Hi scholars! 👋
Welcome to today’s quick Economics revision. This lesson is designed to help you understand important concepts that commonly appear in WAEC, NECO, and JAMB Economics exams. Each question has been simplified, well-explained, and structured just like the real exam to help you study smarter and faster. Let’s dive in together!
1. The basic economic problem refers to
A. How to increase exports only
B. How to raise government revenue
C. How to allocate scarce resources to unlimited wants
D. How to reduce inflation
CORRECT ANSWER: C – How to allocate scarce resources to unlimited wants
Explanation: The economy has limited resources but unlimited human wants. Therefore, every society must choose how best to distribute scarce resources.
2. If the elasticity of demand for a good is –0.5, the demand is
A. Perfectly elastic
B. Perfectly inelastic
C. Relatively inelastic
D. Unit elastic
CORRECT ANSWER: C – Relatively inelastic
Explanation: An elasticity value smaller than 1 (in absolute terms) shows that consumers do not significantly change their quantity demanded when price changes.
3. The equilibrium price is the price at which
A. Government fixes minimum selling price
B. Quantity supplied is greater than demand
C. Quantity demanded equals quantity supplied
D. Sellers make extra profit
CORRECT ANSWER: C – Quantity demanded equals quantity supplied
Explanation: At equilibrium, the market clears because buyers and sellers agree on the same price and quantity.
4. When demand decreases while supply remains constant, the equilibrium price
A. Falls
B. Rises
C. Remains unchanged
D. Becomes infinite
CORRECT ANSWER: A – Falls
Explanation: A decrease in demand shifts the demand curve leftward. Consequently, the new intersection with supply occurs at a lower price.
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5. When supply increases but demand remains unchanged, the quantity sold
A. Falls sharply
B. Remains zero
C. Rises at different possible prices
D. Reduces to equilibrium only
CORRECT ANSWER: C – Rises at different possible prices
Explanation: More supply creates a new market condition where sellers are willing to offer more units at several price levels to attract buyers.
6. A commodity that takes only a small portion of the consumer’s income has
A. Highly elastic demand
B. Price inelastic demand
C. Perfectly elastic demand
D. Zero elasticity
CORRECT ANSWER: B – Price inelastic demand
Explanation: Goods that cost very little (e.g., matches, salt) do not change quantity demanded much even if price changes. As a result, demand is inelastic.
7. In a market economy, decisions on what goods to produce are determined by
A. Government ministries
B. Price mechanism
C. Military rule
D. Trade unions
CORRECT ANSWER: B – Price mechanism
Explanation: In market economies, the forces of demand and supply guide what producers make. Higher demand signals producers to increase output.
8. An outward shift of the Production Possibility Curve (PPC) indicates
A. Economic decline
B. No change in production capacity
C. Economic growth
D. Inefficient resource use
CORRECT ANSWER: C – Economic growth
Explanation: When the PPC shifts outward, the economy can produce more goods than before. This usually results from improved technology or increased resources.
9. Which of the following is NOT a feature of labour?
A. Labour is mobile
B. Labour earns wages
C. Labour is an active factor
D. Labour is created by capital
CORRECT ANSWER: D – Labour is created by capital
Explanation: Labour is provided by humans, not produced by machines or capital. Although capital supports labour, it cannot create labour.
10. Which of the following is NOT a method of controlling monopoly?
A. Anti-trust legislation
B. Price regulation
C. Encouraging mergers
D. Taxation
CORRECT ANSWER: C – Encouraging mergers
Explanation: Mergers increase firm size and market dominance. Therefore, encouraging them would strengthen monopoly instead of controlling it.
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Conclusion
These questions summarize core Economics topics such as elasticity, equilibrium, PPC analysis, and features of various economic systems. As you continue revising, try practicing similar questions to reinforce your understanding. With steady study, your exam confidence will grow significantly.
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Credit: Allschool, Allcbt
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