Economics

1. Basic extractive activities are classified as:

(A) (ANS) primary production
(B) manufacturing production
(C) technical production
(D) secondary production

2. Which of the following is not strictly included in the study of economics?

(A) production
(B) consumption
(C) (ANS) whether a product is harmful
(D) distribution

3. It is impossible to satisfy all human wants because:

(A) of income inequality
(B) (ANS) available resources are limited
(C) human wants are unlimited
(D) money income is limited

4. Mr. Tola needs a book and a calculator that cost N70 each. If he buys the book instead of the calculator, the opportunity cost of his choice is:
   (A) N70
   (B) N140
   (C) (ANS) calculator
   (D) Book
5. The meaning of scale of preference is:

(A) (ANS) a list of consumers wants, arranged in order of importance
(B) the preparation of a list of goods and services that satisfy wants
(C) the consumer budget
(D) the consumer preference for cheap goods

6. The knowledge of Economics enables an individual to:

(A) be careful in the spending of his income
(B) (ANS) derive maximum satisfaction from the use of his resources

(C) be investment conscious
(D) avoid the purchase of harmful goods

7. If you do not have to make any sacrifice in order to get a particular thing then its real cost is:

(A) its price
(B) (ANS) zero
(C) infinite
(D) one

8 Which of the following defines Economics most comprehensively?

(A) Organization of industries and services to produce utility
(B) (ANS) Study of human behaviour in the allocation of scarce resources
(C) Buying and selling of goods and services
(D) Study of economic agents in allocation of goods and services

9. Which of the following is not a classification of economic activities?

(A) Tertiary
(B) (ANS) Construction
(C) Primary
(D) Secondary

10 In economic analysis, a statement is said to be normative when it:

(A) (ANS) relates to value judgment
(B) is concerned with what is
(C) observes economics variables
(D) combines A to C

11. Which of the following statements is not correct about choice?

(A) the process of making a choice involves opportunity cost
(B) (ANS) only individuals and firms make choice
(C) an economist is not interested in the moral judgment of any choice so made
(D) usually choice is made from a consumer scale preference

12. “Economics is a science which studies human behaviour as relationship between ends and scarce means, which have alternative uses”. ‘Ends’ here refers to:
    (A) output
    (B) (ANS) wants
    (C) resources
    (D) demand
13. The study of the economic behaviour of individual decision making unit in a free enterprise economy is called:
    (A) (ANS) microeconomics
    (B) market system
    (C) macroeconomics
    (D) economic system
14. What is the first thing to do if Biola simultaneously needs computer, a laser printer and a scanner and he has money to buy only one of these items?
    (A) check how much money he has
    (B) (ANS) prepare a scale of preference
    (C) seek advice from economic experts
    (D) determine the opportunity cost
15. Another term for opportunity cost is:

(A) implicit cost
(B) money cost
(C) (ANS) real cost
(D) alternative cost

16 A consumer’s decision to purchase more of a product, with constant income will imply that:

(A) more of another product will be bought
(B) the consumer is rational
(C) (ANS) of other product(s) will be bought
(D) no product will be bought subsequently

17. The concept of economic efficiency basically implies:

(A) equity in the distribution of the nation’s wealth
(B) conservation of economic resources
(C) (ANS) obtaining the maximum output from available resources at the lowest cost
(D) a wasteless economy

18. A good example of a free good is:

(A) education
(B) security
(C) (ANS) air
(D) mineral resources

19. The decision on what to produce is a problem in:

(A) developing economic systems
(B) (ANS) all economic system
(C) a centrally planned economic system only
(D) a free-enterprise economic system only

20. Which of the following would not be included in the fundamental principle of a free enterprise economy?
    (A) the right to make private profit
    (B) (ANS) government control factor of production

(C) private ownership of factors of production
(D) government encourages competitive capitalism within the legal framework of the country

21. Advance stage of socialism is referred to as:

(A) quasi-socialism
(B) capitalism
(C) (ANS) communism
(D) feudalism

22. What determines how the factors of production are to be allocated among different production activities in a planned economy?
    (A) equity principle
    (B) individual ability to pay
    (C) private needs
    (D) (ANS) public needs determined by the government
23. One of the fundamental differences between capitalist and a socialist state is that while:

