WAEC SSCE - Economics - 2001

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The economic system in which resources are privately owned is known as capitalism. In this economic system, the means of production such as factories, machines, and land are owned by private individuals or businesses. The primary motive for economic activity is profit, and the market determines the price and quantity of goods and services produced. The government's role in this system is usually limited to regulating business activities and enforcing contracts. Capitalism has been widely adopted by many countries, particularly in the Western world, and is considered the most efficient economic system for generating wealth and promoting innovation.

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Income elasticity of demand is the measurement of the responsiveness of demand to a change in income. In other words, it measures how sensitive the quantity demanded of a good is to changes in income. When income increases, some goods may become more affordable and their demand may increase, while for other goods, demand may remain constant or even decrease. The income elasticity of demand helps to understand these changes and is calculated as the percentage change in the quantity demanded of a good divided by the percentage change in income.

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The reward for a shareholdership of a company is dividends. Dividends are a portion of a company's profits that are distributed to its shareholders. Shareholders receive dividends as a return on their investment in the company, and the amount of dividends paid is typically determined by the company's board of directors.

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Short-term loans can be sourced from commercial banks. Commercial banks offer various types of loans, including short-term loans, which are typically repaid within a year or less. These loans are usually used to finance a company's working capital needs, such as inventory purchase, payroll, and other operating expenses. Unlike long-term loans, short-term loans usually have higher interest rates because of their short repayment periods and the higher risk involved for the lender. Companies can obtain short-term loans from commercial banks by meeting certain creditworthiness criteria and providing collateral or other forms of security to the bank.

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Public expenditure can be financed through various sources such as borrowing, grant-in-aid, royalties and rent, and taxation. However, "mobilization fees" are not typically considered as a source of financing public expenditure. Mobilization fees refer to charges or fees paid to investment banks or underwriters for selling securities to the public. While it is possible that some governments may receive such fees in certain circumstances, they are not a common or recognized source of financing for public expenditures.

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Monocultural agriculture refers to the cultivation of only one type of crop or plant species on a piece of land, usually on a large scale. It is the opposite of polyculture, where multiple crops or plant species are cultivated on the same land. Monoculture is often used in large-scale commercial agriculture and can lead to issues such as soil depletion, pests, and diseases.

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The condition that is not a requirement for a perfect market is "ignorance of consumers". In a perfect market, consumers have perfect information about the goods and services they are buying and the prices at which they are being sold. This allows them to make informed decisions and ensures that market forces operate efficiently. Ignorance of consumers, on the other hand, would lead to inefficiencies and distortions in the market. Therefore, it is not a condition for a perfect market.

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A greater burden of tax on a product with high price elasticity of demand rests mainly on the producer. This is because when the price of a product with high price elasticity of demand increases due to tax, consumers will be less willing to buy it, leading to a decrease in quantity demanded. As a result, the producer will have to bear a greater portion of the tax burden in order to maintain sales. On the other hand, if the product has low price elasticity of demand, consumers will continue to buy it even if the price increases due to tax, allowing the producer to pass on the tax burden to consumers in the form of higher prices.

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Balance of payment deficit occurs when the total imports of a country exceeds the total exports, leading to a negative balance. This means that the country is spending more foreign exchange than it is earning. One way to correct this deficit is by export promotion measures, which include increasing exports, improving export quality, and finding new export markets. This would increase the foreign exchange earnings of the country and reduce the deficit. Another way is to decrease imports, by implementing import promotion measures, such as increasing import tariffs or imposing quotas. However, purchasing foreign assets or accumulating foreign reserves would only provide a temporary solution to the deficit, as these measures do not address the underlying issue of trade imbalance.

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Commercial banks settle their daily interbank indebtedness through the Clearing House. A Clearing House is a financial institution that facilitates the exchange of payments, securities, and other financial transactions between banks. It acts as an intermediary between banks that need to transfer funds or securities to each other. At the end of each business day, each bank sends its transactions to the clearinghouse, which then matches and nets the payments to be made between the banks. This results in a reduction in the number of transactions that need to be settled in cash, which reduces the risk and cost of settlement for banks. The Clearing House helps to ensure the smooth functioning of the payment system and promotes efficiency in the banking sector.

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The performance of one task in a production process is known as specialization. This means that a worker or a group of workers are assigned a specific task in the production process which they are trained to do well. This specialization leads to an increase in efficiency, as the worker becomes more skilled at the task over time, and can complete it faster and with greater accuracy. Specialization also enables the division of labor, where different workers perform different tasks, leading to higher productivity and lower costs.

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The difference between the highest and lowest values in a set of data is called the range. In other words, it is the distance between the largest and smallest values in the data set. It is a measure of dispersion or spread of the data. For example, if a data set contains the numbers 2, 4, 6, 8, and 10, the range would be 10 minus 2, which equals 8. Therefore, the range of this data set is 8.

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In a country with an ageing population, the total population is increasing at a low rate. This is because there are fewer births and a higher number of deaths, leading to a slower population growth. The elderly population also makes up a larger proportion of the population, which can have implications for issues such as healthcare and social security. It does not necessarily mean that the population only comprises young school leavers, mainly women, or has reached the optimum level.

