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) fuel
B) raw material
C) machinery
  • 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) ability to pay for the commodity
B) ability to pay for the commodity
C) desire 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) cost of production
B) the level of technology
C) taxation
  • 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) cost of production
B) time period
C) nature of the product
  • 10. Increase in the supply of a product can be caused by
A) increase in the price of a product
B) increase in the income of consumers
C) a fall in the cost of production
  • 11. A rational consumer will purchase a product whose price is
A) less than his total utility
B) equal to his total utility
C) equal to his marginal utility
  • 12. Parallel market are usually the results of
A) excess supply
B) price legislation
C) inadequate information
  • 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) 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 revenue
B) marginal cost
C) total fixed cost
  • 17. The amount of money that a firm receives from the sales of it's output is called
A) total revenue
B) total cost
C) total profit
  • 18. Which of the following is true of monopolist
A) he determines either price or output
B) he determines both price and 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) public corporation
B) partnership
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) labour force
B) supply of labour
C) demand of labour
  • 22. Which of the following is an implication of a large population
A) increase in food supply
B) decrease in cost of living
C) decrease in standard of living
  • 23. In an industrial area, the location of an industry is largely influenced by ?
A) extent of the division of labour
B) internal economies
C) external economies
  • 24. Which of the following is a threat to the existence of middlemen
A) consumers cooperative society
B) producers cooperative society
C) sales agents
  • 25. Which of the following is a transfer of income
A) interest
B) pensions
C) rent
  • 26. The value added method used in measuring national income is to
A) avoid multiple counting of output
B) measure output as a factor cost
C) add net factor income from abroad
  • 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) general price
B) total level of savings
C) size of workers
  • 29. One of the major function of money is
A) stable in value
B) medium of exchange
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) 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) importation of more consumers goods
B) savings and investment
C) early marriage
  • 34. Infant industries can be described as
A) newly established industries
B) industries producing baby products
C) industries enjoying tax holidays
  • 35. Modern international trade is based on the principle of
A) terms of trade
B) absolute cost advantage
C) comparative 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) land degradation
B) re afforestation in rural communities
C) pollution of water bodies
  • 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) economic development
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) prices must be lowered to sell more
C) demand falls as output falls
  • 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) increases in price of the consumer
B) expectation of future price increase
C) change in taste of the consumer
  • 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 is fixed
B) It varies with time
C) It rises with demand
  • 46. A supply curve parallel to the X -axis indicates
A) fairly elastic supply
B) infinitely elastic supply
C) perfectly inelastic
  • 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) 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 precautionary motive
B) a transaction motive
C) a speculative motive
  • 52. The stock exchange is an example of the
A) capital market
B) money 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) 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) reducing tarrifs
C) adding to export group
  • 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) fixed cost
B) comparative cost
C) variable cost
  • 58. What happens when the central bank increases bank rate in an economy?
A) money supply increases
B) customers increase their borrowing
C) borrowing is discouraged
  • 59. The major employer of labour in developing countries is
A) tertiary sector
B) secondary 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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