WAEC SSCE - Economics - 1998

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The economic system in which private firms make decisions on what to produce, how to produce, and for whom to produce is called capitalism. In a capitalist system, the means of production and distribution are owned and controlled by private individuals or companies, rather than the state or government. The basic principle of capitalism is that individuals are free to pursue their own economic self-interest, and the market, through the forces of supply and demand, determines the prices and quantities of goods and services produced.

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If the last Naira spent on each commodity by a consumer gave him equal satisfaction, it means the consumer has been able to maximize his utility. Utility refers to the satisfaction or happiness that a consumer derives from consuming a particular good or service. In this scenario, since the last Naira spent on each commodity provides equal satisfaction, the consumer has achieved the highest possible level of satisfaction from his spending, which is referred to as utility maximization.

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The level of economic development is low in Nigeria because of ineffective plan implementation. This means that despite the existence of planning models, the implementation of these plans has been poor and ineffective. The lack of proper execution has led to a number of challenges such as poor infrastructure, insufficient investment, lack of diversification, and high unemployment rates. These challenges have hindered economic growth and development in the country. Additionally, the lack of practical relevance in planning, coupled with the absence of a unique planning model, has also contributed to the low level of economic development in Nigeria.

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If a government owed a company N10,000 in 1966, and paid off the debt fully in 1985, when the value of money had depreciated by 20 percent, it means that the government had gained. This is because the value of money in 1985 was 20 percent less than the value of money in 1966. Therefore, the government was able to pay off the debt with money that was worth less than the money it borrowed, effectively paying less than N10,000 in today's value. This is a common occurrence during periods of inflation, where the value of money decreases over time.

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Banks create money by lending out deposits to borrowers. When someone deposits money into a bank account, the bank is required to hold only a fraction of that deposit as reserves, which means they can lend out the rest. This money lent out to borrowers is new money created by the bank, which then becomes deposits in the accounts of the borrowers. This process of lending and creating new money continues, resulting in an expansion of the money supply in the economy.

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The introduction of division of labour in a firm can lead to an increase in output. Division of labour refers to the specialization of tasks among workers whereby each worker performs a specific task in the production process repeatedly. By performing the same task repeatedly, workers become more skilled and efficient, leading to an increase in productivity and output. Additionally, division of labour can also lead to time-saving, reduction in waste and errors, and a better utilization of resources, all of which can contribute to an increase in output. Therefore, it can be concluded that the introduction of division of labour in a firm is likely to result in an increase in output.

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The export price of mineral oil, also known as crude oil, is the main factor that determines the stability of the Nigerian economy. Nigeria is one of the largest exporters of crude oil in the world and the revenue generated from the sale of crude oil accounts for a significant portion of the country's GDP. Therefore, fluctuations in the international price of crude oil can have a significant impact on the Nigerian economy. If the price of crude oil is high, Nigeria can earn more revenue, which can be used to finance developmental projects and boost economic growth. However, if the price of crude oil is low, it can lead to a decline in revenue, which can result in economic instability and a decrease in the standard of living of the Nigerian people.

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Development plans in Nigeria have deviated from their targets due to political instability. Political instability has been a major factor affecting the success of development plans in Nigeria. The frequent changes in government policies, coups, and the lack of consistency in economic policies have affected the effective implementation of development plans. Political instability leads to uncertainties which make it difficult for investors to make long-term investments in the country. This has led to the stunted growth of various sectors of the economy, which in turn has resulted in the deviation from the targets set in development plans.

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The expenditure of a firm on goods and services for the expansion of its productive capacity is known as investment. Investment can include the purchase of capital goods, such as machinery, equipment, and buildings, as well as research and development activities. This expenditure is made with the expectation that it will generate future returns and contribute to the growth and profitability of the firm. Investment is important for economic growth because it leads to increased productivity and job creation, which in turn can lead to higher incomes and improved standards of living.

