Practice waec model questions vol1 economics 2023 Past Questions

Question 1 View Details

A firm's total cost function for producing a product is TC = 5,000 + 20Q + 0.02Q², where Q is the quantity produced. The firm sells each unit at a pre‑tax price of ₦150. The government imposes a sales tax of 10% on the firm's revenue, which the firm must pay. The firm wishes to earn a profit of exactly ₦30,000 after paying the tax. What is the minimum integer quantity Q that must be produced and sold to achieve this profit target?

Correct A. 323

B. 330

C. 321

D. 350

Correct Answer: A

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Question 2 View Details

The Central Bank purchases government securities worth ₦200 million, injecting this amount into the banking system. The public holds currency equal to 30% of their deposits (currency‑deposit ratio c = 0.30). Required reserve ratio is 10% (r = 0.10) and banks keep excess reserves equal to 5% of deposits (e = 0.05). Assuming the monetary base rises by the full purchase amount, what is the eventual increase in the total money supply after the process stabilises?

A. ₦500.00 million

B. ₦600.00 million

C. ₦550.55 million

Correct D. ₦577.78 million

Correct Answer: D

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Question 3 View Details

A farmer has 120 hectares of land that can be planted with either maize or soybeans. Each hectare of maize requires 2 labor‑days and yields a profit of ₦150,000. Each hectare of soybeans requires 3 labor‑days and yields a profit of ₦200,000. The farmer has at most 260 labor‑days available and must plant at least 30 hectares of soybeans to meet a market contract. How many hectares of each crop should be planted to maximise total profit, and what is the maximum profit?

Correct A. 85 hectares of maize, 30 hectares of soybeans; maximum profit ₦18,750,000

B. 85 hectares of maize, 35 hectares of soybeans; maximum profit ₦19,750,000

C. 80 hectares of maize, 30 hectares of soybeans; maximum profit ₦18,000,000

D. 90 hectares of maize, 30 hectares of soybeans; maximum profit ₦19,500,000

Correct Answer: A

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Question 4 View Details

The government levies personal income tax as follows: the first ₦500,000 of total income is tax‑free, the next ₦1,000,000 is taxed at 10%, and any amount above ₦1,500,000 is taxed at 20%. A worker earns a gross salary of ₦2,400,000 per year and receives a non‑taxable allowance of ₦200,000. What is the worker's net after‑tax income?

Correct A. ₦2,280,000

B. ₦2,320,000

C. ₦2,360,000

D. ₦2,200,000

Correct Answer: A

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Question 5 View Details

A monopolist faces the linear demand curve P = 500 - 2Q, where P is the price per unit (₦) and Q is the quantity sold (in thousands of units). The firm's total cost function is TC = 100 + 40Q + Q² (costs in ₦ thousands). Determine the profit‑maximising output (in thousands of units), the corresponding price, and the monopoly profit (in ₦).

Correct A. Output ≈ 76.7 thousand units; Price ≈ ₦346.7; Profit ≈ ₦17.53 million

B. Output ≈ 62.5 thousand units; Price ≈ ₦375.0; Profit ≈ ₦15.00 million

C. Output ≈ 85.0 thousand units; Price ≈ ₦330.0; Profit ≈ ₦20.00 million

D. Output ≈ 70.0 thousand units; Price ≈ ₦340.0; Profit ≈ ₦16.50 million

Correct Answer: A

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Question 6 View Details

Over a year, a country's export price index rose from 120 to 150, while its import price index increased from 100 to 130. Calculate the percentage change in the terms of trade (export price index divided by import price index) for the period and state whether the terms of trade improved or deteriorated.

A. 0.00%

B. -2.50%

Correct C. -3.85%

D. 4.17%

Correct Answer: C

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Question 7 View Details

A loan carries a nominal interest rate of 12% per annum. The inflation expected at the time of the loan was 5% per annum, but the actual inflation turned out to be 8% per annum. Using the exact Fisher formula, determine the real interest rate actually earned by the lender. Also compare it with the approximate real rate obtained by simply subtracting inflation from the nominal rate.

A. 4.00%

Correct B. 3.70%

C. 7.00%

D. 2.00%

Correct Answer: B

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Question 8 View Details

A farmer cultivates maize on 5 hectares. The expected yield is 3.2 tonnes per hectare and the market price is ₦150,000 per tonne. The government offers a subsidy of ₦20,000 per tonne for the first 12 tonnes produced; any production beyond 12 tonnes receives no subsidy. If total production exceeds 14 tonnes, a tax of 5% is levied on the farmer's total revenue (including the subsidy). Determine the farmer's net revenue after accounting for the subsidy and any applicable tax.

