Exam_Economics_Question_SS1
  • 1. The study of how people make choices in the use of scarce resources is known as
A) geography
B) economics
C) sociology
D) political science
  • 2. Economics is best defined as the study of
A) human behaviour as a relationship between ends and scarce means
B) money and banking
C) how to make profit
D) the production of goods only
  • 3. Who is regarded as the father of modern economics?
A) Adam Smith
B) John Keynes
C) David Ricardo
D) Karl Marx
  • 4. The central concept in economics is
A) demand
B) utility
C) scarcity
D) money
  • 5. The branch of economics that studies the whole economy is
A) micro-economics
B) political economics
C) business economics
D) macro-economics
  • 6. The term 'choice' in economics arises because
A) goods are abundant
B) people are greedy
C) wants are limited
D) resources are scarce
  • 7. Which of these best describes opportunity cost?
A) cost of production
B) The next best alternative forgone
C) The total benefit gained
D) The amount of money spent
  • 8. Wants are said to be unlimited because
A) new wants keep arising
B) money is scarce
C) governments are corrupt
D) man's resources are few
  • 9. The economic problem of scarcity means
A) there are not enough resources to satisfy wants
B) consumers are rich
C) prices are always high
D) there too many goods
  • 10. The study of economics helps individuals to
A) spend carelessly
B) ignore opportunity costs
C) make rational decisions
D) waste resources
  • 11. Government studies economics mainly to
A) increase corruption
B) raise salaries
C) formulate good policies
D) exploit the poor
  • 12. Economics contributes to national development by
A) encouraging waste
B) Helping efficient resource use
C) discouraging production
D) increasing inequality
  • 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) increasing wages automatically
B) printing money
C) determining market trends
D) producing advertisments
  • 15. The basic economic problems arise because
A) wants are unlimited and resources are limited
B) population is high
C) governments are weak
D) prices are low
  • 16. 'What to produce' refers to
A) choice of techniques
B) type of goods to produce
C) cost of production
D) location of production
  • 17. 'How to produce' refers to
A) the time of production
B) who will consume the goods
C) the total output
D) the method or technique of production
  • 18. 'For whom to produce' means
A) hiring workers
B) choosing who gets the goods and services
C) deciding what to export
D) determining the cost
  • 19. Which of the following helps solve the basic economic problems?
A) Scarcity
B) Inflation
C) Trade unions
D) Choice
  • 20. Production in economics means
A) selling goods at a market
B) buying and storing
C) manufacturing only
D) creating goods and services to satisfy human wants
  • 21. The major aim of production is to
A) increase population
B) reduce exports
C) satisfy human wants
D) create employment
  • 22. The process that changes raw-materials into finished goods is called
A) exchange
B) distribution
C) manufacturing
D) consumption
  • 23. Primary production involves
A) banking and insurance
B) mining, farming and fishing
C) transport and trade
D) advertising
  • 24. Secondary production includes
A) manufacturing
B) farming
C) banking
D) teaching
  • 25. Tertiary production involves
A) mining
B) service industries
C) manufacturing
D) construction
  • 26. When goods are moved from factory to consumers, this is
A) consumption
B) production
C) distribution
D) exchange
  • 27. Which of these is a form of indirect production?
A) Building your own house
B) Tailor sewing for pay
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) Four
B) Three
C) Two
D) Five
  • 30. The reward for land is
A) interest
B) Rent
C) profit
D) wage
  • 31. Land as a factor of production refers to
A) capital
B) all natural resources used in production
C) buildings and machines
D) soil only
  • 32. Labour refers to
A) all human efforts used in production
B) machines
C) buildings
D) land
  • 33. The reward for labour is
A) rent
B) profit
C) wage
D) interest
  • 34. Capital is important in production because it
A) reduces unemployment
B) causes scarcity
C) increases efficiency
D) decreases output
  • 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) rent
B) wage
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) profitable to the production process
B) brought into the factory
C) combined in the production process
D) purchased for the purpose of production
  • 39. Production resources can also be called
A) primary productive
B) items of production
C) factors of production
D) labour and material resources
  • 40. Economics is founded on the principle that
A) human wants are limitless while the means to satisfy them are limited
B) material things are more than human wants
C) human wants are more than human wants
D) human needs are easy to define
  • 41. An example of circulating capital used by an entrepreneur is
A) factory building
B) electric power
C) raw materials
D) pipe-borne water
  • 42. Immobility of land in the geographical sense is applicable ONLY to
A) fishes in water bodies
B) vegetation and it's products
C) all natural resources
D) land as the earth surface
  • 43. Which of the following factors of production is the most mobile?
A) Entrepreneur
B) Land
C) Labour
D) Capital
  • 44. The act of combining factor inputs in order to obtain specific output is known as
A) manufacturing
B) industrialization
C) production
D) factor procurement
  • 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) Land
D) Entrepreneur
  • 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 scarce
B) are limited
C) are available
D) are available
  • 49. Economic problems arise because of
A) the absence of skilled labour
B) inadequate resources
C) corruption in high places
D) the creation of artificial scarcity
  • 50. Which of the following is a basic economic problem of a society?
A) level of inflation
B) Price of commodity
C) Scarcity
D) What to produce
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