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Wednesday, 17th June 2026
Economics 2 (Essay) 2:00pm – 4:00pm
Economics 1 (Objective) 4:00pm – 5:00pm

WAEC 2026 Economics Question And Answers

ECONOMICS OBJ MR NAIJACLASS

TRACE YOUR ANSWERS

1. B – Joint supply
2. B – Implicit cost
3. B – They are natural and renewable
4. C – 0
5. A – Upward-sloping demand curve (article of ostentation)
6. C – Rise in the general price level
7. D – An increase in import tariffs
8. C – National income increases faster than population
9. A – There will be no demand for the product
10. B – $416.67 million
11. B – Price is higher than marginal revenue
12. C – Harmonization of monetary and fiscal policies
13. A – Backed by deposits in current accounts
14. C – It is required by law to publish its accounts
15. C – Inadequate productive resources
16. C – (ΔQd/ΔP) × (P/Qd)
17. C – External economies of scale
18. D – Liberalizing exchange control for investors
19. B – Proportional tax
20. D – Purchase of securities by the Central Bank from the open market
21. B – Ageing
22. B – 20 utils
23. A – Technical assistance
24. B – Plantation farming
25. B – Purchase goods and services
26. C – Combines factor inputs in right proportions
27. A – Experience technology transfer
28. A – Economic system
29. C – On equal basis for members
30. D – Formulate plans designed to increase industrial productivity
31. B – Total Cost minus Total Fixed Cost
32. B – Increasing the sale of local goods in foreign markets
33. D – Existence of numerous middlemen
34. A – Output being greater than demand
35. C – Excess demand for the crop
36. D – Farm labourer who remains unemployed during the dry season
37. C – There is an increase in the demand for the good
38. A – Labour specialization
39. B – Economy must grow to produce there
40. B – Agricultural sector
41. D – A new supply curve positioned to the right
42. C – Public goods
43. A – They are falsified for political gain
44. A – The limit to the amount of variable inputs the entrepreneur can employ
45. D – Capital
46. D – Capital market
47. B – Increase price between October and December and reduce price at other months in the year
48. B – Rent, wage, interest and profit paid to factor inputs
49. A – It is used in the production of other goods
50. B – Inelastic supply

*WAEC ECONOMICS ANSWER*

*WAEC ECONOMICS ANSWERS*

(1ai)
The consumer at the point of saturation:
Qx = 5 units
(At this point, MU = 0)

(1aii)
Marginal utility of X (MUx) declining but positive:
Qx = 1 to 4 units
(MU is falling but remains above zero)

(1aiii)
Total utility of X (TUx) decreasing:
Qx = 6 to 7 units
(MU becomes negative, causing TU to fall)

(1aiv)
Total utility of X (TUx) at maximum:
Qx = 5 units
(TU is maximum when MU = 0)

(1b)
(i) Law of Diminishing Marginal Utility.
(ii) Law of Equi-Marginal Utility (Consumer Equilibrium).

(1ci)
At 1 unit of commodity X, the marginal utility is 6 utils while the price is $4. Since the marginal utility is greater than the price, the consumer should increase the consumption of commodity X. This is because additional units will still provide satisfaction greater than the amount paid. The consumer will continue consuming until marginal utility equals price (MU = P).

(1cii)
At 4 units of commodity X, the marginal utility is 2 utils while the price is $4. Since the marginal utility is less than the price, the consumer should reduce the consumption of commodity X. This is because the satisfaction obtained from the commodity is less than the amount paid for it. The consumer should reduce consumption until marginal utility equals price (MU = P), which is the equilibrium position.

NUMBER 2

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(3a) (PICK ANY ONE)
A scale of preference is a list of wants arranged in order of importance. It is important because it helps an individual to rank wants according to their urgency and satisfy the most important ones first since resources are limited and cannot satisfy all wants at the same time. It also enables the individual to use available income and resources wisely, avoid wasteful spending, and obtain maximum satisfaction from the resources available.

A scale of preference is a list of wants arranged in order of priority. It is important because it guides an individual in making choices among competing wants and helps him to decide which wants should be satisfied first. Since resources such as income, time, and energy are limited, a scale of preference enables the individual to allocate these resources efficiently and achieve the greatest possible satisfaction from the available resources.

