WAEC Economics Past Questions And Answers (Objective and Theory)
Section A: Multiple Choice Questions
Question: What is the basic economic problem?
a) Scarcity
b) Surplus
c) Abundance
d) Equality
Answer: a) Scarcity
Question: Which market structure is characterized by a large number of sellers, similar but not identical products, and easy entry and exit?
a) Monopoly
b) Oligopoly
c) Perfect competition
d) Monopolistic competition
Answer: c) Perfect competition
Question: What is GDP a measure of?
a) Government Debt
b) Total Population
c) Total Output of Goods and Services
d) Consumer Price Index
Answer: c) Total Output of Goods and Services
Question: Which of the following is a fiscal policy tool?
a) Open market operations
b) Discount rate
c) Government spending
d) Reserve requirement
Answer: c) Government spending
Question: What does the law of demand state?
a) As prices decrease, quantity demanded increases
b) As prices increase, quantity demanded increases
c) As prices decrease, quantity demanded decreases
d) As prices increase, quantity demanded stays constant
Answer: c) As prices decrease, quantity demanded increases
Question: What is the opportunity cost of a decision?
a) The explicit cost
b) The implicit cost
c) The total cost
d) The sunk cost
Answer: b) The implicit cost
Question: In which market structure do a few large firms dominate the industry?
a) Perfect competition
b) Oligopoly
c) Monopoly
d) Monopolistic competition
Answer: b) Oligopoly
Question: Which economic indicator measures the average change over time in the prices paid by consumers for a basket of goods and services?
a) GDP
b) Inflation rate
c) Unemployment rate
d) Exchange rate
Answer: b) Inflation rate
Question: What is the main function of the Federal Reserve in the United States?
a) Fiscal policy
b) Monetary policy
c) Trade policy
d) Industrial policy
Answer: b) Monetary policy
Question: What is the formula for calculating the elasticity of demand?
a) (Change in Quantity Demanded / Change in Price)
b) (Change in Price / Change in Quantity Demanded)
c) (Total Revenue / Quantity Demanded)
d) (Price / Quantity Demanded)
Answer: a) (Change in Quantity Demanded / Change in Price)
Question: Which factor of production refers to the physical and mental effort that people contribute to the production of goods and services?
a) Land
b) Labor
c) Capital
d) Entrepreneurship
Answer: b) Labor
Question: What is the role of the World Trade Organization (WTO)?
a) Regulate global monetary policy
b) Facilitate international trade negotiations
c) Provide humanitarian aid
d) Enforce environmental regulations
Answer: b) Facilitate international trade negotiations
Question: Which type of unemployment occurs when individuals are between jobs or are searching for their first job?
a) Frictional unemployment
b) Structural unemployment
c) Cyclical unemployment
d) Seasonal unemployment
Answer: a) Frictional unemployment
Question: What is the law of diminishing marginal returns?
a) As production increases, total cost decreases
b) As more units of a variable input are added to fixed inputs, the marginal product eventually decreases
c) As production decreases, total revenue increases
d) As more units of a variable input are added, total product always increases
Answer: b) As more units of a variable input are added to fixed inputs, the marginal product eventually decreases
Question: Which type of market failure occurs when one party has more information than the other in a transaction?
a) Monopoly
b) Externalities
c) Asymmetric information
d) Public goods
Answer: c) Asymmetric information
Question: What is the purpose of antitrust laws?
a) Promote monopoly power
b) Regulate international trade
c) Prevent unfair business practices and promote competition
d) Encourage price fixing
Answer: c) Prevent unfair business practices and promote competition
Question: Which economic system relies on the forces of supply and demand to determine prices and allocate resources?
a) Command economy
b) Traditional economy
c) Mixed economy
d) Market economy
Answer: d) Market economy
Question: What is the formula for calculating the unemployment rate?
a) (Number of employed / Labor force) × 100
b) (Number of unemployed / Labor force) × 100
c) (Number of employed / Total population) × 100
d) (Number of unemployed / Total population) × 100
Answer: b) (Number of unemployed / Labor force) × 100
Question: Which of the following is a characteristic of a public good?
a) Rivalry in consumption
b) Excludability
c) Nonexcludable and nonrivalrous
d) Nonexcludable and rivalrous
Answer: c) Nonexcludable and nonrivalrous
Question: What is the formula for calculating the price elasticity of supply?
a) (Change in Quantity Supplied / Change in Price)
b) (Change in Price / Change in Quantity Supplied)
c) (Total Revenue / Quantity Supplied)
d) (Price / Quantity Supplied)
Answer: a) (Change in Quantity Supplied / Change in Price)
Section B: Theory Questions
Question: Explain the concept of opportunity cost.
Answer: Opportunity cost is the value of the next best alternative forgone when a decision is made. It represents the benefits that could have been gained from choosing an alternative option.
Question: Describe the Phillips Curve and its implications for monetary policy.
Answer: The Phillips Curve illustrates the inverse relationship between inflation and unemployment. Policymakers face a trade-off: reducing inflation may lead to higher unemployment and vice versa.
