WAEC SSCE - Economics - 2003 (Objective)

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The Organization of Petroleum Exporting Countries (OPEC) is an example of a cartel. A cartel is a group of firms or countries that come together to control the production and pricing of a particular product in order to maximize profits. OPEC is made up of 14 countries that produce a significant portion of the world's oil, and they work together to control the supply of oil in order to keep prices high. By coordinating their production levels, OPEC can influence the global price of oil, which has a significant impact on the world economy.

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A major problem facing the Economic Community of West African States (ECOWAS) as an economic integration is the weak trade relations among member states. ECOWAS was created to promote economic cooperation among its member states by facilitating the free movement of people, goods, and services across borders. However, trade among ECOWAS member states has remained relatively low, and intra-regional trade barriers continue to exist, including tariffs and non-tariff barriers. This has made it difficult for member states to fully take advantage of the benefits of the integration, such as economies of scale, and has hindered the development of regional value chains. Therefore, the correct answer is "weak trade relations".

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When the demand for foreign exchange exceeds its supply, the value of the domestic currency depreciates. This means that the domestic currency loses value compared to the foreign currency, making imports more expensive and exports more competitive. In other words, if there is more demand for foreign goods than the domestic country can afford to buy, they will need to exchange more of their currency to buy foreign currency to pay for those goods. As a result, the excess demand for foreign currency causes the value of the domestic currency to decrease. This can have both positive and negative effects on the economy, depending on factors such as the level of exports, inflation, and interest rates.

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Estimating the national income of a country is necessary because it indicates the overall performance of the economy. National income gives an idea about the total value of goods and services produced in a country within a specific period. By estimating the national income, we can analyze the growth and development of the economy, which helps in making economic policies and strategies. It also helps in assessing the standard of living of the people in the country. Additionally, it provides crucial information for investors, policymakers, and governments, as it assists them in identifying profitable ventures, making economic decisions, and conserving national resources. Finally, equitable distribution of wealth is also possible through proper estimation of national income as it enables the government to plan and execute social welfare programs for the benefit of the underprivileged.

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The factor of production that consists of man-made goods is capital. Capital refers to all man-made goods used in the production process, such as machinery, tools, buildings, and equipment. These goods are used to produce other goods and services and are not consumed in the production process. Therefore, capital is a man-made factor of production that is used to enhance the efficiency of the production process.

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Governments of West African countries levy taxes to finance government projects. Taxes are a major source of revenue for governments and they are collected from individuals and businesses. These funds are then used to finance government projects such as infrastructure development, education, healthcare, and social welfare programs. Taxes are essential for ensuring that governments have the necessary resources to provide essential services and improve the standard of living of their citizens. Without taxes, governments would not have the means to carry out their duties and responsibilities.

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An advantage of localization of industry is the development of subsidiary firms. When industries are concentrated in a particular region, it leads to the growth of subsidiary firms that provide goods and services to support the industries. These subsidiary firms can include suppliers, manufacturers of parts and components, service providers, and so on. This creates a network of interdependent firms that support and enhance each other's operations, leading to greater efficiency, innovation, and competitiveness. The development of subsidiary firms also creates job opportunities and contributes to the overall economic growth of the region. Therefore, the development of subsidiary firms is an advantage of the localization of industry.

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A continuous fall in the general price level is called deflation. It is a macroeconomic term that describes a persistent decrease in the price of goods and services over time. Deflation occurs when there is a decrease in demand for goods and services relative to supply. This decrease in demand leads to a decrease in prices, as producers and sellers try to attract customers by lowering their prices. Deflation can have negative effects on the economy, as it can lead to decreased spending, lower investment, and higher unemployment. Therefore, a continuous fall in the general price level is called deflation.

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The precautionary motive relates to the demand for money. It refers to the desire of individuals and firms to hold money as a precautionary measure against unexpected future expenses or emergencies. This motive for holding money is based on the need for a financial cushion to protect against unforeseen events that might require immediate access to funds. The greater the uncertainty and risk of future events, the greater the demand for precautionary money holdings.

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Merchant banks are financial institutions that provide a wide range of services to businesses and individuals. Their most important function is to provide financial assistance to companies in the form of loans and investments, especially in the medium to long term. This assistance can be in the form of short-term loans for working capital or long-term loans for capital investments such as infrastructure projects, mergers and acquisitions, and expansion plans. Merchant banks also offer other services such as underwriting, advisory services, and asset management. In summary, the most important function of merchant banks is to provide financial assistance to companies in the form of medium to long term loans and investments, which can help businesses grow and create more jobs.

