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NECO SSCE Economics 2015 past questions and answers

This 2015 NECO SSCE Economics set has 40 practice questions. Try these 5 free sample questions, tap a question to reveal the answer and explanation. Then practise the whole 2015 set with instant marking.

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Sample NECO SSCE Economics 2015 questions

1. Country X can produce either 12 units of cocoa or 6 units of cloth with the same resources, while Country Y can produce either 8 units of cocoa or 8 units of cloth. Which country has a comparative advantage in cloth production?
  1. Country X, because it produces more cocoa
  2. Country Y, because its opportunity cost of cloth is lower
  3. Country X, because its opportunity cost of cloth is lower
  4. Neither country, because their outputs differ

Answer: B. Country Y, because its opportunity cost of cloth is lower

One unit of cloth costs X 2 units of cocoa but costs Y 1 unit, so Y has the lower opportunity cost.

2. If a country's export price index rises from 100 to 120 while its import price index stays at 100, what happens to its terms-of-trade index?
  1. It falls from 100 to 83.3
  2. It remains at 100
  3. It rises from 100 to 120
  4. It rises from 100 to 220

Answer: C. It rises from 100 to 120

The terms-of-trade index is export prices divided by import prices times 100, giving 120.

3. A Nigerian firm exports goods priced in naira, and foreign demand responds to lower foreign-currency prices. What is a likely immediate effect of a naira devaluation, other things being equal?
  1. The goods become cheaper to foreign buyers
  2. The goods become more expensive to foreign buyers
  3. The firm's domestic production cost must fall
  4. The exchange rate becomes fixed automatically

Answer: A. The goods become cheaper to foreign buyers

Devaluation lowers the foreign-currency value of the naira, making naira-priced exports cheaper abroad.

4. A country imports goods worth ₦90 billion and exports goods worth ₦70 billion during a year. Considering merchandise trade alone, what is its balance?
  1. A surplus of ₦160 billion
  2. A surplus of ₦20 billion
  3. A balanced trade account
  4. A deficit of ₦20 billion

Answer: D. A deficit of ₦20 billion

Merchandise exports minus imports equal ₦70 billion minus ₦90 billion, or a ₦20 billion deficit.

5. Which policy is a central feature of a customs union among member countries?
  1. Free movement of labour with no trade rules
  2. A single currency issued by one central bank
  3. A common external tariff on imports from non-members
  4. A prohibition on trade with all non-members

Answer: C. A common external tariff on imports from non-members

A customs union combines free trade among members with a common external tariff.

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