WAEC SSCE - Economics - 2012

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Import substitution is a strategy used by countries to reduce their dependence on imports by producing goods domestically that were previously imported. The strategy aims to boost domestic production, create employment opportunities and increase self-sufficiency. Therefore, option C is correct - import substitution enables a country to curtail importation. It does not necessarily improve on importation or increase exportation, but it may lead to an increase in exports if domestic industries become more competitive and can produce goods for export.

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The correct equation for national income is Y = C + I + (X - M). In this equation, Y represents national income, C represents consumption, I represents investment, X represents exports, and M represents imports. This equation is based on the national income accounting identity, which states that total income in an economy is equal to total expenditure. Therefore, national income (Y) is the sum of consumption (C), investment (I), and net exports (X - M). The net exports component is the difference between exports (X) and imports (M).

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If the price of a good or service is below the equilibrium price, there will be excess demand in the market. This means that buyers will want to purchase more of the good or service than sellers are willing to supply at that price. As a result, there will be a shortage of the good or service, and some potential buyers will be unable to find what they want. In this situation, suppliers may choose to increase their production in order to take advantage of the higher demand, and as a result, the supply of the good or service will eventually increase. At the same time, the excess demand will put upward pressure on prices, which will eventually move towards the equilibrium price, where the quantity demanded equals the quantity supplied. Therefore, in summary, any price below the equilibrium price will lead to excess demand, which will eventually result in an increase in supply and a rise in prices towards the equilibrium level.

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A shift in the demand curve refers to a change in the entire demand schedule, caused by a factor other than the price of the commodity. This means that at every price, the quantity demanded has changed. For instance, a change in consumer preferences, income, or the prices of substitute or complementary goods can shift the demand curve to the right or left. A shift to the right indicates an increase in demand while a shift to the left indicates a decrease in demand. Therefore, a shift in the demand curve represents a change in demand, which is different from a change in quantity demanded, which is caused by a change in the price of the commodity, leading to a movement along the same demand curve.

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The difference between birth rate and death rate is known as the natural growth rate. The natural growth rate is a measure of population change that indicates whether a population is increasing or decreasing over time. If the birth rate is higher than the death rate, the natural growth rate will be positive and the population will be increasing. On the other hand, if the death rate is higher than the birth rate, the natural growth rate will be negative and the population will be decreasing. The natural growth rate is an important factor in population studies and can have significant implications for social and economic development.

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One of the reasons why the government may erect a trade barrier is to protect infant industries. A trade barrier is a government-imposed restriction on international trade, and it can take many forms, including tariffs, quotas, and embargoes. The purpose of trade barriers is to protect domestic industries from foreign competition. One of the arguments in favor of trade barriers is that they can protect infant industries, which are new or emerging industries that may not be able to compete with more established foreign industries. By erecting trade barriers, the government can protect these industries until they are strong enough to compete on their own.

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Bank balance is not a form of money, as it is simply a record of how much money a person or company has in their bank account. It is not a physical object that can be used to make purchases or transactions directly. In contrast, coins, bank notes, and bank deposits can all be used as forms of money in various contexts.

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The demand for X and Y is said to be a joint demand because they are consumed together. A decrease in the demand for one product (X) leads to a decrease in the demand for the other product (Y) because they are complementary goods. This means that they are usually used together, so a change in the demand for one will affect the demand for the other. Joint demand occurs when two or more goods are demanded together because they satisfy a particular need or want.

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In a free market economy, the allocation of goods and services is performed by the price system. The price system is a mechanism by which prices are determined through the interaction of buyers and sellers in the market. Prices serve as a signal for producers to supply goods and services, and for consumers to demand them. As demand for a product increases, its price increases, which signals to producers to increase their supply. Similarly, as demand for a product decreases, its price decreases, which signals to producers to decrease their supply. This mechanism ensures that goods and services are allocated efficiently based on consumer preferences and market demand, without the need for central planning or government intervention.

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When depreciation is deducted from Gross National Product (GNP), the result is Net National Product (NNP). Depreciation is the amount of capital goods that have worn out or been used up during the production process, and it represents a decrease in the value of the economy's stock of physical capital. Deducting depreciation from GNP gives us NNP, which is the value of the nation's final output of goods and services minus the amount of capital that has been used up or worn out during the production process. In other words, NNP is a measure of the economy's net output or income after accounting for the depreciation of its physical capital.