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Price elasticity of supply measures the degree of responsiveness or sensitivity of the quantity supplied of a commodity to a change in the price of the commodity itself. In other words, it indicates how much the quantity supplied of a product changes in response to a change in its own price. This helps to determine the extent to which producers can increase or decrease the supply of a commodity in response to changes in its price in the market. Price elasticity of supply is important for businesses and policymakers to consider when making decisions related to pricing and production levels.

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When the total product is at its maximum, the marginal product is zero. Marginal product refers to the additional output that is produced when an additional unit of input is added while keeping all other inputs constant. As more and more units of input are added, the marginal product eventually starts to decline. When the total product reaches its maximum point, the marginal product is zero, which means that no additional output is produced by adding an additional unit of input. Therefore, the correct answer is "zero".

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The option that is not an advantage of tubular presentation of data is "occupy more space than mathematical equations". Tubular presentation of data is a way of presenting data in rows and columns, much like a table. It has several advantages, including enabling easy location of required figures, making for easy comparison of figures, and showing whether the figures are increasing or decreasing. However, the disadvantage of tubular presentation of data is that it may occupy more space than mathematical equations, making it less efficient in some cases where space is limited or when a lot of data needs to be presented in a small area. Therefore, the correct option is "occupy more space than mathematical equations".

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The major agents of an economic system are individuals, firms, and government. Individuals play a critical role in the economy as consumers and workers. They buy goods and services from firms, and work for firms to earn a living. Firms, on the other hand, produce goods and services for consumers to buy and employ individuals to work for them. Government is also a significant agent of the economic system. It regulates and controls the activities of individuals and firms, provides public goods and services such as healthcare and education, and influences the economy through its fiscal and monetary policies. Thus, these three agents - individuals, firms, and government - interact with each other in a complex web of economic activities that make up the economy.

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A sole proprietorship is a type of business that is owned and operated by a single individual. One advantage of the sole proprietor is that control and supervision are under one man, meaning that the owner has complete autonomy over decision-making and operations. This allows for quick and efficient decision-making without the need for consultation with others. Additionally, the owner is able to keep all profits earned by the business, and is not required to publish accounts or financial information to the public. However, it is important to note that the success of the business is not guaranteed, and funds may not always be easy to obtain.

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Underpopulation refers to a situation where the population is small in relation to available resources. This means that there are fewer people living in a particular area compared to the available resources such as land, water, and other essential resources. This can lead to underutilization of resources and can also lead to slow economic growth as there may not be enough people to utilize the available resources. Underpopulation can be seen as an opportunity for development if proper planning and management are implemented to ensure sustainable use of resources.

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The most common type of business in West African countries is the sole proprietorship. This is because it is the simplest form of business that can be established by an individual, and it requires a relatively small amount of capital to start. In a sole proprietorship, the owner has full control over the business and is personally responsible for all its debts and obligations. The business and the owner are considered to be the same legal entity. Sole proprietorships are common in sectors such as agriculture, retail, and small-scale manufacturing in West Africa.

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The most common index for measuring developments is the per capita income. This index is used to measure the economic development of a country or region by dividing the total income of that area by its total population. It provides a measure of the average income per person and is widely used as an indicator of a country's standard of living and economic growth. By looking at the per capita income, policymakers can make informed decisions about economic policies and development programs.

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A direct tax is a tax that is directly levied on individuals or organizations by the government. Personal income tax is an example of a direct tax because it is a tax on the income earned by individuals. The tax is paid directly to the government by the individuals or their employers. Therefore, the correct option is personal income tax.

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Economics is a social science that studies how individuals, organizations, and societies allocate scarce resources to meet their unlimited wants and needs. It focuses on the production, distribution, and consumption of goods and services. Unlike physical sciences, economics deals with human behavior, which is often unpredictable and influenced by cultural, social, and political factors. Economics also includes the study of government policies, international trade, and financial markets, among other topics. Therefore, the correct answer is social science.

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Cost-push inflation refers to a situation where the general price level increases due to an increase in production costs, such as labor or raw materials. When there is an increase in demand for higher wages and it is granted, the cost of production increases. Consequently, companies would increase the prices of goods and services to maintain their profit margins, which results in cost-push inflation. Thus, demand for higher wages being granted is likely to raise cost-push inflation.

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A normal demand curve slopes downwards from left to right. This means that as the price of a product decreases, the quantity demanded of that product increases. Conversely, as the price of a product increases, the quantity demanded of that product decreases. This is because people generally want to buy more of a product when it is cheaper, and less of a product when it is more expensive. Therefore, the demand curve shows the relationship between the price of a product and the quantity of that product that consumers are willing and able to buy at each price level.