(3b)
(PICK ANY ONE)
Basic concepts of Economics are the fundamental principles that explain how scarce resources are allocated to satisfy human wants. These concepts include scarcity, choice, opportunity cost, demand, supply, production, consumption, and price. Knowledge of these concepts helps a producer to understand how resources can be used efficiently in the production process. It enables the producer to make sound decisions on what to produce, how much to produce, and the methods of production to adopt. It also helps the producer to understand market demand, consumer behaviour, costs, prices, and profit, thereby reducing waste and increasing productivity and profitability.

Basic concepts of Economics are the basic ideas that explain how individuals and firms make decisions in the face of limited resources and unlimited wants. These concepts include scarcity, choice, opportunity cost, demand, supply, and production. Knowledge of these concepts helps a producer to combine the available factors of production effectively and make rational business decisions. It enables the producer to determine the type and quantity of goods to produce, estimate production costs, and set appropriate prices. Such knowledge also helps the producer to respond to changes in demand and supply, minimize losses, increase output, and maximize profit.

(3c)
(PICK ANY FOUR)
(i) Increase in the price of the commodity: An increase in the price of a commodity serves as an incentive to producers because it enables them to earn more revenue and profit. As a result, existing producers expand their output while new producers may enter the industry, leading to an increase in supply.

(ii) Reduction in the cost of production: When the cost of production falls due to lower wages, cheaper raw materials, reduced transport costs, or lower taxes, producers can produce more goods at a lower cost. This encourages them to increase production and supply more commodities to the market.

(iii) Improvement in technology: The introduction of modern machines, improved production methods, and advanced technology increases productivity and efficiency. Producers can therefore produce larger quantities of goods within a shorter period and at a lower cost, resulting in increased supply.

(iv) Availability of adequate capital: Adequate capital enables producers to purchase more machinery, employ additional labour, acquire sufficient raw materials, and expand their scale of production. This increase in productive capacity leads to a higher supply of commodities.

(v) Government subsidies and favourable government policies: Government assistance such as subsidies, grants, tax relief, and low-interest loans reduces the cost of production and encourages producers to expand their operations. Favourable government policies create a conducive business environment that promotes increased supply.

(vi) Availability of raw materials: Raw materials are essential inputs in the production process. When they are readily available and affordable, production can continue without interruption. This enables producers to increase output and supply more goods to the market.
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(4ai)
Consumer goods are goods purchased and used directly by consumers to satisfy their wants.E.g: Bread, clothing, television, or soap. WHILE Producer goods are goods used in the production of other goods and services. They help in further production rather than direct consumption.E.g: Machines, tractors, factory equipment, or industrial tools.

(4aii)
Primary production involves the extraction or exploitation of natural resources from the land, sea, or forest.E.g:Farming, fishing, mining, and forestry. WHILE Tertiary production involves the provision of services that facilitate production and distribution of goods. E.g: Banking, transportation, insurance, communication, and warehousing.

(4bi)
Fixed Capital: Fixed capital refers to durable assets that are used repeatedly in the production process over a long period of time. These assets are not completely used up in a single production cycle and cannot be easily converted into cash. Example: Factory buildings, machines, vehicles and equipment.

(4bii)
Working Capital: Working capital refers to the funds and materials used for the day-to-day running of a business. It consists of assets that are used up during the production process and must be replaced regularly.Example: Cash, raw materials, fuel, and stock of goods.

(4biii)
Social Capital: Social capital refers to the basic infrastructure and public facilities provided by the government or society to support production and improve the welfare of the people. These facilities help businesses operate efficiently and promote economic development.Example: Roads, electricity, hospitals, schools, and communication networks.

[VERSION II]

(4ai)
Consumer goods are goods that are purchased for final use by individuals to satisfy their wants directly.E.g: Food, shoes and soft drinks. WHILE Producer goods are goods that are used by firms and producers in the production of other goods and services.E.g: generators, tractors, and factory equipment.

(4aii)
Primary production is the process of obtaining raw materials directly from nature for use or further production. Example: Mining of coal, fishing, farming, and lumbering. WHILE Tertiary production is concerned with rendering services that assist the production and distribution of goods. Example: Banking, transport, insurance, and telecommunication services.

(4bi)
Fixed Capital: Fixed capital consists of assets that are used continuously in production for many years and are not meant for immediate sale. They help in the production process but are not completely consumed at once.Example: Buildings, machines, motor vehicles, and factory equipment.

