2022 WAEC (WASSCE) Economics Past Questions and Answers
The 2022 WAEC (WASSCE) Economics past questions with answers: 15 objective questions from the 2022 paper in the DeeepSolve question bank, each with its answer behind "Show answer". Try each question before you check, then practise the paper as a timed WAEC-style CBT.
Past questions © the examination body (JAMB/WAEC/NECO). DeeepSolve is not affiliated with them. Rights holders: see /copyright.
Questions
- 1.
A major characteristic of natural resources is that they
- A.are unlimited in supply
- B.have high cost of production
- C.are free gifts of nature
- D.do not command any price
Show answer
Answer: C. are free gifts of nature
AI explanation
Step 1: Analyze the question The question asks for a major characteristic of natural resources. These are resources provided by nature, such as land, crude oil, minerals, forests, and water. Humans did not create them.
Step 2: Explain the concept In Economics, natural resources are part of the factor of production called land. The key features of land and natural resources are:
- They are gifts of nature, not produced by human effort.
- They are limited in supply overall (scarce).
- They are immobile, at least geographically.
- They can have a price once they are owned or exploited, for example crude oil or farmland.
Step 3: Test each option
- A. Unlimited in supply: Wrong. Natural resources are limited, and this is the very reason scarcity exists.
- B. High cost of production: Wrong. Natural resources are not produced by humans, so they have no production cost in the usual sense. Extracting them can be costly, but that is a different matter.
- C. Free gifts of nature: Correct. They exist naturally and were not made by human effort. This is the standard textbook characteristic.
- D. Do not command any price: Wrong. Many natural resources, such as crude oil, gold, and land, command very high prices in the market. "Free" here means nature provides them without cost of creation, not that they are sold at zero price.
Step 4: Answer The correct option is C. are free gifts of nature.
Exam tip: Remember "land = gift of nature." If an option says "unlimited," be suspicious, because economics is built on scarcity. Also, don't confuse "free gift" (no one produced it) with "free of charge" (no price), since option D is a common trap.
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- 2.
The use of mass advertising media enable a firm to enjoy
- A.managerial economies
- B.financial economies
- C.marketing economies
- D.welfare economies
Show answer
Answer: C. marketing economies
AI explanation
Step 1: Analyze the question The question asks which type of economy of scale a firm enjoys when it uses mass advertising media (TV, radio, newspapers, billboards).
Step 2: Explain the concept Economies of scale are the cost advantages a firm gains as it expands production. The main types are:
- Managerial economies: Large firms can hire specialist managers, such as a production manager or a marketing manager, who make operations more efficient.
- Financial economies: Large firms can get loans more easily and at lower interest rates because banks see them as less risky.
- Marketing economies: Large firms can spread the cost of advertising, distribution and sales over a large output. They can also buy in bulk and use mass advertising media, so the advertising cost per unit of product is very low.
- Technical economies: Large firms can use advanced machinery and large-scale production methods.
- Welfare economies: Large firms can provide staff facilities such as clinics, canteens and housing.
Step 3: Solve Mass advertising media such as national TV, radio and newspapers are expensive. A large firm can afford them, and because it sells in large quantities, the advertising cost per unit sold is small. This advantage relates to promoting and selling products, which is marketing.
- A is wrong because it relates to hiring specialist managers.
- B is wrong because it relates to access to credit.
- D is wrong because it relates to staff welfare.
Answer: C. marketing economies
Exam tip: Match the keyword in the question to the type of economy: advertising, distribution and bulk buying point to marketing. Loans and credit point to financial. Specialist staff point to managerial. Machinery points to technical.
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- 3.
Which of the following measures can lead to an increase in exports?
- A.Increase in export duties
- B.Increase in excise duties
- C.Depreciation of currency
- D.Total ban on imports
Show answer
Answer: C. Depreciation of currency
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- 4.
An argument for the use of commercial policy rest on the need to
- A.make imported goods affordable
- B.reduce domestic unemployment
- C.encourage the importation of non-essential goods
- D.make a country enjoy absolute advantage in production of all goods
Show answer
Answer: B. reduce domestic unemployment
AI explanation
Step 1: Analyze the question The question asks about the main argument for using commercial policy. Commercial (trade) policy means government measures that regulate international trade, such as tariffs, quotas, subsidies, import bans and embargoes.