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The market supply curve slopes upwards from left to right indicating that at a higher price, more is supplied and at a lower price, less is supplied. The upward slope of the supply curve indicates that as the price of a good or service increases, producers are willing to supply more of it, and as the price decreases, they are willing to supply less of it. This is because producers are motivated by profit, and higher prices lead to higher profits, making it more attractive to supply more of the good or service. Conversely, lower prices mean lower profits, which make it less attractive to supply the good or service. Therefore, the upward slope of the market supply curve indicates that at a higher price, more is supplied, and at a lower price, less is supplied.

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The economic goals of a public corporation is to provide essential services. Public corporations are established by the government to provide services that are essential to the society. These services may not be profit-oriented, but they are necessary for the well-being of the people. Some examples of public corporations are public hospitals, schools, and utilities such as electricity and water supply. The main goal of these corporations is to provide affordable and accessible services to the public while ensuring quality and sustainability. Unlike private corporations, the profit motive is not the driving force of public corporations, but rather the provision of essential services.

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The reward for labor is a wage. A wage is a payment made by an employer to an employee for the work done. It is usually paid on a regular basis, such as hourly, daily, or weekly. The amount of wage paid is determined by several factors, such as the type of work done, the skill required for the job, the level of experience of the worker, and prevailing market conditions. Wage is the main source of income for workers and is essential for their survival and well-being.

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Agriculture is an important sector of the economy in West Africa. However, the region experiences low agricultural production due to several factors. One of these factors is inadequate research. This means that there is not enough investment in research activities that could enhance the productivity of the sector. Research is essential in identifying best practices, developing new and improved farming techniques, and addressing challenges that farmers face. Without adequate research, farmers in West Africa may continue to rely on traditional methods that may not be efficient or sustainable. As a result, agricultural productivity may remain low, making it difficult for the sector to contribute significantly to the region's economic development.

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Money becomes a very poor store of value in a period of inflation. Inflation is a sustained increase in the general price level of goods and services in an economy over time, which reduces the purchasing power of money. As prices rise, the value of money decreases, and the money that is saved or held loses its purchasing power over time. This makes it difficult to store wealth in the form of money, and people may look to alternative investments or stores of value to protect their wealth against inflation.

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The demand for money refers to the amount of money that individuals and businesses are willing and able to hold at any given time. This demand is based on the need for money to make transactions or purchases, as well as for precautionary reasons such as savings for emergencies. It is called derived demand because it is derived from the demand for goods and services. As the level of income and economic activity increases, the demand for money also increases. Conversely, when income and economic activity decrease, the demand for money decreases.

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Invisible trade refers to the trade in services that are not physically tangible or visible. These services include things like transportation, tourism, banking, insurance, consulting, and other types of services. Unlike visible trade, which involves the physical movement of goods, invisible trade involves the exchange of intangible services between countries. Invisible trade is an important component of international trade as it enables countries to trade services that they may not be able to produce domestically or can produce at a lower cost.

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Efficient distribution of goods in West Africa will be facilitated by an adequate transportation system. This is because a good transportation system allows for the smooth movement of goods from one location to another. With a well-developed transportation system, goods can be easily transported from the production centers to the markets, thereby reducing the cost of transportation and the time taken to move goods. This will in turn lead to a reduction in the cost of goods and increase access to goods, which can improve the standard of living of people in West Africa.

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The shares which do not carry any fixed rate of dividend are known as "ordinary shares". When a company issues ordinary shares, the shareholders who own them do not have any priority or preference over other shareholders in terms of receiving dividends or other payouts. Instead, their dividends are paid out of the company's profits, which are distributed among all shareholders according to the number of shares they own. The amount of dividend paid to ordinary shareholders can fluctuate depending on the company's financial performance, and there is no fixed rate of dividend. Ordinary shares are also called "common shares" or "equity shares".

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Public expenditure on education and health is known as expenditure on social services. This is because the government spends money on education and health to provide basic services to the society, promote human development and improve the standard of living of its citizens. Social services are aimed at meeting the social welfare needs of the population such as healthcare, education, housing, and social security. These services are essential for the well-being and development of the society, and are not intended to generate revenue or profits for the government.

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West African countries experience rapid population growth due to "early marriages". Early marriages are a common practice in many West African countries, where girls are often married off at a young age. Early marriage can lead to higher fertility rates as girls may start having children at a young age and have more children over their lifetime. This, combined with the fact that people are living longer due to improvements in healthcare, results in a rapidly growing population. Additionally, there may be cultural or religious factors that contribute to a preference for larger families, further increasing the fertility rate. Therefore, the correct option is "early marriages".

