Practice waec model questions vol1 economics 2025 Past Questions

Question 1 View Details

A country's poverty rate (P%) is modelled by $P = a - b\cdot\ln(Y)$, where $Y$ is real GDP per capita (in Naira). When $Y = 100{,}000$, $P = 40\%$; when $Y = 150{,}000$, $P = 30\%$. The government aims to reduce poverty to $20\%$. The investment multiplier is 0.5, meaning each additional Naira of investment raises $Y$ by 0.5 Naira. How much additional investment per capita (in Naira) is required to achieve the target poverty rate?

Correct A. 153000

B. 150000

C. 140000

D. 160000

Correct Answer: A

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Question 2 View Details

In an economy, the following data are given (all values in billions of Naira): GDP at market price = 2,800; indirect taxes = 350; subsidies = 70; depreciation = 250; compensation of employees = 1,300; gross operating surplus = 900; mixed income = 300. Using the production and income approaches, determine the net factor income from abroad (NFIA).

A. -10

Correct B. -20

C. -30

D. 0

Correct Answer: B

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Question 3 View Details

A firm's total product schedule (output in units) for labour L is given below: L : 0 1 2 3 4 5 6 7 TP: 0 40 78 112 140 160 170 175 The price of output is ₦200 per unit and the wage rate is ₦6,000 per worker. Determine the number of workers the firm should employ to maximise profit.

A. 2

B. 4

C. 5

Correct D. 3

Correct Answer: D

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Question 4 View Details

The nominal interest rate is 12%. Expected inflation is initially 8% and later rises to 10%. The real interest rate follows the Fisher relation $r = i - \pi^e$. Investment is given by $I = I_0 - b\,r$, where $I_0 = 500$ (billion Naira) and $b = 30$ (billion Naira per percentage point). The multiplier for the economy is 2.5. By how many billions of Naira does equilibrium output increase when expected inflation rises from 8% to 10%?

Correct A. 150

B. 120

C. 200

D. 180

Correct Answer: A

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Question 5 View Details

In an economy, the marginal propensity to consume (MPC) is 0.75 and the proportional tax rate is 20%. The government decides to increase its spending by ₦200 billion. Assuming the simple Keynesian model, by how many billions of Naira will equilibrium national income change?

A. 600

Correct B. 500

C. 250

D. 400

Correct Answer: B

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Question 6 View Details

The market for wheat is described by the linear demand equation Qd = 1000 - 2P and the linear supply equation Qs = 3P - 300, where P is the price per kilogram in Naira and Q is quantity in thousands of kilograms. The government imposes a specific tax of N20 per kilogram on sellers. Determine the new equilibrium consumer price, the equilibrium quantity, and the total tax revenue collected per month.

Correct A. Consumer price = N272 per kg; equilibrium quantity = 456,000 kg; tax revenue = N9,120,000 per month

B. Consumer price = N300 per kg; equilibrium quantity = 400,000 kg; tax revenue = N12,000,000 per month

C. Consumer price = N260 per kg; equilibrium quantity = 480,000 kg; tax revenue = N10,400,000 per month

D. Consumer price = N285 per kg; equilibrium quantity = 420,000 kg; tax revenue = N8,550,000 per month

Correct Answer: A

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Question 7 View Details

In a country with a labour force of 10 million, the actual unemployment rate is 12 %. The frictional unemployment rate is 3 % and the structural unemployment rate is 4 %.\n(a) Calculate the cyclical unemployment rate and the number of people who are cyclically unemployed.\n(b) If the government wants to reduce cyclical unemployment to 2 % by stimulating aggregate demand, and Okun's law states that a 1 % fall in the unemployment rate raises real GDP by 2 %, what percentage increase in real GDP is required?

A. Cyclical unemployment rate = 6 %; number of cyclically unemployed = 600,000; required GDP increase = 7 %

B. Cyclical unemployment rate = 3 %; number of cyclically unemployed = 300,000; required GDP increase = 4 %

C. Cyclical unemployment rate = 4 %; number of cyclically unemployed = 400,000; required GDP increase = 5 %

Correct D. Cyclical unemployment rate = 5 %; number of cyclically unemployed = 500,000; required GDP increase = 6 %

Correct Answer: D

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Question 8 View Details

Country A has a GNP per capita of $1,200 and a constant annual growth rate of 5 %. The national poverty line is $1,500.\n(a) Assuming the growth rate remains unchanged, in how many whole years will GNP per capita first exceed the poverty line?\n(b) Once the poverty line is crossed, the government decides to invest 10 % of GNP per capita each year. The investment multiplier is 1.5, which raises the annual growth rate by an additional 2 % points for the subsequent years. Calculate the GNP per capita at the end of the third year after the investment programme begins.

A. It takes 5 years to exceed the poverty line; after three further years GNP per capita ≈ $1,800.

Correct B. It takes 5 years to exceed the poverty line; after three further years GNP per capita ≈ $1,876.

