2024 WAEC ECONOMICS: Economics (Econs) WAEC Authentic Questions and Answer 2024 (2952)

(3ai)

Money cost refers to the actual amount of money spent or the price paid for a specific good, service, or resource. For instance, if you buy a smartphone for N50,000, the money cost is N50,000. On the other hand, opportunity cost refers to the value of the best alternative foregone when making a decision. For example, if you choose to purchase the smartphone for N50,000, the opportunity cost could be the vacation you could have taken with that money or the other items you could have bought.

(3aii)

Normal goods are products for which the demand increases as consumer income rises, and the demand decreases as consumer income falls. Luxury goods like high-end cars, designer clothing, and gourmet food are examples of normal goods. In contrast, inferior goods are products for which the demand decreases as consumer income rises, and the demand increases as consumer income falls. Generic store-brand products, low-cost fast food, and public transportation are examples of inferior goods.

(3bi)

INDIVIDUALS:

The scale of preference helps individuals make efficient resource allocations by providing a framework for prioritization, resource allocation, considering opportunity costs, making rational decisions, and adapting to different situations.

(3bii)

FIRMS:

The scale of preference assists firms in making efficient decisions regarding resource allocation by providing a systematic framework to 'copied from e x p o c o d e . n e t free' identify preferences, allocate limited resources, analyze opportunity costs, optimize returns on investment, and adapt to changing circumstances.

(3biii)

GOVERNMENT:

The scale of preference aids governments in making efficient resource allocations by considering the priorities, preferences, and needs of the population. It helps them allocate resources effectively, make informed decisions, and adapt to the evolving needs of society.

(4a)

(Choose any one)

An economic system encompasses the organization and management of production, distribution, and consumption of goods and services within a society or nation.

OR

An economic system consists of the rules, institutions, and mechanisms that determine resource allocation, economic activities, and wealth generation and distribution in a given society.

OR

An economic system serves as a framework or structure that guides the production, distribution, and consumption of resources within a society or nation.

(4bi)

PRODUCTION OBJECTIVE:

In a capitalist economy, the primary objective of production is profit-seeking. Private businesses aim to maximize their profits by producing goods and services in demand, selling them at a price higher than the production cost.

In contrast, the production objective in a socialist economy is to fulfill societal needs and achieve social welfare. This entails prioritizing equitable distribution, social justice, and public goods over profit maximization.

(4bii)

CONSUMER AUTHORITY:

In a capitalist economy, consumers have the freedom to choose from a range of products and services available in the market. Their preferences, expressed through purchasing decisions, shape what is produced, how it is produced, and its price. Consumer demand plays a pivotal role in resource allocation.

In a socialist economy, 'copied from e x p o c o d e . n e t free' consumer choices may be more limited compared to capitalist economies. The state may exert control over the types and quantities of goods and services, aiming to meet basic needs and ensure equal access to essential resources.

(4biii)

COMPETITION:

In a capitalist economy, competition occurs within a market framework where prices and resource allocation are determined by supply and demand. Market forces, driven by competition, guide decisions regarding production, consumption, and investment. In contrast, a socialist economy may have limited or no market competition. Production, distribution, and pricing decisions might be dictated by central planning or state intervention.

(4c)

(Choose any three)

(i) The supply of land is limited and remains fixed in the short run.

(ii) Land exhibits heterogeneity, meaning it differs in quality and characteristics across different locations.

(iii) Land is inherently immobile, as it cannot be easily moved or relocated.

(iv) Land is considered a free gift of nature, as it is not created by human effort.

(v) Land serves as a source of economic rent.

(4a)

Economic system refers to the structure and organization of production, distribution, and consumption of goods and services within a society.

(4bi) Aim of production:

(i) Capitalist Economy: In a capitalist economy, the primary aim of production is to generate profit. Private individuals and businesses own and control the means of production, such as factories and businesses, and their main objective is to maximize their profits and wealth accumulation.

(ii) Socialist Economy: In a socialist economy, the aim of production is often centered around meeting the needs of society as a whole. The state or collective ownership controls the means of production, and the focus is on providing goods and services that benefit the entire population rather than solely pursuing individual profits.

(4bii) Consumer sovereignty:

(i) Capitalist Economy: In a capitalist economy, consumer sovereignty is a fundamental principle. Consumers have the freedom to choose and influence what goods and services are produced through their purchasing decisions. Businesses respond to consumer demand and compete to attract customers by offering products and services that cater to their preferences.