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In a socialist economy, the means of production are owned and controlled by the state. This means that the government owns and controls all the industries, businesses, and resources within the country. In a socialist economy, the government makes decisions about how resources are allocated and how goods and services are produced and distributed. The aim of a socialist economy is to promote equality and eliminate poverty and social inequality by ensuring that resources are distributed fairly. Therefore, the correct answer is "state".

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The problem of scarcity arises when the resources available to produce goods and services are limited in comparison to the unlimited wants and needs of people. The reduction of this problem is done by ensuring efficient allocation of resources. This means that the available resources are used in the most effective and efficient manner to produce goods and services that are most needed and wanted by the society. By doing this, the available resources can be utilized to their fullest potential, and the needs of people can be met to the best possible extent. Controlling consumption of goods and services and restricting consumer choice and taste are not effective ways to reduce the problem of scarcity, as these measures can lead to dissatisfaction and inefficiency in the allocation of resources. Producing everything needed by the consumers is not possible due to the limited nature of resources, and thus is not a feasible solution to the problem of scarcity.

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The tax whose rate increases as the level of income increases is known as a progressive tax. This means that the tax rate increases as the taxable income increases, resulting in a higher percentage of tax being paid by those with higher incomes. The idea behind this tax system is to achieve greater income equality and to make the tax system more fair by having those who can afford to pay more contribute a larger percentage of their income towards taxes. In contrast, regressive taxes have a higher percentage of tax being paid by those with lower incomes, while proportional taxes have a fixed tax rate regardless of the level of income. Company tax, on the other hand, is a tax on the profits made by companies.

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Marginal cost can be derived from the "total cost". Marginal cost refers to the additional cost incurred when one extra unit of a product is produced or sold. The total cost is the sum of all the costs incurred in producing a certain number of units. Therefore, if we calculate the total cost for producing n units of a product and then calculate the total cost for producing n+1 units, the difference between the two total costs will give us the marginal cost of producing the extra unit. This is because the additional cost incurred in producing the extra unit is the difference between the total cost of producing n+1 units and the total cost of producing n units. Therefore, the correct option is "total cost".

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The additional satisfaction or benefit obtained from consuming one or more units of a good or service is known as marginal utility. Marginal utility helps to measure the satisfaction gained from each additional unit of a product consumed, and it diminishes as consumption increases. This concept is essential in understanding consumer behavior and decision-making regarding purchases. The goal of rational consumers is to maximize their total utility or satisfaction from the goods and services they consume, which requires considering the marginal utility and price of each unit.

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The type of business organization among the given options is "co-operatives". A co-operative is a type of business organization that is owned and controlled by its members, who share in the profits and decision-making. Co-operatives can be formed by individuals or businesses that come together to meet their common economic, social, and cultural needs and aspirations. Members of a co-operative have equal voting rights and contribute to the co-operative's capital. The profits made by the co-operative are distributed among the members in proportion to their participation. Therefore, the correct answer is "co-operatives".

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One major function of the entrepreneur is bearing of risks. Entrepreneurs are individuals who undertake risks associated with the production and distribution of goods and services. They create new businesses or expand existing ones, develop innovative products or services, and take calculated risks to achieve their goals. Bearing risks involves taking on the uncertainties and potential losses associated with business ventures, such as fluctuations in demand, changes in market conditions, and unexpected expenses. Successful entrepreneurs are able to manage and mitigate these risks while still achieving their objectives.

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The input-output ratio could be used to measure the efficiency of labour. This ratio compares the amount of input used to produce a certain amount of output. In other words, it measures how much input, such as labour, capital, and materials, is required to produce a given amount of output. If the input-output ratio is low, it means that less input is needed to produce the same amount of output, which indicates higher labour efficiency. For example, if a factory can produce 100 units of a product using 10 workers and another factory can produce the same 100 units using only 8 workers, the second factory is more efficient because it uses less labour input to produce the same output. Therefore, the input-output ratio is a useful measure for assessing the efficiency of labour.

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Net investment from abroad is part of the capital account of the balance of payments. The capital account is a record of a country's international transactions in assets. It includes transactions such as foreign investment in the domestic economy, domestic investment in foreign economies, and changes in foreign exchange reserves held by the central bank. Net investment from abroad is a measure of the difference between foreign investment in the domestic economy and domestic investment in foreign economies. It includes items such as foreign direct investment, portfolio investment, and other investments such as loans and currency reserves. The other options mentioned, such as import of machinery, insurance, and transportation costs, are typically categorized as part of the current account, which records transactions related to trade in goods and services.