2018 waec gce question and answer on economics
Fixed cost $
Processing machine 2000
Manager’s salary 1500
Factory rent. 1200
Electricity Bill 800
Variable cost of the firm:
Wages to causallabour 2500
Raw materials 1400
Average cost (AC) = Total cost/Unit produced
TC = TFC+TVC
= $5500 + $4500
AC = $10,000/3000
AC = $3.33
Total profit for the period formular
Profit = Total Revenue – Total cost
Total Revenue = Price×quantuty
Profit = $18,000 – $10,000
Tax paid by the firm
Tax paid = Tax rate * taxable profit
= 10/100 * $8000/1
Fixed cost is defined as the cost incurred by a firm which does not change or vary with the level of activity. Examples are salary, rent, electricity. Whereas variable cost are the cost incurred by a firm which vary or change with the level of activity. Examples are fuel, cost of raw materials, wages of workers.
Primary production involves the extractive industry where the occupation of people is directed to the process of extracting raw materials from the soil or area
Primary production: Mining and Fishing
Secondary production: Manufacturing industries and Construction industries
Tertiary production: Financial institutions, schools
(i) Revenue: The primary industries like timber industry, cocoa industry, fishing industry, mining industry etc pay monies to the government in the form of taxes or levies. These monies are called revenues and they are used for developmental projects in the country.
(ii) Foreign exchange: Most of the the primary industries in such as timber industry, cocoa industry, mining industry etc., do not process or add value to their raw materials. Their raw materials are exported to other countries and this earns the country foreign exchange.
(iii) Employment: The primary industries together employ over 65% of the working population in a country. These various industries serve as employment and help people to earn income to improve their lives.
Majority of the people at the rural areas are farmers and fishermen.
(iv) Raw materials: Some of the industries process or add value to the raw materials from the primary industries.
For example, cocoa beans obtained from the Cocoa industries are processed by some companies such as Cocoa Processing Company into chocolates etc.
Trade by barter may be defined as a form of trading in which goods are exchanged directly for other goods without the use of money as a medium of exchange
(i)Problem of double coincidence of want:-This involves looking for someone who is in need of what you have and at the same time has what you need
(ii)No fixed rate of exchange:-There is the problem of exchange rate determination between two products
(i)Commodity money:-This is the type of money which has value as both money and commodity. commodity money is valuable for it’s own sake since it can be put to some other uses
(ii)Token money:-This is the form of money with a face value which is greater than the value of the metal content. Token money has a face value in excess of it’s metal content, ie the intrinsic value is less than the face value
(iii) Bank Deposit:-This is a form of money kept in the account of the bank. Any money saved in the bank will be credited to the account of the depositor
Unemployment can be defined as an economic situation in which able body men and women who are willing and able to work can not secure any job in the country.
(i) Technological employment: This is caused as a result of company changes its technical ways of production which result in laying off of worker who cannot cope with the new method of production.
(ii) Cyclical Unemployment: This is caused as a result I down-swing in trade cycle ie a fall in a demand for a country’s product.
(i) Industrialization: Government should many industries that can employ many worker.
(ii) Population control – Population should be controlled to obtain optimum level, so as to match the human population with available resources.
(iii) Proper Development plan: This should be put in places to cater for people who are unemployed.
(iv) Re-designing Educational system : The educational system should be redesigned to graduate people that are able to create employment.