(4bii)
Working Capital: Working capital refers to the money and materials required for the daily operation of a business. It includes resources that are regularly used up and replaced in the production process. Example: Cash in hand, raw materials, fuel, and goods for resale.

(4biii)
Social Capital: Social capital refers to the public amenities and infrastructural facilities provided by the government to facilitate production and improve living standards in the economy. Example: good roads, electricity supply, water systems, railways, hospitals, and schools.
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(5a) (PICK ANY ONE)
A firm is a business unit that produces goods or services. It may be owned by one person or a group of people. An industry, on the other hand, is made up of all the firms producing the same or similar products. For example, a bakery is a firm, while all bakeries together form the baking industry.

A firm refers to a single business organization engaged in production or distribution activities with the aim of making profit. An industry consists of a group of firms involved in the production of similar goods or services. For instance, a textile company is a firm, whereas all textile companies together constitute the textile industry.

(5b)
(i) Public Limited Liability Company
(ii) Sole Proprietorship
(iii) Sole Proprietorship
(iv) Public Limited Liability Company
(v) Partnership
(vi) Public Limited Liability Company
(vii) Partnership
(viii) Public Limited Liability Company

NUMBER 5c

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(6a)
(PICK ANY ONE)
Industrialization can be defined as the process by which a country develops manufacturing industries and increases the production of goods through the use of modern technology, machinery, and large-scale production methods. It contributes to employment creation and economic growth.

Industrialization refers to the establishment and expansion of industries in a country through the use of machines, skilled labour, capital, and modern production techniques. It leads to increased output, higher income, improved standards of living, and overall economic development.

(6b)
Location of industry refers to the particular place or site where an industry is established and carries out its production activities. The choice of location is influenced by factors such as raw materials, labour, power supply, and market. For example, A cement factory located at Ewekoro in Ogun State because of the availability of limestone. WHILE Localization of industry refers to the concentration of many firms producing the same or related products in a particular area. This enables firms to enjoy advantages such as a large labour force, specialized services, and shared facilities.For example, The concentration of textile industries in Anambra or automobile industries in Detroit, USA

(6c)
(i)Sawmill: A sawmill should be located near the forest or source of timber. This is because timber is the major raw material required for production, and locating the sawmill close to the forest reduces transportation costs and ensures a regular supply of logs for processing. For Example, A sawmill may be located in forest-rich areas such as Ondo State or Cross River State.

(ii)A ceramic tile producing factory : ceramic tile producing factory should be located near the source of clay and other raw materials. This is because clay is the major raw material used in the production of ceramic tiles, and locating the factory close to the raw material source reduces transportation costs and ensures continuous production. For Example, A ceramic tile factory may be located in areas where clay deposits are abundant, such as parts of Kogi State or Ogun State

(iii)An egg-producing poultry farm: An egg-producing poultry farm should be located near a large market or urban centre. This is because eggs are highly perishable and need to be sold quickly to consumers. Locating the farm close to the market reduces transportation costs and minimizes spoilage. For Example, An egg-producing poultry farm may be located near cities such as Lagos, Abuja, or Benin City where demand for eggs is high.

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(6a) Industrialization is the process by which an economy transforms from a primarily agricultural foundation into one based on the manufacturing of goods. It involves the extensive use of machinery, advanced technology, and factory systems to increase production output.

(6b) -Location of Industry: This refers to the specific geographic site or area where a single business enterprise or factory chooses to establish its operations.
-Localization of Industry: This refers to the concentration or clustering of several independent firms or industries within the same specific geographic region.

(6ci) A Sawmill
(i)Siting Location: Near the source of raw materials (heavily forested areas).
(ii)Reason: Timber is bulky, heavy, and loses significant weight during processing. Siting nearby minimizes expensive transport costs for moving raw logs.

(6cii) A Ceramic Tile Producing Factory
(i)Siting Location: Near the source of raw materials (clay deposits) OR near a reliable power/fuel source (natural gas pipelines).
(ii)Reason: Clay is a heavy, weight-losing raw material. Additionally, ceramic production requires continuous, high-temperature kiln firing, making cheap fuel access critical.

