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) 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) the pattern of consumers spending
C) directives of the government
  • 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) 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) from a single producer
B) offered for sale at a market price
C) produced for the market
  • 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) a fall in the cost of production
B) increase in the income of consumers
C) increase in the price of a product
  • 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) inadequate information
C) excess supply
  • 13. Another term for equilibrium price is
A) market clearing price
B) price fall
C) demand price
  • 14. When a firm is enjoying internal economies of scale, its
A) average cost of production decreases as output increases
B) total cost of production is increasing
C) average revenue and marginal revenue decreases
  • 15. The specialisation of labour enhances production because people ?
A) become experts in all areas of production
B) can concentrate on all goods
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) 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 profit
B) total cost
C) total revenue
  • 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) public company
C) statutory company
  • 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 cost of living
B) increase in food supply
C) decrease in standard of living
  • 23. In an industrial area, the location of an industry is largely influenced by ?
A) internal economies
B) extent of the division of labour
C) external economies
  • 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) rent
B) interest
C) pensions
  • 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) inflation
B) devaluation
C) deflation
  • 28. A measure of the value of money in an economy is
A) size of workers
B) general price
C) total level of savings
  • 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) accepts deposit from the public
C) services the public debts
  • 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) 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) savings and investment
B) early marriage
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) comparative advantage
B) absolute cost advantage
C) terms of trade
  • 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) pollution of water bodies
B) land degradation
C) re afforestation in rural communities
  • 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) 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) complementary goods
C) normal 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 varies with time
B) It is fixed
C) It rises with demand
  • 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 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) greater than average variable cost
B) less 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) rent
B) profits
C) wages and salaries
  • 51. Holding money to take care of contingencies is
A) a transaction motive
B) a speculative 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) 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) agriculture
B) mining
C) trading
  • 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) labour market
B) capital market
C) money market
  • 57. Nations engage in international trade because of the difference in
A) comparative cost
B) fixed 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) more public goods are provided
B) subsidy is provided on petroleum products
C) more private schools are established
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