PES SS2 Economics 3rd Mock
  • 1. Economics Is regarded as a science because
A) its subject matter studies human behaviour
B) It adopts scientific method in making its analysis
C) its issues are relevant for national development
  • 2. The opportunity cost of a worker going to the university is
A) transportation and entertainment
B) the wages given up to attend the university
C) tuition fee and books
  • 3. Which of the following item is not an option of circulating capital
A) raw material
B) machinery
C) fuel
  • 4. In a market economy,the problem of what goods to produced is solved primarily by
A) producers of consumer goods
B) the pattern of consumers spending
C) directives of the government
  • 5. The difference between demand and want is in the
A) ability to pay for the commodity
B) desire for the commodity
C) ability to pay for the commodity
  • 6. Which of the following is an example of derived demand
A) labour
B) mobile phone
C) textbook
  • 7. A right ward shift in the supply of a commodity is brought about by an increase in
A) the level of technology
B) taxation
C) cost of production
  • 8. Effective supply is the total amount of a commodity
A) offered for sale at a market price
B) produced for the market
C) from a single producer
  • 9. Price elasticity of supply can be influenced by the following factors except
A) time period
B) nature of the product
C) cost of production
  • 10. Increase in the supply of a product can be caused by
A) increase in the income of consumers
B) increase in the price of a product
C) a fall in the cost of production
  • 11. A rational consumer will purchase a product whose price is
A) equal to his marginal utility
B) less than his total utility
C) equal to his total utility
  • 12. Parallel market are usually the results of
A) inadequate information
B) excess supply
C) price legislation
  • 13. Another term for equilibrium price is
A) market clearing price
B) price fall
C) demand price
  • 14. When a firm is enjoying internal economies of scale, its
A) total cost of production is increasing
B) average cost of production decreases as output increases
C) average revenue and marginal revenue decreases
  • 15. The specialisation of labour enhances production because people ?
A) can concentrate on all goods
B) can save time and produce more
C) become experts in all areas of production
  • 16. Which of the following can be added to a firm's profit to obtain total revenue
A) total fixed cost
B) total revenue
C) marginal cost
  • 17. The amount of money that a firm receives from the sales of it's output is called
A) total revenue
B) total profit
C) total cost
  • 18. Which of the following is true of monopolist
A) he determines both price and output
B) he determines either price or output
C) his average revenue cost is horizontal
  • 19. Equity shares form the bulk of the capital of a
A) public company
B) statutory company
C) private firm
  • 20. If a state owned firm is sold through the stock market,the organization becomes
A) partnership
B) public corporation
C) public limited company
  • 21. The total number of people of working age who are willing and prepared to work at a given age wage rate is the
A) demand of labour
B) supply of labour
C) labour force
  • 22. Which of the following is an implication of a large population
A) decrease in standard of living
B) decrease in cost of living
C) increase in food supply
  • 23. In an industrial area, the location of an industry is largely influenced by ?
A) extent of the division of labour
B) external economies
C) internal economies
  • 24. Which of the following is a threat to the existence of middlemen
A) sales agents
B) producers cooperative society
C) consumers cooperative society
  • 25. Which of the following is a transfer of income
A) rent
B) interest
C) pensions
  • 26. The value added method used in measuring national income is to
A) measure output as a factor cost
B) add net factor income from abroad
C) avoid multiple counting of output
  • 27. Which of the following is most likely to be of a benefit to a debtor
A) deflation
B) devaluation
C) inflation
  • 28. A measure of the value of money in an economy is
A) size of workers
B) total level of savings
C) general price
  • 29. One of the major function of money is
A) stable in value
B) store of value
C) medium of exchange
  • 30. The function that distinguishes commercial banks from the central bank is that the former
A) services the public debts
B) accepts deposit from the public
C) lender of last resort
  • 31. Direct taxes include
A) specific tax
B) excise duty
C) capital gain tax
  • 32. Which of the following is not a feature of underdevelopment
A) low life expectancy
B) high productivity
C) income inequality
  • 33. One way of speeding up the economic development of a country is by encouraging
A) savings and investment
B) early marriage
C) importation of more consumers goods
  • 34. Infant industries can be described as
A) industries enjoying tax holidays
B) newly established industries
C) industries producing baby products
  • 35. Modern international trade is based on the principle of
A) comparative advantage
B) terms of trade
C) absolute cost advantage
  • 36. Which of the following resources is renewable
A) coal
B) iron ore
C) rice
  • 37. The negative effect of mining in West Africa does not include
A) re afforestation in rural communities
B) pollution of water bodies
C) land degradation
  • 38. Economic problems arises in all society because
A) there is no proper planning
B) resources are not in adequate supply
C) resources are mismanaged by leaders
  • 39. Which of the following is not emphasized in a production possibility curve
A) scarcity of resources
B) unemployment of labour
C) economic development
  • 40. The organization of productive factors is the responsibility of the
A) entrepreneur
B) management
C) labour union
  • 41. A downward sloping demand curve means that
A) prices must be lowered to sell more
B) demand falls as output falls
C) demand falls as output rises
  • 42. Goods whose demand vary directly with money income are called
A) normal goods
B) complementary goods
C) inferior goods
  • 43. An exceptional demand curve can result from
A) increases in price of the consumer
B) change in taste of the consumer
C) expectation of future price increase
  • 44. Palm oil and palm kernel are in
A) joint supply
B) competitive demand
C) complementary demand
  • 45. Which of the following is true about supply of land?
A) It rises with demand
B) It is fixed
C) It varies with time
  • 46. A supply curve parallel to the X -axis indicates
A) infinitely elastic supply
B) perfectly inelastic
C) fairly elastic supply
  • 47. A market is in equilibrium when
A) the demand is the same as the supply
B) there is no free entry and exit
C) there is no government intervention
  • 48. In the long-run, a firm must shutdown if the average revenue is
A) equal to the average cost
B) greater than average variable cost
C) less than average variable cost
  • 49. If workers at the school canteen sell during the holidays, this is an example of
A) seasonal unemployment
B) structural unemployment
C) residual unemployment
  • 50. The largest component of national income in developing countries consist of
A) rent
B) wages and salaries
C) profits
  • 51. Holding money to take care of contingencies is
A) a precautionary motive
B) a speculative motive
C) a transaction motive
  • 52. The stock exchange is an example of the
A) money market
B) capital market
C) commodity market
  • 53. The fundamental economic problem in every society is
A) corruption and mismanagement
B) the large number of the unemployed
C) inadequate supply of money
  • 54. The poorer the country, the larger the percentage of labour force engaged in _______
A) mining
B) trading
C) agriculture
  • 55. Which of the following is not a method of reducing balance of payments deficits?
A) adding to export group
B) reducing tarrifs
C) increasing local production
  • 56. The stock exchange is an example of the...
A) money market
B) capital market
C) labour market
  • 57. Nations engage in international trade because of the difference in
A) comparative cost
B) fixed cost
C) variable cost
  • 58. What happens when the central bank increases bank rate in an economy?
A) borrowing is discouraged
B) money supply increases
C) customers increase their borrowing
  • 59. The major employer of labour in developing countries is
A) secondary sector
B) primary sector
C) tertiary sector
  • 60. Income is redistributed when the rich are progressively taxed and _________
A) subsidy is provided on petroleum products
B) more public goods are provided
C) more private schools are established
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