WAEC Economics Past Questions & Answers - Page 8

A progressive tax is a tax system in which the tax rate increases as the amount of taxable income increases. This means that people with higher incomes pay a higher percentage of their income in taxes than people with lower incomes.

The curve labeled W shows that the tax rate increases as the amount of taxable income increases. This is the defining characteristic of a progressive tax system.

The study of economics is mainly concerned with how to make choices when resources are inadequate. This is because resources are always scarce, meaning that there is never enough to satisfy all of our wants and needs. As a result, we have to make choices about how to allocate our resources in a way that maximizes our well-being.

The other options listed are not the main focus of economics. While economics can be used to rank individuals' wants, satisfy every member of all societies, and produce all the goods needed by everyone, these are not the primary goals of the discipline. Economics is more concerned with understanding how these things are achieved in the real world, and how we can make better decisions about how to allocate our resources.

Warehousing is an economic activity that falls under intermediate production. Intermediate production is the production of goods and services that are used to produce other goods and services. In the case of warehousing, the goods and services that are produced are storage space and logistics services. These services are used by businesses to store their products and to distribute them to their customers.

If the demand for a commodity remains constant as price increases, the commodity is said to be perfectly price inelastic. This means that the quantity demanded of the commodity does not change at all in response to changes in price.

Price elasticity of demand is a measure of how responsive the demand for a good or service is to changes in its price. It is calculated as the percentage change in quantity demanded divided by the percentage change in price.

A perfectly price inelastic good has an elasticity of demand of 0. This means that the quantity demanded does not change at all in response to changes in price.

Some examples of perfectly price inelastic goods include:

- Life-saving drugs

- Basic food items

- Essential services (e.g., electricity, water)

In these cases, the demand for the good is so high that even a large increase in price will not cause consumers to decrease their consumption.

The answer is equipment. Working capital is the difference between a company's current assets and current liabilities. Current assets are those that can be converted into cash within a year, such as cash, accounts receivable, and inventory. Current liabilities are those that are due within a year, such as accounts payable and accrued expenses.

Equipment is a long-term asset, meaning that it is not expected to be converted into cash within a year. Therefore, it is not classified as working capital.

The other options, fuel, money to pay wages, and semi-finished goods, are all current assets and are therefore classified as working capital.

To summarize, the item that is not classified as working capital is equipment.