SS3 Mock Examinations
  • 1. What is the fundamental economic problem?
A) Scarcity
B) Poverty
C) Inflation
D) Unemployment
  • 2. Which economic system is characterized by private ownership?
A) Capitalist
B) Mixed
C) Command
D) Socialist
  • 3. What type of market structure has many buyers and sellers?
A) Monopsony
B) Monopoly
C) Oligopoly
D) Perfect Competition
  • 4. What is the purpose of fiscal policy?
A) To control inflation
B) To reduce unemployment
C) All of the above
D) To promote economic growth
  • 5. A Minimum price legislation is also called
A) Price Ceiling
B) Price floor
C) Price control
D) Price mechanism
  • 6. Which of the following factors is not a cause of change in demand? Changes in
A) taste and fashion
B) price of the commodity
C) the size of the population
D) income distribution
  • 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) 2.00
B) 2.50
C) 0.50
D) 0.65
  • 8. The use of the bank rate, cash ratio and open market operations constitute
A) import policy
B) fiscal policy
C) monetary policy
D) export policy
  • 9. Scale of Preference shows
A) Incomes of consumer in order of size
B) opportunity cost of goods consumed
C) consumer’s wants in order of priority
D) utilities enjoyed by consumers
  • 10. Gross National Product (GNP) less the provision for the wear and tear of assets is the
A) net factor income
B) net present value
C) net national product
D) net indirect taxes
  • 11. In perfectly elastic supply, the supply curve
A) Is Horizontal
B) Slopes downward
C) Is Vertical
D) Slopes upward
  • 12. An example of transfer payments in national income accounting is
A) the amount paid to a worker on transfer
B) transfer of funds from one bank to another
C) money transferred to another country
D) unemployment allowance paid to the citizens
  • 13. Which of the following industries will add more value to primary products?
A) Service industry
B) Mining industry
C) Construction industry
D) Processing industry
  • 14. A consumer of a single commodity is in equilibrium when
A) he can equate his demand with price
B) he can equate his marginal and total utilities
C) he equates marginal utility and price
D) his marginal utility is equal to zero
  • 15. Foreign investment and long term securities in the balance of payment accounts are recorded as
A) invisible balance account transaction
B) balance of trade account transaction
C) current account transaction
D) capital account transaction
  • 16. A benefit that is present in all forms of economic integration is that
A) the size of the market is widened
B) common agricultural policy is in place
C) common currency is in use
D) factors of production are free to move and be moved
  • 17. Points within a Production Possibilities Curve (PPC) indicate
A) attainable and efficient production levels.
B) unattainable production levels.
C) attainable but inefficient production levels.
D) optimum production levels.
  • 18. Which of the following is not a feature of labour?
A) it’s efficiency depends on its size
B) it is an active factor
C) it’s reward is wages and salaries
D) it is highly mobile
  • 19. The pursuit of private profits is a feature of
A) socialist economies
B) statutory corporations
C) capitalist economies
D) command economies
  • 20. A major feature of the socialist economic system is
A) determination of price by market forces.
B) freedom of choice for consumers.
C) setting of production targets by public authorities.
D) private ownership of productive inputs.
  • 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) 150°
B) 16.6°
C) 60°
D) 300°
  • 22. Price elasticity of demand is the responsiveness of quantity demanded to a change in
A) price of the product
B) price of another product
C) income of the buyer
D) demand for the product
  • 23. When total revenue increases as price falls, the coefficient of price elasticity of demand is
A) one
B) less than one
C) greater than one
D) zero
  • 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) 33.3%
C) 80%
D) 65%
  • 25. The law of demand will not hold when
A) rare commodities are involved
B) size of the population changes
C) normal goods are involved
D) income and consumers increase
  • 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) a favorable weather condition
B) a change in taste in favour of milk
C) a decrease in the price of milk
D) an increase in income of consumers
  • 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) composite demand
B) competitive demand
C) complementary demand
D) derived demand
  • 28. Other things being equal, an increase in the demand for land in the short-run will cause an increase in the
A) quantity supplied only
B) price only
C) price and supply
D) supply only
  • 29. If the coefficient of price elasticity of supply of a commodity is 0.8, then supply is
A) perfectly inelastic
B) fairly inelastic
C) perfectly elastic
D) fairly elastic
  • 30. The negative slope of the demand curve is best explained by
A) diminishing returns to scale
B) increasing return to scale
C) consumer’s choice
D) diminishing marginal utility
  • 31. Minimum price legislation is used to protect the interests of
A) consumers
B) small scale producers
C) government
D) foreign companies
  • 32. Which of the following best explains diseconomies of scale? Increase in output causes the
A) marginal cost to fall
B) firm to be de-stabilized
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) changing its organizational structure
C) increasing the quantity of raw materials
D) increasing the size of its machines
  • 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) $8
C) $4
D) $15
  • 35. Firms in perfect competition break even in the long-run because
A) new firms can not enter the market due to copyright laws.
B) more firms can enter the industry due to attractive prof its.
C) marginal revenue is greater than marginal cost at all levels.
D) profits are not enough to repay traders' loans.
  • 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) wholesalers
B) supermarkets
C) retailers
D) departmental stores
  • 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) immigration rate
B) death rate
C) net migration
D) fertility rate
  • 40. The low productivity per worker in agriculture experienced in West African countries is due to
A) the use of simple traditional implements
B) laziness on the part of farmers
C) the law of increasing returns to scale
D) the presence of many extension workers
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