See the complete NECO Economics Questions and Answers 2025 here
Are you looking for how to make an excellent result in your NECO examination? If yes, just know that you are in the right place where all your questions will be thoroughly dealt with. Our NECO Economics questions and answers will be a great guide to you in achieving your target in the examination. It is well prepared to offer you a hand with information before the exam date and time.
However, it is now left for you to determine what you want and delve into reading this article in order to maximise the benefits therein.
The following are the answers to the likely questions for NECO economics scheduled to hold on the 16th July, 2025:
2025 NECO ECONOMICS (OBJECTIVE) ANSWERS:
1-10: DCCBDCADBE
11-20: BCADCEEEBE
21-30: BBDDCACDED
31-40: BCDEEABBAD
41-50: EEDECCEDEA
51-60: DADEDABADB
2025 NECO Theory Answers:
No. 1
(1a)
(i) Population of children = 162/360 × 140 = 63 million
(ii) Population of old people = 108/360 × 140 = 42 million
(iii) Active population = 90/360 × 140 = 35 million
(iv) Dependent population = Population of children + Population of old people = 63,000,000 + 42,000,000
= 105,000,000
= 105 million
(1b)
(i) The demand for goods and services required by the youths and old ones because they form the large percentage of the population
(ii) If the items required by the young and old ones are not produced locally, there will be increased importation and resultant strain in the balance of payment
(iii) Low level of savings and investment because of the high dependency ratio
(iv) Increased taxation and borrowing by government to meet increased demand for consumable items because the taxable population is small
(v) High prospective labour force because if the large proportion of young ones
No. 3
(3a)
Wants are the insatiable desire or need by human beings to own goods or services that give satisfaction. Human wants or needs are many and are usually described as insatiable because the means of satisfying them are limited or scarce.
(3b)
Scarcity is the limited supply of resources which are used for the satisfaction of unlimited wants. Scarcity is the inability of human beings to provide themselves with all the things they desire or want. These resources are scarce relative to their demand.
(3c)
Choice refers to a system of selecting or choosing one out of several alternatives. Choices arise as a result of numerous human wants and the scarcity of the resources used in satisfying these wants. Choice, therefore, arises as a result of scarcity of resources.
(3d)
Scale of preference refers to a list of unsatisfied wants arranged in the order of their relative importance. It is a list showing the order in which we want to satisfy our wants, arranged in order of priority. On the scale of preference, the most pressing wants come first, and the least pressing ones come last.
(3e)
Opportunity cost is an expression of cost in terms of forgone alternatives. It is the satisfaction of one’s want at the expense of another want. It refers to the wants that are left unsatisfied to satisfy another more pressing need.
No. 4
(4)
(i) Allocation of resources: The study of economics enables the government to allocate scarce resources to various sectors of the economy.
(ii) Development of programmes: It also enables the government to develop certain programmes that are beneficial to the people.
(iii) Rational decision: Economics enables individuals to choose certain wants among the numerous needs, using their scarce resources.
(iv) Preparation of budget: Economics assists the government to determine the expected income and expenditure of a country.
(v) Solutions to economic problems: Economics also enables individuals, firms and governments to solve their problems using various principles of the subject
No. 6
(6a)
Monopoly may be defined as a market situation where there is only one producer or supplier of a particular good or service that has no substitute. The monopolist has the power to influence the price of goods in his favour. The goods sold by a monopolist are normally differentiated.
(6b)
(i) Act of Parliament: This is a legal instrument by the government, conferring a special monopoly on some organisations to produce or supply certain goods or services, e.g., public corporations.
(ii) Patent Law: This law confers on a firm special privilege to protect its new invention, and it tends to scare away other competitors.
(iii) Level of technology: When a firm develops high level of technology, which makes goods cheaper, this may force other competitors out of production
(iv) Effective advertising: The success of a firm in effective advertising may force other competitors out of business
No. 7
(7a)
Co-operative society is defined as a voluntary business organisation in which a group of individuals with common interests pool their resources together to promote the economic welfare of their members in the production, distribution and consumption of goods and services.
(7b)
(i) Production co-operative society:
A producers’ co-operative society is formed by producers of similar products who organise co-operative production and undertake joint marketing of their products on a wholesale or retail basis. They share useful information among members.
(ii) Consumers co-operative society: Consumers co-operative society is owned and operated by a group of ultimate consumers who pool their resources together to purchase goods and services in large quantities and distribute them mainly to its members. The operating policies used are open membership, democratic control, limited interest paid on capital invested, and proportionate dividends based on their level of purchases or patronage.
(iii) Wholesale co-operative society: Wholesale co-operative society is formed by small-scale wholesalers who purchase goods in bulk from the manufacturers at reasonable prices and sell in small quantities to retail co-operatives. They can raise large sums of money to finance wholesale purchases when they come together. As an entity, they have the better bargaining power to purchase in bulk from the manufacturers.
