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