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The law of diminishing marginal utility states that as a consumer consumes more and more units of a particular good or service, the additional satisfaction or utility that he derives from each additional unit goes on decreasing. In other words, the consumer will derive less and less satisfaction from each additional unit consumed, up to a point where the satisfaction derived from each additional unit consumed becomes zero or negative. Therefore, the law of diminishing marginal utility applies to a consumer who is trying to maximize his or her satisfaction from consuming a particular good or service.

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The given demand function is Qd = 20 - 1/2P, which represents the relationship between the quantity demanded (Qd) and the price (P) of a product. To find Qd when P is $12, we simply substitute 12 for P in the demand function and solve for Qd as follows: Qd = 20 - 1/2(12) Qd = 20 - 6 Qd = 14 units Therefore, when the price is $12, the quantity demanded is 14 units.

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One of the main problems facing industrial development in West African countries is inadequate infrastructure. This includes things like poor transportation networks, unreliable energy supply, and a lack of access to basic services like water and sanitation. Without sufficient infrastructure, it can be difficult for businesses to operate efficiently, transport goods, and connect with markets. This can limit economic growth and make it challenging for countries to attract investment and create jobs. Additionally, inadequate infrastructure can exacerbate poverty and inequality by limiting access to essential services for marginalized communities.

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The factor of production which takes the initiative in combining resources for production is the entrepreneur. An entrepreneur is a person who identifies a need in the market and uses their creativity, innovation, and risk-taking abilities to combine other factors of production such as land, labor, and capital in a productive manner to produce goods or services. They take the responsibility of organizing, managing, and coordinating the other factors of production to achieve their business goals.

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An increase in birth rate is capable of increasing the population of a country. Birth rate refers to the number of live births per thousand of the population per year. If the birth rate of a country increases, it means that more babies are being born per thousand of the population per year. This can lead to an increase in the population of the country over time. Therefore, option A (increase in birth rate) is the correct answer. The other options (increase in death rate, poor medical facilities, and decrease in birth rate) are likely to result in a decrease in population or a slower population growth rate.

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If a 6% decrease in price results in more than a 6% decrease in quantity supplied, then supply can be regarded as elastic. Elasticity of supply refers to the degree of responsiveness of quantity supplied to a change in price. If the percentage change in the quantity supplied is greater than the percentage change in price, then supply is considered elastic, meaning that small changes in price can result in significant changes in the quantity supplied. In this case, if the decrease in price results in more than a 6% decrease in quantity supplied, it indicates that suppliers are sensitive to price changes and will adjust their supply accordingly. Therefore, the supply can be considered elastic.

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The problem that arises where there are more than one technically possible methods of production is "how to produce". This is because the decision on how to produce is concerned with the selection of the most efficient and cost-effective method of producing a good or service. When there are multiple technically feasible methods of production, the producer has to decide which method to choose in order to minimize production costs and maximize profits. This problem is important in the field of economics because it determines the efficiency and profitability of a production process.

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When a country experiences an improvement in its terms of trade, it means that the prices of its exports have increased relative to the prices of its imports. In other words, the country can now purchase more imports with the same quantity of exports or receive a higher income for the same amount of exports. This can be beneficial to the country's economy because it increases the purchasing power of its exports and can lead to increased revenue and economic growth. Therefore, the correct option is that "exports are cheaper relative to imports" is not correct, while "imports are cheaper relative to exports" is not the answer either. The correct option is that "exports are more expensive relative to imports".

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In open market operations, the Central Bank sells or buys securities. Securities refer to financial instruments that represent ownership in a publicly-traded corporation, a creditor relationship with a governmental body, or a right to ownership as represented by an option. When the Central Bank wants to reduce the money supply in the economy, it can sell securities to commercial banks, which reduces the amount of money the banks have to lend to customers. Conversely, when the Central Bank wants to increase the money supply in the economy, it can buy securities from commercial banks, which injects new money into the economy. Therefore, buying and selling securities is a key tool in implementing monetary policy and managing the money supply in an economy.

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The mode is the observation or value that appears most frequently in a dataset. In other words, it is the value that occurs with the highest frequency. For example, in a dataset of {1, 2, 2, 3, 4, 4, 4, 5}, the mode is 4 because it appears three times, which is more than any other value. Unlike the mean and median, the mode can be used with both numerical and categorical data.

