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) 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) fuel
B) machinery
C) raw material
  • 4. In a market economy,the problem of what goods to produced is solved primarily by
A) directives of the government
B) producers of consumer goods
C) the pattern of consumers spending
  • 5. The difference between demand and want is in the
A) desire for the commodity
B) ability to pay for the commodity
C) ability to pay for the commodity
  • 6. Which of the following is an example of derived demand
A) mobile phone
B) labour
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) from a single producer
C) produced for the market
  • 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) price legislation
B) inadequate information
C) excess supply
  • 13. Another term for equilibrium price is
A) demand price
B) price fall
C) market clearing price
  • 14. When a firm is enjoying internal economies of scale, its
A) average revenue and marginal revenue decreases
B) average cost of production decreases as output increases
C) total cost of production is increasing
  • 15. The specialisation of labour enhances production because people ?
A) can save time and produce more
B) become experts in all areas of production
C) can concentrate on all goods
  • 16. Which of the following can be added to a firm's profit to obtain total revenue
A) marginal cost
B) total revenue
C) total fixed cost
  • 17. The amount of money that a firm receives from the sales of it's output is called
A) total profit
B) total revenue
C) total cost
  • 18. Which of the following is true of monopolist
A) he determines either price or output
B) his average revenue cost is horizontal
C) he determines both price and output
  • 19. Equity shares form the bulk of the capital of a
A) private firm
B) statutory company
C) public company
  • 20. If a state owned firm is sold through the stock market,the organization becomes
A) public limited company
B) public corporation
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) 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) 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) consumers cooperative society
B) sales agents
C) producers cooperative society
  • 25. Which of the following is a transfer of income
A) pensions
B) interest
C) rent
  • 26. The value added method used in measuring national income is to
A) add net factor income from abroad
B) avoid multiple counting of output
C) measure output as a factor cost
  • 27. Which of the following is most likely to be of a benefit to a debtor
A) devaluation
B) deflation
C) inflation
  • 28. A measure of the value of money in an economy is
A) total level of savings
B) size of workers
C) general price
  • 29. One of the major function of money is
A) medium of exchange
B) stable in value
C) store of value
  • 30. The function that distinguishes commercial banks from the central bank is that the former
A) accepts deposit from the public
B) lender of last resort
C) services the public debts
  • 31. Direct taxes include
A) capital gain tax
B) excise duty
C) specific tax
  • 32. Which of the following is not a feature of underdevelopment
A) low life expectancy
B) income inequality
C) high productivity
  • 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 producing baby products
B) industries enjoying tax holidays
C) newly established industries
  • 35. Modern international trade is based on the principle of
A) absolute cost advantage
B) terms of trade
C) comparative advantage
  • 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) land degradation
B) re afforestation in rural communities
C) pollution of water bodies
  • 38. Economic problems arises in all society because
A) resources are mismanaged by leaders
B) there is no proper planning
C) resources are not in adequate supply
  • 39. Which of the following is not emphasized in a production possibility curve
A) economic development
B) scarcity of resources
C) unemployment of labour
  • 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) demand falls as output rises
B) demand falls as output falls
C) prices must be lowered to sell more
  • 42. Goods whose demand vary directly with money income are called
A) complementary goods
B) normal goods
C) inferior goods
  • 43. An exceptional demand curve can result from
A) change in taste of the consumer
B) expectation of future price increase
C) increases in price of the consumer
  • 44. Palm oil and palm kernel are in
A) joint supply
B) complementary demand
C) competitive demand
  • 45. Which of the following is true about supply of land?
A) It rises with demand
B) It varies with time
C) It is fixed
  • 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 government intervention
B) the demand is the same as the supply
C) there is no free entry and exit
  • 48. In the long-run, a firm must shutdown if the average revenue is
A) greater than average variable cost
B) equal to the average cost
C) less than average variable cost
  • 49. If workers at the school canteen sell during the holidays, this is an example of
A) residual unemployment
B) structural unemployment
C) seasonal unemployment
  • 50. The largest component of national income in developing countries consist of
A) profits
B) wages and salaries
C) rent
  • 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) commodity market
B) money market
C) capital 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) trading
B) agriculture
C) mining
  • 55. Which of the following is not a method of reducing balance of payments deficits?
A) increasing local production
B) adding to export group
C) reducing tarrifs
  • 56. The stock exchange is an example of the...
A) money market
B) labour market
C) capital market
  • 57. Nations engage in international trade because of the difference in
A) comparative cost
B) variable cost
C) fixed 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) primary sector
B) secondary sector
C) tertiary 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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