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) the production of goods only
B) how to make profit
C) money and banking
D) human behaviour as a relationship between ends and scarce means
  • 3. Who is regarded as the father of modern economics?
A) Karl Marx
B) Adam Smith
C) John Keynes
D) David Ricardo
  • 4. The central concept in economics is
A) utility
B) demand
C) scarcity
D) money
  • 5. The branch of economics that studies the whole economy is
A) business economics
B) political economics
C) micro-economics
D) macro-economics
  • 6. The term 'choice' in economics arises because
A) wants are limited
B) people are greedy
C) goods are abundant
D) resources are scarce
  • 7. Which of these best describes opportunity cost?
A) cost of production
B) The total benefit gained
C) The next best alternative forgone
D) The amount of money spent
  • 8. Wants are said to be unlimited because
A) money is scarce
B) new wants keep arising
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) prices are always high
C) there too many goods
D) consumers are rich
  • 10. The study of economics helps individuals to
A) make rational decisions
B) spend carelessly
C) waste resources
D) ignore opportunity costs
  • 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) encouraging waste
B) discouraging production
C) increasing inequality
D) Helping efficient resource use
  • 13. Knowledge of economics helps a consumer to
A) waste resources
B) make wise spending decisions
C) avoid saving
D) buy more than needed
  • 14. Economist help businesses by
A) printing money
B) increasing wages automatically
C) determining market trends
D) producing advertisments
  • 15. The basic economic problems arise because
A) governments are weak
B) wants are unlimited and resources are limited
C) prices are low
D) population is high
  • 16. 'What to produce' refers to
A) location of production
B) choice of techniques
C) type of goods to produce
D) cost of production
  • 17. 'How to produce' refers to
A) who will consume the goods
B) the time of production
C) the method or technique of production
D) the total output
  • 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) Choice
B) Trade unions
C) Scarcity
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) reduce exports
B) increase population
C) create employment
D) satisfy human wants
  • 22. The process that changes raw-materials into finished goods is called
A) manufacturing
B) exchange
C) distribution
D) consumption
  • 23. Primary production involves
A) banking and insurance
B) transport and trade
C) advertising
D) mining, farming and fishing
  • 24. Secondary production includes
A) teaching
B) banking
C) farming
D) manufacturing
  • 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) distribution
C) consumption
D) exchange
  • 27. Which of these is a form of indirect production?
A) Washing your own clothes
B) self-cooking
C) Tailor sewing for pay
D) Building your own house
  • 28. The reward for the successful organization of production is
A) profit
B) wage
C) rent
D) interest
  • 29. How many major factors of production are there?
A) Five
B) Four
C) Three
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) all natural resources used in production
C) capital
D) buildings and machines
  • 32. Labour refers to
A) machines
B) buildings
C) land
D) all human efforts used in production
  • 33. The reward for labour is
A) rent
B) interest
C) wage
D) profit
  • 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) making government policies
B) earning rent
C) organizing and managing the factors of production
D) providing only labour
  • 36. The reward for the entrepreneur is
A) interest
B) rent
C) profit
D) wage
  • 37. Which of the following IS NOT a reward of any factor of production?
A) Profit
B) Interest
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) purchased for the purpose of production
B) brought into the factory
C) profitable to the production process
D) combined in 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 wants are limitless while the means to satisfy them are limited
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) pipe-borne water
C) electric power
D) raw materials
  • 42. Immobility of land in the geographical sense is applicable ONLY to
A) all natural resources
B) land as the earth surface
C) vegetation and it's products
D) fishes in water bodies
  • 43. Which of the following factors of production is the most mobile?
A) Labour
B) Entrepreneur
C) Land
D) Capital
  • 44. The act of combining factor inputs in order to obtain specific output is known as
A) factor procurement
B) production
C) manufacturing
D) industrialization
  • 45. Capital as a factor of production is important because
A) people can work without capital
B) most tasks can be done with bare hands
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) Entrepreneur
B) Capital
C) Land
D) labour
  • 47. Which of the following IS NOT regarded as labour?
A) Immobility of labour
B) Skillful effort
C) Physical effort
D) Mental 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) inadequate resources
B) corruption in high places
C) the absence of skilled labour
D) the creation of artificial scarcity
  • 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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