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SS3 Mock Examinations
Contributed by: Ajiboye
  • 1. What is the fundamental economic problem?
A) Unemployment
B) Poverty
C) Inflation
D) Scarcity
  • 2. Which economic system is characterized by private ownership?
A) Mixed
B) Command
C) Socialist
D) Capitalist
  • 3. What type of market structure has many buyers and sellers?
A) Oligopoly
B) Monopsony
C) Monopoly
D) Perfect Competition
  • 4. What is the purpose of fiscal policy?
A) To reduce unemployment
B) To promote economic growth
C) All of the above
D) To control inflation
  • 5. A Minimum price legislation is also called
A) Price Ceiling
B) Price mechanism
C) Price control
D) Price floor
  • 6. Which of the following factors is not a cause of change in demand? Changes in
A) the size of the population
B) price of the commodity
C) income distribution
D) taste and fashion
  • 7. If the quantity demanded of a commodity increases from 20 units to 30 units when there is an increase in price from $4.00 to $5.00, the elasticity of demand is
A) 0.50
B) 0.65
C) 2.50
D) 2.00
  • 8. The use of the bank rate, cash ratio and open market operations constitute
A) export policy
B) import policy
C) monetary policy
D) fiscal policy
  • 9. Scale of Preference shows
A) Incomes of consumer in order of size
B) consumer’s wants in order of priority
C) opportunity cost of goods consumed
D) utilities enjoyed by consumers
  • 10. Gross National Product (GNP) less the provision for the wear and tear of assets is the
A) net factor income
B) net indirect taxes
C) net present value
D) net national product
  • 11. In perfectly elastic supply, the supply curve
A) Slopes downward
B) Is Horizontal
C) Is Vertical
D) Slopes upward
  • 12. An example of transfer payments in national income accounting is
A) transfer of funds from one bank to another
B) the amount paid to a worker on transfer
C) unemployment allowance paid to the citizens
D) money transferred to another country
  • 13. Which of the following industries will add more value to primary products?
A) Service industry
B) Processing industry
C) Mining industry
D) Construction industry
  • 14. A consumer of a single commodity is in equilibrium when
A) his marginal utility is equal to zero
B) he can equate his demand with price
C) he equates marginal utility and price
D) he can equate his marginal and total utilities
  • 15. Foreign investment and long term securities in the balance of payment accounts are recorded as
A) balance of trade account transaction
B) current account transaction
C) invisible balance account transaction
D) capital account transaction
  • 16. A benefit that is present in all forms of economic integration is that
A) common agricultural policy is in place
B) common currency is in use
C) the size of the market is widened
D) factors of production are free to move and be moved
  • 17. Points within a Production Possibilities Curve (PPC) indicate
A) attainable and efficient production levels.
B) attainable but inefficient production levels.
C) unattainable production levels.
D) optimum production levels.
  • 18. Which of the following is not a feature of labour?
A) it is an active factor
B) it is highly mobile
C) it’s reward is wages and salaries
D) it’s efficiency depends on its size
  • 19. The pursuit of private profits is a feature of
A) socialist economies
B) capitalist economies
C) command economies
D) statutory corporations
  • 20. A major feature of the socialist economic system is
A) private ownership of productive inputs.
B) determination of price by market forces.
C) setting of production targets by public authorities.
D) freedom of choice for consumers.
  • 21. If the budget on education is $50 m out of an annual national budget of $300 m. The sector of a pie chart representing education is
A) 16.6°
B) 150°
C) 60°
D) 300°
  • 22. Price elasticity of demand is the responsiveness of quantity demanded to a change in
A) demand for the product
B) income of the buyer
C) price of another product
D) price of the product
  • 23. When total revenue increases as price falls, the coefficient of price elasticity of demand is
A) zero
B) greater than one
C) less than one
D) one
  • 24. If the quantity demanded of rice de- creased from 150 bags to 100 bags, the percentage change in quantity demanded is
A) 33.3%
B) 80%
C) 65%
D) 30%
  • 25. The law of demand will not hold when
A) size of the population changes
B) normal goods are involved
C) income and consumers increase
D) rare commodities are involved
  • 26. The diagram above shows the demand for milk. Use it to answer questions this question.



    The movement from point x to z might have been caused by
A) a change in taste in favour of milk
B) an increase in income of consumers
C) a favorable weather condition
D) a decrease in the price of milk
  • 27. The diagram above shows the demand for milk. Use it to answer this question.

    If demand for postal services decline as a result of increased use of e-mails, then the two services are in
A) composite demand
B) complementary demand
C) derived demand
D) competitive demand
  • 28. Other things being equal, an increase in the demand for land in the short-run will cause an increase in the
A) quantity supplied only
B) supply only
C) price only
D) price and supply
  • 29. If the coefficient of price elasticity of supply of a commodity is 0.8, then supply is
A) fairly elastic
B) perfectly inelastic
C) perfectly elastic
D) fairly inelastic
  • 30. The negative slope of the demand curve is best explained by
A) diminishing returns to scale
B) consumer’s choice
C) diminishing marginal utility
D) increasing return to scale
  • 31. Minimum price legislation is used to protect the interests of
A) government
B) foreign companies
C) consumers
D) small scale producers
  • 32. Which of the following best explains diseconomies of scale? Increase in output causes the
A) marginal cost to fall
B) average cost to rise
C) marginal revenue to fall
D) firm to be de-stabilized
  • 33. In the short-run, a firm can increase output by
A) changing its organizational structure
B) purchasing more equipments
C) increasing the size of its machines
D) increasing the quantity of raw materials
  • 34. The fixed cost of producing 100 units of a good is $600. If the variable cost is $400. the average total cost of one unit of the good is
A) $10
B) $8
C) $15
D) $4
  • 35. Firms in perfect competition break even in the long-run because
A) profits are not enough to repay traders' loans.
B) marginal revenue is greater than marginal cost at all levels.
C) more firms can enter the industry due to attractive prof its.
D) new firms can not enter the market due to copyright laws.
  • 36. The government policy that encourages public corporations to operate profitably is
A) indigenization
B) liberalization
C) nationalization
D) commercialization
  • 37. Warehousing of goods in the process of distribution is the function of
A) supermarkets
B) wholesalers
C) retailers
D) departmental stores
  • 38. The supply of labour to an occupation will tend to rise when
A) welfare packages improve
B) holiday entitlement is cut
C) unemployment benefit rises
D) there are less monetary benefits
  • 39. In determining the growth of a country's population, infant mortality is a component of
A) death rate
B) fertility rate
C) net migration
D) immigration rate
  • 40. The low productivity per worker in agriculture experienced in West African countries is due to
A) laziness on the part of farmers
B) the presence of many extension workers
C) the use of simple traditional implements
D) the law of increasing returns to scale
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