No. 9
(9a)
Demand may be defined as the ability and willingness to buy a specific quantity of goods and services at a given price and at a particular period of time
(9b)
(i) Population
(ii) Income of the consumer
(iii) Changes in taste of consumer
(iv) Period of festivals
(i) Population: Increase in population in an area will lead to high demand for commodities and vice versa
(ii) Income of the consumer: The higher the Income of a consumer, the higher the quantity of commodities that he/she will demand and vice versa
(iii) Changes in taste of consumer: If consumers change their taste for a particular commodity, the demand for that commodity will also change
(iv) Period of festivals: It is well known that people demand for more of specific commodities during certain festivals
See also:
NECO Civic Education Questions and Answers for 2025 | Essay and Objectives
NECO Biology Questions and Answers for 2025 | Essay and Objectives
NECO Government Questions and Answers for 2025 | Essay and Objectives
NECO Biology Practical Specimen, Questions And Answers 2025 | Complete Specimen And Solutions
NECO Home Management Questions And Answers 2025 | Essay And Objectives
NECO Mathematics Questions And Answers For 2025 | Theories And Objectives
NECO Agric Questions And Answers 2025 | Essay And Objectives
NECO Marketing Questions And Answers 2025 | Theories & Objectives
More Theory Answers
(3)
(i) Marginal Cost:
Marginal cost is the additional cost incurred when producing one more unit of a good or service. It is calculated by taking the change in total cost that comes from producing an extra unit. Marginal cost helps firms decide the optimal level of production to maximize profits, as it should ideally equal marginal revenue (the revenue from selling one more unit).
(ii) Wants:
Wants are desires for goods and services that people wish to have. Unlike needs, which are essential for survival, wants are not necessary but enhance comfort and quality of life. They are influenced by personal preferences, culture, and socio-economic status and are unlimited, which means they can never be fully satisfied.
(iii) Scarcity:
Scarcity is the fundamental economic problem of having seemingly unlimited human wants in a world of limited resources. It means that there are not enough resources to produce enough goods and services to satisfy all human wants. Scarcity necessitates the need for choices and prioritization in the use of resources.
(iv) Choice:
Choice refers to the decision-making process individuals and societies use to allocate their limited resources among competing uses. Because resources are scarce, choices must be made about what to produce, how to produce, and for whom to produce. Every choice involves trade-offs, as choosing one option means giving up others.
(v) Opportunity Cost:
Opportunity cost is the value of the next best alternative that is foregone when a decision is made. It represents the benefits that could have been received by taking a different decision. Opportunity cost is a critical concept in economics because it highlights the cost associated with every choice and the inherent trade-offs in decision-making.
ECONOMICS
(4)
(PICK ANY FOUR)
(i) What to Produce:
Societies face the fundamental decision of what goods and services to produce with their limited resources. This problem arises because resources are finite, but human wants are virtually unlimited. Deciding what to produce involves evaluating the needs and desires of the population, considering both consumer goods (like food, clothing, and housing) and capital goods (like machinery and infrastructure). The aim is to produce a mix of goods that maximizes societal welfare.
(ii) How to Produce:
Once the decision of what to produce has been made, societies must determine how to produce these goods and services efficiently. This involves choosing the appropriate combination of labor, capital, and technology. The objective is to minimize production costs while maintaining or improving quality. This decision is influenced by the availability of resources, the level of technology, and the need to preserve the environment.
(iii) For Whom to Produce:
This problem addresses the distribution of the produced goods and services among the population. Societies must decide who will receive the output based on various criteria, such as income, wealth, and social policies. This distribution affects the overall equity and fairness in society. In market economies, distribution is often determined by purchasing power, meaning those with higher incomes can afford more goods and services.
(iv) Efficient Use of Resources:
Efficient resource use involves maximizing the output obtained from the available resources. This requires careful allocation and management to ensure that resources are not wasted and are used in the most productive ways. Efficiency can be improved through technological innovation, better management practices, and optimal resource allocation. The goal is to produce the maximum possible output with the given inputs, ensuring that resources contribute to their highest valued uses and that the opportunity cost is minimized.
(v) Economic Stability:
Maintaining economic stability is crucial for the well-being of a society. This involves managing economic fluctuations and avoiding severe inflation or deflation, high unemployment, and economic recessions. Governments and central banks play a vital role in stabilizing the economy through monetary and fiscal policies. Measures such as interest rate adjustments, government spending, and taxation are used to influence economic activity and maintain a stable growth path. Stability ensures a predictable economic environment, which is conducive to investment and long-term planning.
