2026 WAEC GCE ECONOMICS ANSWER



WAEC-GCE-ECONOMICS OBJ
Please Trace it

- palm kernel oil will increase
- repaying her foreign debts
- current account
- easy access to long term loans
- is self regulating through the price system
- always appreciate in value
- urban rural migration
- price of the good is lowered
- inadequate low skilled labour supply
- negatively sloped
- protect the interest of its members
- Gross National Product at market prices
- the demand for maize for poultry farming will decrease
- cause businessmen to reduce the level of investment
- rationing of affected commodities
- average fixed cost
- speculative demand for money
- are price takers
- value added tax
- increase in the price of the commodity
- cross price elasticity of demand
- an inferior good
- tax the rich to provide services for the poor
- is reduced
- there is an increase in Gross Domestic Product
- warehousing of the goods by the wholesaler

====================================



PLS PICK 1 ANSWER FROM THIS SECTION; THIS IS 1 AND 2 ANSWERS BELOW 👇


(1a)
Monetary value of kerosine sold and bought
Monetary value = Price × Quantity
(i) Before removal: $8 × 200 = $1,600
(ii) After removal: $12 × 150 = $1,800

(1b)
Percentage change in sellers' total revenue
Total revenue = Price × Quantity sold, so:
Initial revenue = $1,600
New revenue = $1,800
Change in revenue = 1,800 − 1,600 = $200
% change = (Change in revenue ÷ Initial revenue) × 100
= (200 ÷ 1,600) × 100 = 12.5% increase

(1c)
Price elasticity of demand (PED)
PED = % change in quantity demanded ÷ % change in price
Quantity demanded:
Change = 150 − 200 = −50
% change = (−50 ÷ 200) × 100 = −25%
Price:
Change = 12 − 8 = +4
% change = (4 ÷ 8) × 100 = +50%
PED = −25% ÷ +50% = −0.5
Ignoring the negative sign (the law of demand), PED = 0.5

(1d)
Demand is inelastic.
Reason: the PED value of 0.5 is less than 1, so the percentage change in quantity demanded (25%) is smaller than the percentage change in price (50%). Consumers do not reduce their purchases of kerosine much when the price rises. This is why the sellers' total revenue increased from $1,600 to $1,800 after the price rose.

====================================

(2a)
(i) Total variable cost (TVC)
TVC = Electricity + Water + Wages
= $9,000 + $4,000 + $50,000 = $63,000
(ii) Total fixed cost (TFC)
TFC = Building + Equipment + Loan interest
= $200,000 + $12,000 + $23,000 = $235,000
(iii) Total cost (TC)
TC = TVC + TFC
= $63,000 + $235,000 = $298,000

(2b)
(i) Explicit cost
Explicit cost is the actual money paid to outsiders, which equals the total cost above.
Explicit cost = $298,000
(ii) Implicit cost
Implicit cost = Salary forgone + Rent forgone on house + Car used as van
= $150,000 + $60,000 + $30,000 = $240,000
(iii) Accounting profit
Accounting profit = Total revenue − Explicit cost
= $400,000 − $298,000 = $102,000
(iv) Economic profit
Economic profit = Total revenue − (Explicit cost + Implicit cost)
= $400,000 − ($298,000 + $240,000)
= $400,000 − $538,000
= −$138,000 (an economic loss of $138,000)

============================

(3a)
(i) Decrease in Consumer Income: Travel bags are typically considered normal goods. When disposable incomes fall, consumers prioritize essential goods (like food and housing) over luxury or non-essential items, leading to a decrease in the demand for travel bags.
(ii) Increase in the Price of Complementary Goods: Traveling activities and travel bags are complements. If the costs associated with travel rise significantly such as higher airline ticket prices, hotel rates, or tourist visas fewer people will travel, directly decreasing the demand for travel bags.
(iii) Unfavorable Government Travel Policies or Travel Restrictions: Impositions of strict travel regulations, border closures, or stringent visa requirements reduce international and domestic travel. With fewer people traveling, the overall market demand for luggage and travel bags declines sharply.

(3bi)
The quantity demanded decreases. In other words When computers become more expensive, people naturally buy fewer of them. Since this is caused purely by a change in the price of the item itself, the demand curve does not move. Instead, you simply climb upward along the same line to a lower quantity

(3bii)
The quantity demanded increases.
In other words Parts (like microchips and screens) become much cheaper, making it cheaper for companies to build computers. As a result, companies create more computers, shifting the supply curve to the right. This extra supply floods the market and drops the store price, which encourages consumers to step in and buy more.

(3biii)
The quantity demanded decreases.
In other words A subsidy is free financial aid from the government to help factories lower their costs. Taking away 70% of that financial aid makes making computers much more expensive for companies. This shrinks production, shifting the supply curve to the left. This shortage drives up the retail prices, forcing consumers to cut back on buying them.





============================

(5a)
(PICK ANY ONE)
Labour force is the total number of people who are employed and those who are unemployed but are willing and able to work and are actively seeking employment in a country. It comprises people within the working-age population who are available to contribute to the production of goods and services.

OR

Labour force refers to the economically active population of a country who are engaged in or available for the production of goods and services. It includes both employed and unemployed persons who are willing and able to work and are seeking employment, but excludes children, retired persons and those who are not willing or available to work.

(5b)
An under-populated country(country Z) is a country whose population is too small in relation to its available natural resources and capital, resulting in insufficient labour to fully utilise its resources. WHILE
An over-populated country(Country Q) is a country whose population is too large in relation to its available natural resources and capital, resulting in pressure on resources and difficulties in providing employment and other basic needs.

(5c)
(PICK ANY THREE)

(i)Encouragement of childbirth: The government can encourage families to have more children through incentives such as child allowances and maternity benefits.

