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) tuition fee and books
C) transportation and entertainment
  • 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) 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) 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) the level of technology
B) cost of production
C) taxation
  • 8. Effective supply is the total amount of a commodity
A) offered for sale at a market price
B) produced for the market
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 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) market clearing price
C) price fall
  • 14. When a firm is enjoying internal economies of scale, its
A) total cost of production is increasing
B) average cost of production decreases as output increases
C) average revenue and marginal revenue decreases
  • 15. The specialisation of labour enhances production because people ?
A) can concentrate on all goods
B) become experts in all areas of production
C) can save time and produce more
  • 16. Which of the following can be added to a firm's profit to obtain total revenue
A) total revenue
B) total fixed cost
C) marginal cost
  • 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) he determines both price and output
B) his average revenue cost is horizontal
C) he determines either price or 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) labour force
B) supply of labour
C) demand of labour
  • 22. Which of the following is an implication of a large population
A) decrease in cost of living
B) decrease in standard 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) 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) 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) 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) excise duty
B) capital gain tax
C) specific tax
  • 32. Which of the following is not a feature of underdevelopment
A) high productivity
B) low life expectancy
C) income inequality
  • 33. One way of speeding up the economic development of a country is by encouraging
A) savings and investment
B) importation of more consumers goods
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) absolute cost advantage
B) terms of trade
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) resources are not in adequate supply
B) there is no proper planning
C) resources are mismanaged by leaders
  • 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) 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) complementary goods
B) normal goods
C) inferior 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) competitive demand
B) complementary demand
C) joint supply
  • 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) fairly elastic supply
B) infinitely elastic supply
C) perfectly inelastic
  • 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) 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) residual unemployment
C) seasonal unemployment
  • 50. The largest component of national income in developing countries consist of
A) rent
B) wages and salaries
C) profits
  • 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) money market
B) capital market
C) commodity 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) reducing tarrifs
B) increasing local production
C) adding to export group
  • 56. The stock exchange is an example of the...
A) capital market
B) labour market
C) money 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) customers increase their borrowing
B) borrowing is discouraged
C) money supply increases
  • 59. The major employer of labour in developing countries is
A) primary sector
B) tertiary 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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