NECO Economics (OBJ & Essay) Questions and Answers 2026

*NECO ECONOMICS OBJ* https://whatsapp.com/channel/0029Vb8Fm3hH5JM3KEspIR04 1-10: E, B, D, E, C, E, B, B, B, A 11-20: B, C, A, B, D, C, B, A, D, C 21-30: B, D, A, A, D, B, A, C, A, B 31-40: B, B, C, A, E, C, E, A, A, E 41-50: B, E, D, B, C, B, B, E, E, A 51-60: E, E, E, D, D, A, A, B, A, D *USE THIS IF URS IS RESHUFFLED ❤️🔥👇🏻👇🏻* 1. E – Movement of workers from one geographical area to another = mobility of labour. 2. B – Fisher's quantity theory equation = MV = PT. 3. D – Structure a society uses to produce, distribute and consume = economic system. 4. E – Agricultural productivity = increase in output per farmer. 5. C – Projected growth rate of fourth National Development Plan = 9%. 6. E – Production of food for farmer and family = subsistence farming. 7. B – Asian Tigers: Hong Kong, Singapore, South Korea and Taiwan. 8. B – Satisfaction from additional unit = marginal utility. 9. B – Arrangement of wants in order of importance = scale of preference. 10. A – Central Bank of Nigeria established in 1958. 11. B – Transformation of commodity to satisfy consumer's need = form utility. 12. C – Possible combination of two commodities yielding same satisfaction = indifference curve. 13. A – Total number of people able and willing to work = labour force. 14. B – Measure that uses all observations = mean. 15. D – Demand for complementary goods = joint demand. 16. C – How a country is ruled without force = democracy. 17. B – Crude oil and natural gas are in joint supply. 18. A – Goods demanded to satisfy wants = consumption goods. 19. D – Capital market deals in long-term securities. 20. C – Labour supply is affected by population size. 21. B – Privatisation is encouraged for efficiency. 22. D – Means of payment in international trade = foreign exchange. 23. A – Economic integration by ECOWAS = free trade area. 24. A – Government restrictions on production = regulation. 25. D – In the long run, all factors of production are variable. https://whatsapp.com/channel/0029VbCpC6c5Ejy61HyxKZ0v *To all POLAC RC 13 aspirants 👆👆.* https://t.me/necovipanswer Neco vip 👆👆 *REACT, SHARE AND FORWARD TO EVERYONE ❤️🔥* FOR NECO STATE QUESTIONS, MESSAGE ME ON TELEGRAM👇👇: https://t.me/Officialkingjay1 JOIN OUR VIP CHANNEL 👇🏻👇🏻 https://t.me/freewassceditto 26. B – Fixed cost = rent on land. 27. A – Demand curve of imperfect market = downward sloping. 28. C – Determining what to produce considers cost of production. 29. A – Money is a poor store of value during inflation. 30. B – Crops for family consumption = subsistence farming. 31. B – Positive contribution of petroleum = increase in revenue base. 32. B – World Bank = International Bank for Reconstruction and Development (IBRD). 33. C – Loans for individuals to own houses = mortgage bank. 34. A – Coefficient between 0 and 1 = fairly inelastic. 35. E – "Ends" in Robbins' definition = wants. 36. C – System where individuals not allowed to own factors = socialism. 37. E – Characteristic of developing economy = low literacy rate. 38. A – Mobilises savings and channels to investment = capital market. 39. A – Accepts deposits and valuables for safe keeping = commercial bank. 40. E – Communication, banking, tourism = service industry. 41. B – Warehousing function performed by wholesaler. 42. E – Advantage of monopoly = standardisation. 43. D – If TR remains constant, MR = zero. 44. D – Indigenous policy aims to increase citizen participation. 45. B – Stock of goods does not affect demand. 46. C – Encouraging rural-urban drift will not revamp agriculture. 47. B – Balance of payments deficit corrected through devaluation. 48. E – Agriculture = source of raw materials for industries. 49. E – Problem of commercial banks = high interest rate. 50. A – Fixing maximum price ensures consumers' protection. 51. E – Mean = (2+5+7+10)/4 = 24/4 = 6. 52. E – Diagram shows perfectly elastic demand (horizontal demand curve). 53. E – Upstream activities exclude marketing and distribution (downstream). 54. D – APC = Consumption/Income = 4800/8000 = 0.6. 55. D – Basic economic problems arise from scarcity of resources. 56. A – Provision of financial securities = function of insurance companies. 57. A – Bank recapitalisation ensures banks are strong and efficient. 58. B – Population density = 20,400,000/240,000 = 85 persons/km². 59. A – Figure depicts unitary elastic demand. 60. D – Multiplier = 1/MPS → 10 = 1/MPS → MPS = 0.1. *REACT, SHARE, FORWARD TO EVERYONE ❤️🔥✅* *NECO 2026 ECONOMICS (PAPER II – ESSAY)* *COMPLETE ANSWERS – QUESTIONS 1 TO 12* https://whatsapp.com/channel/0029Vb7uxd5F1YlSJpZclt24 =========================================================== SECTION A Answer ONE question only from this section. =========================================================== QUESTION 1 =========================================================== (a) Calculate the coefficient of income elasticity of demand (10 marks) Income elasticity of demand (YED) = (% change in quantity demanded) / (% change in income) Initial income (Y₁) = ₦2,000 New income (Y₂) = ₦5,000 % change in income = (Y₂ - Y₁)/Y₁ × 100 = (5,000 - 2,000)/2,000 × 100 = 3,000/2,000 × 100 = 150% Initial quantity (Q₁) = 10 tins New quantity (Q₂) = 20 tins % change in quantity = (Q₂ - Q₁)/Q₁ × 100 = (20 - 10)/10 × 100 = 10/10 × 100 = 100% YED = 100% / 150% = 0.67 Answer: 0.67 (b) What is the nature of the elasticity in (a) above? (2 marks) The elasticity is positive and less than 1. This means milk is a necessity good (income inelastic). The demand for milk increases as income rises, but at a slower rate than the increase in income. (c) What kind of good is milk to Mr. Shaba? (2 marks) Milk is a normal good (specifically a necessity) because as his income increases, his demand for milk also increases. (d) Mention three determinants of elasticity of supply (6 marks) 1. Time period – In the short run, supply is less elastic because firms cannot easily increase production. In the long run, supply becomes more elastic. 2. Availability of factors of production – If raw materials, labour, and capital are readily available, supply is more elastic. 3. Nature of the industry – Industries with excess capacity can increase output quickly, making supply more elastic, while industries operating at full capacity have inelastic supply. =========================================================== https://whatsapp.com/channel/0029VbCpC6c5Ejy61HyxKZ0v *To all POLAC RC 13 aspirants 👆👆.* https://t.me/necovipanswer Neco vip 👆👆 *REACT, SHARE AND FORWARD TO EVERYONE ❤️🔥* FOR NECO STATE QUESTIONS, MESSAGE ME ON TELEGRAM👇👇: https://t.me/Officialkingjay1 JOIN OUR VIP CHANNEL 👇🏻👇🏻 https://t.me/freewassceditto QUESTION 2 =========================================================== Income data: 20, 10, 12, 16, 10, 14, 18, 10, 16, 14 (i) Modal income (2 marks) Arrange data: 10, 10, 10, 12, 14, 14, 16, 16, 18, 20 The mode is the value that appears most frequently. 10 appears 3 times. Answer: 10 (ii) Median income (3 marks) Arrange in ascending order: 10, 10, 10, 12, 14, 14, 16, 16, 18, 20 Number of observations (n) = 10 (even) Median = average of the 5th and 6th values = (14 + 14)/2 = 14 Answer: 14 (iii) Mean income (5 marks) Sum of values = 20 + 10 + 12 + 16 + 10 + 14 + 18 + 10 + 16 + 14 = 140 Mean = Sum / n = 140 / 10 = 14 Answer: 14 (iv) Standard deviation (10 marks) Mean (μ) = 14 x x - μ (x - μ)² 20 6 36 10 -4 16 12 -2 4 16 2 4 10 -4 16 14 0 0 18 4 16 10 -4 16 16 2 4 14 0 0 Sum of (x - μ)² = 36 + 16 + 4 + 4 + 16 + 0 + 16 + 16 + 4 + 0 = 112 Variance = Sum / n = 112 / 10 = 11.2 Standard deviation = √11.2 = 3.35 Answer: 3.35 =========================================================== SECTION B Answer FOUR questions only from this section. =========================================================== QUESTION 3 =========================================================== Explain five functions performed by an Entrepreneur (20 marks) 1. Organising – The entrepreneur coordinates all factors of production, bringing together land, labour, capital, and raw materials in the right proportions to produce goods and services efficiently. 2. Risk bearing – The entrepreneur bears the risk of uncertainty in business. He invests his capital and time without knowing whether the business will succeed or fail. 3. Innovation – The entrepreneur introduces new products, new production methods, new markets, new sources of raw materials, and new ways of organising production. This drives economic growth. 4. Decision making – The entrepreneur makes key decisions about what to produce, how much to produce, what price to charge, and where to sell. These decisions determine the success or failure of the business. 5. Management and control – The entrepreneur supervises and controls all business activities, ensures that production is efficient, and that goals are achieved within the budget and timeline. =========================================================== QUESTION 4 =========================================================== (a) What is Effective Demand? (5 marks) Effective demand is the desire or willingness to buy a commodity backed by the ability to pay. It is not just wanting a good, but having the financial means to purchase it. Effective demand is represented by the demand curve and determines the actual quantity of goods that are bought in the market. (b) Explain five factors that affect the demand for a commodity (15 marks) 1. Price of the commodity – As the price of a commodity falls, the quantity demanded increases, and vice versa. This is the law of demand. 2. Income of the consumer – An increase in income leads to an increase in demand for normal goods, and a decrease in demand for inferior goods. 3. Price of related goods – The demand for a good is affected by changes in the price of substitutes and complements. An increase in the price of a substitute increases demand for the good, while an increase in the price of a complement decreases demand. 4. Taste and preferences – Changes in fashion, culture, advertising, and consumer habits affect demand. If a good becomes more fashionable, demand increases. 