Practice waec model questions vol1 economics 2024 Past Questions

Question 1 View Details

In a certain economy the total unemployment rate is 12 %. The cyclical unemployment rate is twice the frictional unemployment rate, and the structural unemployment rate is 1.5 times the frictional unemployment rate. What is the natural rate of unemployment (the sum of frictional and structural unemployment) expressed as a percentage (to two decimal places)?

A. 7.00%

B. 8.00%

C. 5.33%

Correct D. 6.67%

Correct Answer: D

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Question 2 View Details

The Consumer Price Index (CPI) rose from 150 at the end of 2022 to 165 at the end of 2023. The inflation rate for the first six months of 2023 was 8 % (prices increased by 8 % over that period). Assuming the two half‑year inflation rates compound to give the annual inflation reflected by the CPI, determine the inflation rate for the second half of 2023. A 1‑year government bond issued in 2023 carries a nominal annual interest rate of 12 % payable semi‑annually. Using the overall annual inflation rate you have found, calculate the real interest rate (to two decimal places) on the bond using the exact Fisher formula: $(1+\text{nominal})/(1+\text{inflation})-1$.

A. 2.00%

B. 1.85%

C. 1.50%

Correct D. 1.82%

Correct Answer: D

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Question 3 View Details

A firm produces output Q according to the production function $Q = 20L - 0.5L^{2}$, where L is the number of labour units employed (capital is fixed). The price of output is ₦50 per unit and the wage rate is ₦200 per labour unit. Determine the number of labour units that maximizes profit and compute the maximum profit (in naira).

Correct A. 6400

B. 6375

C. 6175

D. 6300

Correct Answer: A

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Question 4 View Details

Country A had a GNP per capita of $2,000 in 2020. For the first three years (2020‑2023) the real growth rate of GNP per capita was 5 % per annum. From 2023 onward a development programme raised the growth rate to 7 % per annum. The programme costs $150 per capita each year starting in 2023 and is financed by a tax that reduces disposable income by 3 % of GNP per capita each year. Consumption is given by C = 0.6 × (disposable income). Calculate the net change in per‑capita consumption in 2025 relative to what it would have been without the programme. State the answer in dollars (negative sign indicates a decrease).

A. -85

B. -70

Correct C. -79

D. -60

Correct Answer: C

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Question 5 View Details

Using the income approach, compute Net National Income (NNI) at market prices for a year given the following data (in billions of naira): Compensation of employees = 500, Gross operating surplus = 300, Gross mixed income = 150, Indirect taxes = 120, Subsidies = 30, Depreciation = 80, Net factor income from abroad = -20. Show all steps.

Correct A. 940

B. 1020

C. 860

D. 880

Correct Answer: A

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Question 6 View Details

The following data are for a country in a given year: GDP at market price = ₦8,500 billion, indirect taxes = ₦600 billion, subsidies = ₦150 billion, depreciation = ₦500 billion, and net factor income from abroad = -₦200 billion (net outflow). Calculate the Net National Income (NNI) at factor cost for that year.

Correct A. 7350

B. 7950

C. 7850

D. 6950

Correct Answer: A

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Question 7 View Details

The price of a commodity rises from ₦200 to ₦250 and its quantity demanded falls from 5,000 units to 4,000 units. Using the midpoint (arc) method, calculate the price elasticity of demand.

A. -0.5

Correct B. -1

C. -0.8

D. -1.2

Correct Answer: B

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Question 8 View Details

If the supply of a good increases, what is the likely effect on the equilibrium price and equilibrium quantity in the market?

A. Equilibrium price falls and equilibrium quantity falls

B. Equilibrium price unchanged and equilibrium quantity rises

C. Equilibrium price rises and equilibrium quantity falls

Correct D. Equilibrium price falls and equilibrium quantity rises

Correct Answer: D

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Question 9 View Details

A monopoly faces the demand curve P = 100 - 2Q and has total cost TC = 20Q + 0.5Q².\n(a) Determine the monopoly's profit‑maximising output, price and profit.\n(b) Assuming perfect competition, find the competitive equilibrium output and price.\n(c) Calculate the dead‑weight loss caused by the monopoly.

