PES SS1 Economics (OBJ) 3rd Term Exam 2025/2026
  • 1. Cost means the amount of __ spent to produce goods or services.
A) Machines
B) Money
C) People
D) Time
  • 2. The total cost of producing a good is the sum of --- and ---cost.
A) Old and New cost
B) Fixed and Variable cost
C) Good and Bad cost
D) Big and Small cost
  • 3. Cost that does not change with level of output is called __.
A) Variable cost
B) Fixed cost
C) Average cost
D) Total cost
  • 4. Example of fixed cost is __.
A) Raw materials
B) Rent of factory
C) Wages of workers
D) Fuel for machines
  • 5. Cost that changes directly with output is called ---.
A) Opportunity cost
B) Variable cost
C) Social cost
D) Fixed cost
  • 6. Example of variable cost is ---.
A) Cost of raw materials
B) Insurance premium
C) Salary of manager
D) License fee
  • 7. Total cost is calculated as ---.
A) TC= Fixed cost - Variable cost
B) TC=Fixed cost + Variable cost
C) TC= Fixed cost / Variable cost
D) TC= Fixed cost * Variable cost
  • 8. The cost of the next best alternative forgone is called ---.
A) Marginal cost
B) Average cost
C) Opportunity cost
D) Private cost
  • 9. The cost of producing one additional unit of output is ---.
A) Fixed cost
B) Average cost
C) Total cost
D) Marginal cost
  • 10. Average Cost is equal to ---.
A) FC + VC
B) TC * Quantity
C) TC - Quantity
D) TC / Quantity
  • 11. An economic system is the way a country organizes and manages its ---.
A) Sports
B) Resources and production of goods and services
C) Religion
D) Schools
  • 12. In a capitalist economy, the means of production are owned by ---.
A) Foreigners only
B) The government
C) Private individuals
D) The community
  • 13. A major feature of capitalism is ---.
A) Government controls everything
B) Equal distribution of wealth
C) Profit motive
D) No competition
  • 14. Which country practices capitalism?
A) China before 1978
B) Cuba
C) United States of America
D) North Korea
  • 15. In socialism, the major means of production are owned by ---.
A) Religious leaders
B) Private individuals
C) No one
D) The state or government
  • 16. A feature of socialism is ---.
A) Equal distribution of wealth
B) Private ownership of factories
C) Profit maximization
D) Competition
  • 17. Socialism aims to reduce ---.
A) Jobs
B) Inequality and exploitation
C) Food production
D) Education
  • 18. A mixed economy combines features of ---.
A) None of the above
B) Capitalism and Communalism
C) Capitalism and Socialism
D) Socialism and Communalism
  • 19. Nigeria operates a --- economic system.
A) Communalism
B) Pure Capitalism
C) Mixed Economy
D) Pure Socialism
  • 20. A feature of communalism is ---.
A) Profit motive
B) Private ownership
C) Competition
D) Self-help and cooperation
  • 21. A practical example of diminishing marginal utility is ---.
A) Buying more cars
B) Eating more and more rice at a sitting
C) Saving more money
D) Working more hours
  • 22. The law of diminishing marginal utility helps to explain ---.
A) Government revenue
B) The law of demand
C) Cost of production
D) The law of supply
  • 23. If TU from 3 oranges = 30 utils and TU from 4 oranges = 36 utils, then MU of the 4th orange = ---.
A) 9 utils
B) 36 utils
C) 6 utils
D) 30 utils
  • 24. The formula for Marginal Utility is ---.
A) MU = Change in TU / Change in Quantity
B) MU = TU + Quantity
C) MU = TU - Quantity
D) MU = TU * Quantity
  • 25. Utility can be measured in units called ---.
A) Naira
B) Utils
C) Dollars
D) Kilos
  • 26. When Marginal Utility becomes negative, Total Utility ---.
A) Increases
B) Remains constant
C) Becomes zero
D) Decreases
  • 27. When Marginal Utility becomes zero, Total Utility is at its ---.
A) Zero
B) Minimum
C) Maximum
D) Negative
  • 28. Which of these best explains the law of diminishing marginal utility?
A) Water has no utility
B) The 1st cup of water gives more satisfaction than the 5th cup
C) All cups give equal satisfaction
D) The 5th cup of water gives more satisfaction than the 1st cup
  • 29. If TU increases at a decreasing rate, MU is ---.
A) Negative
B) Increasing
C) Zero
D) Decreasing
  • 30. The two main types of utility are ---.
A) Private and Social Utility
B) Fixed and Variable Utility
C) Cost and Revenue Utility
D) Total Utility and Marginal Utility
  • 31. Price determination in a free market is done through the interaction of __.
A) Cost and Revenue
B) Buyers and sellers
C) Demand and Supply
D) Government and firms
  • 32. The price at which quantity demanded equals quantity supplied is called __.
A) Market price
B) Fixed price
C) Equilibrium price
D) Controlled price
  • 33. At equilibrium price, there is __.
A) High inflation
B) Surplus
C) Shortage
D) No excess demand or supply
  • 34. If demand increases and supply remains constant, equilibrium price will __.
A) Remain the same
B) Become zero
C) Rise
D) Fall
  • 35. If supply increases and demand remains constant, equilibrium price will __.
A) Rise
B) Double
C) Remain the same
D) Fall
  • 36. A situation where quantity demanded is greater than quantity supplied leads to __.
A) Equilibrium
B) Glut
C) Shortage
D) Surplus
  • 37. A situation where quantity supplied is greater than quantity demanded leads to __.
A) Shortage
B) Equilibrium
C) Surplus
D) Price control
  • 38. The forces that bring the market back to equilibrium are __.
A) Government policy
B) Taxation
C) Price mechanism
D) Advertising
  • 39. In the diagram of demand and supply, equilibrium is where the __ curves intersect.
A) Fixed and Variable
B) Demand and Supply
C) Private and Social
D) Cost and Revenue
  • 40. If the price is above equilibrium price, there will be __.
A) Shortage
B) Excess supply
C) Excess demand
D) Black market
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