(A) there is equality in distribution of wealth in the socialist state, it is not so in a capitalist economy
(B) (ANS) in the former, price mechanism guides the allocation of resources, it is the government agency that performs this function in the latter
(C) the former is governed by the principle of the survival of the fittest, the latter is concerned with the welfare of all
(D) taxes are levied in a socialist economy; there is no taxation in capitalist economy

24. The Nigerian economy can best be described as a:

(A) (ANS) mixed economy
(B) socialist economy
(C) mono-product economy
(D) capitalist economy

25. In market economy, the economy questions of what, how and for whom to produce are solved by:

(A) government agencies
(B) (ANS) price mechanism
(C) chief economic advisers
(D) planning committee

26. A socialist economy is characterized by the:

(A) (ANS) public ownership and control of factor of production
(B) use of capital-intensive method of production
(C) government ownership and private control of means of production
(D) equal access to public utilities

27. Irrespective of economic system adopted, which of the following is not an economic problem?

(A) techniques of production to be adopted

(B) (ANS) equal distribution of economi
(C) for whom to produce goods and services
(D) how to ensure economic efficiency

28. The following are the arguments for capitalism EXCEPT:

(A) there is freedom of consumption and production
(B) it disallows monopoly of economic power
(C) (ANS) there is exploitation of consumers since the producers are out to maximize profit
(D) its profit motive leads to increased efficiency in production

29. In event of shortage in supply of a commodity in the market under a planned economy, the allocation of the available commodity will be carried out by:
    (A) the producer
    (B) (ANS) the government
    (C) price mechanism
    (D) group of consumers
30. The economic system in which resources are privately owned is known as:

(A) communism
(B) socialism
(C) (ANS) capitalism (ANS)
(D) democracy

31. In a market economy, the main function of price to:

(A) (ANS) allocate resources to both consumer and producers in an efficient manner
(B) ensure equitable distribution of resources
(C) ration the available goods among consumers
(D) determine the value of each assets

32. The term Laissez-faire is associated with:

(A) a welfare state
(B) a civil society
(C) a controlled economy
(D) (ANS) a free enterprise

33. With regard to the benefit of socialism, which of the alternatives is not correct?

(A) consumers are charged fair prices for goods they purchase
(B) (ANS) there is disincentive to hard work because private property is not allowed
(C) it ensures production of essential goods
(D) it is more efficient since resources are not wasted on producing surplus

34. Which of the following countries does not practice capitalism?

(A) (ANS) Tanzania
(B) Nigeria

(C) Britain
(D) United States of America

35. The graph of the function C = a + bY is:

(A) Exponential
(B) Quadratic
(C) (ANS) Linear
(D) Simultaneous

36. If y represents tons of cocoa that a farmer produce, find the range of cocoa in tons that satisfies the following inequality 250 < 2y – 400: (A) y > 75
    (B) y > 150
    (C) y < 75 (D) (ANS) y > 325
37. Use the information below to answer question below

The raw data scores of 10 students of St. Okoro College who took part in Nov/Dec. 2005 G.C.E in Economics are given below. The pass mark is 40%.

34 45 25 49 15
59 64 34 40 71

38. What is the mean score of the students’ marks?

(A) (ANS) 43.6
(B) 46.3
(C) 41.1
(D) 38.2

39. The quantities of apple supplied by a farmer in a week are shown below: 9, 14, 4, 15, 18
    The mean deviation of this data is:

(A) 12
(B) 2.2
(C) 60
(D) (ANS) 4.4

40. Which of the following is not a good method of data presentation and interpretation?

(A) Charts
(B) graphs
(C) (ANS) maps
(D) tables

41. MUA = PA where A = good, A:P = price of good A; MU = Marginal Utility The above equation represents:
    (A) Total utility equation
    (B) Marginal utility equation
    (C) equilibrium equation
    (D) (ANS) Utility maximization equation
42. For a free commodity, a rational consumer will continuously increase his consumption until:

(A) (ANS) his marginal utility becomes zero
(B) he attains the highest marginal utility level
(C) his marginal utility equal the price he would have paid
(D) he decides to stop