5. Population and market size – An increase in population leads to an increase in demand for goods and services. This includes both the number of consumers and their age distribution. =========================================================== QUESTION 5 =========================================================== (a) Define Price System (4 marks) The price system (or price mechanism) is the process by which prices of goods and services are determined in a market through the interaction of demand and supply. It coordinates the decisions of consumers, producers, and resource owners in an economy. (b) Explain four importance of Price System to an economy (12 marks) 1. Allocative efficiency – The price system ensures that resources are allocated to their most valued uses. High prices signal scarcity and encourage production, while low prices signal abundance. 2. Consumer sovereignty – The price system reflects consumer preferences. Producers produce what consumers want because consumers express their choices through their willingness to pay. 3. Signalling function – Prices act as signals to producers about where to direct resources. Rising prices indicate shortages and encourage increased production, while falling prices indicate surpluses and encourage reduced production. 4. Rationing function – Prices ration scarce goods and services. When demand exceeds supply, prices rise, allocating goods to those who are willing and able to pay. (c) Give two differences between capitalist and socialist price system (4 marks) 1. In a capitalist price system, prices are determined by the free interaction of demand and supply in the market. In a socialist price system, prices are fixed by the government or central planning authority. 2. In a capitalist price system, prices reflect consumer preferences and resource scarcity. In a socialist price system, prices are set based on government objectives such as equity or affordability. =========================================================== QUESTION 6 =========================================================== (a) Define Marketing Board (4 marks) A Marketing Board is a statutory body established by the government to regulate the production, pricing, and marketing of certain agricultural products. It buys produce from farmers at guaranteed prices, processes, stores, and sells them, often for export. (b) Discuss three functions of Marketing Board (15 marks) 1. Price stabilization – Marketing Boards stabilize prices for agricultural products by buying at guaranteed prices during periods of surplus (to prevent price falls) and selling from reserves during periods of scarcity (to prevent price hikes). 2. Quality control – Marketing Boards ensure that agricultural products meet quality standards before they are sold locally or exported. This helps maintain the reputation of the country's produce. 3. Market research and promotion – Marketing Boards conduct research on market trends and promote local products both domestically and internationally. They help find new markets and increase exports. =========================================================== QUESTION 7 =========================================================== Discuss five factors militating against rapid Industrialisation in Nigeria (20 marks) 1. Inadequate capital – Industrialisation requires huge capital investment. Nigeria lacks sufficient funds for building factories, purchasing machinery, and developing infrastructure. 2. Poor infrastructure – Inadequate electricity supply, poor roads, and lack of efficient transport and communication systems increase production costs and discourage industrial growth. 3. Inadequate skilled labour – Nigeria lacks enough trained engineers, technicians, and skilled workers needed for modern industries. Many skilled workers migrate abroad for better opportunities. 4. Dependence on imported raw materials – Many Nigerian industries depend on imported raw materials, which are expensive and subject to foreign exchange fluctuations. 5. Political instability and corruption – Frequent changes in government, policy inconsistencies, and high levels of corruption discourage both local and foreign investment in the industrial sector. =========================================================== QUESTION 8 =========================================================== (a) Explain the relationship between Savings and Investment (8 marks) Savings and investment are closely related in an economy. Savings provide the funds available for investment. When households save, the funds are channelled through financial institutions (banks) to firms that wish to invest. In a closed economy, total savings must equal total investment (S = I) in equilibrium. Higher savings lead to higher investment and economic growth. (b) Elaborate on three factors that affect Personal Consumption Expenditure (12 marks) 1. Disposable income – The primary determinant of consumption is disposable income (income after tax). The higher the income, the higher the consumption, though the relationship is not proportionate (Keynes's marginal propensity to consume). 2. Wealth – The level of accumulated assets (wealth) affects consumption. People with higher wealth tend to consume more because they feel more secure and may spend from their assets. 