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