WAEC ECONOMICS ANSWER BOTH OBJ AND THEORY RELEASED FOR FREEwww

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1a )
(s )TC = AC *Q
=6 * 3= 18
(T ) TC =AC * Q
=6 * 5= 30
(U ) AC =TC / Q = 14 / 2 = 7
(v ) AC =20/ 4
=5
(w) AC = 48/ 6
=8
(x ) AC =14 – 6 = 6
(y )20 -18= 2
(z )30 -20= 10
1b )
i) Profit = revenue-cost
$ 10-$ 1 =$ 9
ii )P = R – C
=$ 10- $ 4
=$ 6
1c )
-It is output 1 – It is where TC = AC

6 a )
Price elasticity of demand ; -This may be defined
as the degree of responsiveness of demand to
little changes in prices of goods and services
6 b )
-Income elasticity of demand is defined as the degree of
responsiveness of demand to
changes in income of consumers while Cross
elasticity of demand may be defined as the
degree of responsiveness of demand for a
commodity to changes in the price of another
commodity – Income elasticity of demand measures how
changes in income of consumers will affect the
quantity of commodities demanded by such
consumers while cross elasticity of demand is
the proportionate change in the price of goods
demanded over the proportionate change in the price of
another good demanded
-Income elasticity of demand is negative for
inferior goods since an increase in income will
lead to a decreased in demand for them while
cross elasticitry of demand is applicable mainly
to goods that are close substitutes as well as
complimentary goods
6 c )
-Availability of substitutes goods ; -The more
possible substitutes they are for a given good
and service,the greater the elasticity when the
close substitues are available , consumer can easily
switch from one good to another even if
there is only small change in price ,conversely if
there is no substitutes available , demand for a
good is more likely to be inelastic
-Proportion of the purchaser ‘s budget
consumed by the item ;- products that consume a large
portion of the purchaser ‘s budget tend
to have greater elasticity.The relative high cost
of such goods will cause consumers to pay
attention to purchase and seek substitutes. In
contrast, demand will tend to be inelastic when
a good represents only negligible portion of the budget
-Degree of necessity;- The greater the necessity
for a good , the lower the elasticity .consumers
will attempt to buy necessary products
regardless of the price . luxury products ,on the
other hand ,tend to have greater elasticity – Brand
loyalty ;-An attachment to a certain
brand can override sensitvity to price changes ,
resulting to price changes ,resulting in more
inelastic demand

2a)inflation is the persistent rise in the general price level of goods and services.inflation occurs when the volume of purchase is permanently running ahead of production and too much money in circulation chasing too few goods.
2b)demand pull inflation:This occurs when consumers have high purchasing power leading to increase in aggregate demand without a corresponding increase in supply.
-Cost pull inflation:This occurs when increase in cost of production are passed on to consumers in form of high prices for good and services on sale.
2c)-increase in demand:This is when the demand for goods and services is greater tan supply,this result in demand pull inflation.
-low production:Low production of good and services can lead to their scarcity and when supply cannot meet up high demand,then cost push inflation set in.
-excess band lending:this can lead to excess money in inflation chasing few goods and services.

3a)
(i)a firm is the basic unit within which factors of
prodution are organised for the purpose of producing wealth. it is an entity which specialises in the production and distribution of goods under one administration. e.g Texaco Nig Ltd, Leventis PLC
An industry on the other hand is a group of firms producing similar products and under seperate administration.

(3aii)
Location of industry is defined simply as the siting or establishment of a firm or industry in a particular place.
localisation on the other hand refers to the
concentration of firmsor industries producing
similar products in an area.

(3b)
(i) proximity of source of raw materials:
-cement producing industries should be
located close to sources of raw materials to
reduce transportation.
-perishable goods like fruits, palm oil industries etec should also be located near their raw
materials.
(ii)
availability of capital:
-there should be enough capital to purchase
industrial input before and after setting up industries
-entrepreneurs should have access to loans
(iii)
Nearness to source of power:
-there should be ready dependable source of power
-source of power could be electricity, coal,
thermal etc
(iv)
nearness to market:
-there should be ready market for rporducts


(5a) Inflation may be defined as a persistent rise in the general price level of goods and services. Inflation occurs when the volume of purchases is permanently running ahead of production and too much money in circulation chasing too few goods

(5bi) Demand-pull inflation occurs when consumers have high purchasing power leading to increases in aggregate demand without a corresponding increase in supply.

(5bii) Cost-push inflation occurs when increases in cost of production are passed on to consumers in the form of high prices for the goods and services on sale. The prices of goods and services are pushed up by rising costs.


(5c)
-High cost of production: when there is high cost of production,manufacturers build in this high cost into cost per unit and pass it to consumers leading to cost pull inflation

-Increase in salaries and wages: when salaries and wages are increase without corresponding increase in supply of goods and services,it can lead to excess money in circulation chasing few goods

-Excessive bank lending: This can lead to excessive money in circulation chasing few goods and services

-Money laundering: Mass transfer and injection of money into circulation can also cause inflation

(8a) Economic growth maybe defined as the process by which the productive capacity of an economy increases over a givenperiod,leading to a rise in the level of the national income.

(8b)
(i) Population explosion: Underdeveloped countries do witness high birth rate leading to population explosion.
(ii) Low standard of living: The standard of living in these countries is generally low
(iii) High dependency on foreign nations: Most of these developing nations depend greatly on foreign countries for their survival.
(iv) Low savings and investment: Labour receives low income and this reduces or leads to low savings and investments.


(8c)
(i) Encouragement of savings: People and firms should be encouraged to save provided there is an improvement in their income. Good savings leads to investments. Expenditure in consumption should be reduced.

(ii) Provision of capital: Banks should be encouraged to provide capital or fund for individuals and firms to enable them embark on productive ventures.
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