8 WASSCE Economics Questions & Answering Guidelines From UK Examiners

You have 8 Difficult WASSCE Economics Questions and 8 Simple Answering Guidelines presented to you at no extra cost from UK Examiners.

You would agree that the best way to learn economics is to get guidelines on how to answer supposed difficult questions.

In this post, we seek to make the answering of the questions preented here super easy for all economics students.

The answering guideline has been well structured so that you cannot forget the way to answer these questions onces you study them anwering guideline. This will ensure that in future if you are quized with similar questions, you wold be able to answer them perfectly.

JOIN OUR WASSCE 2022-2025 TELEGRAM PAGE FOR MORE RELATED UPDATES  [JOIN HERE]

8 WASSCE Economics Questions and 8 Answering Guidelines From UK Examiners

Firstly, let us look at the 8 questions carefully.

1. (a) Explain how a fall in price of a product might affect the demand for its substitute. Include examples and diagrams in your answer. [10 marks]

(b) Discuss the effect of rising consumer incomes on the demand for:
(i) Normal goods. [5 marks]
(ii) Inferior goods. [5 marks]

2. (a) Explain using examples from business what is meant by internal economies of scale. [10 marks]
(b) Define diseconomies of scale and give examples of both internal and
external diseconomies of scale. [10 marks]

3. (a) Define the term monopoly and explain the principal sources of monopoly power. [10 marks]
(b) Discuss the idea that perfect competition is a more efficient market structure than monopoly for allocating scarce resources. [10 marks]

4. (a) Outline the assumptions upon which the market structure known as imperfect (monopolistic) competition is based. [10 marks]
(b) Explain the long run equilibrium position of a firm in monopolistic competition. Include a diagram in your answer. [10 marks]

5. (a) Explain the following methods of calculating National Income:

(i) The output method. [5 marks]
(ii) The expenditure method. [5 marks]
(b) Discuss two uses of national income statistics. [10 marks]

6. (a) Explain why a government might seek to maintain a low and stable rate

of inflation. [10 marks]
(b) Outline what is meant by fiscal policy and discuss how a tight fiscal
policy can reduce inflation. [10 marks]

7. (a) Define economic growth and discuss the positive consequences for an economy of rapid economic growth. [10 marks]
(b) Discuss any problems that may be generated by growth. [10 marks]

8. Discuss four reasons why countries engage in international trade. [20 marks]

 

Below are the suggested answers to 8 WASSCE Economics Questions From UK Examiners

Question Answer Annotate Guidance
1 (a) Explain how a fall in price of a product might affect the demand for its substitute. Include
examples and a diagram in your answer. [10 marks]
(b) Discuss the effect of rising consumer incomes on the demand for
(i) Normal goods. [5 marks]
(ii) Inferior goods. [5 marks]

(a) Definition of substitute goods – examples include different types of meat, different forms of transport. Accept any suitable examples. Fall in price of beef will reduce the demand for chicken. Demand curve for chicken will shift inwards to the left. Brief explanation of the diagram. The extent of the change will depend on the closeness of the relationship between the two goods and the cross elasticity of demand

(b) (i) normal goods – where a rise in income increase the demand. The extent of the shift will depend upon the income elasticity of demand. The greater the elasticity the larger the shift to the right of the demand curve. YED is positive.

(ii) Inferior goods – where the rise in income reduces the demand. Negative YED. As income rises people shift to better quality products. Inferior goods tend to be such things as supermarket own brands, cheap wine rather than expensive wine etc.

 

2 (a) Explain using examples from business what is meant by internal economies of scale. [10 marks]
(b) Define diseconomies of scale and give examples of both internal and external diseconomies of scale. [10 marks]

(a) When long run average cost fall as output rises. Long run is period of time when all factors of production are variable.

A given percentage increase in inputs will yield a larger percentage increase in outputs.

Internal economies occur at plant/firm level.

They include Specialisation, division of labour, bulk buying, financial economies, transportation economies.

(b) Diseconomies of scale occur when unit costs rise as output increases in the long run. A given percentage increase in inputs will yield a smaller percentage increase in outputs.

Internal diseconomies occur at plant/firm level and include control and communication problems, worker alienation and associated issues

External diseconomies are due to the growth of industry where growth leads to
shortages of skills, materials etc. because of competition and problems of localisation

3 (a) Define the term monopoly and explain the principle sources of monopoly power. [10 marks]
(b) Discuss the idea that perfect competition is a more efficient market structure than monopoly for allocating scarce resources. [10 marks]

(a) Monopoly is the situation when in theory there is only one firm producing a product (the firm is the industry). In practice, it refers to market dominance. Sources of monopoly power include scale economies. Natural monopoly. Legal barriers to entry and anti-competitive behaviour

(b) Perfect competition occurs where there are many firms producing a homogeneous product in conditions of free market entry and exit. The benefit of monopoly are access to scale economies, therefore lower cost structures, and greater potential for R&D. The problems are that monopolists tend to restrict output and raise price in order to maintain long run supernormal profits. Prices thus tend to be higher than in PC and outputs lower, restricting consumer choice and raising price. Monopolies are productively and allocatively less efficient than perfectly competitive firms..