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The transaction is possible because of the "double coincidence of wants." This refers to a situation where two individuals have goods or services that the other wants, and they are willing to exchange them directly without the need for money or a medium of exchange. In this case, Mr. Akpoti has meat and wants maize, while Mr. Adama has maize and wants meat, and they can exchange these goods without the use of money because there is a mutual need for each other's goods. Therefore, the double coincidence of wants facilitates the barter exchange between Mr. Akpoti and Mr. Adama.

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The question is asking to identify the option that is NOT a reason for the failure of agricultural policies in West Africa. The correct answer is "creation of agro-service stations" because it is not a reason for the failure of agricultural policies in West Africa. Agro-service stations are intended to provide farmers with information, inputs, and services to improve their agricultural productivity, and thus can be a helpful initiative for supporting agriculture in West Africa. On the other hand, the other options are reasons for the failure of agricultural policies in West Africa. Vague policy statements can lead to confusion and misinterpretation of policy objectives, negation of policies can occur when policies are not enforced or not backed by adequate resources, and provision of obsolete implements can hinder farmers' ability to achieve their full potential.

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Visible balance is also known as the balance of trade. It refers to the difference between a country's exports and imports of visible goods, such as physical goods like machinery, food, and clothing. If a country's exports of visible goods are higher than its imports, it has a surplus in its balance of trade, while if its imports are higher than its exports, it has a deficit. The balance of trade is one component of the balance of payments, which also includes the balance of services, capital transfers, and financial flows.

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National income refers to the total income earned by a country's citizens and businesses in a given period. It includes all income earned by citizens and companies both domestically and abroad, minus income earned by foreign entities within the country. Therefore, the answer to the question is not listed as an option. However, it is worth noting that Gross National Product at factor cost is often considered as the best measure of national income, as it includes income earned by the country's citizens both domestically and abroad, and it is adjusted for taxes and subsidies.

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The function of a retailer is to provide sales services. This means that retailers are businesses that sell goods or products directly to consumers for their personal use. Retailers can operate through physical stores or online platforms, and they usually offer a range of products from different brands or manufacturers. Retailers play a crucial role in the supply chain by connecting producers or manufacturers with end consumers. They buy products in bulk from suppliers and then sell them to individual customers at a higher price, adding their profit margin. This allows customers to access a wide range of products conveniently and at a competitive price. While some retailers may offer banking, hoarding, or storage services, these are not their primary functions. Banking services are typically provided by financial institutions such as banks and credit unions. Hoarding services refer to the practice of accumulating and storing goods or commodities, which is not a core function of retailers. Finally, storage services are typically provided by logistics companies or warehousing businesses, which specialize in storing and managing inventory for different industries.

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Small scale businesses are very common in West Africa because their initial capital is easy to raise. Small scale businesses require a small amount of capital to start, which is easily available to entrepreneurs in West Africa. This is in contrast to large businesses that require significant amounts of capital to start and run, which is often difficult to obtain. Additionally, small scale businesses are often managed by the owners themselves or their family members, which means that they can make quick decisions and adapt to changing market conditions more easily than large businesses with complex management structures.

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Encouraging early marriage is not a means of reducing the population of a country. Early marriage can actually lead to an increase in population, as individuals who marry at a younger age are likely to have more children. On the other hand, emigration, family planning, and sex education are all commonly used as methods of reducing population growth. Emigration involves individuals leaving a country to live permanently in another country, which can reduce the population of the first country. Family planning involves the use of contraceptives and other methods to control the number of children a family has, which can help to slow population growth. Sex education involves providing individuals with information about reproductive health and family planning, which can also help to reduce population growth by encouraging individuals to have smaller families.

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The difference between the number of immigrants (people who move into a country) and emigrants (people who move out of a country) is known as net migration. It is a measure of the total number of people who have migrated to a country or left a country over a specific period of time. Net migration can be positive (more people are entering the country than leaving) or negative (more people are leaving the country than entering). It is an important factor in understanding population growth and demographic changes in a country.

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The feature that best describes peasant agriculture in West Africa is the use of small farm holdings. Peasant agriculture in West Africa typically involves small-scale farmers who cultivate small plots of land for subsistence and sometimes for sale in local markets. They often use traditional methods of farming, such as manual labor and hand-held tools, and rely on family labor. This type of farming is generally not capital-intensive and does not specialize in the production of a single crop. While tree crops are important in some areas, peasant agriculture in West Africa is generally characterized by a diverse range of crops grown on small plots of land.

