Exam_Economics_Question_SS1
  • 1. The study of how people make choices in the use of scarce resources is known as
A) political science
B) geography
C) sociology
D) economics
  • 2. Economics is best defined as the study of
A) money and banking
B) human behaviour as a relationship between ends and scarce means
C) the production of goods only
D) how to make profit
  • 3. Who is regarded as the father of modern economics?
A) Adam Smith
B) David Ricardo
C) Karl Marx
D) John Keynes
  • 4. The central concept in economics is
A) demand
B) scarcity
C) money
D) utility
  • 5. The branch of economics that studies the whole economy is
A) macro-economics
B) political economics
C) micro-economics
D) business economics
  • 6. The term 'choice' in economics arises because
A) goods are abundant
B) people are greedy
C) resources are scarce
D) wants are limited
  • 7. Which of these best describes opportunity cost?
A) The next best alternative forgone
B) cost of production
C) The amount of money spent
D) The total benefit gained
  • 8. Wants are said to be unlimited because
A) man's resources are few
B) governments are corrupt
C) new wants keep arising
D) money is scarce
  • 9. The economic problem of scarcity means
A) prices are always high
B) there are not enough resources to satisfy wants
C) consumers are rich
D) there too many goods
  • 10. The study of economics helps individuals to
A) ignore opportunity costs
B) spend carelessly
C) waste resources
D) make rational decisions
  • 11. Government studies economics mainly to
A) exploit the poor
B) formulate good policies
C) raise salaries
D) increase corruption
  • 12. Economics contributes to national development by
A) Helping efficient resource use
B) discouraging production
C) increasing inequality
D) encouraging waste
  • 13. Knowledge of economics helps a consumer to
A) buy more than needed
B) avoid saving
C) waste resources
D) make wise spending decisions
  • 14. Economist help businesses by
A) printing money
B) producing advertisments
C) increasing wages automatically
D) determining market trends
  • 15. The basic economic problems arise because
A) population is high
B) wants are unlimited and resources are limited
C) prices are low
D) governments are weak
  • 16. 'What to produce' refers to
A) type of goods to produce
B) cost of production
C) location of production
D) choice of techniques
  • 17. 'How to produce' refers to
A) who will consume the goods
B) the method or technique of production
C) the total output
D) the time of production
  • 18. 'For whom to produce' means
A) choosing who gets the goods and services
B) determining the cost
C) deciding what to export
D) hiring workers
  • 19. Which of the following helps solve the basic economic problems?
A) Trade unions
B) Inflation
C) Scarcity
D) Choice
  • 20. Production in economics means
A) buying and storing
B) creating goods and services to satisfy human wants
C) selling goods at a market
D) manufacturing only
  • 21. The major aim of production is to
A) create employment
B) satisfy human wants
C) reduce exports
D) increase population
  • 22. The process that changes raw-materials into finished goods is called
A) distribution
B) consumption
C) exchange
D) manufacturing
  • 23. Primary production involves
A) transport and trade
B) banking and insurance
C) mining, farming and fishing
D) advertising
  • 24. Secondary production includes
A) banking
B) manufacturing
C) farming
D) teaching
  • 25. Tertiary production involves
A) construction
B) service industries
C) mining
D) manufacturing
  • 26. When goods are moved from factory to consumers, this is
A) production
B) consumption
C) distribution
D) exchange
  • 27. Which of these is a form of indirect production?
A) Tailor sewing for pay
B) Building your own house
C) Washing your own clothes
D) self-cooking
  • 28. The reward for the successful organization of production is
A) wage
B) profit
C) interest
D) rent
  • 29. How many major factors of production are there?
A) Five
B) Two
C) Four
D) Three
  • 30. The reward for land is
A) profit
B) interest
C) Rent
D) wage
  • 31. Land as a factor of production refers to
A) soil only
B) all natural resources used in production
C) buildings and machines
D) capital
  • 32. Labour refers to
A) buildings
B) machines
C) land
D) all human efforts used in production
  • 33. The reward for labour is
A) interest
B) wage
C) profit
D) rent
  • 34. Capital is important in production because it
A) decreases output
B) causes scarcity
C) increases efficiency
D) reduces unemployment
  • 35. The entrepreneur is responsible for
A) earning rent
B) making government policies
C) providing only labour
D) organizing and managing the factors of production
  • 36. The reward for the entrepreneur is
A) interest
B) profit
C) wage
D) rent
  • 37. Which of the following IS NOT a reward of any factor of production?
A) Interest
B) Profit
C) Rent
D) Subsidy
  • 38. In the study of economics land, labour, capital and entrepreneur are referred to as factors of production. These factors produce commodities only if they are
A) combined in the production process
B) profitable to the production process
C) purchased for the purpose of production
D) brought into the factory
  • 39. Production resources can also be called
A) primary productive
B) labour and material resources
C) factors of production
D) items of production
  • 40. Economics is founded on the principle that
A) human needs are easy to define
B) material things are more than human wants
C) human wants are limitless while the means to satisfy them are limited
D) human wants are more than human wants
  • 41. An example of circulating capital used by an entrepreneur is
A) factory building
B) raw materials
C) electric power
D) pipe-borne water
  • 42. Immobility of land in the geographical sense is applicable ONLY to
A) fishes in water bodies
B) land as the earth surface
C) all natural resources
D) vegetation and it's products
  • 43. Which of the following factors of production is the most mobile?
A) Land
B) Labour
C) Entrepreneur
D) Capital
  • 44. The act of combining factor inputs in order to obtain specific output is known as
A) industrialization
B) manufacturing
C) production
D) factor procurement
  • 45. Capital as a factor of production is important because
A) it provides money which is essential for the growth of business
B) people can work without capital
C) it enables us to carry out tasks which cannot be done by human effort only
D) most tasks can be done with bare hands
  • 46. Which of the following factors of production consists of man-made goods?
A) labour
B) Capital
C) Land
D) Entrepreneur
  • 47. Which of the following IS NOT regarded as labour?
A) Immobility of labour
B) Skillful effort
C) Mental effort
D) Physical effort
  • 48. Choice is necessary because resources
A) are available
B) are limited
C) are available
D) are scarce
  • 49. Economic problems arise because of
A) the absence of skilled labour
B) corruption in high places
C) inadequate resources
D) the creation of artificial scarcity
  • 50. Which of the following is a basic economic problem of a society?
A) What to produce
B) Scarcity
C) Price of commodity
D) level of inflation
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