(ii) Socialist Economy: In a socialist economy, consumer sovereignty is typically more limited. The state or central planning authority often determines the production and distribution of goods and services based on 'copied from e x p o c o d e . n e t free' collective interests and social priorities. While consumers still have access to goods and services, their choices may be constrained or influenced by the state's decision-making processes.

(4biii) Competition:

(i) Capitalist Economy: Competition plays a crucial role in a capitalist economy. Multiple private individuals and businesses operate within the market, striving to gain a competitive edge and maximize their profits. Competition fosters innovation, efficiency, and productivity, as businesses seek to attract customers and outperform their rivals.

(ii) Socialist Economy: Competition is less prevalent in a socialist economy, particularly in sectors where state ownership and central planning dominate. The priority is on cooperation and collective goals rather than competition among businesses. Some socialist economies may still allow limited competition in certain areas to spur innovation and efficiency.

(4c)

(PICK THREE ONLY)

(i) Fixed Supply: Land is a finite resource, and its supply cannot be increased. The quantity and quality of land available for production remain relatively constant over time.

(ii) Immobility: Unlike other factors of production such as labor and capital, land is immobile. It cannot be easily relocated to different areas or transferred between industries. The location of land is an inherent characteristic that influences its value and 'copied from e x p o c o d e . n e t free' productivity.

(iii) Heterogeneity: Land exhibits heterogeneity in terms of quality, fertility, natural resources, and geographical features. Different parcels of land have varying levels of suitability for specific purposes such as agriculture, mining, construction, or residential use.

(iv) Indestructibility: Land is generally considered indestructible and persists over time. While human activities can alter the quality or condition of land, the underlying physical space remains.

(v) Passive Income: Land can generate passive income in the form of rent, lease payments, or royalties. Due to its fixed supply and immobility, landowners can earn income by allowing others to use their land for various purposes.

(vi) Location Value: The value of land is influenced by its location and proximity to markets, infrastructure, transportation networks, natural resources, and amenities. Desirable locations tend to have higher land values and can offer strategic advantages for businesses.

(vii) Natural Resources: Land often encompasses valuable natural resources such as minerals, oil, gas, water, timber, and wildlife. These resources can be extracted and utilized for economic purposes.

(viii) Land Ownership: Land ownership can be held by individuals, businesses, governments, or communities. Property rights associated with land ownership allow individuals or entities to use, transfer, or 'copied from e x p o c o d e . n e t free' exclude others from the land.

(5a)

(PICK ANY TWO)

(i)sole proprietorship is a business structure in which a single individual owns and operates the business WHILE partnership is a business structure where two or more individuals or entities come together to operate a business and share its profits and losses

(ii)The sole proprietor has unlimited personal liability for the debts and obligations of the business. WHILE  partnership have unlimited personal liability for the debts and obligations of the business. 

(iii)The sole proprietor has complete control over all business decisions and operations. WHILE The partners share decision-making authority and responsibilities.

(iv)The sole proprietor is entitled to all the profits generated by the business and is personally responsible for any losses incurred. WHILE The partners share the profits and losses of the business based on their agreed-upon partnership agreement.

(5b)

(PICK ANY FOUR)

(i)The business enterprise owned by one person

(ii) The main objective of the one man business is to make profit

(iii) The sole proprietorship has limited liability

(iv)The business is controlled and managed by the sole proprietor

(v)The life span depends on the owner

(vi)Sole proprietorship is not a legal entity

(5c)

(PICK ANY FOUR)

(i)Limited liability: Shareholders of a 'copied from e x p o c o d e . n e t free' public limited company have limited liability, which means their personal assets are protected in the event of business debts or liabilities. Their liability is limited to the amount they have invested in the company.

(ii)Access to capital: Public limited liability companies can raise capital by selling shares to the public through the stock market. This allows them to tap into a wider pool of potential investors and raise substantial amounts.

(iii)Perpetual existence: Public limited companies have perpetual existence, meaning the company continues to exist even if shareholders change or transfer their shares. This provides stability and continuity for the business.

(iv)Credibility and reputation: Being a public limited company often enhances a company's credibility and reputation in the market. It enhance relationships with suppliers, customers, and other stakeholders.

(v)Attracting talent and incentivizing employees: Public limited companies can use shares as a form of employee compensation, such as employee stock ownership plans (ESOPs) or stock options.This can help attract and retain talented employees, align their interests with the company's performance.

(vi)Enhanced transparency and accountability: Public limited companies are subject to rigorous reporting and disclosure requirements imposed by regulatory authorities. This fosters transparency and accountability, providing 'copied from e x p o c o d e . n e t free' shareholders and the public with access to accurate and timely information about the company.