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The arrangement described in the question implies "limited liability". Limited liability is a legal concept that limits the amount of money a shareholder or owner can lose in case of a company's failure. In other words, the debts of a company can only be paid from its own assets, and the personal assets of shareholders or owners are protected. This means that the liability of the shareholders or owners is limited to the amount they have invested in the company. Therefore, if a company fails, the shareholders or owners will not lose more than the value of their investment.

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A price index as a statistic measures how the value of money changes over time. It tracks the average price level of a selected basket of goods and services over time, comparing it to a base year or period. The price index allows economists and policymakers to monitor and analyze inflation, deflation, and changes in purchasing power. By tracking the prices of goods and services, a price index can provide insights into the state of the economy and the effectiveness of economic policies.

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The features of an optimum population are characteristics that describe an ideal population level for a country or region. The features of an optimum population include full employment of available resources, maximum per capita production and income, and a high standard of living. However, one of the options listed, "unlimited amount of unexploited resources," is not a feature of an optimum population. In fact, the concept of an unlimited amount of unexploited resources is not realistic, as all resources are finite and will eventually become depleted if not managed sustainably. Therefore, the answer is "unlimited amount of unexploited resources."

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When the estimated government revenue is less than the proposed expenditure for a given year, it creates a situation where the government is expected to spend more money than it can generate. This is known as a deficit budgeting. In this scenario, the government has to borrow money or increase taxes to meet its financial obligations, which can lead to inflation and other economic challenges.

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The financial institution that specializes in risk spreading is an insurance company. An insurance company offers various insurance products to individuals or businesses to protect them against financial losses due to unexpected events, such as accidents, theft, natural disasters, or illnesses. In exchange for a premium payment, the insurance company assumes the risk of financial loss and promises to compensate the policyholder for any covered losses. By spreading the risk among many policyholders, the insurance company can ensure that no single individual or business suffers a devastating financial loss.

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To calculate average utility, we divide total utility by the quantity consumed. Therefore, the average utility in this case would be 22/4 = 5.5 utils. So, the answer is: 5.5 utils.

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Population control will not retard economic development in West Africa. Population control refers to measures taken to regulate the growth rate of a population, typically by reducing the birth rate. While population growth can be a challenge for economic development if it outpaces the capacity of a country to provide adequate resources and infrastructure, population control can actually be beneficial for economic growth by reducing pressure on resources and increasing the available labor force. On the other hand, dependence on imports, high level of illiteracy, and low level of savings can all hinder economic development in West Africa. Dependence on imports can strain foreign exchange reserves and limit the growth of domestic industries. High levels of illiteracy can limit access to education and skills training, making it difficult for people to participate in the labor force and for businesses to innovate and grow. Low levels of savings can limit investment in infrastructure and human capital, which are critical for long-term economic growth.

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The condition for consumer utility maximization is the equality of the ratio of marginal utilities and the ratio of prices. In simpler terms, this means that a consumer can maximize their satisfaction or utility by allocating their budget in such a way that the additional satisfaction gained from consuming an extra unit of a good (marginal utility) is equal to the price of that good divided by the price of another good. In other words, the consumer should spend their money on goods in such a way that the satisfaction gained from the last dollar spent on each good is the same. By following this condition, the consumer can spend their budget in the most efficient way and achieve the highest level of satisfaction or utility possible.

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A public limited company can finance its operations in various ways, including issuing equity shares to the public, which involves selling ownership shares in the company to investors. This provides the company with funds that can be used to finance its operations, such as purchasing new equipment or expanding the business. Additionally, a public limited company may also generate revenue through dividend payments, which are payments made to shareholders based on the company's profits. These payments can be reinvested by shareholders or used for personal expenses. However, government taxes and import duties are not typically used as a means of financing a company's operations, as they are expenses that the company is required to pay. Rather, these expenses are factored into the company's operating costs and are accounted for in its financial statements.

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The correct answer is "legal monopoly". A legal monopoly arises from the granting of exclusive rights to a company or individual by the government. In this case, a patent is a legal right granted by the government that gives the owner the exclusive right to produce and sell a particular product or invention for a certain period of time. Therefore, the monopoly that arises from the grant of a patent is referred to as a legal monopoly. This means that no other company can produce or sell the product without permission from the patent owner, and the patent owner can charge a higher price due to their exclusive right to produce and sell the product.

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In a situation where the finished product of an industry is fragile, bulky and perishable, such an industry should be located close to its market. This is because transporting such goods over long distances can be difficult and costly, and may result in damage or spoilage of the goods. Additionally, being close to the market allows for quick and efficient delivery of the goods to consumers, which is important in maintaining their freshness and quality.

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