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Export is not a type of industry. Export refers to the act of sending goods or services to another country for sale. It is a trade activity that involves the exchange of goods and services between countries. In contrast, construction, mining, manufacturing, and transport are all types of industries that involve the production or movement of goods or services.

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Total cost is the sum of all costs incurred by a business in producing a given level of output. It includes both fixed costs (such as rent and salaries) and variable costs (such as raw materials and production costs). Therefore, the correct answer is "fixed cost and variable cost".

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Total cost is the sum of all costs incurred in the production of a good or service. It includes both fixed costs and variable costs. Fixed costs are costs that do not change with changes in the level of output, while variable costs change with changes in the level of output. Examples of fixed costs are rent, insurance, and salaries of permanent staff. Examples of variable costs are raw materials, fuel, and hourly wages of workers. Therefore, the correct option is "fixed cost and variable cost".

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An imperfect competitor is in equilibrium when the marginal cost (MC) is equal to marginal revenue (MR). This is because a firm will produce at a level where the additional cost of producing one more unit of output (MC) is equal to the additional revenue gained by selling that additional unit (MR). At this point, the firm is maximizing its profits and there is no incentive to produce more or less output. Therefore, the firm will continue to produce at this level of output until there is a change in either cost or revenue.

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The advantage of localization of industry is that firms can have a large pool of skilled labor. Localization of industry refers to the concentration of industries in a particular region or area. This leads to the development of a cluster of related industries, which attracts a skilled labor force to the area. Firms benefit from this concentration of skilled labor because they have a large pool of qualified workers from which to choose. This can increase the efficiency and productivity of firms, leading to greater profits and growth. Additionally, firms in a localized industry can benefit from the sharing of resources and knowledge within the cluster, leading to further innovation and development.

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Price index is used to measure inflation. It is a statistical measure that tracks the changes in the prices of a basket of goods and services over time. The basket of goods and services typically represents the items that an average household consumes. The price index can help to determine the rate of inflation, which is the rate at which the general level of prices for goods and services is rising over a given period of time. Commonly used price indices include the Consumer Price Index (CPI) and the Producer Price Index (PPI).

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To find the price at which a trader will be ready to sell 6 oranges, we can substitute q = 6 in the equilibrium equation p = 1/2q + 2. p = 1/2(6) + 2 p = 3 + 2 p = 5 Therefore, the trader will be ready to sell 6 oranges at a price of N5.00.

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External economies refer to the cost-saving advantage that a firm enjoys when being close to other firms in the same industry. This means that a firm can benefit from the shared infrastructure, technology, and skilled labor that are available in the area, leading to lower production costs and higher productivity. It can also result in the growth of the industry in the area, attracting more suppliers, customers, and investors.

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Malthus' contention is that population increases at a faster rate than food production. He argued that while population grows at a geometric progression, food production only increases at an arithmetic progression. As a result, there will come a time when the population will outstrip the food supply, leading to famine, disease, and other forms of suffering. He also believed that population growth should be controlled to prevent these negative consequences.

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The West African house was established to enhance financial transaction among member countries. The West African House was the first regional bank in Africa, established in 1948 to promote trade and economic integration among member countries of the West African Monetary Union (WAMU). The bank provides a range of services including financing of development projects, trade financing, and technical assistance to member countries to promote economic development and stability in the region. The ultimate goal of the West African House is to enhance economic cooperation among member countries through financial integration and cooperation.

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Efficiency of resource use means maximizing output from a given amount of resource. It involves using the resources available in the best possible way to achieve the desired objectives. This can be done by producing the maximum amount of goods and services with the minimum amount of resources, minimizing wastage, and using the right resources for the right purposes. The efficient use of resources leads to the reduction of costs and the maximization of profits, which is important in any economic activity.

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A major setback in any mixed economy is the absence of profit motive in the public sector, which may reduce incentives for hard work. A mixed economy combines both capitalist and socialist systems, allowing the freedom of choice in the production and consumption of goods and services. However, government intervention is necessary to secure full utilization of resources. In a mixed economy, economic decisions are determined by both market forces and government policies. The public sector is run by the government, and profit motive may not be as strong as in the private sector. This may lead to a lack of incentives for workers in the public sector, which can affect productivity and the overall performance of the economy.

