WAEC Economics Answers (Objective & Essay) 2026/2027

WAEC Economics Answers (Objective & Essay) 2026/2027:WAEC Economics examination consists of two main papers: Paper 1 (Objective) and Paper 2 (Essay). The syllabus generally covers foundational microeconomic and macroeconomic theories, economic systems, trade, and economic development. 

WAEC Economics Answers (Objective & Essay) 2026/2027

PLS KINDLY TRACE CAREFULLY WITH THIS ANSWERS WITH YOUR QUESTIONS;
KINDLY TRACE
1 B. Joint supply
2 B. Implicit cost
3 B. They are natural and renewable
4 C. 0
5 A
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. $416.66 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
20 D. Purchase of securities by Central Bank
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 to increase industrial productivity
31 B. Total Cost minus Total Fixed Cost
32 B. Increasing 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 A. University graduate looking for a job
37 C. There is an increase in demand for the good
38 A. Labour specialization
39 B. Economy must grow to produce there
40 A. Manufacturing 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 variable inputs an entrepreneur can employ
45 D. Capital
46 A. Financial market
47 B. Increase price Oct–Dec, reduce at other months
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 Essay

Number 1

(1a)
(i) Point of saturation (MU = 0): Qx = 6 units
(ii) MU declining but positive (MU between 8 and 0): Qx = 1 to 5 units
(iii) TU decreasing (when MU is negative): Qx = 7 units and beyond
(iv) TU at maximum (when MU = 0): Qx = 6 units

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

(1ci)
Consuming 1 unit of X: MU = 8 > Price ($4) → Consumer should increase consumption since they’re getting more utility than they’re paying. They are NOT in equilibrium yet.

(1cii)
Consuming 4 units of X: MU = 4 = Price ($4) → Consumer is at equilibrium. They should maintain this level of consumption as MU equals the price paid.

3a)
(PICK ANY ONE)
A scale of preference is important to an individual because it helps him or her to arrange wants in order of priority according to their importance. Since human wants are unlimited while resources are limited, a scale of preference enables an individual to make rational choices and allocate available resources efficiently. It also helps to avoid wasteful spending and ensures that the most urgent wants are satisfied first.

OR

A scale of preference is important to an individual because it helps to arrange wants in order of priority. Since resources are scarce and human wants are numerous, an individual cannot satisfy all wants at the same time. Therefore, a scale of preference helps in making choices among alternatives, enables the satisfaction of urgent wants before less urgent ones, promotes the efficient allocation of scarce resources, and helps to achieve maximum satisfaction from available resources.

OR

A scale of preference is important to an individual because it helps an individual to rank wants in order of importance. Since resources are limited and wants are unlimited, it enables the satisfaction of the most pressing wants first. It also assists in making rational decisions and choices among competing wants. It ensures efficient use of scarce resources and helps to avoid waste and unnecessary expenditure. As a result, the individual is able to make the best use of available resources

3b)
(PICK ANY ONE)
The knowledge of the basic concepts of economics can help a producer in many ways. It helps the producer to make rational decisions on what to produce, how to produce, and for whom to produce. It also enables the producer to allocate scarce resources efficiently in order to maximize profit. Knowledge of economics helps the producer to determine the level of demand for goods and services, set appropriate prices, reduce production costs, and avoid waste. It assists the producer in planning production, utilizing resources effectively, and responding to changes in market

OR

The knowledge of the basic concepts of economics is important to a producer because it helps in making rational decisions concerning production. It enables the producer to allocate scarce resources efficiently and determine the level of demand for goods and services. Such knowledge also assists in fixing appropriate prices, minimizing production costs, and maximizing profit. In addition, it promotes efficient utilization of available resources, helps in planning and organizing production activities, and enables the producer to respond effectively to changes in market conditions.

3c)
(PICK ANY FOUR)
(i) Availability of adequate capital: When producers have access to sufficient funds, they can purchase more machinery, employ more workers, and acquire additional raw materials, thereby increasing the quantity of goods supplied.

(ii) Technological advancement: The adoption of modern technology and improved production techniques increases efficiency and output, enabling producers to supply more goods within a given period.

(iii) Availability of raw materials: A steady and adequate supply of raw materials ensures uninterrupted production and allows producers to increase the quantity of goods supplied to the market.

(iv) Government assistance: Government measures such as subsidies, grants, tax concessions and low-interest loans reduce production costs and encourage producers to expand their output.

(v) Availability of skilled labour: Skilled workers perform their tasks more efficiently and productively, leading to higher output and an increase in the supply of goods.

vi) Favourable weather conditions: Good weather promotes agricultural production by improving crop yields and livestock performance, thereby increasing the supply of agricultural commodities.

Number 4

(4ai)
Consumer goods are goods purchased and used directly by consumers to satisfy their wants. Examples are bread, clothing, television and soap. While producer goods are goods used in the production of other goods and services. They help in further production rather than direct consumption. Examples are machines, tractors, factory equipment and industrial tools.

4aii)
Primary production involves the extraction or exploitation of natural resources from the land, sea or forest. Examples are farming, fishing, mining and forestry. While tertiary production involves the provision of services that facilitate production and distribution of goods. Examples are banking, transportation, insurance, communication and warehousing.

(4bi)
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. Examples are factory buildings, machines, vehicles and equipment.

4bii)
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. Examples are cash, raw materials, fuel and stock of goods.

(4biii)
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. Examples are roads, electricity, hospitals, schools and communication networks.

Number 5

(5a)
A firm is a single business unit that produces goods and services for sale. An industry is a group of firms producing similar goods and services. For example, Dangote Cement is a firm, while all cement-producing firms together form the cement industry.

(5b)
(i) Much red tape and legal expenses in starting the firm – Public limited liability company.

(ii) Owner(s) personal assets can be used to settle business debts – Sole proprietorship and partnership.

(iii) No specialized management – Sole proprietorship.

(iv) Has a life independent of its owner(s) – Public limited liability company.

(v) Permits some but not great deal of specialization – Partnership.

vi) Greatest ability to acquire funds for expansion of the firm – Public limited liability company.

(vii) Unresolved disagreements among members can end the business – Partnership.

(viii) Distinct separation of ownership and control of the business – Public limited liability company.

(5c)
A profit-maximizing firm in monopolistic competition is in equilibrium where marginal cost equals marginal revenue, that is MC = MR. At this point, the firm produces output OQ and sells at price OP from the average revenue curve.

The firm makes a loss when the average cost is above the average revenue at the equilibrium output. This means that the cost per unit is higher than the price per unit. Therefore, the firm’s loss is shown by the vertical difference between AC and AR at output OQ.

In the diagram, the MC curve cuts the MR curve at the equilibrium point. From this point, output is traced down to the quantity axis, while price is traced up to the AR curve. Since AC is above AR at that output level, the firm is making a loss.

Number 6

(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.

OR

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.

Number 7

(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.

Number 8

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