Step 2: Explain the concept Governments use commercial policy to:
- Protect infant industries from foreign competition
- Protect domestic jobs and reduce unemployment
- Correct balance of payments deficits
- Conserve foreign exchange
- Prevent dumping
- Diversify the economy
Step 3: Evaluate each option
- A. Make imported goods affordable: Wrong. Tariffs and quotas usually make imports more expensive, not cheaper.
- B. Reduce domestic unemployment: Correct. By restricting imports, the government encourages consumers to buy locally made goods. Local industries then expand and employ more workers. This is a classic protectionist argument.
- C. Encourage importation of non-essential goods: Wrong. Commercial policy usually discourages the importation of non-essential or luxury goods.
- D. Absolute advantage in all goods: Wrong. This is unrealistic, and trade policy cannot give a country an advantage in everything.
Step 4: Answer
Tip: When you see "commercial policy" or "protectionism" in an exam, think of the keywords protect, jobs, infant industries, balance of payments. Options that say imports become cheaper or more plentiful are usually distractors.
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- 5.
Given that a country's index of export price is 180 and that of import is 200, the terms of trade is
- A.0.09
- B.2.00
- C.90.00
- D.380.00
Show answer
Answer: C. 90.00
AI explanation
Step 1: Analyze the question We are asked to find the terms of trade given the export price index (180) and the import price index (200).
Step 2: The concept The commodity (net barter) terms of trade measure how much imports a country can obtain for its exports:
Terms of Trade = (Index of Export Prices ÷ Index of Import Prices) × 100
- A value above 100 means the terms of trade are favourable (export prices are rising faster than import prices).
- A value below 100 means they are unfavourable.
Step 3: Solution
Terms of Trade = (180 ÷ 200) × 100 = 0.9 × 100 = 90
Step 4: Interpretation Since 90 is less than 100, the country's terms of trade are unfavourable. Its exports now buy fewer imports than in the base year.
Step 5: Check the options
- A. 0.09: wrong, a miscalculation of the decimal place.
- B. 2.00: wrong.
- C. 90.00: correct.
- D. 380.00: wrong, this simply adds 180 and 200.
Exam tip: Remember the order: Exports over Imports, times 100. Think "Every Index ×100". If the answer is under 100, the trade is against the country. If it is over 100, it favours the country. Always multiply by 100 when the question gives index numbers.
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- 6.
Foreign investment and long term securities in the balance of payment accounts are recorded as
- A.current account transaction
- B.capital account transaction
- C.balance of trade account transaction
- D.invisible balance account transaction
Show answer
Answer: B. capital account transaction
AI explanation
Step 1: Analyze the question The question asks which part of the Balance of Payments (BOP) records foreign investment and long-term securities.
Step 2: Explain the concept The Balance of Payments has two main parts:
- Current account: records trade in goods (visible trade), trade in services (invisible trade), income (interest, dividends, profits) and current transfers (remittances, gifts).
- Capital account (often called the capital and financial account): records capital movements, such as foreign direct investment, portfolio investment (shares and bonds), long-term securities, loans and borrowings, and changes in reserves.
The balance of trade is only part of the current account. It covers just the difference between visible exports and visible imports. Invisible balance is also part of the current account, because it covers services and similar items.
Step 3: Apply it to the question
- Foreign investment is a movement of capital across borders, so it belongs in the capital account.
- Long-term securities (bonds, shares and similar assets held across borders) are also capital movements, so they belong in the capital account too.
Checking the options:
- A. Current account covers trade, services, income and transfers. This is wrong.
- B. Capital account covers investments and long-term capital flows. This is correct.
- C. Balance of trade covers only visible goods. This is wrong.
- D. Invisible balance covers services and similar items. This is wrong.
Step 4: Answer The correct option is B. capital account transaction.
Exam tip: Remember "Current = Day-to-day" (goods, services, income, transfers) and "Capital = Investments and Loans" (money moved to build or hold assets). If you see words like investment, securities, loans or borrowing, think capital account.
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- 7.