(6ciii)
An Egg-Producing Poultry Farm
(i)Siting Location: Near urban market centers.
(ii)Reason: Eggs are highly fragile, perishable, and expensive to transport over long distances. Proximity to consumers ensures freshness and reduces breakage risks.

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(7a)
Economic growth is an increase in the production of goods and services, while economic development involves improvements in the welfare and standard of living of the people. In Country X, GDP increased from $80 billion to over $100 billion, indicating economic growth. However, because poverty and unemployment remained high and per capita income was low, the benefits of growth did not significantly improve the welfare of the people.

(7b)
Economic growth can improve the standard of living by increasing income, employment opportunities, and the availability of goods and services. However, in Country X, despite the increase in GDP, poverty and unemployment remained high and per capita income was low. As a result, the standard of living of many citizens did not improve significantly.

(7c)
(PICK ANY FOUR)
(i) Inadequate funding of the economic plan: The government may not have provided enough money to finance the projects and programmes contained in the plan, leading to poor implementation. This would make it difficult to complete development projects as scheduled.

(ii) Corruption and embezzlement of public funds: Funds meant for the execution of the plan may have been diverted or misused by public officials, thereby affecting its success. As a result, many projects may remain unfinished or abandoned.

(iii) Poor planning and implementation of government policies: The plan may have lacked clear objectives and proper coordination, making it difficult to achieve the desired results. This can lead to wastage of resources and failure to meet development targets.

(iv) Political instability and frequent policy changes: Changes in government or government policies can disrupt the continuity of development programmes and hinder their implementation. New administrations may abandon projects started by previous governments.

(v) Shortage of skilled manpower and technical expertise: The absence of qualified personnel to manage and execute projects can reduce the effectiveness of the economic plan. This may result in delays and poor-quality project execution.

(vi) Inadequate infrastructure: Poor roads, irregular electricity supply, and weak communication networks can make the implementation of development projects difficult and costly. This can discourage investment and slow down economic activities.

(7a) Economic growth refers to the increase in the value of goods and services produced in an economy, usually measured by GDP. In Country X, GDP increased from $50 billion to over $100 billion, showing that economic growth occurred.

*WHILE*

Economic development, on the other hand, involves improvements in the welfare and quality of life of the people through better income, education, healthcare, and employment opportunities. Although Country X experienced economic growth, economic development was limited because poverty remained high, unemployment was high, and living standards did not improve significantly.

(7b)
Economic growth can improve the standard of living by increasing national income, creating employment opportunities, and providing more resources for social services such as education and healthcare.
However, in Country X, despite the growth in GDP, the standard of living remained low because per capita income was only $1,850, poverty affected 37% of the population, and unemployment stood at 23%. This suggests that the benefits of economic growth were not widely distributed among the citizens. As a result, many people did not experience significant improvements in their living conditions despite the country’s economic growth.

(7c)
(PICK ANY FOUR)
(i) Inadequate funding: The government may not have provided enough money to finance the projects and programmes contained in the economic plan.
(ii) Corruption and embezzlement: Funds meant for implementing the plan may have been diverted for personal use by public officials.
(iii) Poor planning: The objectives and strategies of the plan may not have been properly designed, making implementation difficult.
(iv) Lack of skilled manpower: There may have been an insufficient number of qualified personnel to execute and manage the projects effectively.
(v) Political instability: Changes in government or political conflicts may have disrupted the continuity of the economic plan.
(vi) Poor infrastructure: Inadequate electricity, roads, water supply, and communication facilities may have hindered the successful execution of projects.
(vii) Weak monitoring and supervision: Lack of proper oversight may have led to delays, inefficiency, and abandonment of projects.
(viii) Rapid population growth: The increase in population may have outpaced the benefits of the economic plan, making it difficult to improve the welfare of citizens.

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(8ai) Import quotas: Physical restrictions placed on the absolute quantity or total value of a specific commodity allowed into a country during a given period.

Purpose: To protect domestic industries from foreign competition and manage the balance of payments.

(ii) Embargo: A complete, official government ban on trade, commercial activity, or shipping movement with a specific foreign country or regarding a specific commodity.

Purpose: Usually deployed as a diplomatic sanction to exert political or economic pressure on the targeted nation.

(iii) Import licences: Official documents issued by a government authority authorizing an importer to bring a specific quantity of designated foreign goods into the country.