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The factor affecting the size of national income is the size of the active population. The active population refers to the number of people who are employed and actively contributing to the production of goods and services in an economy. The larger the size of the active population, the greater the potential for the production of goods and services, which in turn can increase the size of the national income. As more people are employed, there is a greater output of goods and services, leading to increased economic growth and a higher national income. Therefore, the size of the active population is an important factor in determining the size of a nation's income. The other options listed, such as taste of consumers, number of registered trade unions, credit-worthiness of neighbouring countries, and regularity of payment of national debt, do not directly impact the size of national income.

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The instrument used in many countries to restrict imports is high tariffs. A tariff is a tax imposed on imported goods and services, making them more expensive and less competitive in the domestic market. This is done to protect local industries from foreign competition and stimulate domestic production. High tariffs make imports less attractive and promote local production and consumption. Therefore, many countries use tariffs as a means of restricting imports and promoting domestic industries.

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If the equilibrium price of mangoes is N1.00, it means that at that price, the quantity of mangoes demanded by consumers is equal to the quantity of mangoes supplied by producers. If the price falls to 50k, it means that the price of mangoes has decreased below the equilibrium price. This will result in an increase in the quantity of mangoes demanded by consumers as mangoes become more affordable, while producers will reduce the quantity of mangoes supplied because the price is now too low for them to make a profit. As a result, there will be excess demand for mangoes, which means that consumers want to buy more mangoes than producers are willing to supply at the lower price. This excess demand could lead to a shortage of mangoes in the market, as consumers compete to buy the available supply. Therefore, the answer is "an excess demand."

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Scarcity means that there are limited resources to meet unlimited wants. One way of solving this problem is for individuals to choose between alternative wants since they cannot meet all their wants. This means that individuals need to prioritize their wants and choose the most important ones that they can afford with their available resources. By doing this, they can maximize their satisfaction and make the most efficient use of their limited resources.

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The study of economics enables individuals to derive maximum satisfaction from the money they spend. Economics is a social science that studies the production, consumption, and distribution of goods and services. It helps individuals to understand the principles of how people make choices and allocate their resources, including money. By studying economics, individuals can learn how to make rational decisions about how to spend their money to maximize their satisfaction or utility. They can also understand how markets work and how to make informed decisions about purchasing goods and services. Therefore, the study of economics enables individuals to make better choices about how to spend their money to achieve their goals and maximize their satisfaction.

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The progressive system of taxation implies that the tax rate increases as the tax base (income or wealth) increases. This means that individuals who earn higher incomes or have greater wealth are required to pay a larger percentage of their income or wealth in taxes compared to those with lower incomes or less wealth. The idea behind this system is to make the tax burden more equitable, with the ability to pay being taken into account. In other words, the wealthy are expected to contribute more to the government's revenue than the poor. This system is often used to redistribute wealth and reduce income inequality.

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In a joint-stock company, the shareholders are the owners. A joint-stock company is a type of business entity in which the ownership is divided into shares or stocks, and each shareholder owns a proportionate share of the company. Shareholders have the right to vote on important company decisions, receive dividends, and participate in the distribution of profits. However, they are not involved in the day-to-day management or decision making of the company. That responsibility lies with the management or board of directors, who are appointed by the shareholders to oversee the company's operations.

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The shape of the average cost (AC) shows that as production increases, the average cost decreases and then increases. The average cost (AC) is the cost per unit of production, calculated by dividing the total cost by the quantity produced. As production increases, the average cost initially decreases because the fixed cost is spread over a larger number of units. However, at some point, the marginal cost begins to increase, causing the average cost to increase as well. This happens because, beyond a certain level of production, the additional cost of producing each additional unit increases due to factors such as diminishing returns, increased specialization, and higher input costs. Therefore, the correct answer is that as production increases, the average cost decreases and then increases.

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