(vi) Economic Growth:
Economic growth is the process of increasing a country’s output of goods and services over time. It is measured by the growth rate of real Gross Domestic Product (GDP). Sustainable economic growth improves living standards, reduces poverty, and provides more resources to meet the needs and wants of the population. Achieving growth requires investments in capital, education, research and development, and infrastructure. It also involves fostering innovation, improving productivity, and creating a favorable business environment.
(5a)
Utility refers to the satisfaction or pleasure that a consumer derives from consuming goods and services. It is a measure of the usefulness or value that an individual receives from a particular product or service. Utility is subjective and varies from person to person, depending on their preferences, needs, and circumstances.
(5b)
(PICK ANY THREE)
(i) Form Utility:
Form utility is created by transforming raw materials into finished products that are more useful to consumers. It involves changing the physical form of a product to make it more desirable. For example, turning wheat into bread or cotton into clothing enhances its utility for consumers.
(ii) Place Utility:
Place utility is created by making goods and services available at locations where they are needed or wanted by consumers. It involves the transportation and distribution of products to convenient locations. For instance, having a retail store in a residential area or delivering products directly to customers’ homes increases place utility.
(iii) Time Utility:
Time utility is created by making goods and services available at the time when they are needed or desired by consumers. It involves storing products and ensuring they are accessible when demand arises. For example, selling winter clothing during the winter season or offering 24/7 customer service enhances time utility.
(iv) Possession Utility:
Possession utility is created by transferring ownership or the right to use a product or service to the consumer. It involves facilitating the purchase process, making it easy for consumers to acquire and use the product. Examples include providing financing options, accepting various payment methods, and offering legal ownership documentation.
(v) Information Utility:
Information utility is created by providing consumers with the necessary information about a product or service. It involves educating consumers on the benefits, features, and usage of the product, which helps them make informed purchasing decisions. Examples include advertising, product labeling, and customer support services.
(5c)
(PICK ANY TWO)
(i) Total utility is the overall satisfaction or pleasure obtained from consuming a certain quantity of goods or services WHILE marginal utility is the additional satisfaction or pleasure obtained from consuming one more unit of a good or service.
(ii) Total utility is calculated as the sum of the utilities derived from all units consumed WHILE Marginal utility, on the other hand, is the change in total utility that results from consuming an additional unit of the good or service.
(iii) Total utility generally increases as more units are consumed, but it does so at a decreasing rate if marginal utility is diminishing WHILE Marginal utility can be positive, zero, or negative. It is positive when the additional unit adds satisfaction, zero when it has no effect, and negative when it reduces overall satisfaction.
(iv) Total utility reaches its maximum point when marginal utility is zero. Beyond this point, if marginal utility becomes negative, total utility will start to decrease WHILE Marginal utility is derived from the slope of the total utility curve, reflecting the rate of change in total utility with respect to the quantity consumed.
(6a)
(PICK ANY ONE)
Public finance is the study of how governments raise revenue, allocate resources, and manage public expenditure to influence the economy. It involves analyzing government taxation, spending, budgeting, and debt management. Public finance aims to understand how government policies affect economic efficiency, income distribution, and macroeconomic stability.
OR
Public finance is the branch of economics which assesses the government revenue and government expenditure of the
public authorities and the adjustment of one or the other to achieve desirable effects and avoid undesirable ones.
OR
Public Finance deals with the financial activities of government concerning revenue, expenditure and debt
operations and their effects on the economy. It tries to analyse the impacts of these financial activities of
government on individuals and corporate bodies.
(6b)
(PICK ANY FIVE)
(i) Economic Stability:
One of the primary objectives of fiscal policy is to stabilize the economy by reducing the volatility of economic cycles. This involves using government spending and taxation to counteract inflation, control deflation, and manage unemployment levels. By doing so, fiscal policy aims to achieve steady economic growth and prevent economic crises.
(ii) Full Employment:
Fiscal policy seeks to achieve and maintain high levels of employment. Governments use expansionary fiscal measures, such as increased public spending and tax cuts, to stimulate economic activity and create jobs. Conversely, contractionary measures may be used to cool down an overheating economy.
(iii) Economic Growth:
Promoting sustainable economic growth is a key objective of fiscal policy. Governments invest in infrastructure, education, and technology to enhance productivity and foster long-term economic development. Fiscal policies are designed to create a favorable environment for investment and innovation, thereby driving economic expansion.
(iv) Redistribution of Income:
Fiscal policy aims to reduce income inequality by redistributing wealth through progressive taxation and social welfare programs. Higher taxes on the wealthy and targeted public spending on social services such as healthcare, education, and housing help to provide a safety net for the less privileged and promote social equity.