4 (a) Outline the assumptions upon which the market structure known as imperfect (monopolistic) competition is based. [10 marks]
(b) Explain the long run equilibrium position of a firm in monopolistic competition. Include a diagram in your answer. [10 marks]

(a) The assumptions are
 Large number of firms
 Firms are relatively small in relation to the industry
 The actions of one firm have little effect on competitors
 Products are slightly differentiated (thus distinguishing monopolistic competition from perfect competition)
 Entry and exit is free
 The demand curve slopes downwards but is relatively elastic
(b) All firms will earn normal profits. Short run abnormal profits attract new firms thus competing away the excess profits. Firms compete with non-price offerings. Standard monopolistic competition graph with the AC tangential to the demand curve at the point where MC=MR.

5 (a) Explain the following methods of calculating National Income:

(i) The output method. [5 marks]
(ii) The expenditure method. [5 marks]
(b) Discuss two uses of national income statistics. [10 marks]

(a) (i) Output method measures the actual value of G&S. Sums all of the value added by firms. This avoids double counting. Data is grouped according to production sectors. The final figure is the GDP
(ii) Expenditure method measures the flow of expenditure in the economy. The sum arrived at can only take account of all final expenditures. Spending is usually grouped in terms of Consumption (C), investment (I) government (G) and balance of payments (X-M). It is measured at market prices. Indirect taxes and subsidies must be deducted and added to measure expenditure at factor cost

(b) Candidates can chose from
 Measuring changes standard of living over time.
 Measuring relative standards in different nations
 For forecasting and planning purposes and developing models of how the economy grows (both business and government) Best answers will discuss the limitations to each of these reasons

6 (a) Explain why a government might seek to maintain a low and stable rate of inflation [10 marks]
(b) Outline what is meant by fiscal policy and discuss how a tight fiscal policy can reduce inflation [10 marks]

(a) Rate of inflation measures the rate at which prices are rising over time. Governments seek to maintain inflation at a low and stable rate essentially because inflation has ‘costs’ for the economy, business and individuals which include
 Loss of purchasing power
 Negative effects on savers whilst encouraging over borrowing
 Effects on competitiveness
 Uncertainty

(b) Fiscal policy is defined as the set of government policies relating to government spending and taxation. Can be expansionary (loose) or contractionary (tight). Tight policy involves increasing taxes or reducing expenditure or a combination of both. Sometimes known as ‘deflationary’ policy. Thus it can be used to reduce aggregate demand thus reducing demand-pull inflation (reducing consumer spending, reducing investment etc.), and reducing the budget deficit to improve government finance requiring less borrowing. Excellent answers will consider the negative effects – on
growth and employment for example.

JOIN OUR WASSCE 2022-2025 TELEGRAM PAGE FOR MORE RELATED UPDATES  [JOIN HERE]

WASSCE Economics Questions & Answering guide no. 7

7 (a) Define economic growth and discuss the positive consequences for an economy of rapid economic growth. [10 marks]
(b) Discuss any problems that may be generated by growth. [10 marks] Syllabus reference: Ch 19; pp244-249

(a) Defined as an increase in GDP over time (note the difference between real growth and monetary growth – taking into account inflation). . Positive consequences include
 Rising employment and material standards of living
 Rising incomes and more leisure time
 Improvements in technology, medicine, educational facilities, infrastructure, transportation etc.

READ: How to reduce WASSCE, NOV-DEC or BECE Failure by 50% for Free

(b)
 Not all sectors benefit equally. It depends upon the distribution of the benefits.
May be inequitable
 There may be disruptive structural change in the economy
 Environmental effects – climate change, greater levels of waste, depletion of non-renewable resources. Negative externalities.

 

READ: Fail 2021 NovDec and lock up dreams or pass now and shine into the future

 

JOIN OUR WASSCE 2022-2025 TELEGRAM PAGE FOR MORE RELATED UPDATES  [JOIN HERE]

WASSCE Economics Questions & Answering guide no. 8

8 Discuss four reasons why countries engage in international trade. [20 marks]
Candidates should discuss the benefits of internationals trade which include:
 Lower prices (a discussion of absolute and comparative advantage would lead to high marks)
 Greater choice of products based on different resources available in different countries
 Scale economies because of specialisation (international division of labour and specialisation)
 More efficient global allocation of resources
 Source of foreign exchange
 Breaks down domestic monopolies and Increases competition
 Increased employment
 Technology and managerial transfer

We hope these 8 WASSCE Economics Questions and 8 Answering Guidelines From UK Examiners have been of help to you. Expert more from us.

 

 

Source: Source: ICM-UK Economics Questions and Answers