(5a)

A sole proprietorship is a business model where an individual is an owner as well as the operator of the business Whereas A partnership is a business model where two or more persons agree to carry on business and share profits and losses mutually.

(5b)

(i) Sole owner of the business

(ii) Unlimited liability

(iii) No legal entity

(iv) Sole decision maker

(5c)

(i) Generation of Income through Public Issue of Shares: One of the major channels through which Public Limited Companies generate capital is y selling shares to the public.

(ii) Security for Loan Advancement: Public Limited Companies can obtain and secure loans using the assets of the company as security as opposed to using the personal assets of the members.

(iii) Spreading Risks of Ownership: Because a Public Limited Company allows for pubic and unlimited membership, the risk of ownership is then spread amongst many people as opposed to being centered on a few as in the case of a Private Limited Company.

(iv) Separate Legal Identity: A duly incorporated Public Limited Company has an identity entirely different from that of the members. This means that the company is capable of independent existence and can enter into contractual transactions, acquire and own properties, and has the legal capacity to sue and be sued in its own name.

(6a)

(Choose any one)

The concept of industry location can be defined as the establishment or placement of a firm or industry in a specific area. Industries can be set up by individuals or governments, driven by economic or political motivations.

OR

The location of industries refers to the geographical distribution or arrangement of industrial activities or businesses within a region or country. It involves understanding the factors that influence firms' decisions when selecting the optimal location for their production facilities.

(6bi)

Raw materials: Industries involved in cement production should be situated near the sources of raw materials to minimize transportation costs. Similarly, industries dealing with perishable goods like fruits or palm oil should be located close to their respective sources.

(6bii)

Market: The presence of a viable market is crucial for any industry seeking to establish itself in a particular area. Fragile goods like glass, bulky goods like cement, and other perishable goods should be located near the market. Such industries that cater to the market demand are known as market-oriented industries.

(6biii)

Government policy: Governments can encourage industrial location through various policies, such as direct participation in establishing industries, the creation of industrial zones within the country, and the provision 'copied from e x p o c o d e . n e t free' of infrastructure like electricity, water supply, roads, and telecommunications.

(6c)

(Choose any three)

(i) Promotes development: Industrial growth leads to increased production of goods and services, contributing to overall development.

(ii) Emergence of supporting firms: When major firms concentrate in one area, subsidiary service firms that assist in the production of goods tend to emerge.

(iii) Job creation: Concentration of industries in an area creates numerous employment opportunities.

(iv) Development of organized markets: The localization of industries facilitates the development of organized markets for their products.

(v) Fosters competition: The presence of multiple industries promotes healthy competition among them, driving innovation and striving for market dominance.

(vi) Attraction of population: Areas with highly concentrated industrial estates tend to attract diverse groups of people due to various factors or opportunities present.

(8a) 

Embargo is a government-imposed restriction on trade or other economic activity with a particular country or group of countries. This restriction may include prohibiting or reducing imports, exports, financial transactions and/or travel to and from the targeted country.

(8b) 

(i) Protection of Domestic Industries: Governments may impose tariffs to protect domestic industries from foreign competition. When foreign goods are imported at lower prices, it can lead to a decline in sales of similar domestically produced products. Tariffs can be seen as a way to make imports more expensive, thereby providing protection for local businesses and industries.

(ii) Generating Revenue: Tariffs on imports can generate revenue for governments. This revenue can be used to fund various government programs, infrastructure projects, or to reduce budget deficits.

(iii) National Security: Governments may impose tariffs on imports to protect national security interests. This could include limiting the import of goods that are critical to national defense or that could pose a threat to public safety. In times of war or economic conflict, tariffs can be seen as a way to preserve national interests and protect the country's economy from foreign influence.

(8c)

[PICK ANY THREE]

(i) Inflation: Tariffs can cause inflation, as domestic producers will be able to charge higher prices due to reduced 'copied from e x p o c o d e . n e t free' competition from imports. This can ultimately result in higher prices for consumers, reducing their purchasing power and overall economic growth.

(ii) Retaliation: When a country imposes tariffs on another country's imports, the other country may respond by imposing tariffs of its own on the first country's exports. This can lead to a trade war, which harms both countries and global economic growth.

(iii) Reduced Efficiency: Tariffs can lead to reduced efficiency in the market, as domestic companies may become less productive and innovative due to reduced competition from imports. This can ultimately harm the industry as a whole and reduce economic growth.