A. ₦2,640,000

B. ₦2,584,000

C. ₦2,520,000

Correct D. ₦2,508,000

Correct Answer: D

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Question 9 View Details

In a country with a labour force of 8 million, the natural rate of unemployment is 6%. Due to a recession, the actual unemployment rate rose to 10%. The government subsequently creates 200,000 new jobs, assuming the labour force size remains unchanged. What is the new unemployment rate after the job creation?

Correct A. 7.5%

B. 7.0%

C. 10%

D. 8%

Correct Answer: A

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Question 10 View Details

A firm produces output according to the Cobb‑Douglas function $Q = 20 L^{0.5} K^{0.5}$, where $L$ is labour units and $K$ is capital units. The wage rate is ₦500 per unit of labour and the rental rate of capital is ₦800 per unit. The firm must produce at least 2,000 units of output. Determine the cost‑minimising quantities of labour and capital and compute the minimum total cost.

Correct A. ₦126,491

B. ₦132,750

C. ₦115,000

D. ₦140,200

Correct Answer: A

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Question 11 View Details

The population of a country was 150 million in the year 2000 and 180 million in 2010. From 2010 onward the annual population growth rate declines linearly by 0.1 percentage point each year, starting at 3% in 2010. Assuming the population each year is obtained by multiplying the previous year's population by (1 + growth rate), in which year will the population first reach or exceed 250 million?

A. 2028

B. 2024

Correct C. 2025

D. 2026

Correct Answer: C

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Question 12 View Details

A firm produces a product. Fixed cost = ₦500,000. Variable cost per unit = ₦150 + ₦0.02Q, where Q is the number of units produced. The selling price is ₦800 per unit, and a 10% sales tax is levied on revenue which the firm must pay. What is the smallest integer output level (in units) at which the firm makes a profit after tax?

Correct A. 1101

B. 1150

C. 1050

D. 1000

Correct Answer: A

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Question 13 View Details

A farmer grows maize. The market price is ₦30,000 per tonne. The farmer's total cost (in thousands of naira) is $C=20+0.5Q+0.02Q^{2}$, where $Q$ is the quantity produced in tonnes. Assuming the farmer produces where price equals marginal cost, determine whether a 10% increase in price (to ₦33,000) that reduces quantity demanded by 8% will raise or lower the farmer's profit.

A. Profit remains the same

B. Profit decreases

C. Profit unchanged

Correct D. Profit increases

Correct Answer: D

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Question 14 View Details

The government imposes a specific tax of ₦50 per unit on a good. The market demand is $Q_d=800-4P$ and the supply is $Q_s=-200+3P$, where $P$ is the price received by producers. Find the new equilibrium consumer price and the dead‑weight loss caused by the tax (in naira).

A. ₦160.00, ₦2,000

B. ₦170.45, ₦2,500

Correct C. ₦164.29, ₦2,143

D. ₦150.00, ₦1,800

Correct Answer: C

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Question 15 View Details

A firm must transport 500 tonnes of cement from a quarry to a city. Two transport options are available: - Rail: fixed cost per trip ₦150,000, capacity 100 tonnes per trip, variable cost ₦200 per tonne. - Road: fixed cost per truck ₦30,000, capacity 10 tonnes per truck, variable cost ₦250 per tonne. Because of road congestion, at most 20 trucks can be used. Determine the numbers of rail trips and trucks that minimise total transport cost and state that minimum cost (in naira).

A. 4 rail trips, 10 trucks; ₦1,005,000

B. 3 rail trips, 20 trucks; ₦1,160,000

Correct C. 5 rail trips, 0 trucks; ₦850,000

D. 5 rail trips, 1 truck; ₦882,500

Correct Answer: C

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Question 16 View Details

A firm's total product (TP) at successive levels of labour (L) is given below: L=1, TP=20; L=2, TP=45; L=3, TP=66; L=4, TP=80; L=5, TP=90. Assuming the marginal product (MP) between two successive labour levels changes linearly, at what approximate level of labour does the average product (AP) become equal to the marginal product? Give your answer to two decimal places.