3. Consumer expectations – Expectations about the future affect current consumption. If people expect price increases or future income growth, they may increase consumption; if they expect economic hardship, they may reduce consumption. =========================================================== QUESTION 9 =========================================================== Write short notes on the following: (i) Under Population (4 marks) Under population occurs when the population of a country is too small relative to its available resources. There are not enough people to fully utilise the available land, capital, and other resources. This leads to low production, low output, and low standard of living. (ii) Over Population (4 marks) Over population occurs when the population of a country is too large relative to its available resources. The resources are insufficient to support the population at a desirable standard of living. This leads to unemployment, poverty, food shortages, and pressure on social amenities. (iii) Optimum Population (4 marks) Optimum population is the ideal population size that, with the available resources and technology, can achieve the highest possible standard of living. At this level, there is neither shortage nor surplus of labour relative to other factors of production. (iv) Malthusian Population Theory (8 marks) Thomas Malthus proposed that population increases geometrically (1, 2, 4, 8, 16) while food production increases arithmetically (1, 2, 3, 4, 5). Therefore, population would eventually outstrip food supply, leading to famine, disease, and war. He argued that positive checks (famine, disease) and preventive checks (moral restraint) would keep population in check. The theory has been criticised because technological advances have increased food production beyond Malthus's predictions. =========================================================== QUESTION 10 =========================================================== (a) Define Supply of Labour (4 marks) Supply of labour refers to the number of workers willing and able to work at different wage rates over a given period. It includes both the quantity of labour offered and the quality (skills, education, and training) of the workforce. (b) Expatiate on four factors that affect the supply of Labour (16 marks) 1. Population size – A larger population generally leads to a larger labour force, increasing the supply of labour. 2. Age structure – The proportion of working-age people (15-65 years) in the population affects labour supply. A young population with many working-age people increases labour supply. 3. Wage rate – Higher wages attract more people into the labour force and encourage existing workers to work more hours. The supply curve of labour slopes upward. 4. Level of education and training – A more educated and trained workforce increases the quality and productivity of labour, even if the quantity remains the same. =========================================================== QUESTION 11 =========================================================== (a) What is Comparative Cost Advantage? (5 marks) Comparative cost advantage is the principle that a country should specialise in producing goods in which it has a lower opportunity cost compared to other countries. Even if one country is more efficient in producing all goods, trade can still benefit both countries if they specialise according to their comparative advantage. (b) Elaborate on five assumptions of Comparative Cost Advantage (15 marks) 1. Two-country, two-commodity model – The theory assumes trade between two countries with two goods. 2. Constant returns to scale – It assumes that production costs do not change as output increases. 3. Perfect competition – Both product and factor markets are perfectly competitive. 4. Full employment – All resources are fully employed in both countries. 5. No transport costs – The theory assumes that there are no transport costs or trade barriers that would affect the cost of goods. =========================================================== QUESTION 12 =========================================================== Explain five functions of Economic and Financial Crimes Commission (EFCC) (20 marks) 1. Investigation of financial crimes – EFCC investigates cases of financial crimes such as money laundering, fraud, and corruption, gathering evidence for prosecution. 2. Prosecution of offenders – The EFCC prosecutes persons suspected of economic and financial crimes in courts of law, ensuring they face legal consequences. 3. Asset recovery and forfeiture – EFCC recovers assets acquired through illegal means and ensures they are forfeited to the government. 4. Prevention of financial crimes – EFCC educates the public about financial crimes and works with financial institutions to prevent money laundering and other illegal activities. 5. Coordination with international bodies – EFCC collaborates with international organisations such as the Financial Action Task Force (FATF) and Interpol to combat cross-border financial crimes. =========================================================== *END OF ANSWERS – QUESTIONS 1 TO 12* =========================================================== INSTRUCTIONS FOR THE EXAM Answer FIVE questions in total: · ONE from Section A (Q1 or Q2) · FOUR from Section B (Q3 to Q12) All questions carry equal marks (20 marks each) Total marks = 100

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