PES SS2 Economics 3rd Mock
  • 1. Economics Is regarded as a science because
A) its issues are relevant for national development
B) its subject matter studies human behaviour
C) It adopts scientific method in making its analysis
  • 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) fuel
C) machinery
  • 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) 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) labour
B) textbook
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) produced for the market
B) offered for sale at a market price
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) equal to his total utility
C) less than his total utility
  • 12. Parallel market are usually the results of
A) price legislation
B) excess supply
C) inadequate information
  • 13. Another term for equilibrium price is
A) price fall
B) market clearing price
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) 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 fixed 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 revenue
C) total profit
  • 18. Which of the following is true of monopolist
A) his average revenue cost is horizontal
B) he determines both price and output
C) he determines either price or output
  • 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) public limited company
B) partnership
C) public corporation
  • 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) labour force
C) supply of labour
  • 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) internal economies
B) external 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) pensions
B) rent
C) interest
  • 26. The value added method used in measuring national income is to
A) add net factor income from abroad
B) measure output as a factor cost
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) inflation
C) devaluation
  • 28. A measure of the value of money in an economy is
A) general price
B) total level of savings
C) size of workers
  • 29. One of the major function of money is
A) store of value
B) medium of exchange
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) accepts deposit from the public
C) services the public debts
  • 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) high productivity
B) income inequality
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) newly established industries
B) industries enjoying tax holidays
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) coal
B) rice
C) iron ore
  • 37. The negative effect of mining in West Africa does not include
A) re afforestation in rural communities
B) land degradation
C) pollution of water bodies
  • 38. Economic problems arises in all society because
A) resources are mismanaged by leaders
B) resources are not in adequate supply
C) there is no proper planning
  • 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) labour union
B) entrepreneur
C) management
  • 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) inferior goods
B) normal goods
C) complementary 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) competitive demand
B) joint supply
C) complementary 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) fairly elastic supply
C) infinitely elastic supply
  • 47. A market is in equilibrium when
A) there is no government intervention
B) there is no free entry and exit
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) greater than average variable cost
C) equal to the average cost
  • 49. If workers at the school canteen sell during the holidays, this is an example of
A) structural unemployment
B) seasonal unemployment
C) residual 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) capital market
C) money market
  • 53. The fundamental economic problem in every society is
A) inadequate supply of money
B) corruption and mismanagement
C) the large number of the unemployed
  • 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) 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) fixed cost
B) comparative cost
C) variable 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) secondary sector
B) tertiary sector
C) primary sector
  • 60. Income is redistributed when the rich are progressively taxed and _________
A) subsidy is provided on petroleum products
B) more private schools are established
C) more public goods are provided
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