WAEC Economics Objective & Essays 2023 Verified Answers – May/June

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ECONOMICS
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COMPLETED

(3ai)
Money cost refers to the actual monetary expenditure or price of a particular good, service, or resource, for example, if you purchase a smartphone for N50,000, the money cost is N50,000 WHILE Opportunity cost refers to the value of the next best alternative forgone when making a decision. For example, if you choose to buy the smartphone for N50,000, the opportunity cost could be the vacation you could have taken with that money or the other items you could have purchased.

(3aii)
Normal goods are goods for which demand increases as consumer income rises, and demand decreases as consumer income falls. Examples include luxury goods, such as high-end cars, designer clothing, or gourmet food WHILE Inferior goods are goods for which demand decreases as consumer income rises, and demand increases as consumer income falls. Examples of inferior goods include generic store-brand products, low-cost fast food, or public transportation.

(3bi)
INDIVIDUALS:
The scale of preference assist individuals in making efficient allocations of their resources by providing a framework for prioritization, resource allocation, considering opportunity costs, rational decision-making, and adaptability.

(3bii)
FIRMS:
The scale of preference assists firms in making efficient resource allocation decisions by providing a systematic framework to identify preferences, allocate scarce resources, analyze opportunity costs, optimize returns on investment, and adapt to changing circumstances.

(3biii)
GOVERNMENT:
The scale of preference assists governments in making efficient allocations of their resources by considering the priorities, preferences, and needs of the population.

(4a)
(PICK ANY ONE)
An economic system refers to the way a society or nation organizes and manages its production, distribution, and consumption of goods and services.

OR

An economic system is defined as the set of rules, institutions, and mechanisms that determine how resources are allocated, how economic activities are conducted, and how wealth is generated and distributed within a given society.

OR

An economic system is a framework or structure that guides how resources are produced, distributed, and consumed within a society or nation.

(4bi)
AIM OF PRODUCTION:
In capitalist economy, the aim of production is the pursuit of profit. Private businesses aim to maximize their profits by producing goods and services that are in demand and can be sold at a higher price than the cost of production.

Meanwhile, the aim of production in a socialist economy is to meet the needs of society and achieve social welfare. This means prioritizing equitable distribution, social justice, and public goods over profit maximization.

(4bii)
CONSUMER SOVEREIGNTY:
In a capitalist economy, consumers have the freedom to choose among various products and services offered in the market. They can vote with their wallets, and their preferences shape what is produced, how it is produced, and at what price. Consumer demand plays a crucial role in determining the allocation of resources.

In socialist economy, consumer choices may be more limited compared to capitalist economies. The state may exert control over the types and quantities of goods and services available, aiming to meet basic needs and ensure equal access to essential resources.

(4biii)
COMPETITION:
In a capitalist economy, competition typically takes place within a market framework where supply and demand determine prices and allocate resources. Market forces of supply and demand, driven by competition, guide production, consumption, and investment decisions WHILE a socialist economy may have limited or no market competition. Instead, central planning or state intervention might dictate production, distribution, and pricing decisions.

(5a)
(PICK ANY TWO)

(i)sole proprietorship is a business structure in which a single individual owns and operates the business WHILE partnership is a business structure where two or more individuals or entities come together to operate a business and share its profits and losses

(ii)The sole proprietor has unlimited personal liability for the debts and obligations of the business. WHILE partnership have unlimited personal liability for the debts and obligations of the business.

(iii)The sole proprietor has complete control over all business decisions and operations. WHILE The partners share decision-making authority and responsibilities.

(iv)The sole proprietor is entitled to all the profits generated by the business and is personally responsible for any losses incurred. WHILE The partners share the profits and losses of the business based on their agreed-upon partnership agreement.

(5b)
(PICK ANY FOUR)

(i)The business enterprise owned by one person
(ii) The main objective of the one man business is to make profit
(iii) The sole proprietorship has limited liability
(iv)The business is controlled and managed by the sole proprietor
(v)The life span depends on the owner
(vi)Sole proprietorship is not a legal entity

(5c)
(PICK ANY FOUR)

(i)Limited liability: Shareholders of a public limited company have limited liability, which means their personal assets are protected in the event of business debts or liabilities. Their liability is limited to the amount they have invested in the company.

(ii)Access to capital: Public limited liability companies can raise capital by selling shares to the public through the stock market. This allows them to tap into a wider pool of potential investors and raise substantial amounts.

(iii)Perpetual existence: Public limited companies have perpetual existence, meaning the company continues to exist even if shareholders change or transfer their shares. This provides stability and continuity for the business.

(iv)Credibility and reputation: Being a public limited company often enhances a company’s credibility and reputation in the market. It enhance relationships with suppliers, customers, and other stakeholders.

(v)Attracting talent and incentivizing employees: Public limited companies can use shares as a form of employee compensation, such as employee stock ownership plans (ESOPs) or stock options.This can help attract and retain talented employees, align their interests with the company’s performance.

(vi)Enhanced transparency and accountability: Public limited companies are subject to rigorous reporting and disclosure requirements imposed by regulatory authorities. This fosters transparency and accountability, providing shareholders and the public with access to accurate and timely information about the company.