PES SS1 Economics (OBJ) 3rd Term Exam 2025/2026
  • 1. Cost means the amount of __ spent to produce goods or services.
A) People
B) Time
C) Machines
D) Money
  • 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) Big and Small cost
D) Good and Bad cost
  • 3. Cost that does not change with level of output is called __.
A) Variable cost
B) Total cost
C) Average cost
D) Fixed cost
  • 4. Example of fixed cost is __.
A) Rent of factory
B) Wages of workers
C) Raw materials
D) Fuel for machines
  • 5. Cost that changes directly with output is called ---.
A) Social cost
B) Opportunity cost
C) Variable cost
D) Fixed 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) Private cost
B) Opportunity cost
C) Marginal cost
D) Average 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) Schools
C) Resources and production of goods and services
D) Religion
  • 12. In a capitalist economy, the means of production are owned by ---.
A) Private individuals
B) The community
C) The government
D) Foreigners only
  • 13. A major feature of capitalism is ---.
A) No competition
B) Profit motive
C) Equal distribution of wealth
D) Government controls everything
  • 14. Which country practices capitalism?
A) China before 1978
B) North Korea
C) United States of America
D) Cuba
  • 15. In socialism, the major means of production are owned by ---.
A) Religious leaders
B) The state or government
C) Private individuals
D) No one
  • 16. A feature of socialism is ---.
A) Competition
B) Profit maximization
C) Private ownership of factories
D) Equal distribution of wealth
  • 17. Socialism aims to reduce ---.
A) Food production
B) Jobs
C) Education
D) Inequality and exploitation
  • 18. A mixed economy combines features of ---.
A) None of the above
B) Capitalism and Socialism
C) Socialism and Communalism
D) Capitalism and Communalism
  • 19. Nigeria operates a --- economic system.
A) Mixed Economy
B) Communalism
C) Pure Capitalism
D) Pure Socialism
  • 20. A feature of communalism is ---.
A) Competition
B) Profit motive
C) Self-help and cooperation
D) Private ownership
  • 21. A practical example of diminishing marginal utility is ---.
A) Buying more cars
B) Saving more money
C) Working more hours
D) Eating more and more rice at a sitting
  • 22. The law of diminishing marginal utility helps to explain ---.
A) The law of supply
B) Cost of production
C) The law of demand
D) Government revenue
  • 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) 9 utils
C) 6 utils
D) 36 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) Kilos
B) Dollars
C) Naira
D) Utils
  • 26. When Marginal Utility becomes negative, Total Utility ---.
A) Decreases
B) Remains constant
C) Becomes zero
D) Increases
  • 27. When Marginal Utility becomes zero, Total Utility is at its ---.
A) Zero
B) Negative
C) Maximum
D) Minimum
  • 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) Decreasing
B) Negative
C) Zero
D) Increasing
  • 30. The two main types of utility are ---.
A) Fixed and Variable Utility
B) Cost and Revenue Utility
C) Total Utility and Marginal Utility
D) Private and Social Utility
  • 31. Price determination in a free market is done through the interaction of __.
A) Cost and Revenue
B) Demand and Supply
C) Government and firms
D) Buyers and sellers
  • 32. The price at which quantity demanded equals quantity supplied is called __.
A) Fixed price
B) Equilibrium price
C) Controlled price
D) Market price
  • 33. At equilibrium price, there is __.
A) High inflation
B) Shortage
C) Surplus
D) No excess demand or supply
  • 34. If demand increases and supply remains constant, equilibrium price will __.
A) Fall
B) Remain the same
C) Rise
D) Become zero
  • 35. If supply increases and demand remains constant, equilibrium price will __.
A) Remain the same
B) Fall
C) Double
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) Price control
B) Surplus
C) Equilibrium
D) Shortage
  • 38. The forces that bring the market back to equilibrium are __.
A) Price mechanism
B) Government policy
C) Advertising
D) Taxation
  • 39. In the diagram of demand and supply, equilibrium is where the __ curves intersect.
A) Fixed and Variable
B) Private and Social
C) Demand and Supply
D) Cost and Revenue
  • 40. If the price is above equilibrium price, there will be __.
A) Excess demand
B) Excess supply
C) Black market
D) Shortage
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