WAEC SSCE - Economics - 1996

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Diminishing returns occurs in the short run when there is a reduction in the marginal product of the variable factor. In other words, when the additional output that is produced by adding one more unit of the variable factor, such as labor or capital, decreases. This is due to the limited capacity of the fixed factors, such as land, buildings, and equipment. As more and more variable factors are added, the fixed factors become more and more congested, leading to inefficiencies and a reduction in the marginal product of the variable factor.

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Changes in the value of money can be measured by a price index. A price index is a measure of the average price of a basket of goods and services consumed in an economy. The price index is used to track the changes in the price of goods and services over a period of time. The most commonly used price index is the Consumer Price Index (CPI), which measures the price changes of a basket of goods and services purchased by households. The CPI is used by the government and central banks to monitor inflation, which is the rate at which the prices of goods and services are increasing over time. By monitoring inflation, the government can adjust policies and take necessary actions to stabilize the economy.

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In production, factory buildings are regarded as fixed costs. Fixed costs are expenses that do not change regardless of the level of production. This means that even if the level of production increases or decreases, the fixed costs will remain the same. Examples of fixed costs include rent, salaries, property taxes, and depreciation of assets such as factory buildings. Therefore, the cost of the factory building remains the same whether the factory produces a large or small number of goods.

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The petroleum industry in Nigeria is an example of a capital-intensive industry. This is because it requires a large amount of investment in equipment, machinery, technology, and infrastructure to extract and refine petroleum. The exploration, drilling, extraction, transportation, and refining of petroleum all require a significant amount of capital investment. Additionally, the production processes involved in the petroleum industry are highly mechanized and automated, requiring relatively few workers compared to other industries. Therefore, the petroleum industry in Nigeria is an example of an industry that requires a significant amount of capital investment to operate efficiently and profitably.

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The United Nation Conference on Trade and Development (UNCTAD) is a forum designed specifically for discussing better terms of trade in the world. UNCTAD is an organization under the United Nations system that promotes international trade, investment, and development. Its primary goal is to integrate developing countries into the global economy on equitable terms. UNCTAD provides research, analysis, and policy recommendations to help countries to make informed decisions related to trade and development. Its discussions and initiatives aim to promote fair and sustainable trade policies that benefit all countries, particularly the developing ones.

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The co-efficient of elasticity of supply measures the responsiveness of quantity supplied of a commodity to a change in its price. It is calculated as the percentage change in quantity supplied divided by the percentage change in price. Using the given values, the percentage change in price is: ((4 - 2)/2) x 100% = 100% The percentage change in quantity supplied is: ((125 - 100)/100) x 100% = 25% Therefore, the co-efficient of elasticity of supply is: 25% ÷ 100% = 0.25 So, the correct answer is 0.25.

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The natural growth rate of a population refers to the difference between the birth rate and the death rate. It indicates the rate at which a population is increasing or decreasing without considering the effects of migration. The natural growth rate can be calculated by subtracting the death rate from the birth rate. Therefore, the correct option is "Birth rate minus death rate."

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Economic growth specifically refers to a sustained increase in the output of goods and services per person (per head) in an economy. This means that over time, the economy is producing more goods and services per person, which can lead to higher standards of living, increased employment opportunities, and improved overall economic well-being. It is not about relying on imported goods in preference to home-made goods, depleting natural resources, or simply increasing the total number of people in the economy. Rather, it is a result of changes in the technical and institutional arrangements of the economy that lead to increased efficiency, productivity, and innovation.

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The establishment of public enterprises is done to achieve various economic goals, including the provision of socially necessary facilities, services that are natural monopolies, employment opportunities, and services at a cheaper cost. However, establishing public enterprises to express national prestige is not an economic reason. This is because the expression of national prestige is a political or social reason rather than an economic one. In summary, public enterprises are established to achieve economic goals, but the expression of national prestige is not one of them.