43. A rational consumer will adjust his spending pattern so that:

(A) (ANS) the marginal utility he gets from the last naira spent on each item is the same
(B) the total amount of money he spends on each item is the same
(C) the total utility he gets from each item is the same
(D) the marginal utility he gets from the last unit of each item is the same

44. The sum of all the marginal utilities a consumer derives from the consumption of extra units of a commodity is known as:
    (A) average utility
    (B) time utility
    (C) (ANS) total utility
    (D) marginal utility
45. The ordinalist approach to the theory of consumer behaviour is based on the following assumption except that:
    (A) the consumer acts rationally
    (B) the consumer’s taste, habit and income are consistent
    (C) (ANS) utilities are measurable in monetary value
    (D) there are only two commodities existing in the market and their prices are known
46. The demand for a commodity not directly for immediate consumption but for the production of another commodity is:
    (A) joint demand
    (B) composite demand
    (C) (ANS) derived demand
    (D) competitive demand
47. Demand in Economics is synonymous with:

(A) needs of a rational consumer
(B) all goods demanded in the market at a time

(C) wants of the consumer at a time
(D) (ANS) wants back with ability to pay

48. The responsiveness of demand to a change in income is termed:

(A) (ANS) income elasticity of demand
(B) cross elasticity of demand
(C) price elasticity of demand
(D) money income index

49. In Ekiti State, the demand curve for rice in every household is downward sloping because:

(A) (ANS) the higher the price of rice, the lower the quantity of rice to be demanded
(B) rice is produced in the state
(C) every household has access to the market
(D) there is excess supply

50. An increase in the demand for pen raises the demand for ink. This type of demand is called:

(A) competitive demand
(B) composite demand
(C) (ANS) complementary demand
(D) derived demand.