A. 3.10

B. 1.85

C. 2.45

Correct D. 2.71

Correct Answer: D

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Question 17 View Details

In a country with a labour force of 10 million, the unemployment rate is 12 %. Of the unemployed, 5 % are frictionally unemployed and 3 % are structurally unemployed (both percentages of the total labour force). How many persons are unemployed due to cyclical unemployment? Give your answer in persons.

A. 500000

B. 300000

C. 600000

Correct D. 400000

Correct Answer: D

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Question 18 View Details

Country Y had a real GNI per capita of $10 000 in 2020. Its population grows at 2 % per year. The government aims to raise real GNI per capita to $15 000 by 2030 (10 years). If the real GDP growth rate remains at 5 % per year, will the target be met? If not, what real GDP growth rate (to two decimal places) would be required to achieve the target? Assume the population growth rate stays at 2 % per year.

A. 7.25

B. 8.33

C. 5.00

Correct D. 6.14

Correct Answer: D

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Question 19 View Details

A competitive firm faces a constant market price of ₦80 000 per unit. Its total cost function (in thousands of Naira) is $TC = 0.5Q^{2} + 20Q + 100$, where $Q$ is output in units. Determine the output level that maximises profit and compute the maximum profit (in thousands of Naira).

A. 1900

B. 2100

Correct C. 1700

D. 1500

Correct Answer: C

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Question 20 View Details

In year 1, a country's export price index is 120 and its import price index is 100. In year 2, the export price index rises to 138 while the import price index rises to 110. Assuming the quantities of exports and imports remain unchanged, calculate the percentage change in the country's real national income resulting from the change in terms of trade. Give your answer to two decimal places.

A. 5.00

B. 4.00

C. 3.64

Correct D. 4.55

Correct Answer: D

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Question 21 View Details

The Central Bank of Nigeria purchases government securities worth N400 million, paying by crediting the reserves of commercial banks. The required reserve ratio is 15% and the public holds currency equal to 20% of deposits. Assuming banks lend out all excess reserves, what is the increase in the money supply (in millions of Naira) resulting from this open‑market operation? Round your answer to two decimal places.

A. 2666.67

B. 3200.00

C. 1142.86

Correct D. 1371.43

Correct Answer: D

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Question 22 View Details

A transport company operates a 50‑seat bus on a 200 km round‑trip route. Fixed costs per trip (driver's salary, depreciation) amount to N150 000, and the variable cost is N250 per kilometre. The ticket price per passenger is N2 500. Government regulation requires that at least 60 % of the seats be occupied on each trip. Determine the minimum number of passengers needed for the company to cover its total cost on a trip, and state whether the regulation is binding (i.e., whether the required occupancy alone ensures cost coverage).

Correct A. Not feasible; break‑even requires 80 passengers which exceeds the bus capacity of 50, so the regulation does not ensure cost coverage.

B. Feasible; break‑even requires 30 passengers, well below the bus capacity of 50, therefore the regulation guarantees cost coverage.

C. Not feasible; break‑even requires 55 passengers which exceeds the bus capacity of 50, so the regulation is binding.

D. Feasible; break‑even requires 45 passengers which is below the bus capacity of 50, so the regulation ensures cost coverage.

Correct Answer: A

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Question 23 View Details

A firm's production function is Q = 20 L^{0.5} K^{0.5}, where Q is output, L is labour units and K is capital units. Capital is fixed at 100 units. How many additional units of labour are required to raise output from 200 units to 300 units? Give your answer to two decimal places.

Correct A. 1.25

B. 0.75

C. 2.00

D. 1.50

Correct Answer: A

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Question 24 View Details

Given the following data for a country (in billions of Naira): wages = 500, rent = 120, interest = 80, profits = 300, indirect taxes = 150, subsidies = 30, depreciation = 100, net factor income from abroad = -20. Compute the Net National Income (NNI).

A. 850

B. 950

C. 1100

Correct D. 1000

Correct Answer: D

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Question 25 View Details

The market for a certain good is described by the linear demand equation Q_d = 500 - 5P and the linear supply equation Q_s = 2P - 20, where Q is quantity and P is price (in Naira). Find the equilibrium price and quantity. Give the price and quantity each to two decimal places.

Correct A. Price = 74.29, Quantity = 128.57

B. Price = 74.29, Quantity = 130.00

C. Price = 80.00, Quantity = 120.00

D. Price = 70.00, Quantity = 150.00

Correct Answer: A

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