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An economic system in which most means of production are owned and controlled by the state is known as a socialist economy. In a socialist economy, the state plays a major role in planning and managing the economy, with the goal of achieving greater social and economic equality. The state may own and operate key industries such as healthcare, education, and transportation, as well as regulate and control private enterprise. This is in contrast to a capitalist economy, in which private individuals and businesses own and operate the means of production, and the government's role is limited to regulating and providing some services. A mixed economy combines elements of both socialism and capitalism, with varying degrees of government intervention in the economy depending on the specific country or region.

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The process that leads to an agreement on the conditions of service between an employer and an employee is called collective bargaining. It involves negotiations between representatives of the workers (usually a union) and representatives of the employer to reach an agreement on issues such as wages, benefits, and working conditions. The goal of collective bargaining is to ensure that both parties are satisfied with the terms of the agreement and to avoid labor disputes such as strikes or lockouts.

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A bank's responsibility to its shareholders is primarily to make profits. Shareholders are the owners of the bank, and they expect to earn a return on their investment. The bank must manage its operations in a way that generates profits, which may involve lending money, investing in securities, and charging fees for services. The profits made by the bank are distributed to shareholders in the form of dividends or reinvested in the bank to support its growth. While a bank may play a role in preventing inflation or issuing currencies, these are generally considered to be responsibilities of central banks or government authorities rather than commercial banks.

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Development banks mainly provide capital for the development of specific sectors in a country. They are established by governments or international organizations to provide long-term funding for projects that are deemed important for the development of a country's economy. These banks focus on financing projects that may not be attractive to commercial banks due to their risk or lack of profitability, but which have a potential for long-term economic growth. Development banks provide loans, equity investments, and technical assistance to support projects in areas such as infrastructure, agriculture, industry, and small and medium enterprises. By providing long-term financing, development banks can play a critical role in promoting economic growth and reducing poverty in developing countries.

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Decreasing returns to scale means that if all factors of production are increased by a certain proportion, the resulting output will increase by a proportion that is less than the increase in inputs. So, if there are decreasing returns to scale, doubling all factors of production would result in an increase in output that is less than double. Therefore, the answer is "less than doubled."

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The unemployment associated with a decrease in demand is referred to as cyclical unemployment. This type of unemployment occurs when there is a decrease in the demand for goods and services in an economy, leading to a decrease in production and a decrease in the demand for labor. Workers who are unable to find jobs due to the decrease in demand are said to be cyclical unemployment. This type of unemployment is temporary in nature and is expected to decrease when the economy starts to recover and demand for goods and services begins to increase again.

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When the demand for a commodity is inelastic, it means that consumers are not very responsive to changes in price and will continue to purchase the commodity even if the price increases. In this situation, the burden of an indirect tax falls more heavily on the consumers because they are willing to pay the higher price and cannot easily reduce their consumption. Therefore, the correct answer is "consumers".

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Farm produce are graded, packed and distributed by marketing cooperatives. Marketing cooperatives are owned and controlled by farmers who are producers of agricultural commodities. These cooperatives help the farmers to sell their products effectively, by providing grading, packing and distribution services. They can also negotiate better prices with buyers on behalf of farmers, reducing the risk of price fluctuations. By pooling their resources and working together, farmers can achieve economies of scale and gain access to larger markets, leading to increased income and profitability. Marketing cooperatives can also provide technical assistance and training to farmers, improving their skills and knowledge in production and marketing.

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The efficiency of a country's labor force refers to how productive and effective the workers are in contributing to the country's economic output. All of the options listed, except for frequent strikes and lock-outs, can contribute to improving the efficiency of a country's labor force. Improved working conditions, such as providing a safe and comfortable work environment, can increase job satisfaction and productivity. Better healthcare facilities can lead to a healthier workforce, reducing absenteeism and improving productivity. Adequate training can equip workers with the necessary skills to perform their jobs more effectively, increasing their output. A stable economy can create an environment conducive to business growth and investment, leading to increased employment opportunities and improved worker productivity. Frequent strikes and lock-outs, on the other hand, can disrupt productivity, leading to a loss of income for both workers and the country. Therefore, frequent strikes and lock-outs can negatively impact the efficiency of a country's labor force.