The main function of the African Development Bank (AFDB) is to
- A.promote free trade and development among members
- B.provide loans to finance balance of payment problems
- C.provide loans to members to finance viable projects
- D.help members overcome their internal problems
Show answer
Answer: C. provide loans to members to finance viable projects
AI explanation
Step 1: Analyze the question The question asks for the main function of the African Development Bank (AfDB). Think about what kind of institution it is.
Step 2: Explain the concept The AfDB was established in 1964 (headquartered in Abidjan, Côte d'Ivoire, and now operating from there after a temporary stay in Tunis). It is a development finance institution, similar to the World Bank but focused on Africa. Its main aim is to promote the economic development and social progress of its regional member countries. It does this mainly by lending money and providing technical support for development projects such as roads, power, agriculture, water supply, and education.
Step 3: Evaluate the options
- A. Promote free trade and development among members: Free trade promotion is more the role of bodies like ECOWAS, the AfCFTA, or the WTO. Not the AfDB's main function.
- B. Provide loans to finance balance of payment problems: This is the role of the IMF, not the AfDB.
- C. Provide loans to members to finance viable projects: This matches the AfDB's core mandate of financing development projects such as infrastructure and agriculture.
- D. Help members overcome their internal problems: This is too vague and is not a specific function of the bank.
Step 4: Answer The correct option is C.
Tip: Remember the contrast:
- IMF → balance of payments problems and short-term support
- World Bank / AfDB → long-term loans for development projects
If you see "projects" and "development," think AfDB or World Bank. If you see "balance of payments," think IMF.
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- 8.
Political instability hinders economic growth because it
- A.scares many people from politics
- B.prevent politicians from playing effective politics
- C.discourage entrepreneurs generally
- D.encourages urban-rural migration
Show answer
Answer: C. discourage entrepreneurs generally
AI explanation
Step 1: Analyze the question The question asks why political instability (coups, civil unrest, frequent changes of government, violence) hinders economic growth. We need the option that links instability to economic activity.
Step 2: The concept Economic growth depends on investment, production, and business expansion. Entrepreneurs and investors need a stable, predictable environment with secure property, consistent policies, and safety. When a country is politically unstable:
- Investors fear losing their capital and assets.
- Policies change often, so long-term planning becomes risky.
- Foreign investors withdraw or stay away (capital flight).
- Businesses may be destroyed or forced to close.
The result is lower investment, less output, fewer jobs, and slower growth.
Step 3: Evaluate the options
- A. Scares many people from politics: This affects political participation, not the economy directly.
- B. Prevents politicians from playing effective politics: This is a political effect, not an economic one.
- C. Discourages entrepreneurs generally: This is an economic link. Entrepreneurs lose confidence, invest less, and create fewer businesses and jobs, so growth slows.
- D. Encourages urban-rural migration: Instability may cause displacement, but this is not the main reason it hinders growth.
Step 4: Answer The correct option is C. discourage entrepreneurs generally.
Tip: In Economics questions asking how a non-economic factor affects growth, look for the option that mentions investment, entrepreneurs, or production. Stability gives investors confidence, and instability destroys it.
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- 9.
A benefit that is present in all forms of economic integration is that
- A.common agricultural policy is in place
- B.the size of the market is widened
- C.factors of production are free to move and be moved
- D.common currency is in use
Show answer
Answer: B. the size of the market is widened
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- 10.
The production of rice and yam on the same farmland is an example of
- A.joint supply
- B.composite supply
- C.competitive supply
- D.market supply
Show answer
Answer: C. competitive supply
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- 11.
An increase in the price of commodity X led to a fall in the supply of commodity Y. Commodities X and Y are
- A.competitive goods
- B.composite goods
- C.jointly supplied
- D.derived goods
Show answer
Answer: A. competitive goods
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- 12.
If demand is perfectly inelastic, a tax imposed
- A.is borne only by the producer
- B.is borne only by the consumer
- C.will have greater impact on the seller
- D.will have no impact on the buyer
Show answer
Answer: B. is borne only by the consumer
AI explanation
Analyze the question: We need to know who bears the burden of a tax when demand is perfectly inelastic (elasticity of demand = 0).
Concept: Tax incidence The burden of a tax is shared between buyers and sellers depending on the relative elasticities of demand and supply:
- The less elastic side of the market bears more of the tax.
- The more elastic side bears less of the tax.