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Sole traders and supermarkets are not legally allowed to issue shares, whereas private limited companies can issue shares to their shareholders. Central banks are not business units, but rather government institutions responsible for managing the country's monetary policy.

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The government can control the monopolist power through price legislation. Price legislation refers to government regulations that set limits on the prices that monopolies can charge for their products or services. This is done to protect consumers from being charged unfair or excessively high prices by companies that hold a monopoly in the market. By imposing price controls, the government can ensure that consumers have access to affordable products and services, while also preventing monopolies from exploiting their market power to maximize their profits at the expense of consumers.

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If there is an increase in wages and salaries without a corresponding increase in the supply of goods and services, the situation will lead to inflation. This is because workers will have more money to spend but the supply of goods and services available for purchase remains the same, leading to an increase in demand without a corresponding increase in supply. As a result, the prices of goods and services will increase, leading to inflation.

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The main role of the Organization of Petroleum Exporting Countries (OPEC) is to fix oil production levels. OPEC is a cartel of oil-producing countries whose main goal is to control the supply and price of oil on the world market. To achieve this goal, OPEC sets production quotas for its member countries and coordinates their oil policies. By limiting oil production, OPEC aims to maintain stable prices and prevent price wars among its members.

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The function of an entrepreneur is to make decisions. An entrepreneur is an individual who takes risks to create a business, and decision-making is an essential aspect of the job. They make choices regarding the type of business to create, the products or services to offer, the price to charge, the location of the business, and the employees to hire, among others. Entrepreneurs also manage and control employment, but their main function is to make decisions that will make their business successful. Organizing unions is not a typical function of an entrepreneur.

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Economic problems arise because resources are scarce relative to wants. This means that people have unlimited wants or needs, but the resources to satisfy those wants are limited or scarce. Therefore, choices have to be made on how to allocate these limited resources among different needs and wants. This leads to the problem of scarcity, which is at the heart of all economic problems. The other options mentioned, such as man being insatiable, money being scarce, or engaging in too many economic activities, may contribute to specific economic issues but are not the underlying cause of economic problems.

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The given demand function is Qd = 30 - 2p, where Qd represents the quantity demanded and p represents the price of the commodity. We are asked to find the quantity demanded at a price of twelve Naira. Substituting p = 12 in the demand function, we get: Qd = 30 - 2(12) Qd = 30 - 24 Qd = 6 Therefore, at a price of twelve Naira, the quantity demanded of the commodity is 6 units. Hence, the answer is: 6 units.

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Inflation can be defined as the persistent increase in the general price level of goods and services over time. One major disadvantage of inflation is that it leads to a decrease in the purchasing power of money, which in turn affects fixed income earners negatively. When there is inflation, the cost of goods and services goes up, but the income of fixed income earners remains constant. This means that the amount of goods and services they can purchase with their income decreases. As a result, their real income reduces, and they are worse off. Therefore, the correct answer is fixed income earners lose.

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The most liquid asset among the options listed is bank deposit. Liquidity refers to the ease with which an asset can be converted into cash without affecting its market value. Bank deposits are highly liquid assets because they can be easily converted into cash by simply making a withdrawal from a bank account. On the other hand, bank notes, silver, and cheques may not be as readily accepted as a means of payment and may take longer to convert into cash. Therefore, bank deposits are considered the most liquid asset.

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An ad valorem tax refers to a tax that is based on the value of the commodity or product being taxed. This means that the tax amount increases or decreases in proportion to the value of the product. For example, if a country imposes a 5% ad valorem tax on imported cars, the amount of tax levied would be 5% of the value of the car. This is in contrast to a fixed tax where the tax amount is a fixed amount regardless of the value of the product being taxed.

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Industries are not sited in most rural areas of Nigeria because of inadequate basic infrastructure. Basic infrastructure such as good roads, electricity, water supply, and communication networks are necessary for industries to function effectively. These infrastructure are often lacking or poorly developed in rural areas, which makes it difficult for industries to operate. As a result, industries are usually located in urban or peri-urban areas where infrastructure is more developed.

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Deflation refers to a persistent decrease in the general price level of goods and services in an economy over a period of time. This can happen due to a variety of reasons, such as a decrease in demand, an increase in productivity, or a decrease in the money supply. Deflation can have negative impacts on the economy, such as discouraging spending, reducing investment, and increasing the real value of debt.

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The upward slope of the supply curve indicates that more will be supplied as price rises. This means that suppliers are willing to offer a higher quantity of a product or service as the price goes up. As the price of a good or service increases, suppliers are incentivized to produce more of it because they can earn higher profits. In other words, the quantity supplied of a good or service increases as its price rises.

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Consumers buy more of a commodity at a lower price than at a higher price because with the same amount of money they will be able to buy more. When the price of a commodity decreases, the quantity demanded by consumers increases because they are able to get more of the commodity for the same amount of money. This is known as the law of demand in economics. It assumes that consumers are rational and always seek to maximize their satisfaction or utility, and that price is one of the factors that influence their buying decisions. When prices are higher, consumers are likely to buy less of a commodity because it is more expensive and they are unable to purchase as much with their limited budget.

