100% Real Waec Gce 2015 Economics Obj And Theory Answers

100% Real Waec Gce 2015 Economics Obj And Theory Answers


=14/2 =7
(v) AC=20/4
(w) AC=48/6
(x) AC=14-6
(i) Profit=revenue-cost
-It is output 1
-It is where TC=AC

-A firm is the basic unit within which factors of
production are organised for the purpose of
producing wealth. it is an entity which specialises in
the production and distribution of goods under one
administration. e.g Texaco Nig Ltd, Leventis PLC
-An industry on the other hand is a group of firms
producing similar products and under separate

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-Location of industry is defined simply as the siting or
establishment of a firm or industry in a particular
-Localisation on the other hand refers to the
concentration of firms or industries producing
similar products in an area.

Proximity of source of raw materials:
-cement producing industries should be located close
to sources of raw materials to reduce transportation.
-perishable goods like fruits, palm oil industries etc
should also be located near their raw materials.

Availability of capital:
-there should be enough capital to purchase
industrial input before and after setting up industries
-entrepreneurs should have access to loans

(5a) Inflation may be defined as a persistent rise in
the general price level of goods and services.
Inflation occurs when the volume of purchases is
permanently running ahead of production and too
much money in circulation chasing too few goods
(5bi) Demand-pull inflation occurs when consumers
have high purchasing power leading to increases in
aggregate demand without a corresponding
increase in supply.
(5bii) Cost-push inflation occurs when increases in
cost of production are passed on to consumers in
the form of high prices for the goods and services
on sale. The prices of goods and services are
pushed up by rising costs.
-High cost of production: when there is high cost of
production,manufacturers build in this high cost
into cost per unit and pass it to consumers leading
to cost pull inflation
-Increase in salaries and wages: when salaries and
wages are increase without corresponding increase
in supply of goods and services,it can lead to excess
money in circulation chasing few goods
-Excessive bank lending: This can lead to excessive
money in circulation chasing few goods and
-Money laundering: Mass transfer and injection of
money into circulation can also cause inflation

Price elasticity of demand;-This may be defined as
the degree of responsiveness of demand to little
changes in prices of goods and services

-Income elasticity of demand is defined as the
degree of responsiveness of demand to changes in
income of consumers while Cross elasticity of
demand may be defined as the degree of
responsiveness of demand for a commodity to
changes in the price of another commodity
-Income elasticity of demand measures how
changes in income of consumers will affect the
quantity of commodities demanded by such
consumers while cross elasticity of demand is the
proportionate change in the price of goods
demanded over the proportionate change in the
price of another good demanded
-Income elasticity of demand is negative for inferior
goods since an increase in income will lead to a
decreased in demand for them while cross
elasticitry of demand is applicable mainly to goods
that are close substitutes as well as complimentary

-Availability of substitutes goods;-The more
possible substitutes they are for a given good and
service,the greater the elasticity when the close
substitues are available,consumer can easily
switch from one good to another even if there is
only small change in price,conversely if there is no
substitutes available, demand for a good is more
likely to be inelastic
-Proportion of the purchaser’s budget consumed by
the item;-products that consume a large portion of
the purchaser’s budget tend to have greater
elasticity.The relative high cost of such goods will
cause consumers to pay attention to purchase and
seek substitutes.In contrast,demand will tend to be
inelastic when a good represents only negligible
portion of the budget
-Degree of necessity;-The greater the necessity for
a good,the lower the elasticity.consumers will
attempt to buy necessary products regardless of
the price.luxury products,on the other hand,tend to
have greater elasticity
-Brand loyalty;-An attachment to a certain brand
can override sensitvity to price changes, resulting
to price changes,resulting in more inelastic demand

(8a) Economic growth maybe defined as the process
by which the productive capacity of an economy
increases over a givenperiod,leading to a rise in the
level of the national income.

(i) Population explosion: Underdeveloped countries
do witness high birth rate leading to population
(ii) Low standard of living: The standard of living in
these countries is generally low
(iii) High dependency on foreign nations: Most of
these developing nations depend greatly on foreign
countries for their survival.
(iv) Low savings and investment: Labour receives low
income and this reduces or leads to low savings and
(i) Encouragement of savings: People and firms
should be encouraged to save provided there is an
improvement in their income. Good savings leads to
investments. Expenditure in consumption should be
(ii) Provision of capital: Banks should be encouraged
to provide capital or fund for individuals and firms to
enable them embark on productive ventures.

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