A manufacturing firm produces output according to the Cobb‑Douglas function Q = 4 L^{0.6} K^{0.4}. The price of labour is ₦2,000 per unit and the price of capital is ₦5,000 per unit. The firm sells its output at a constant price of ₦20,000 per unit. (a) With L = 8 units and K = 27 units, calculate the marginal product of labour (MPL). (b) Should the firm increase, decrease, or keep the labour input unchanged to maximise profit, assuming capital remains at 27 units? Justify using the condition MPL × price of output compared with the wage.

A. MPL ≈ 5.00; increase labour

Correct B. MPL ≈ 3.89; increase labour

C. MPL ≈ 4.12; keep labour

D. MPL ≈ 3.45; decrease labour

Correct Answer: B

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Question 21 View Details

Country X exports 2 million tonnes of cocoa at $1,200 per tonne and imports 1.5 million tonnes of wheat at $800 per tonne. The government imposes a 10 % export tax on cocoa and a 5 % import tariff on wheat. Calculate the percentage change in the country's terms of trade (export price ÷ import price) after the taxes.

Correct A. Decrease of 14.29 %

B. Decrease of 12.50 %

C. Increase of 14.29 %

D. Decrease of 16.67 %

Correct Answer: A

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Question 22 View Details

In a banking system the required reserve ratio is 10 % and the public holds currency equal to 30 % of bank deposits. If the central bank injects ₦200 million as excess reserves, determine the resulting increase in the money supply.

A. ₦700 million

B. ₦600 million

Correct C. ₦650 million

D. ₦750 million

Correct Answer: C

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Question 23 View Details

The price of a bag of rice rises from ₦200 to ₦250 and the quantity demanded falls from 5,000 bags to 4,000 bags. Compute the price elasticity of demand for rice.

A. -1.2

B. -0.5

Correct C. -0.8

D. 0.8

Correct Answer: C

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Question 24 View Details

A country has a labor force of 12 million, of which 10.5 million are employed. There are also 0.3 million discouraged workers who are not counted in the labor force. A government programme creates 200,000 jobs, moving 150,000 of the discouraged workers into employment and 50,000 of the previously unemployed into jobs. Find the original unemployment rate, the new unemployment rate after the programme, and the percentage change in the unemployment rate.

A. Original rate 12 %; new rate ≈11.5 %; decrease of about 4.2 %

B. Original rate 13 %; new rate ≈12.5 %; decrease of about 3.8 %

Correct C. Original rate 12.5 %; new rate ≈11.93 %; decrease of about 4.5 %

D. Original rate 12.5 %; new rate ≈12.0 %; decrease of about 2.5 %

Correct Answer: C

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Question 25 View Details

A small open economy has domestic demand for a good given by Q_d = 800 - 4P and domestic supply by Q_s = 200 + 2P, where P is the price per unit. The world price is ₦120. Initially the economy is a net exporter. The government introduces an export tax of ₦15 per unit and an import tariff of ₦10 per unit. Assuming the country remains an exporter after the taxes, calculate the domestic price after the taxes, the quantities demanded and supplied, the government revenue from the export tax, and the net change in national welfare (sum of consumer surplus, producer surplus and government revenue).

Correct A. ₦675 loss

B. ₦675 gain

C. ₦600 loss

D. ₦750 loss

Correct Answer: A

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