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Gold is considered a luxury item because it is a precious metal that is valued for its rarity, beauty, and economic significance. It is often used for jewelry and decorative objects, and its high price makes it a symbol of wealth and status. In contrast, petrol, textbook, and pencil are not usually considered luxury items, as they are common, everyday items that are widely used and easily accessible.

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The dispersal of people in a country is called geographical distribution. Geographical distribution refers to how people are spread out or located across a particular geographic area, such as a country or region. It includes the study of population density, patterns of settlement, and how demographic factors such as age, gender, ethnicity, and socioeconomic status are distributed across different areas. Understanding geographical distribution is important for policymakers, planners, and researchers to make informed decisions about resource allocation, service provision, and other matters related to population distribution.

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In a public corporation, the risks of business are borne by the **taxpayers**. This is because public corporations are owned and funded by the government using taxpayers' money. Any losses incurred by the corporation are ultimately the responsibility of the government and by extension, the taxpayers.

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One of the functions of money is to serve as a unit of account. This means that money is used as a standard measurement of value in an economy, allowing for the comparison of the worth of goods and services. Money serves as a common denominator for all goods and services, and prices can be expressed in terms of a particular currency. This function of money helps facilitate economic transactions by providing a standard means of measuring value and prices, making it easier for buyers and sellers to engage in trade.

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Quasi-rent refers to payments made on any factors of production that are temporarily fixed in supply. It is a concept used in economics to describe a situation where a factor of production (such as land, machinery, or even labor) becomes scarce and commands a higher price than would be the case if it were in abundant supply. In other words, quasi-rent represents the extra income earned by a factor of production that is not permanent, but is nevertheless being used to produce goods or services. This is because the supply of the factor is fixed in the short run, but can be adjusted in the long run.

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The quantity theory of money is an economic theory that states that the level of prices in an economy is directly proportional to the amount of money in circulation. Therefore, a reduction in the quantity of money in circulation would result in a fall in the level of prices in the economy. This means that the answer is "a fall in prices" or "a proportionate fall in prices" as the theory suggests that the fall in prices would be directly proportional to the reduction in the quantity of money.

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The reward for entrepreneurship is profit. Profit is the excess of revenue or income earned by a business over the expenses and costs incurred in producing the goods or services. It is the return that an entrepreneur receives for taking the risk of starting and managing a business. The profit earned by entrepreneurs is a reward for their innovation, effort, and risk-taking ability. Profit serves as an incentive for entrepreneurs to continue investing in their businesses and to create new ventures. It is an important measure of the success and viability of a business.

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A direct tax is a type of tax that is paid directly to the government by the person or entity on whom it is imposed. Capital gain tax is an example of a direct tax because it is a tax on the profit made from selling an asset such as property, stocks, or other investments. Import duty and export duty are types of indirect taxes because they are levied on goods and services and paid by the consumers indirectly. Sales tax is also an indirect tax because it is collected by the seller from the buyer and paid to the government.

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A country is economically rich if it has a large volume of goods and services relative to its population. This means that the country has a high level of production and output, which translates to more goods and services being available for consumption by its citizens. This also implies that the country is able to generate high levels of income and wealth, and is likely to have a high standard of living. The other options listed may contribute to a country's economic well-being, but they are not sufficient on their own to determine if a country is economically rich.

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When the government initiates measures to make an organization in which it has substantial interest more profit oriented, such a business is described as being commercialized. Commercialization of a business involves introducing market principles into the operation of the business in order to increase its profitability. This can include cost-cutting measures, introducing new revenue streams, and restructuring the organization to be more efficient. The goal is to make the business more competitive and profitable, while still retaining some degree of government control or ownership.

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Population growth can be controlled by various measures, including legalizing abortion, family planning, and limiting the number of children per family. Incentives on immigration, however, are unlikely to have any effect on population growth, as they do not affect the number of births in a given population. Therefore, the correct answer to the question is "incentives on immigration."

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The demand for a commodity not directly for immediate consumption but for the production of another commodity is called "derived demand". In other words, it refers to the demand for a product that is derived from the demand for another product. For example, the demand for steel is a derived demand because it is not consumed directly but is used in the production of other products such as cars, buildings, and machinery. Therefore, the demand for steel is derived from the demand for these other products.

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The cost incurred by using both fixed and variable factors in production is called "total cost." Total cost is the sum of all costs of production, including fixed costs (costs that do not vary with changes in the level of production) and variable costs (costs that do vary with changes in the level of production). It represents the full cost of producing a certain quantity of output, and is an important concept in economics and business management.

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In a capitalist economy, the consumer is often referred to as the king. This is because in a capitalist system, businesses operate in a competitive environment where they must cater to the needs and wants of consumers in order to succeed. Consumers have the power to make choices about what goods and services they purchase, and businesses must respond to those choices by producing products that meet their demands. The satisfaction of consumers is therefore essential to the success of businesses in a capitalist economy.

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