SS3 Mock Examinations
  • 1. What is the fundamental economic problem?
A) Poverty
B) Unemployment
C) Inflation
D) Scarcity
  • 2. Which economic system is characterized by private ownership?
A) Capitalist
B) Socialist
C) Mixed
D) Command
  • 3. What type of market structure has many buyers and sellers?
A) Oligopoly
B) Perfect Competition
C) Monopoly
D) Monopsony
  • 4. What is the purpose of fiscal policy?
A) All of the above
B) To control inflation
C) To reduce unemployment
D) To promote economic growth
  • 5. A Minimum price legislation is also called
A) Price Ceiling
B) Price control
C) Price mechanism
D) Price floor
  • 6. Which of the following factors is not a cause of change in demand? Changes in
A) income distribution
B) taste and fashion
C) the size of the population
D) price of the commodity
  • 7. If the quantity demanded of a commodity increases from 20 units to 30 units when there is an increase in price from $4.00 to $5.00, the elasticity of demand is
A) 0.50
B) 0.65
C) 2.50
D) 2.00
  • 8. The use of the bank rate, cash ratio and open market operations constitute
A) fiscal policy
B) import policy
C) monetary policy
D) export policy
  • 9. Scale of Preference shows
A) utilities enjoyed by consumers
B) Incomes of consumer in order of size
C) consumer’s wants in order of priority
D) opportunity cost of goods consumed
  • 10. Gross National Product (GNP) less the provision for the wear and tear of assets is the
A) net indirect taxes
B) net factor income
C) net national product
D) net present value
  • 11. In perfectly elastic supply, the supply curve
A) Is Horizontal
B) Is Vertical
C) Slopes upward
D) Slopes downward
  • 12. An example of transfer payments in national income accounting is
A) the amount paid to a worker on transfer
B) unemployment allowance paid to the citizens
C) money transferred to another country
D) transfer of funds from one bank to another
  • 13. Which of the following industries will add more value to primary products?
A) Mining industry
B) Construction industry
C) Service industry
D) Processing industry
  • 14. A consumer of a single commodity is in equilibrium when
A) his marginal utility is equal to zero
B) he equates marginal utility and price
C) he can equate his demand with price
D) he can equate his marginal and total utilities
  • 15. Foreign investment and long term securities in the balance of payment accounts are recorded as
A) invisible balance account transaction
B) current account transaction
C) balance of trade account transaction
D) capital account transaction
  • 16. A benefit that is present in all forms of economic integration is that
A) common currency is in use
B) factors of production are free to move and be moved
C) the size of the market is widened
D) common agricultural policy is in place
  • 17. Points within a Production Possibilities Curve (PPC) indicate
A) optimum production levels.
B) attainable but inefficient production levels.
C) attainable and efficient production levels.
D) unattainable production levels.
  • 18. Which of the following is not a feature of labour?
A) it is an active factor
B) it’s efficiency depends on its size
C) it is highly mobile
D) it’s reward is wages and salaries
  • 19. The pursuit of private profits is a feature of
A) capitalist economies
B) statutory corporations
C) socialist economies
D) command economies
  • 20. A major feature of the socialist economic system is
A) private ownership of productive inputs.
B) freedom of choice for consumers.
C) setting of production targets by public authorities.
D) determination of price by market forces.
  • 21. If the budget on education is $50 m out of an annual national budget of $300 m. The sector of a pie chart representing education is
A) 60°
B) 16.6°
C) 150°
D) 300°
  • 22. Price elasticity of demand is the responsiveness of quantity demanded to a change in
A) price of another product
B) demand for the product
C) price of the product
D) income of the buyer
  • 23. When total revenue increases as price falls, the coefficient of price elasticity of demand is
A) one
B) less than one
C) zero
D) greater than one
  • 24. If the quantity demanded of rice de- creased from 150 bags to 100 bags, the percentage change in quantity demanded is
A) 30%
B) 65%
C) 80%
D) 33.3%
  • 25. The law of demand will not hold when
A) rare commodities are involved
B) income and consumers increase
C) size of the population changes
D) normal goods are involved
  • 26. The diagram above shows the demand for milk. Use it to answer questions this question.



    The movement from point x to z might have been caused by
A) an increase in income of consumers
B) a favorable weather condition
C) a change in taste in favour of milk
D) a decrease in the price of milk
  • 27. The diagram above shows the demand for milk. Use it to answer this question.

    If demand for postal services decline as a result of increased use of e-mails, then the two services are in
A) derived demand
B) competitive demand
C) complementary demand
D) composite demand
  • 28. Other things being equal, an increase in the demand for land in the short-run will cause an increase in the
A) price and supply
B) supply only
C) price only
D) quantity supplied only
  • 29. If the coefficient of price elasticity of supply of a commodity is 0.8, then supply is
A) fairly elastic
B) perfectly elastic
C) fairly inelastic
D) perfectly inelastic
  • 30. The negative slope of the demand curve is best explained by
A) increasing return to scale
B) diminishing returns to scale
C) diminishing marginal utility
D) consumer’s choice
  • 31. Minimum price legislation is used to protect the interests of
A) foreign companies
B) small scale producers
C) government
D) consumers
  • 32. Which of the following best explains diseconomies of scale? Increase in output causes the
A) firm to be de-stabilized
B) marginal cost to fall
C) marginal revenue to fall
D) average cost to rise
  • 33. In the short-run, a firm can increase output by
A) purchasing more equipments
B) increasing the size of its machines
C) increasing the quantity of raw materials
D) changing its organizational structure
  • 34. The fixed cost of producing 100 units of a good is $600. If the variable cost is $400. the average total cost of one unit of the good is
A) $10
B) $4
C) $8
D) $15
  • 35. Firms in perfect competition break even in the long-run because
A) profits are not enough to repay traders' loans.
B) more firms can enter the industry due to attractive prof its.
C) marginal revenue is greater than marginal cost at all levels.
D) new firms can not enter the market due to copyright laws.
  • 36. The government policy that encourages public corporations to operate profitably is
A) liberalization
B) commercialization
C) nationalization
D) indigenization
  • 37. Warehousing of goods in the process of distribution is the function of
A) retailers
B) departmental stores
C) supermarkets
D) wholesalers
  • 38. The supply of labour to an occupation will tend to rise when
A) holiday entitlement is cut
B) unemployment benefit rises
C) there are less monetary benefits
D) welfare packages improve
  • 39. In determining the growth of a country's population, infant mortality is a component of
A) fertility rate
B) death rate
C) net migration
D) immigration rate
  • 40. The low productivity per worker in agriculture experienced in West African countries is due to
A) the law of increasing returns to scale
B) laziness on the part of farmers
C) the presence of many extension workers
D) the use of simple traditional implements
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