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