(ii)Payment of birth bonuses: Financial rewards can be given to parents who give birth to children to encourage population growth.

(iii)Provision of maternity and paternity leave: Paid leave can be provided to workers to enable them to care for their children and encourage family formation.

(iv)Provision of childcare facilities: Affordable crèches and childcare centres can be established to help working parents raise children while maintaining their employment.

(v)Reduction of the cost of raising children: The government can provide affordable housing, education and healthcare to reduce the financial burden on families.

(vi)Encouragement of early marriage: The government can promote responsible family formation at an appropriate age to increase the birth rate and future labour supply.


(5d)
(PICK ANY THREE)
(i)Establishment of industries: The government should establish more industries to provide employment opportunities for the growing population.

(ii)Development of agriculture: Farmers should be provided with loans, improved seedlings and modern farming equipment to expand agricultural production and create jobs.

(iii)Provision of vocational training: Training centres should be established to equip unemployed people with practical skills such as tailoring, carpentry, plumbing and electrical installation.

(iv)Encouragement of small-scale businesses: The government should provide loans and financial assistance to entrepreneurs to establish small businesses that can employ more people.

(v)Improvement of infrastructure: The government should provide good roads, electricity and other basic facilities to encourage investment and the establishment of businesses, thereby creating employment opportunities.

=============================

*WAEC GCE ECONOMICS*

(6ai)
National income is the total monetary value of all final goods and services produced by the citizens of a country within a given period, usually one year, including their net income from abroad.

(6aii)
GDP measures the total value of all final goods and services produced within the geographical boundaries of a country in a given period, regardless of who owns the factors of production WHILE GNP measures the total value of all final goods and services produced by the citizens and nationals of a country in a given period, including their net factor income from abroad.

(6b)
Per capita income is measured by dividing the national income of a country by its total population.
Formula:
Per Capita Income = National Income ÷ Total Population
Example:
If the national income of a country is ₦600 billion and its population is 30 million,
Per Capita Income = ₦600,000,000,000 ÷ 30,000,000
= ₦20,000 per person.

(6c)
(PICK ANY THREE)
(i) Unequal distribution of income: Per capita income does not show how income is distributed among citizens. A country may have high per capita income while most of its wealth is concentrated in the hands of a few rich people.
(ii) Differences in the cost of living: The cost of goods and services varies from country to country. Citizens in a country with a high per capita income may enjoy a lower standard of living if prices are also very high.
(iii) Differences in population size and structure: Countries have different population structures, such as the proportion of children, working adults and elderly people. This can affect the interpretation of average income and welfare.
(iv) Non-monetary activities: Per capita income may exclude unpaid services such as housework, subsistence farming and voluntary work, even though these activities contribute to people's welfare.
(v) Differences in working hours: People in one country may work longer hours to earn a particular income than people in another country. Per capita income does not show the amount of leisure time available to citizens.
(vi) Differences in government services: Two countries with the same per capita income may provide different levels of free education, healthcare, housing and other public services, resulting in different standards of living.
(vii) Environmental conditions: Per capita income does not measure environmental quality. A country may have high income but suffer from pollution, poor sanitation and environmental degradation, which reduce citizens' welfare.
(viii) Differences in exchange rates: When comparing countries, converting incomes into a common currency using market exchange rates may not accurately reflect the purchasing power of citizens in each country.

============================

(7a)
A limited liability company is a legal business structure where the owners' (shareholders') personal assets are protected, meaning their financial liability for the company's debts is strictly limited to the amount they invested in the business.

(7bi)
(i) Bulk buying: Purchasing raw materials in massive quantities to secure substantial volume discounts.
(ii) Cost spreading: Distributing large, fixed advertising and promotional expenses across a high volume of output.

(7bii)
(i) Lower interest rates: Securing cheaper credit because financial institutions view large firms as low-risk borrowers.
(ii) Capital market access: Raising large amounts of capital easily by issuing public shares or corporate bonds.

(7biii)
(i) Product diversification: Spreading commercial risk by manufacturing a wide variety of goods to avoid reliance on a single product.
(ii) Market diversification: Selling across multiple geographical regions to minimize the impact of a localized economic downturn.

(7c)
(i) Skilled labor pool: Attracting a highly specialized, trained workforce to the area, which significantly lowers recruitment and training costs.
(ii) Subsidiary industry growth: Encouraging specialized component suppliers and repair services to set up nearby, streamlining the supply chain.
(iii) Shared infrastructure: Benefiting from advanced, industry-specific transportation networks, power grids, and research facilities funded by local growth.

============================

(8a)
The Central Bank is the apex financial institution in a country responsible for issuing currency, controlling money supply, regulating commercial banks and implementing monetary policies.

(8bi)
An insurance company is a financial institution that provides protection against financial losses by agreeing to compensate individuals or businesses when specified risks occur in exchange for regular payments called premiums.

(8bii)
A building society is a financial institution that accepts savings from members and uses the funds mainly to provide loans to people who want to build, buy or improve houses.

(8biii)
A stock exchange is an organised financial market where shares, bonds and other securities are bought and sold by investors through authorised brokers.

(8ci)
An increase in the cash ratio reduces the amount of money commercial banks can lend to customers because they must keep a larger proportion of their deposits as reserves with the Central Bank. This reduces credit creation and decreases the money supply in the economy.

(8cii)
A reduction in the bank rate makes borrowing from the Central Bank cheaper for commercial banks. Commercial banks may consequently reduce their lending rates, encouraging individuals and businesses to borrow more money. This increases credit creation and expands the money supply in the economy.

(8ciii)
When the Central Bank buys securities, such as government bonds, from commercial banks and the public, it injects money into the banking system. Commercial banks have more reserves available for lending, which encourages credit creation and increases the money supply in the economy.