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Rents and interest are rewards to land and capital respectively. Rent is a payment made for the use of land or any other natural resource. It is the income earned by the owner of the land or the natural resource for allowing someone else to use it. Interest, on the other hand, is the payment made for the use of capital. It is the compensation paid to the lender for the use of their funds or money. The lender may be an individual, a bank or any other financial institution that provides loans or credit to borrowers. Therefore, the rewards of rents and interest are related to the factors of production land and capital, respectively.

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The international cartel formed to stabilize the world oil market is the Organization of Petroleum Exporting Countries (OPEC). OPEC is a group of 13 oil-producing nations that coordinate and unify their petroleum policies to ensure market stability and a steady income for member countries. OPEC was formed in 1960 and has its headquarters in Vienna, Austria. Its member countries collectively control approximately 44% of global oil production and 73% of the "proven" oil reserves.

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The ranking of a consumer's need in order of importance is termed a "scale of preference". This refers to the way in which individuals prioritize their wants and needs based on their level of importance or urgency. The scale of preference enables consumers to make rational economic decisions by allocating their limited resources to satisfy their most important needs first. The scale of preference is essential in decision making as it helps consumers to avoid overspending on less important items while ensuring that they satisfy their essential needs first.

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The International Monetary Fund (IMF) is an international organization that helps countries with their financial problems. Specifically, the IMF assists countries in resolving their balance of payments issues, which is when a country is unable to pay for its imports or other international obligations. The IMF provides loans and other types of financial support to these countries to help them stabilize their economies and get back on track. The IMF is not owned by any particular country, but rather is a cooperative organization that all member countries have a stake in.

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Subsistence agriculture refers to farming practices that are carried out primarily to produce food for the farmer's own consumption and that of their family, rather than for sale in markets or for export. In other words, it is farming for household consumption. The goal is to produce enough food to sustain the farmer and their family, with little or no surplus to sell. This type of farming is often found in rural areas of developing countries where farmers have limited resources and rely on traditional and labor-intensive methods to grow crops and raise livestock.

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The correct illustration of the chain of distribution is: Manufacturer -> wholesaler -> retailer -> consumer In this chain, the manufacturer produces goods and sells them to the wholesaler who then sells them to the retailer. The retailer, in turn, sells the goods directly to the consumer. This is the most common chain of distribution for most goods and products. The manufacturer has a direct relationship with the wholesaler, who then has a direct relationship with the retailer, who finally has a direct relationship with the consumer.

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Demand-pull inflation occurs when there is excessive demand for goods and services in an economy, resulting in increased prices. This is usually caused by a combination of factors, such as increased government spending, increased consumer confidence, low interest rates, or an increase in exports. As demand for goods and services increases, suppliers may increase prices in response to the higher demand, leading to inflation. This can also be caused by a shortage of goods and services, leading to competition among buyers, driving up prices.

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Localization of industries refers to the concentration of industries or firms in a particular area or region. It is the process of selecting and locating an industry in a specific place or region due to the availability of resources, labor, and other favorable conditions. This process is influenced by factors such as transportation, communication, raw materials, and labor availability. The aim of localization of industries is to achieve economies of scale, increase efficiency, and reduce production costs. Therefore, it is an important factor in the economic development of a region or country.

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Monopoly can be described as a market structure in which a single seller or producer sells a product that has no close substitutes. In a monopoly market, there are no other firms producing the same product or offering a similar substitute. The single producer or seller has complete control over the price and supply of the product in the market, with no competition to worry about. This can lead to higher prices for consumers and reduced efficiency in production.

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