(iv) Unfairness: Tariffs can be unfair, as they may favor certain domestic industries over others. This can lead to a lack of competition in certain industries, which ultimately harms consumers through higher prices and reduced innovation.

(v) Increased Costs of Living: Tariffs can significantly increase the cost of living for many people, as they increase the prices of imported consumer goods. This can disproportionately impact the poor, who may have limited options for purchasing basic necessities.

(8a)

(PICK ANY ONE)

An embargo refers to a government-imposed restriction or ban on the importation or exportation of certain goods or services to or from a particular country. It is a trade barrier that is typically implemented for political or economic reasons.

OR

An embargo can be defined as a governmental action that prohibits or restricts trade activities between countries which involves the deliberate limitation or complete prohibition of imports or exports of goods, services, or specific products to or from a targeted country.

(8b)

(PICK ANY THREE)

(i) Protecting Domestic Industries: Tariffs can be used to shield domestic industries from foreign competition by making imported goods more expensive. This protectionist measure aims to provide a competitive advantage to domestic producers, allowing them to grow and maintain employment levels.

(ii) Promoting National Security: Tariffs can be employed to safeguard industries that are considered vital for national security, such as defense or critical infrastructure. By discouraging reliance on foreign suppliers, tariffs can ensure a country's self-sufficiency in essential goods and protect against potential disruptions in the global supply chain.

(iii) Correcting Trade Imbalances: Countries may impose tariffs to address trade imbalances, where the value of imports significantly exceeds that of exports. By making 'copied from e x p o c o d e . n e t free' imported goods more costly, tariffs aim to reduce imports and encourage domestic production and export-oriented industries, thereby narrowing the trade deficit.

(iv) Revenue Generation: Tariffs can serve as a revenue source for governments. Import duties levied on imported goods generate income that can be used to fund public services, infrastructure projects, or reduce budget deficits.

(v) Encouraging Fair Trade Practices: Tariffs can be implemented as a response to unfair trade practices, such as dumping or subsidies provided to foreign producers. By imposing tariffs on goods that are sold below their fair market value or benefiting from government subsidies, countries can create a more level playing field for domestic industries.

(vi) Environmental Protection: Tariffs can be used to promote environmentally friendly practices by discouraging the importation of goods produced in countries with lax environmental regulations. This measure aims to prevent the outsourcing of pollution and encourage global adherence to environmental standards.

(vii) Infant Industry Protection: Tariffs can be employed to support the growth of emerging or "infant" industries in a country. By shielding them from foreign competition during their early stages, tariffs provide these industries with a chance to develop, gain competitiveness, and eventually contribute to the domestic economy.

(8c)

(PICK ANY 'copied from e x p o c o d e . n e t free' THREE)

(i) Increased Consumer Prices: Tariffs lead to higher prices for imported goods, which can directly impact consumers. When tariffs are imposed, the cost of imported products rises, and domestic consumers may have to bear the burden of these increased prices. This can reduce consumers' purchasing power and potentially lead to decreased overall welfare.

(ii) Retaliation and Trade Wars: Imposing tariffs can trigger retaliatory measures from other countries. When one country raises tariffs, other countries may respond by imposing their own tariffs on the original country's exports. This can escalate into a trade war, where trade barriers increase on both sides, harming global economic growth and stability.

(iii) Reduced Efficiency and Productivity: Tariffs disrupt international supply chains and hinder the efficient allocation of resources. They can discourage the use of imported inputs, which may be more cost-effective or of higher quality than domestic alternatives. This can reduce overall productivity, increase production costs, and limit the competitiveness of domestic industries in the global market.

(iv) Negative Impact on Exporters: Tariffs can harm industries reliant on exporting their products. When a country imposes tariffs on imports, it can trigger retaliatory actions, reducing demand for the country's exports. This can adversely affect export-oriented industries, leading to job losses, decreased 'copied from e x p o c o d e . n e t free' revenues, and economic difficulties for those relying on international trade.

(v) Distortion of Comparative Advantage: Tariffs can distort comparative advantage, which is the principle that countries specialize in producing goods and services in which they have a relative advantage. By protecting domestic industries through tariffs, resources may be diverted from sectors where the country has a competitive edge to less efficient industries. This can hinder overall economic efficiency and limit potential gains from trade.

(vi) Consumer Choice and Innovation: Tariffs limit the variety and availability of imported goods, leading to reduced consumer choice. Domestic industries that are protected by tariffs may face less pressure to innovate and improve their products since they face less competition. This can hinder technological progress, limit market dynamism, and slow down overall economic development.