WAEC 2026/ 2027 Objective and Essay Questions and Answers for Economics

ECONOMICS 1 (OBJECTIVE) – 60 QUESTIONS

INSTRUCTION: Choose the option that best answers each question.

Economics is best described as the study of
A. how people make choices under scarcity
B. how to make profits
C. how goods are advertised
D. how governments collect taxes
Answer A

The reward for labour is
A. interest
B. rent
C. profit
D. wages
Answer D

Which of the following is NOT a factor of production
A. Capital
B. Entrepreneurship
C. Land
D. Money
Answer D

The basic economic problem faced by every society is
A. inflation
B. scarcity
C. unemployment
D. poverty
Answer B

A normal good is one whose demand
A. falls as income rises
B. rises as income rises
C. is fixed regardless of price
D. depends only on taste
Answer B

If supply decreases while demand remains constant, price will
A. rise
B. fall
C. remain constant
D. fluctuate
Answer A

The point where demand equals supply is known as
A. equilibrium
B. monopoly
C. break-even
D. optimum point
Answer A

The market structure with only one seller is
A. monopoly
B. oligopoly
C. perfect competition
D. monopsony
Answer A

A demand curve usually slopes
A. upward
B. downward
C. vertically
D. horizontally
Answer B

The term GDP means
A. Gross Domestic Product
B. General Domestic Price
C. Gross Domestic Profit
D. Global Domestic Production
Answer A

A country experiences inflation when
A. there is a persistent fall in prices
B. money wages fall
C. there is a persistent rise in prices
D. government reduces spending
Answer C

A shift in the demand curve to the right implies
A. decrease in demand
B. increase in demand
C. fall in price
D. rise in supply
Answer B

The public sector consists of
A. private companies
B. government-controlled enterprises
C. family businesses
D. multinational corporations
Answer B

Tax paid on imported goods is called
A. income tax
B. excise duty
C. import duty
D. VAT
Answer C

A budget deficit occurs when
A. income equals expenditure
B. expenditure exceeds income
C. income exceeds expenditure
D. debt is repaid
Answer B

Opportunity cost is
A. money spent on goods
B. the alternative forgone
C. income earned from work
D. cost of production
Answer B

A country’s balance of trade is the difference between
A. exports and imports
B. income and expenditure
C. profit and loss
D. savings and investment
Answer A

Which is a characteristic of money
A. perishability
B. double coincidence of wants
C. durability
D. divisibility
Answer C

A firm that enjoys economies of scale experiences
A. rising average cost
B. constant average cost
C. falling average cost
D. fixed total cost
Answer C

The type of unemployment caused by changes in technology is
A. frictional
B. structural
C. seasonal
D. cyclical
Answer B

A commercial bank performs all except
A. accepting deposits
B. granting loans
C. conducting monetary policy
D. transferring funds
Answer C

The central bank controls
A. the capital market
B. money supply
C. private companies
D. insurance houses
Answer B

Productivity is the ratio of
A. output to input
B. cost to capital
C. labour to wages
D. workers to salary
Answer A

A tariff is used to
A. encourage imports
B. reduce government revenue
C. restrict imports
D. increase exchange rate
Answer C

The law of diminishing returns applies in the
A. short run
B. long run
C. financial market
D. labour market
Answer A

In economics, capital refers to
A. money saved in a bank
B. tools and machines
C. raw materials
D. natural resources
Answer B

When price elasticity of demand is greater than 1, demand is
A. unitary
B. elastic
C. inelastic
D. perfectly inelastic
Answer B

One major feature of a developing economy is
A. high per capita income
B. high unemployment
C. low population
D. high industrialisation
Answer B

A country’s population census is usually conducted to
A. collect tax
B. determine population size
C. elect leaders
D. increase inflation
Answer B

Import substitution policy encourages
A. overdependence on foreign goods
B. domestic production
C. reduction in savings
D. capital flight
Answer B

Which of the following is NOT an economic good
A. air
B. water in a bottle
C. electricity
D. salt
Answer A

The invisible hand principle was developed by
A. J. M. Keynes
B. Adam Smith
C. David Ricardo
D. Marshall
Answer B

Public goods are
A. excludable
B. rival in consumption
C. non-excludable
D. private commodities
Answer C

A mixed economy combines
A. barter and money
B. capitalism and socialism
C. agriculture and industry
D. demand and supply
Answer B

The money market deals with
A. long-term funds
B. short-term funds
C. agricultural credit
D. stock exchange
Answer B

A consumer is in equilibrium when
A. marginal utility equals zero
B. price is highest
C. marginal utility equals price
D. total utility is zero
Answer C

Petroleum is an example of
A. renewable resource
B. man-made resource
C. non-renewable resource
D. public good
Answer C

The term deficit financing means
A. reducing taxes
B. printing more money
C. borrowing to fund expenditure
D. increasing exports
Answer C

The supply of labour depends on
A. population size
B. cost of capital
C. inflation
D. national income
Answer A

Migration caused by search for jobs is
A. seasonal migration
B. industrial migration
C. rural-urban migration
D. forced migration
Answer C

If price falls and total revenue rises, demand is
A. perfectly inelastic
B. inelastic
C. elastic
D. unitary
Answer C

Which sector employs the highest labour force in developing countries
A. manufacturing
B. agriculture
C. finance
D. education
Answer B

A regressive tax takes a higher percentage from
A. high income earners
B. low income earners
C. businesses
D. foreign investors
Answer B

Bank overdraft is
A. loan given for ten years
B. withdrawal above account balance
C. overnight deposit
D. savings account
Answer B

When a firm charges different prices for the same product, it is
A. differentiation
B. price discrimination
C. price stabilization
D. subsidy
Answer B

The primary motive of a producer in a capitalist economy is
A. welfare
B. fairness
C. profit
D. sustainability
Answer C

Which of the following is a direct tax
A. excise duty
B. income tax
C. import duty
D. VAT
Answer B

Specialisation often leads to
A. lower efficiency
B. higher productivity
C. reduced output
D. waste
Answer B

When exports exceed imports, there is
A. trade deficit
B. budget deficit
C. trade surplus
D. inflation
Answer C

Elasticity of supply measures responsiveness of
A. price to supply
B. supply to price
C. demand to supply
D. income to supply
Answer B

A public corporation is owned by
A. individuals
B. private companies
C. government
D. NGOs
Answer C

A firm’s break-even point occurs when
A. total cost equals fixed cost
B. total revenue equals total cost
C. marginal revenue equals output
D. average cost is zero
Answer B

High dependency ratio implies that
A. few people depend on workers
B. there are many dependents
C. wages are high
D. labour supply is high
Answer B

The national income measured at constant prices is
A. nominal income
B. gross income
C. real income
D. inflation income
Answer C

Cost-push inflation may be caused by
A. increased productivity
B. fall in wages
C. rise in cost of production
D. decline in taxes
Answer C

Government uses fiscal policy to
A. control money supply
B. influence spending and taxation
C. adjust exchange rate
D. issue currency
Answer B

An industry refers to
A. group of firms producing similar goods
B. single manufacturing plant
C. construction site
D. agricultural region
Answer A

The term privatisation means
A. selling government property to private individuals
B. creating new ministries
C. increasing subsidies
D. nationalising industries
Answer A

International trade is necessary because nations
A. want to increase inflation
B. depend on each other for goods
C. want to reduce population
D. are equal in resources
Answer B

Excess demand in the market causes
A. price fall
B. price rise
C. market surplus
D. equilibrium
Answer B