WAEC Economics Past Questions & Answers - Page 106

526.

One reason why small scale businesses are very common in West Africa is that

A.

They can easily float shares

B.

Their management boards are easily formed

C.

Their initial capital is easy to rise

D.

Their dividend payments are very regular

Correct answer is C

Because they require minimal capital for start up. Most small businesses rely on loans and grants from family and friends, personal savings and plough back profit as their initial start up capital.

527.

An arrangement in which the debts of a company can only be paid from its own assets implies

A.

Unlimited liability

B.

Transferred liability

C.

Limited liability

D.

Capital liability

Correct answer is C

Limited liability is a kind of legal protection whereby owners and shareholders have no personal responsibility for their company's debts and financial losses.. In other words, investor's and owner's of private assets are not at risk if the company fails.

528.

If a firm's price is less than average cost but more than part of variable cost, the firm is covering

A.

All of its fixed cost and variable cost

B.

All of its fixed cost and part of variable cost

C.

All of its variable cost and part of fixed cost

D.

Part of its fixed cost and part of varible cost

Correct answer is A

No explanation has been provided for this answer.

529.

In the firm's production process, marginal cost

A.

Falls continuously throughout

B.

Falls and later rises

C.

Remains unchanged throughout

D.

Rises and later falls

Correct answer is D

Marginal cost is the cost additional cost incurred by producing one additional unit of a product or service. In the production process, the cost would usually rise and the fall in the long run when the firm starts enjoying economies of scale. That is, higher outputs, minimal cost.

530.

Which of the following is capable of increasing the population of a country?

A.

Increase in birth rate

B.

Increase in death rate

C.

Poor medical facilities

D.

Decrease in birth rate

Correct answer is A

Birth rate is the proportion of births to the total population in a place in a given time. That is, the amount of babies born and alive  in a given period of time. An increase in the birth rate would cause the population of that geographical area to increase.