WAEC Economics 2018 past questions

Checked by the Skolra question team · Last updated 23 October 2026

Ten questions from the 2018 WAEC Economics paper, with answers and explanations. We hold 65 questions from this paper, and the Skolra app has all of them.

WAEC Economics 2018 questions and answers

1. 1.

   A market is in equilibrium when?

   1. A
      Supply of a good exceeds its demand at the prevailing price
   2. B
      Demand for a good exceeds its supply at the prevailing price
   3. C
      Quantity demanded equals quantity supplied at the prevailing price
      Correct
   4. D
      Price is at its highest possible level in the market
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   Answer: C

   Market equilibrium is the state at which the quantity of a good that buyers are willing and able to purchase equals the quantity that sellers are willing and able to supply at a given price. At the equilibrium price, there is no tendency for price to change because the market clears. Surpluses or shortages drive prices back toward equilibrium through market forces.

2. 2.

   which of the following is not a measure for reducing balance of payments deficits?

   1. A
      Increasing imports of consumer goods
      Correct
   2. B
      Devaluation of the domestic currency
   3. C
      Promoting exports through subsidies
   4. D
      Imposing tariffs and import restrictions
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   Answer: A

   A balance of payments deficit occurs when a country spends more on imports than it earns from exports. Measures to correct this deficit include devaluing the currency (to make exports cheaper and imports dearer), imposing import restrictions, and boosting exports through subsidies or trade promotion. Increasing imports would worsen the deficit, not reduce it.

3. 3.

   if the price of commodity X rises and consumers shift to commodity Y, then commodity X and Y are?

   1. A
      Inferior goods
   2. B
      Complementary goods
   3. C
      Substitute goods
      Correct
   4. D
      Jointly demanded goods
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   Answer: C

   When consumers switch from commodity X to commodity Y in response to a price rise in X, it means Y can serve as a replacement for X — they are substitute goods (also called competitive goods in demand). The cross-price elasticity of demand between substitutes is positive, meaning a rise in the price of one leads to an increase in the demand for the other. Common examples include butter and margarine, or tea and coffee.

4. 4.

   the organisation of productive factors is the reponsibility of the?

   1. A
      Capital
   2. B
      Entrepreneur
      Correct
   3. C
      Land
   4. D
      Labour
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   Answer: B

   The entrepreneur is the factor of production responsible for organising and combining the other three factors — land, labour, and capital — into productive activity. Entrepreneurs take the initiative to start businesses, bear the risks of production, make key decisions, and innovate to generate profit. In return for this organisational role and risk-bearing, the entrepreneur earns profit as their factor reward.

5. 5.

   which of the following is true about supply of land?

   1. A
      Land supply increases automatically as population and economic demand grow
   2. B
      Supply of land increases significantly through irrigation and land reclamation
   3. C
      Supply of land is perfectly elastic in response to price changes
   4. D
      The total supply of land is fixed and perfectly inelastic in aggregate
      Correct
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   Answer: D

   The total supply of land in an economy is fixed by nature and cannot be increased in aggregate, making it perfectly inelastic at the national level. Unlike labour and capital, land cannot be produced or reproduced; its total quantity remains constant regardless of changes in its price or the income (rent) it earns. This is why economists classify land as a factor of production with unique characteristics compared to labour and capital.

6. 6.

   which of the following factors is not a reason for farmer's unstable incomes

   1. A
      Access to credit facilities from financial institutions
      Correct
   2. B
      Inelastic demand for most farm products
   3. C
      Price fluctuations for agricultural commodities
   4. D
      Seasonal nature of agricultural production
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   Answer: A

   Farmers' incomes tend to be unstable due to price volatility, seasonal production cycles, weather uncertainty, and the inelastic demand for farm products (where a good harvest reduces prices and income). Access to credit facilities would actually help stabilise farm incomes by allowing farmers to invest in inputs and manage cash flow across seasons. Therefore, access to credit is not a cause of income instability.

7. 7.

   in a country with large population of full-time housewives, national income

   1. A
      Is correctly measured since all economic activity is captured
   2. B
      Increases rapidly because housewives create consumer demand
   3. C
      Is underestimated because unpaid household work is excluded from GDP
      Correct
   4. D
      Is overestimated because household services add to expenditure
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   Answer: C

   National income statistics typically do not account for unpaid domestic work such as cooking, cleaning, and childcare performed by full-time housewives. As a result, countries with large numbers of full-time housewives will have an underestimated national income figure, even though significant economic activity is taking place. This is a well-known limitation of GDP as a measure of economic welfare.

8. 8.

   (a) What is a demand schedule?

   (b) State the law of demand.

   (c) Using appropriate examples, explain the following types of demand:
   (i) Competitive demand
   (ii) Derived demand
   (iii) Joint demand
   (iv) Composite demand

   1. A
      Price and quantity demanded move in the same direction
   2. B
      As price decreases, quantity demanded also decreases
   3. C
      As price increases, quantity demanded increases
   4. D
      As price increases, quantity demanded decreases, all else being equal
      Correct
   Show answerHide answer

   Answer: D

   The law of demand states that, ceteris paribus (all other things being equal), as the price of a commodity rises, the quantity demanded falls, and as the price falls, the quantity demanded rises. This inverse relationship results in a downward-sloping demand curve. Types of demand include competitive (substitute) demand, joint demand, composite demand, and derived demand.

9. 9.

   one benefit a country can derive from the extraction of crude oil is increase in?

   1. A
      Unemployment
   2. B
      Import expenditure
   3. C
      Government revenue
      Correct
   4. D
      Domestic inflation
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   Answer: C

   The extraction and export of crude oil generates foreign exchange earnings and tax revenues, significantly increasing government revenue. In many developing countries like Nigeria, oil proceeds form the bulk of government income used to fund infrastructure and public services. This revenue boost can support national development if managed efficiently.

10. 10.

    A firm's average cost decreases in the long run because?

    1. A
       Fixed costs increase proportionally as the firm expands output
    2. B
       Variable costs are entirely eliminated in long-run production
    3. C
       The firm can expand all factors of production and realise economies of scale
       Correct
    4. D
       Marginal cost always falls as a firm increases its output
    Show answerHide answer

    Answer: C

    In the long run, all factors of production are variable, allowing the firm to adjust its entire scale of operations. As the firm expands, it can take advantage of economies of scale — such as bulk purchasing, specialisation of labour, and more efficient machinery — which reduce the average cost per unit. This long-run flexibility distinguishes the firm's cost behaviour from the short run, where at least one factor is fixed.

The questions come from past JAMB, WAEC and NECO papers. We use software to help write the answer options and explanations, and every answer is checked twice before it goes on the site. How we check

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