PRACTICE 2

Question 1
A demand which gives rise to the reverse of the law of demand is__________
Options
A) Derived demand
B) Joint demand
C) Abnormal demand
D) Composite demand
The correct answer is C.
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Question 2
If two commodities are unrelated, a change in the price of one will____________
Options
A) have effect on the quantity demanded of the other
B) have no effect on the quantity demanded of the other
C) increase the quantity demanded on the other
D) decrease the quantity demanded on the other
The correct answer is B.
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Question 3
Price
(₦) Quantity Demanded
8 10
6 12
If we move from 8 to 6, the elasticity of demand is_______
Options
A) -1.25
B) 0.62
C) 1.25
D) 1
The correct answer is C.
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Question 4
In a perfect competition, the market price is determined by_______
Options
A) the government
B) the producer
C) the consumer
D) the market supply and demand junctions
The correct answer is D.
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Question 5
In the short-run, the monopoly makes_______
Options
A) Normal profit
B) Abnormal Profit
C) Loss
D) Sales
The correct answer is B.
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Question 6
The demand curve facing the monopolist in the foreign market is__________
Options
A) Elastic
B) Inelastic
C) Perfectly elastic
D) Unitary
The correct answer is C.
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Question 7
Supply is________
Options
A) A stock
B) A Flow
C) Constant
D) A table
The correct answer is B.
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Question 8
A rise in the supply of a commodity cause__________
Options
A) an increase in the equilibrium price and decrease in the equilibrium quantity bought and sold
B) an increase in both equilibrium
C) a decrease in the equilibrium price and an increase in the equilibrium quantity bought and sold
D) a decrease in both equilibrium
The correct answer is C.
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Question 9
The method obtained by adding all the reward of factors of production in national income is________
Options
A) income approach
B) expenditure approach
C) value added method
D) output approach
The correct answer is A.
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Question 10
An economy in which the whole income is not consumed is referred to as______
Options
A) Frugal economy
B) Spend thrift economy
C) Capitalist economy
D) Mixed economy
The correct answer is A.
Question 11
The arithmetic mean of 5, 8, 10, 15, 24 and 28 is_______
Options
A) 145
B) 15
C) 90
D) 6
The correct answer is B.
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Question 12
A method of analysis that draws conclusions from data rather than general Principles already known is________
Options
A) Deductive reasoning
B) Inductive reasoning
C) Normative reasoning
D) Positive reasoning
The correct answer is B.
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Question 13
The money market equilibrium is defined as_________
Options
A) when the demand and supply of money are equal
B) when demand is greater than supply of money
C) when demand is less than supply of money
D) when supply is greater than demand for money
The correct answer is A.
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Question 14
An economic condition in which much reduced economic activity co-exists with inflation is referred to as__________
Options
A) stagflation
B) inflationary spiral
C) slump inflation
D) inflationary gap
The correct answer is C.
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Question 15
An Instrument used by the central bank to fix commercial and merchant banks total credit to domestic economy is________
Options
A) monetary policy
B) fiscal policy
C) credit ceiling
D) open market operation
The correct answer is C.
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Question 16
Restrictive monetary policy is designed to curtail aggregate demand and to overcome________
Options
A) Deflation
B) Reinflation
C) Disinflation
D) Inflationary gap
The correct answer is D.
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Question 17
The average curve and the marginal curve are U-shaped in the short-run and flatter in the long-run due to________
Options
A) Economies of scale
B) Money cost
C) Opportunity cost
D) Cost functions
The correct answer is A.
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Question 18
The most important cost curve for the firm is_________
Options
A) MC
B) AC
C) TC
D) FC
The correct answer is B.
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Question 19
In the case of highly or close complementary goods, the indifference curve is_______
Options
A) A straight line
B) A right-angled
C) L – shaped
D) Curvature
The correct answer is D.
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Question 20
One of these is not an assumption of the cardinalist theory of utility?
Options
A) The consumer is rational
B) Diminishing marginal utility
C) The concept of money utility
D) Consistency and transivity of choice
The correct answer is D.
Question 21
The shape of the production possibility frontier is determined by the_________
Options
A) law of returns to scale
B) law of diminishing returns
C) factors of productions
D) technology
The correct answer is B.
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Question 22
As indifference curve shows equal level of satisfaction at all points, An isoquant shows equal level of_________
Options
A) Input
B) Commodities
C) Output
D) Factors
The correct answer is C.
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Question 23
Which of the following is not a cause of unemployment_______
Options
A) poor education
B) lack of skills
C) good government planning
D) corruption
The correct answer is C.
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Question 24
The demand for labour is a________
Options
A) Derived demand
B) Joint demand
C) Complementary demand
D) Composite demand
The correct answer is A.
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Question 25
The use of government income and expenditure instrument to regulate the economy is termed______
Options
A) monetary policy
B) physical policy
C) fiscal policy
D) public finance
The correct answer is C.
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Question 26
A form of tax that is midly progressive and regressive is_______
Options
A) Proportional tax
B) Progressive tax
C) Regressive tax
D) Digressive tax
The correct answer is D.
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Question 27
Industrialization is the process of___________
Options
A) concentrating a firm in a place
B) transforming as economy based on extractive to manufacturing
C) transferring a government industry to individual
D) transforming finished goods into semi-finished goods
The correct answer is B.
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Question 28
One of these is not a way by which government encourage industrialization?
Options
A) Protection of Infant industries
B) Establishment of Nigeria Enterprises Promotion Decree
C) Low Productivity and inefficiency
D) Establishment of higher institutions
The correct answer is C.
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Question 29
The sector which contribute highly to the economy is___________
Options
A) Primary sector
B) Secondary sector
C) Tertiary sector
D) Education sector
The correct answer is A.
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Question 30
A permit that allows an importer to bring a certain quantity of foreign goods into a country is_________
Options
A) Import monopoly
B) Import licence
C) Import quota
D) Embargo
The correct answer is B.
Question 31
The lands that belong to the community is referred to as__________
Options
A) sacred land
B) individual land
C) communal land
D) rent land
The correct answer is C.
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Question 32
Among the disadvantages of the one-man business is the fact that______
Options
A) its capital may not be increased without government permission
B) the proprietor is personally liable for the firm’s debts
C) the proprietor is not able to obtain credit
D) the proprietor may not sue for bad debts
The correct answer is B.
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Question 33
The most reliable and acceptable index of economic growth is the__________
Options
A) Wholesale Price Index
B) Consumer Price Index
C) National Income
D) Retailer’s Price Index
The correct answer is C.
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Question 34
The release of a liquid petroleum hydrocarbon into the environment is_______
Options
A) Oil glut
B) Oil spill
C) Oil shock
D) Oil wastage
The correct answer is B.
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Question 35
ECOWAS was formed for the purpose of________
Options
A) promoting co-operation and integration
B) to facilitate the expansion of international trade
C) to provide insurance
D) to insure new investment
The correct answer is A.
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Question 36
Economics is a social science concerned with the proper use and______
Options
A) production of goods and services
B) distribution of wealth
C) allocation of resources for growth
D) creation of utility
The correct answer is C.
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Question 37
The determination of price by bargaining between buyers and sellers is________
Options
A) Sales by Auction
B) Tender
C) Higgling and Haggling
D) Price Control
The correct answer is C.
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Question 38
An economy system that uses what is regarded as the “Market mechanism” is called_______
Options
A) Mixed economy
B) Socialism
C) Command economy
D) Capitalism
The correct answer is D.
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Question 39
The last link in the channel of distribution is____________
Options
A) Producer
B) Retailer
C) Consumer
D) Wholesaler
The correct answer is C.
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Question 40
John an apprentice, engineer and amateur trumpet player, was earning ₦30 per week before accepting Full-time employment in a top orchestra, for which he now receives ₦150 per week. ₦120 of his current weekly earnings can be described as________
Options
A) marginal physical productivity
B) marginal income productivity
C) consumer’s surplus
D) economic rent
The correct answer is D.
Question 41
Effective demand for a commodity is desire for that commodity backed by_______
Options
A) a wish for the lowest possible price
B) ability and willingness to pay
C) cash in one’s pocket
D) a promise to make payment
The correct answer is B.
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Question 42
A commodity is defined as normal when its demand changes in the same direction as______
Options
A) income
B) price
C) taste
D) preferences
The correct answer is A.
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Question 43
Which of the following matters may account for changes in demand?