C. It takes 4 years to exceed the poverty line; after three further years GNP per capita ≈ $1,720.

D. It takes 6 years to exceed the poverty line; after three further years GNP per capita ≈ $1,950.

Correct Answer: B

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Question 9 View Details

In the labour market for clerical workers, the equilibrium wage is N5,000 per month with 200,000 workers employed. The government introduces a minimum wage of N6,000. The price elasticity of labour demand is -0.8 and the price elasticity of labour supply is 0.5. Assuming the percentage change in employment can be approximated by the elasticity formula, estimate the number of workers who will be unemployed after the minimum‑wage law is enforced.

A. 58,000 workers will be unemployed.

B. 45,000 workers will be unemployed.

Correct C. 52,000 workers will be unemployed.

D. 48,000 workers will be unemployed.

Correct Answer: C

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Question 10 View Details

An economy can produce at most 10 units of Good A if it produces none of Good B, and at most 15 units of Good B if it produces none of Good A. Currently it produces 4 units of A and 6 units of B. What is the opportunity cost of producing one additional unit of Good A in terms of Good B?

Correct A. 1.5 units of Good B

B. 0.75 units of Good B

C. 1 unit of Good B

D. 2 units of Good B

Correct Answer: A

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Question 11 View Details

A farmer grows maize on a one‑hectare plot. The input costs are: fertilizer (NPK) at ₦150 per kg and seed at ₦200 per kg. The farmer applies a whole‑number amount of fertilizer F (kg) between 15 kg and 25 kg inclusive. The seed quantity is always 0.25 × F kg. Fixed costs (land, labour, etc.) are ₦30,000 per hectare. The base yield is 2.5 tonnes per hectare. For each kilogram of fertilizer above 15 kg, yield rises by 0.05 tonnes, but the yield cannot exceed 3.0 tonnes. The market price of maize is ₦40,000 per tonne; however, if the total output of the five identical farmers in the region exceeds 13 tonnes, the price falls by 10 % (to ₦36,000 per tonne). Determine the amount of fertilizer (in kg) that each farmer should apply to maximise profit per hectare.

Correct A. 25

B. 23

C. 15

D. 20

Correct Answer: A

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Question 12 View Details

In the market for a certain good, the demand function is Qd = 800 - 5P and the supply function is Qs = 5P - 200, where Q is quantity (units) and P is price (₦ per unit). Find the equilibrium price.

A. 120

Correct B. 100

C. 80

D. 90

Correct Answer: B

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Question 13 View Details

A small manufacturing firm uses labour (L) and capital (K) to produce a product. The cost of one labour unit is ₦2,000 and the cost of one capital unit is ₦8,000. However, if the firm purchases at least 10 capital units, a bulk discount reduces the price of each capital unit to ₦1,800. The firm can employ at most 80 labour units because of skill‑shortage constraints. The production function (in thousands of units) is Q = 5L + 8K. The firm must produce at least 500 thousand units. Determine the numbers of labour and capital units the firm should employ to meet the target at the minimum total cost, and state that minimum cost (in ₦).

A. 78 labour units and 15 capital units; minimum cost ₦183,000

Correct B. 80 labour units and 13 capital units; minimum cost ₦183,400

C. 79 labour units and 14 capital units; minimum cost ₦183,200

D. 80 labour units and 12 capital units; minimum cost ₦181,600

Correct Answer: B

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Question 14 View Details

The Central Bank of Nigeria requires commercial banks to hold a required reserve ratio of 10 %. Banks also keep excess reserves equal to 2 % of deposits, and the public holds cash equal to 15 % of deposits. If the Central Bank injects ₦500 million into the banking system by purchasing government securities, what is the expected increase in the money supply, assuming the multiplier operates fully? Express your answer in millions of Naira, rounded to the nearest million.

Correct A. 1852

B. 1700

C. 1500

D. 2000

Correct Answer: A

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Question 15 View Details

A textile firm produces shirts (Q_s) and trousers (Q_t). The total cost function (in thousands of Naira) is C = 50 + 2Q_s + 3Q_t + 0.01Q_s^2 + 0.02Q_t^2 + 0.005Q_sQ_t, where Q_s and Q_t are quantities (in thousands) of shirts and trousers respectively. The inverse demand functions are P_s = 30 - 0.5Q_s for shirts and P_t = 45 - 0.4Q_t for trousers (prices in thousands of Naira per thousand units). Determine the production levels (Q_s, Q_t) that maximise total profit and compute the maximum profit (in thousands of Naira). Treat quantities as continuous variables.

Correct A. Q_s ≈ 27.2 thousand shirts, Q_t ≈ 49.8 thousand trousers; maximum profit ≈ ₦1,378,000

B. Q_s ≈ 30.0 thousand shirts, Q_t ≈ 45.0 thousand trousers; maximum profit ≈ ₦1,250,000

C. Q_s ≈ 28.8 thousand shirts, Q_t ≈ 48.1 thousand trousers; maximum profit ≈ ₦1,300,000

D. Q_s ≈ 25.5 thousand shirts, Q_t ≈ 52.3 thousand trousers; maximum profit ≈ ₦1,420,000

Correct Answer: A

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Question 16 View Details

A farmer cultivates maize and soybeans on a total of 10 hectares. He allocates 6 hectares to maize and the remaining 4 hectares to soybeans. The expected yields are 3.5 tonnes per hectare for maize and 2.2 tonnes per hectare for soybeans. Market prices are ₦120 per kilogram for maize and ₦200 per kilogram for soybeans. Variable cost per hectare is ₦150,000 for maize and ₦180,000 for soybeans, and the farm has a fixed cost of ₦500,000. The farmer can apply a special fertilizer to at most 4 hectares of maize. Each fertilized hectare raises the maize yield by 15 % (from 3.5 t/ha to 4.025 t/ha) and adds an extra cost of ₦30,000 per hectare. The farmer wants a total profit of at least ₦2,250,000. What is the minimum whole number of hectares of maize that must be fertilized to meet this profit target?

