PES SS2 Economics 3rd Mock
  • 1. Economics Is regarded as a science because
A) It adopts scientific method in making its analysis
B) its subject matter studies human behaviour
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) tuition fee and books
C) the wages given up to attend the university
  • 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) producers of consumer goods
B) directives of the government
C) the pattern of consumers spending
  • 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) taxation
B) cost of production
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) nature of the product
B) cost of production
C) time period
  • 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) price legislation
B) excess supply
C) inadequate information
  • 13. Another term for equilibrium price is
A) market clearing price
B) demand price
C) price fall
  • 14. When a firm is enjoying internal economies of scale, its
A) average cost of production decreases as output increases
B) average revenue and marginal revenue decreases
C) total cost of production is increasing
  • 15. The specialisation of labour enhances production because people ?
A) become experts in all areas of production
B) can save time and produce more
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 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) public company
B) private firm
C) statutory company
  • 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) demand of labour
C) labour force
  • 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) 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) 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) 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) 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) lender of last resort
B) services the public debts
C) accepts deposit from the public
  • 31. Direct taxes include
A) excise duty
B) specific tax
C) capital gain tax
  • 32. Which of the following is not a feature of underdevelopment
A) income inequality
B) low life expectancy
C) high productivity
  • 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) terms of trade
B) absolute cost advantage
C) comparative advantage
  • 36. Which of the following resources is renewable
A) iron ore
B) coal
C) rice
  • 37. The negative effect of mining in West Africa does not include
A) pollution of water bodies
B) land degradation
C) re afforestation in rural communities
  • 38. Economic problems arises in all society because
A) there is no proper planning
B) resources are mismanaged by leaders
C) resources are not in adequate supply
  • 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) 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) complementary goods
B) inferior goods
C) normal goods
  • 43. An exceptional demand curve can result from
A) expectation of future price increase
B) increases in price of the consumer
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 rises with demand
B) It is fixed
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) the demand is the same as the supply
C) there is no government intervention
  • 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) wages and salaries
B) profits
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) capital market
B) commodity market
C) money market
  • 53. The fundamental economic problem in every society is
A) the large number of the unemployed
B) inadequate supply of money
C) corruption and mismanagement
  • 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) adding to export group
B) increasing local production
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) variable cost
B) fixed cost
C) comparative 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) secondary sector
B) tertiary sector
C) primary sector
  • 60. Income is redistributed when the rich are progressively taxed and _________
A) more public goods are provided
B) more private schools are established
C) subsidy is provided on petroleum products
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