Economics Theory Past Questions and Answers – Economics is one of the compulsory subjects in any examination today, especially for those who choose Economics as a course of study. This simply means that as a compulsory subject, one needs to pass the examination in this subject excellently to be qualified to study in any institution of your choice social science, and one way to pass this examination is by getting Past Questions and Answers.
Before attempting to sit for this examination, since it is an admission-qualifying examination, maximum preparation is required to get the necessary success. Therefore, we bring you information on Economics Theory Past Questions and Answers, what it is all about, how it is patterned to suit your demand, and the easiest way to download or get it. It will also expose you to the questions that have been asked years back as those questions and answers get repeated every year.
Why you need Economics Theory Past Questions and Answers
Past questions help familiarize you with likely examination questions, time, strengths, weaknesses, and technicalities of questions. When studying with past questions, endeavor to attempt 60% or more of each year’s questions correctly. If you get this, you are as good as ready to go.
Economics Theory Past Questions and Answers Pattern
Past questions and answers are patterned in multiple-choice format, and it is not usually computer-based. All Candidate are expected to be in the hall on time with their exam materials. This exam involves calculation which means you are to bring mathematical instruments, logarithm tables, and a calculator to assist you in the examination hall instead of coming to get from your neighbor to distract them and also put yourself in trouble.
Below is the free sample of this past question materials;
Sample of Economics Theory Past Questions and Answers
3. (a) Why is scarcity a fundamental problem in Economics?
(b) Give a reason why Economics is a;
(ii) Social Science.
ANS: (a) Economics seeks to study the relationship between ends and means. Ends are unlimited while the means are limited. Scarcity means resources are limited to the ends. Economics is therefore concerned with allocating limited resources among competing and unlimited wants.
(b) (i) Economics is a science because it adopts the scientific method.
(ii) Economics is a social science because it studies human behaviour. e.g. If the price of a commodity rises, people will buy less, other things equal.
4. (a) Explain the concept of localization of industry.
(b) Highlight any four problems of localization of industry in any economy.
(a) Localization of industry occurs when firms in the same line of production concentrate in an area.
(b) Undue competition for raw materials and other factors of production push up costs;
(i) traffic congestion;
(ii) pressure on other infrastructure such as electricity;
(iii) limitation for expansion due to pressure on land;
(iv) rural-urban migration is increased, etc.
5. (a) Define labour.
(b) Give four factors that affect the efficiency of labour in your country.
ANS: (b) (i) Education and Training: All kinds of labour require training which may include formal training, training on the job.
(ii) Availability of equipment and tools: Labour efficiency also depends on the equipment and tools available to workers.
(iii) Physical Environment: The environment in which labour works helps to determine its efficiency as well as its productivity e.g. harsh physical environment.
(iv) Human environment – conducive management style will increase labour efficiency.
6. (a) Define money.
(b) State the three motives for holding money.
(c) Mention two determinants of each of the motives for holding money.
ANS: Transactions motive
(i) size of income;
(ii) the interval between wage payments;
(iii) availability of credit;
(iv) family size.
(i) size of income;
(ii) the interval between wage payments;
(iii) availability of credit;
(iv) perception of risks.
(i) the rate of interest;
(ii) the degree of risk aversion.
7. (a) With the aid of a diagram, explain a minimum price.
(b) State any five measures by which a minimum price for agricultural products can be made effective.
8. (a) What is a supply schedule?
(b) Using an example, show how a market supply schedule of a product is obtained from individual supply schedules.
(c) State three examples of exceptional demand.
ANS: (c) Exceptional demand:
i. Fixed demand or perfectly inelastic demand e.g. salt
ii. Perfectly elastic demand
iii. Expectation of future increase in price.
iv. Articles of ostentation.
v. Giffen goods.
9. (a) With examples, distinguish between direct and indirect tax.
(b) Explain any four problems of tax collection in any West African Country.
ANS: (a) A direct tax is a tax on incomes and properties. Examples include personal income tax, company tax, death duties, inheritance tax, capital gains taxes, etc.
Whereas, an indirect tax is a tax on goods and services. Examples include sales tax, import and export duties, excise tax, purchase tax, value-added tax, etc.
(b) (i) absence of reliable records of business activities and revenues collected.
(ii) the prevalence of subsistence production.
(iii) corruption on the part of tax officials.
(iv) high level of tax evasion and tax avoidance etc.
10. (a) What is the demographic transition theory?
(b) Explain the three stages of the theory.
ANS: (a) Demographic Transition Theory is concerned with the historical population growth of society. It explains the relationship between fertility and mortality on population growth and how developed countries in contemporary times have passed through three identical stages of population history.
(b) Stages of the Theory;
stage 1 (pre-transition phase/ stage)
stage 2 (transition phase/ stage)
stage 3 (post-transition phase /stage)
11. (a) Differentiate between shares and debentures.
(b) Identify any four problems encountered by farmers in raising capital
ANS: (a) A share is the smallest unit into which the capital of a company is divided. It is a unit of ownership of a business concern while a debenture is a loan capital or corporate bond. A debenture holder is a creditor to a company.
(b) (i) low level of loanable funds;
(ii) the inability of firms to produce the required collateral facilities;
(iii) under-developed money and capital markets;
(iv) the high cost of loans;
(v) the fluctuation of share prices;
(vi) Government financial regulation.
12. (a) What is a capital market?
(b) Describe any three instruments used in the capital market.
ANS: (a) The capital market is a financial market in which funds for medium and long-term investments are borrowed or lent.
(b) (i) Shares: These are financial instruments utilized in the capital market for long-term investments. A share is the portion of a limited liability company owned by an investor.
(ii) Bonds: This is a long-term financial security used to source funds. Bonds may be issued by firms, financial institutions, or governments. Bonds issued by the government are generally regarded as very safe.
(iii) Treasury certificates: These are government financial securities that mature after a year. They are issued by the government through the central bank to either borrow or lend money in the capital market.
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7 Tips to Prepare for Economics Exams
- Don’t make reading your hobby: A lot of people put reading as a hobby in their CV, they might be right because they have finished schooling. But “You” are still schooling, so reading should be a top priority, not a hobby. Read far and wide to enhance your level of aptitude
- Get Exams Preparation Materials: These involve textbooks, dictionaries, Babcock University Post UTME Past Questions and Answers, mock questions, and others. These materials will enhance your mastery of the scope of the exams you are expecting.
- Attend Extramural Classes: Register and attend extramural classes at your location. This class will help you refresh your memory and boost your classroom understanding and discoveries of new knowledge.
- Sleep when you feel like: When you are preparing for any exams, sleeping is very important because it helps in the consolidation of memory. Caution: Only sleep when you feel like it and don’t oversleep.
- Make sure you are healthy: Sickness can cause excessive feelings of tiredness and fatigue and will not allow you to concentrate on reading. If you are feeling as if you are not well, report to your parent, a nurse, or a doctor. Make sure you are well.
- Eat when you feel like it: During the exam preparation period, you are advised not to overeat, and to avoid sleep. You need to eat little and light food whenever you feel like eating. Eat more fruits, drink milk and glucose. This will help you enhance retention.
- Reduce your time on social media: Some people live their entire lives on Facebook, Twitter, WhatsApp, Messenger chat. This is so bad and catastrophic if you are preparing for exams. Try and reduce your time spent on social media during this time. Maybe after the exams, you can go back and sleep in it.
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