(v) Efficient Resource Allocation:
Fiscal policy is used to allocate resources in a manner that maximizes social welfare. By prioritizing public expenditures on essential services and infrastructure, governments ensure that resources are used efficiently to meet the needs of society. Additionally, subsidies and incentives may be provided to encourage the development of certain industries or regions.
(vi) Price Stability:
Controlling inflation and maintaining price stability is an important objective of fiscal policy. By adjusting taxes and public spending, governments can influence the level of aggregate demand in the economy. Reducing excessive demand can help to control inflation, while stimulating demand can prevent deflation.
(vii) Reduction of Public Debt:
Managing and reducing public debt is a critical goal of fiscal policy. Excessive debt can lead to high interest payments and reduced fiscal space for essential spending. Fiscal policies are implemented to ensure sustainable debt levels through prudent budgeting, efficient tax collection, and controlled borrowing.
(viii) Provision of Public Goods:
Fiscal policy ensures the provision of public goods and services that are not efficiently provided by the private sector. These include national defense, public safety, education, and infrastructure. Government spending on these goods enhances overall societal welfare and contributes to economic stability and growth.
(7a)
Price legislation refers to the laws and regulations enacted by a government to control or influence the prices of goods and services in the market. This includes setting minimum or maximum price limits, prohibiting price gouging during emergencies, and regulating the prices of essential goods to ensure affordability and prevent exploitation.
(7b)
(PICK ANY FOUR)
(i) Preventing Inflation:
Price control policies aim to curb excessive inflation, especially in times of economic instability. By capping the prices of essential goods and services, governments can prevent rapid increases in the cost of living, which can erode purchasing power and lead to economic hardships for consumers.
(ii) Ensuring Affordability of Essential Goods:
A primary objective of price control is to ensure that essential goods and services, such as food, healthcare, and fuel, remain affordable for all segments of the population. By regulating prices, governments can protect low-income households from price spikes and ensure equitable access to basic necessities.
(iii) Preventing Exploitation and Price Gouging:
Price control policies are implemented to protect consumers from unfair pricing practices, especially during emergencies or shortages. By setting maximum price limits, governments can prevent businesses from taking advantage of high demand to charge exorbitant prices, thereby protecting consumers from exploitation.
(iv) Stabilizing the Economy:
Price controls can help stabilize the economy by reducing price volatility and uncertainty. By maintaining stable prices, governments can foster a predictable economic environment, encouraging investment and consumption. This stability is crucial for long-term economic growth and planning.
(v) Supporting Low-Income Households:
Price control policies often aim to support low-income and vulnerable households by making essential goods and services more accessible. This includes subsidizing certain products or setting price ceilings to ensure that these households can afford basic needs without compromising their financial stability.
(vi) Ensuring Fair Competition:
By regulating prices, governments can prevent monopolistic and oligopolistic practices that can distort the market and harm consumers. Price controls can ensure a level playing field, promoting fair competition and preventing dominant firms from setting excessively high prices that can exclude competitors and exploit consumers.
(8a)
(PICK ANY ONE)
A financial institution is an organization that provides financial services to individuals, businesses, and governments. These services include accepting deposits, providing loans, investment products, insurance, and facilitating transactions. Financial institutions play a crucial role in the economy by mobilizing savings, allocating resources, managing risks, and enabling the flow of money and credit in the financial system.
OR
A financial institution is a company involved in the business of dealing with financial and monetary transactions such as deposits, loans, investments, and currency exchange. Financial institutions encompass a broad range of business operations within the financial services sector including banks, trust companies, insurance companies, brokerage firms, and investment dealers.
(8b)
(i) Money Market:
The money market is a segment of the financial market where short-term borrowing, lending, buying, and selling of financial instruments occur. These instruments typically have maturities of one year or less and include Treasury bills, commercial paper, certificates of deposit, and repurchase agreements. The money market is essential for managing liquidity and short-term funding needs for governments, financial institutions, and corporations.
(ii) Insurance Companies:
Insurance companies are financial institutions that provide risk management services by offering various insurance products. These products protect individuals and businesses against financial losses from specific risks such as accidents, illness, property damage, and liability. Policyholders pay premiums to the insurance company, which in turn promises to compensate them for covered losses according to the terms of the policy.
(iii) Capital Market:
The capital market is a segment of the financial market where long-term securities, such as stocks and bonds, are bought and sold. It enables governments and corporations to raise long-term funds for investment and growth by issuing these securities. The capital market provides a platform for investors to trade existing securities, ensuring liquidity and price discovery. By facilitating the flow of capital, it supports economic development and allows investors to diversify their portfolios and manage risks.
If you have found this article helpful, please drop a comment and share it with you colleagues. For any other inquiries about NECO Economics Questions and Answers 2025, kindly make use of the comment section below.
Goodluck!