Waec Economics 2012 Past Questions and Answers

Question 51:

• WAEC 2012

The diagram below represents the cost and revenue situation of a firm. Use the information in the diagram to
answer the questions that follow.

(a) Why would the firm not produce at (i) Q\(\_1\) (ii) Q\(\_3\) ? [6 marks]
(b) How much profit does the firm make at P\(\_1\)? [4 marks]
(c) If price falls to P\(\_1\)
(i) What quantity would the firm produce? [2 marks]
(ii) What type of profit does the firm make? [2 marks]
(iii) Explain your answer in c(ii). [4 marks]
(d) In which type of market s the firm operating?[2 marks]

Question 52:

• WAEC 2012

The tables below show the expected revenues and projected expenditures from the budget of a hypothetical country in 1998. Use the information in the tables to answer the questions that follow. EXPECTED REVENUE

ITEM	AMOUNT ($ millions)
Rents, royalties and profits	75.00
Company income tax	150.00
Customs and excise duties	300.20
Personal income tax	80.00
Fees specific charges	60.80
Value added tax	100.00

PROJECTED EXPENDITURE

ITEM	AMOUNT ($ millions)
General administration	220.10
Maintenance of foreign missions	50.00
Transfer payments	65.00
Building of schools and hospitals	200.00
Road construction	180.90

(a) Calculate the total revenue from
(i) direct taxes [3 marks]
(ii) indirect taxes [3 marks]
(iii) non-tax sources [3 marks]
(b) Determine the total
(i) capital expenditure [3 marks]
(ii) recurrent expenditure [3 marks]
(c) Determine whether the budget is a surplus or deficit. [5 marks]

Question 53:

• WAEC 2012

Explain how the following factors will affect the demand for a commodity X:
(a) a decrease in the price of a implement Y; [5 marks]
(b) an increase in consumers' disposable income; [5 marks]
(c) a decrease in the apply of a substitute P; [5 marks]
(d) an increase in income tax. [5 marks] )

Question 54:

• WAEC 2012

(a) State and explain the law of comparative cost advantage. [12 marks]
(b) Give two limitations of the law as a theory of international trade. [8 marks]

Question 55:

• WAEC 2012

(a) Define money. [2 marks]
(b) State the three motives for holding money. [6 marks]
(c) Mention two determinants each of the motives for holding money. [12 marks