A. Monopoly output 18, price 64, profit 720; Competitive output 24.00, price 48.00; DWL 150.00

B. Monopoly output 14, price 72, profit 560; Competitive output 28.00, price 44.00; DWL 180.00

C. Monopoly output 16, price 70, profit 600; Competitive output 30.00, price 40.00; DWL 200.00

Correct D. Monopoly output 16, price 68, profit 640; Competitive output 26.67, price 46.67; DWL 170.67

Correct Answer: D

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Question 10 View Details

In a banking system the required reserve ratio is 10% and banks keep an excess‑reserve ratio of 2% of deposits. If a new cash injection of ₦20 billion is deposited in the banking system, what is the maximum possible increase in the money supply?

A. 1000.00

B. 200.00

Correct C. 166.67

D. 2.40

Correct Answer: C

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Question 11 View Details

A firm operating in a monopolistically competitive market faces the demand equation P = 120 - 4Q, where P is the price (₦) and Q is the quantity demanded (units). The firm's marginal cost (MC) is constant at ₦20 per unit and its fixed cost is ₦200. Determine the profit‑maximising output, the corresponding price, and the maximum profit the firm can earn.

A. ₦380

B. ₦450

Correct C. ₦425

D. ₦400

Correct Answer: C

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Question 12 View Details

A farmer has 20 hectares of land to allocate between wheat and rice. Each hectare of wheat yields a profit of ₦500,000 and requires 2 kg of fertilizer. Each hectare of rice yields a profit of ₦600,000 and requires 3 kg of fertilizer. The farmer possesses only 45 kg of fertilizer. Determine how many hectares of wheat and rice should be cultivated to maximise total profit and state the maximum profit.

A. 13 hectares wheat, 6 hectares rice; maximum profit = ₦10,100,000

B. 14 hectares wheat, 5 hectares rice; maximum profit = ₦10,000,000

Correct C. 15 hectares wheat, 5 hectares rice; maximum profit = ₦10,500,000

D. 12 hectares wheat, 7 hectares rice; maximum profit = ₦10,200,000

Correct Answer: C

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Question 13 View Details

A transport company runs identical trucks. Each truck incurs a fixed monthly cost of ₦150,000 and a variable cost of ₦30 per kilometre travelled. The company can charge a freight rate R (₦ per ton·km). Each truck can carry 20 tons per trip and the average trip distance is 200 km. Market demand for freight is represented by the linear function T = 120 - 2R, where T is the number of trips a truck makes per month. Determine the freight rate R that maximises the monthly profit per truck and compute that maximum profit.

A. R = 31.50 ₦/ton·km; maximum profit = ₦6,500,000 per month

B. R = 32.00 ₦/ton·km; maximum profit = ₦7,200,000 per month

C. R = 28.50 ₦/ton·km; maximum profit = ₦5,800,000 per month

Correct D. R = 30.75 ₦/ton·km; maximum profit = ₦6,694,500 per month

Correct Answer: D

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Question 14 View Details

A firm's total cost function is TC = 0.5Q² + 30Q + 500, where Q is output (units). The market price of the product is a constant ₦80 per unit. Find the output level that maximises profit and state the maximum profit.

A. ₦1,050

Correct B. ₦750

C. ₦900

D. ₦600

Correct Answer: B

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Question 15 View Details

A company produces two products, A and B. Selling prices are ₦120 and ₦150 per unit respectively. Variable costs are ₦70 for A and ₦90 for B. Fixed costs amount to ₦100,000 per month. Each unit of A requires 2 labour‑hours and each unit of B requires 3 labour‑hours. The firm has at most 5,000 labour‑hours available each month. Determine the production plan (units of A and B) that yields the highest profit and compute that maximum profit.