I – changes in consumer preferences
II – changes in real income
III – changes in distribution of incomes
IV – changes in levels of taxation

Options
A) I, II
B) II, III
C) I, III, IV
D) I, II, III, IV
The correct answer is D.
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Question 44
An example of a market which approaches fairly near to perfection is____________
Options
A) the retail market
B) the house market
C) the labour market
D) the foreign exchange market
The correct answer is D.
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Question 45
Whether a monopolist is able to increase his revenue by restricting his output depends on the shape of the_________
Options
A) marginal product
B) marginal cost curve
C) demand curve
D) average cost curve
The correct answer is C.
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Question 46
An example of a vertical combination is the merger of_________
Options
A) a spinning firm and a wearing firm
B) two meat retailing firms
C) two very large wholesale textile distributors
D) three secretarial employment agencies in one town
The correct answer is A.
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Question 47
When of the following matters may account for changes in supply?

I – technological advances in an industry
II – changes in labour costs
III – changes in source of supply
IV – changes in levels of taxation
Options
A) I, II
B) I, III
C) II, III, IV
D) I, II, III, IV
The correct answer is D.
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Question 48
A supply curve slopes upwards from the left to the right indicating__________
Options
A) a negative slope
B) a positive slope
C) a backward sloping supply curve
D) short-run supply curve
The correct answer is B.
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Question 49
Use the following information given to answer this question
Total of all expenditure incurred during the year ₤ 80,000m
Indirect taxes on goods and services ₤ 8,000m
Capital consumption ₤ 6,000m

National income is__________
Options
A) ₤ 74,000m
B) ₤ 66,000m
C) ₤ 60,000m
D) ₤ 14,000m
The correct answer is B.
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Question 50
Use the following information given to answer this question
Total of all expenditure incurred during the year ₤ 80,000m
Indirect taxes on goods and services ₤ 8,000m
Capital consumption ₤ 6,000m

Gross national expenditure at factor cost is_________
Options
A) ₤ 88,000μ
B) ₤ 82,000μ
C) ₤ 74,000μ
D) ₤ 72,000μ
The correct answer is D.