Step-by-step solution:
- Perfectly inelastic demand (Ed = 0) means consumers will buy the same quantity no matter how high the price goes. The demand curve is a vertical line.
- When a tax is imposed, the supply curve shifts upward (left) by the amount of the tax.
- Because the demand curve is vertical, quantity bought does not change, and the price rises by the full amount of the tax.
- The producer can therefore pass the whole tax on to the consumer, so the producer's net price received is unchanged.
- The consumer pays the full tax through the higher price.
Checking the options:
- A. Borne only by the producer: wrong, this happens when demand is perfectly elastic.
- B. Borne only by the consumer: correct.
- C. Greater impact on the seller: wrong, the seller passes it on.
- D. No impact on the buyer: wrong, the buyer pays the whole tax.
Exam tip: Remember "Inelastic = Consumer pays." The side that cannot easily walk away (the less elastic side) is the one that carries the tax. Likewise, if demand is perfectly elastic, the producer bears the tax. This is why governments often tax goods with inelastic demand, like cigarettes, alcohol, and petrol, to raise revenue.
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- 13.
Which of the following factors is not a cause of change in demand? Changes in
- A.the size of the population
- B.price of the commodity
- C.income distribution
- D.taste and fashion
Show answer
Answer: B. price of the commodity
AI explanation
Analyze the question: We are asked to find the factor that is not a cause of a change in demand (that is, not a shift of the demand curve).
Concept: Economics separates two ideas:
- Change in quantity demanded (a movement along the demand curve) is caused only by a change in the price of the commodity itself.
- Change in demand (a shift of the whole demand curve) is caused by non-price factors, called the determinants of demand. These include: • Income and income distribution • Tastes and fashion • Population size • Prices of related goods (substitutes and complements) • Expectations about future prices • Advertising
Check each option:
- A. Size of population: More people means more buyers, so the demand curve shifts. This is a cause of change in demand.
- B. Price of the commodity: This only moves us along the same demand curve, so it changes the quantity demanded, not the demand. This is not a cause of change in demand.
- C. Income distribution: This changes who has purchasing power and so shifts demand. It is a cause.
- D. Taste and fashion: A change in preferences shifts the demand curve. It is a cause.
Answer: The own price of the commodity is the factor that does not cause a change in demand. It causes a change in quantity demanded.
Exam tip: Remember "Price moves along, everything else shifts." If the question mentions the commodity's own price, think of a movement along the curve. If it mentions anything else (income, taste, population, related goods), think of a shift of the curve.
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- 14.
Development planning focuses mainly on
- A.allocation of resources by the entrepreneurs
- B.mapping out strategies by the government
- C.developing some areas of the country by the government
- D.deciding on which types of homes to build
Show answer
Answer: B. mapping out strategies by the government
AI explanation
Analyzing the question The question asks what development planning mainly focuses on. The key words are "development planning", which is a government-led activity.
The concept Development planning is the process by which a government sets out the goals for a country's economic and social progress. It also decides the strategies, policies and priorities for reaching those goals, usually over a fixed period such as 5 or 10 years. Examples in Nigeria include the National Development Plans of the 1960s-80s, Vision 20:2020, and the current National Development Plan.
Its main features are:
- It is carried out by the government or central authority.
- It sets objectives, such as growth, employment and poverty reduction.
- It maps out strategies and allocates resources across sectors, such as agriculture, education, health and infrastructure.
Evaluating the options
- A. Allocation of resources by entrepreneurs. This describes the private sector and the market mechanism, not planning.
- B. Mapping out strategies by the government. This matches the definition of development planning: the government designing strategies to achieve national goals.
- C. Developing some areas of the country by the government. This is too narrow. Development planning covers the whole nation and all sectors, not only selected areas.
- D. Deciding on which types of homes to build. This is a housing decision, which is only one small part of a plan.
Answer: The correct option is B.
Exam tip: In WASSCE Economics, when you see "planning" paired with "development", think "government strategy for the whole economy". Options that are too narrow (a single area or sector) or that name private actors are usually distractors.
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- 15.
If petrol is no longer needed to produce energy, then demand for crude oil
- A.will increase
- B.will remain constant
- C.may be limited to chemical industries
- D.will make producing countries richer
Show answer
Answer: C. may be limited to chemical industries
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