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