Correct A. 3 hectares

B. 4 hectares

C. 5 hectares

D. 2 hectares

Correct Answer: A

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Question 17 View Details

A consumer spends ₦5,000 on food, ₦2,000 on clothing, and ₦3,000 on entertainment in a month. Which of these expenditures is most clearly a "need" rather than a "want"?

A. Clothing

B. Savings

C. Entertainment

Correct D. Food

Correct Answer: D

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Question 18 View Details

A farm's total product (TP) is obtained by adding the marginal products of each worker. The marginal product of the nth worker is MPₙ = 120 ÷ n (units). The farm currently employs 4 workers. If the farm hires two additional workers (making a total of 6 workers), what will be the total product after the sixth worker is hired, and what will be the average product of labor for the six workers?

Correct A. Total product = 294 units; average product = 49 units per worker

B. Total product = 280 units; average product = 46.7 units per worker

C. Total product = 260 units; average product = 43.3 units per worker

D. Total product = 300 units; average product = 50 units per worker

Correct Answer: A

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Question 19 View Details

In an economy the labour force is 12 million and the number of employed persons is 10.5 million. The natural rate of unemployment is 5 %. Calculate the number of people who are cyclically unemployed.

A. 0.75 million (750,000) people

B. 0.6 million (600,000) people

C. 1.5 million (1,500,000) people

Correct D. 0.9 million (900,000) people

Correct Answer: D

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Question 20 View Details

A company can transport its product from a farm to a market 300 km away using either trucks or rail. The cost structure is as follows: • Truck: fixed cost per trip ₦50,000, variable cost ₦2,000 per km, capacity 10 tonnes per trip, speed 60 km/h. • Rail: fixed cost per trip ₦120,000, variable cost ₦800 per km, capacity 30 tonnes per trip, speed 40 km/h. For rail, the first three trips are charged at the full fixed cost, but each additional rail trip beyond the third enjoys a 20 % discount on the fixed cost (i.e., fixed cost becomes ₦96,000 for trips 4, 5, …). The company must deliver exactly 150 tonnes. Trips may be fractional, but each trip incurs its full (discounted where applicable) fixed cost. Determine the combination of truck trips and rail trips that minimises total transportation cost and state that minimum cost.

Correct A. 5 rail trips, 0 truck trips; minimum total cost = ₦1,752,000

B. 4 rail trips, 3 truck trips; minimum total cost = ₦3,366,000

C. 4.5 rail trips, 1.5 truck trips; minimum total cost = ₦2,511,000

D. 3 rail trips, 6 truck trips; minimum total cost = ₦4,980,000

Correct Answer: A

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Question 21 View Details

A farmer can use his land and labour to produce either 100 kg of rice or 200 kg of beans. If he decides to produce 60 kg of rice, what is the maximum quantity of beans he can also produce with the same resources?

A. 120

B. 60

Correct C. 80

D. 100

Correct Answer: C

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Question 22 View Details

A firm's total cost (in thousand Naira) for producing Q units is TC = 0.5Q² + 20Q + 150. The market price per unit is given by the demand equation P = 80 - 0.2Q. Determine the output level that maximizes profit and state the maximum profit (in thousand Naira).

A. 40.00 units, 1000.00

Correct B. 42.86 units, 1135.71

C. 45.00 units, 1200.00

D. 50.00 units, 1500.00

Correct Answer: B

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Question 23 View Details

The Central Bank requires a reserve ratio of 10% and the public holds a currency‑deposit ratio of 0.25. If the public increases its cash holdings by ₦200 million and banks increase excess reserves by ₦50 million, by how much will the total money supply change? (Give your answer in million Naira, rounded to two decimal places.)

A. 928.57

B. 1071.43

Correct C. 892.86

D. 857.14

Correct Answer: C

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Question 24 View Details

A firm's production function is Q = L^{0.5} K^{0.5}. Currently it employs 16 units of labour (L) and 9 units of capital (K), producing Q = 12 units of output. If capital is reduced by 4 units, how many additional units of labour are required to keep output unchanged? (Give your answer to two decimal places.)

Correct A. 7.11

B. 8.00

C. 6.00

D. 9.50

Correct Answer: A

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Question 25 View Details

The market demand for a good is Qd = 500 - 5P and the market supply is Qs = 2P - 20, where P is price in Naira and Q is quantity. What is the equilibrium price? (Express your answer as an exact fraction.)

Correct A. 520/7

B. 540/7

C. 520/5

D. 500/7

Correct Answer: A

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