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