Purpose: Used as an administrative tool to monitor international trade flows, enforce quotas, and control foreign exchange spending.

(iv) Foreign exchange control: Government regulations that restrict, ration, or monopolize the purchase, sale, and holding of foreign currencies by domestic citizens and businesses.

Purpose: Designed to stabilize the national currency value, prevent capital flight, and preserve scarce foreign reserves.

(8b)
(i)Export subsidies: Providing direct financial assistance, cash grants, or low-interest loans to domestic producers to lower production costs and make goods cheaper abroad.
(ii)Tax incentives and holidays: Granting exemptions from corporate taxes, customs duties on raw materials, or value-added tax (VAT) refunds specifically for firms selling goods internationally.
(iii)Currency devaluation: Deliberately lowering the official value of the national currency, which automatically makes domestic exports cheaper and more competitive in foreign markets.

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*[VERSION II]*

*WAEC ECONOMICS*

(8ai)
(PICK ANY ONE)
Import quotas are government-imposed restrictions on the quantity or value of goods that may be imported into a country within a specified period. By limiting the volume of imports, import quotas help to protect domestic industries from foreign competition, reduce pressure on foreign exchange reserves and encourage the consumption of locally produced goods.

Import quotas refer to the maximum amount of a particular commodity that the government permits to be imported into a country during a given period. They are used as a trade control measure to regulate imports, protect local producers and correct balance of payments problems.

(8aii)
(PICK ANY ONE)
An embargo is a complete ban or prohibition placed by a government on the importation or exportation of certain goods or on all trade with a particular country. It is usually imposed for political, economic, military or security reasons and may be used to influence the policies or actions of another country.

An embargo refers to a situation where a government totally restricts trade activities involving specific goods or a particular nation. The aim may be to protect national interests, enforce international sanctions or prevent the movement of strategic goods.

(8aiii)
(PICK ANY ONE)
Import licences are official documents or permits issued by the government authorizing individuals or firms to import specified goods into a country. They enable the government to monitor and regulate imports, control the quantity and type of goods entering the country and ensure compliance with trade regulations.

Import licences are legal authorizations granted by appropriate government agencies allowing importers to bring certain goods into a country under stated conditions. They serve as a means of controlling imports, protecting local industries and preventing the importation of prohibited goods.

(8aiv)
(PICK ANY ONE)
Foreign exchange control refers to the system through which the government or central bank regulates the purchase, sale and use of foreign currencies within a country. It is designed to conserve scarce foreign exchange resources, ensure their efficient allocation and maintain stability in the country’s external sector.

Foreign exchange control is a government policy aimed at supervising and regulating foreign exchange transactions. Through this system, the authorities determine how foreign currencies are obtained and used in order to prevent excessive capital flight, promote economic stability and safeguard the balance of payments.

(8b)
(PICK ANY THREE)
(i) Providing export subsidies to exporters: This helps to reduce production costs and encourage greater exportation. It also enables local producers to compete more effectively in foreign markets.

(ii) Granting tax reliefs and tax holidays to export-oriented industries: This increases their profitability and competitiveness. As a result, firms are encouraged to expand production for export.

(iii) Improving transportation and communication facilities: Good roads, railways, ports, airports, and communication networks facilitate the movement of export goods. This reduces delays and lowers transportation costs.

(iv) Ensuring exchange rate stability: A stable exchange rate makes locally produced goods more attractive in the international market. It also gives exporters confidence in planning their business activities.

(v) Establishing export promotion agencies: These agencies assist exporters in finding foreign markets and expanding their sales. They also provide information and guidance on export opportunities.

(vi) Providing adequate credit facilities and loans to exporters: Access to finance enables exporters to increase production for export. It also helps them acquire modern equipment and improve efficiency.

(vii) Improving the quality and standard of locally produced goods: This enables them to compete favourably in international markets. High-quality products attract more foreign buyers and increase export earnings.

(viii) Participating in international trade fairs and exhibitions:This helps to create awareness and demand for locally produced goods. It also enables exporters to establish contacts with foreign buyers.

(ix) Removing unnecessary export restrictions and bureaucratic bottlenecks: This makes the export process easier and faster for exporters. It also encourages more firms to participate in export trade.

(x) Encouraging industrialization and diversification of production: This increases the range of goods available for export. It also reduces dependence on a few export products and boosts foreign exchange earnings.