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