A. 1,500 units of A, 500 units of B; maximum profit = ₦5,000

B. 1,000 units of A, 1,000 units of B; maximum profit = ₦10,000

Correct C. 2,500 units of A, 0 units of B; maximum profit = ₦25,000

D. 2,000 units of A, 250 units of B; maximum profit = ₦15,000

Correct Answer: C

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Question 16 View Details

The price elasticity of demand for a certain good is -1.2. Initially the price is ₦200 and the quantity demanded is 5,000 units. If the price is raised to ₦220, what is the total revenue after the price change?

A. 1000000

B. 1100000

Correct C. 968000

D. 880000

Correct Answer: C

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Question 17 View Details

A firm's total cost (TC) of producing Q units is given by TC = 2000 + 5Q + 0.1Q² (₦). The market price per unit is ₦50 for output up to 200 units, but falls to ₦45 for any output above 200 units. Determine the output level that maximizes the firm's profit and state the profit at that output.

A. 180 units, profit ₦2700

B. 220 units, profit ₦2500

Correct C. 200 units, profit ₦3000

D. 200 units, profit ₦3500

Correct Answer: C

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Question 18 View Details

The Consumer Price Index (CPI) was 112 in 2022 and 124 in 2023. A savings account offers a nominal interest rate of 8% per annum. Calculate the real interest rate for 2023 using the Fisher approximation, and then find the real value of a ₦10,000 deposit after one year.

A. 9500

Correct B. 9729

C. 9200

D. 10800

Correct Answer: B

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Question 19 View Details

A farmer can use his land to produce either 10 bags of rice or 5 bags of beans with the same resources. What is the opportunity cost of producing one bag of rice in terms of beans?

Correct A. 0.5

B. 5

C. 2

D. 0.2

Correct Answer: A

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Question 20 View Details

In a country with a labour force of 5,000,000, the unemployment rate is 12%. Of the unemployed, 2% of the labour force are frictionally unemployed and 3% are structurally unemployed. Calculate the number of people who are cyclically unemployed.

Correct A. 350000

B. 573000

C. 450000

D. 250000

Correct Answer: A

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Question 21 View Details

In a developing country the real GDP in year 0 is ₦1,000 billion. The economy grows at a natural rate of 5% per annum and its population grows at 2% per annum. Investment accounts for 20% of GDP and the government decides to increase investment by 10% (i.e., a 10% rise in the amount of investment). The investment multiplier is 2.5. Assuming the multiplier effect operates in the same year, what is the percentage increase in per‑capita real income for that year?

A. 12%

B. 6%

C. 10%

Correct D. 8%

Correct Answer: D

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Question 22 View Details

A firm's total cost function is TC = 0.5Q² + 20Q + 150 (where Q is output in units and costs are in naira). The market demand curve is P = 200 - 0.5Q. Determine the output level that maximises profit and state the maximum profit.

A. 8200

B. 7500

C. 6800

Correct D. 7950

Correct Answer: D

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Question 23 View Details

A firm uses the Cobb‑Douglas production function Q = L^0.5 K^0.5. To produce 100 units of output it employs 25 units of labour. What is the marginal rate of technical substitution of labour for capital (MRTS_{LK}) at this input combination?

A. 20

B. 8

C. 12

Correct D. 16

Correct Answer: D

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Question 24 View Details

The population of Country X was 150 million in 2010. From 2010 to 2015 the natural increase (births minus deaths) was a constant 2.5% per year. From 2015 to 2020 the natural increase fell linearly to 1.5% per year. Net migration was a steady +0.3% per year throughout the whole period. What is the estimated population in 2020 (rounded to the nearest million)?

A. 200 million

Correct B. 194 million

C. 190 million

D. 185 million

Correct Answer: B

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Question 25 View Details

The market demand for a commodity is given by Qd = 500 - 2P and the market supply by Qs = 3P - 30, where Q is quantity and P is price in naira. Find the equilibrium price.

Correct A. 106

B. 100

C. 108

D. 112

Correct Answer: A

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