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SS3 Mock Examinations
Contributed by: Ajiboye
  • 1. What is the fundamental economic problem?
A) Scarcity
B) Unemployment
C) Poverty
D) Inflation
  • 2. Which economic system is characterized by private ownership?
A) Socialist
B) Command
C) Mixed
D) Capitalist
  • 3. What type of market structure has many buyers and sellers?
A) Perfect Competition
B) Monopsony
C) Oligopoly
D) Monopoly
  • 4. What is the purpose of fiscal policy?
A) To reduce unemployment
B) To promote economic growth
C) To control inflation
D) All of the above
  • 5. A Minimum price legislation is also called
A) Price mechanism
B) Price Ceiling
C) Price control
D) Price floor
  • 6. Which of the following factors is not a cause of change in demand? Changes in
A) income distribution
B) price of the commodity
C) taste and fashion
D) the size of the population
  • 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) 2.00
B) 0.50
C) 2.50
D) 0.65
  • 8. The use of the bank rate, cash ratio and open market operations constitute
A) fiscal policy
B) import policy
C) monetary policy
D) export policy
  • 9. Scale of Preference shows
A) consumer’s wants in order of priority
B) Incomes of consumer in order of size
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) Is Horizontal
B) Slopes upward
C) Is Vertical
D) Slopes downward
  • 12. An example of transfer payments in national income accounting is
A) transfer of funds from one bank to another
B) money transferred to another country
C) the amount paid to a worker on transfer
D) unemployment allowance paid to the citizens
  • 13. Which of the following industries will add more value to primary products?
A) Construction industry
B) Mining industry
C) Processing industry
D) Service industry
  • 14. A consumer of a single commodity is in equilibrium when
A) his marginal utility is equal to zero
B) he equates marginal utility and price
C) he can equate his marginal and total utilities
D) he can equate his demand with price
  • 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) the size of the market is widened
B) common currency is in use
C) factors of production are free to move and be moved
D) common agricultural policy is in place
  • 17. Points within a Production Possibilities Curve (PPC) indicate
A) optimum production levels.
B) unattainable production levels.
C) attainable but inefficient production levels.
D) attainable and efficient production levels.
  • 18. Which of the following is not a feature of labour?
A) it’s reward is wages and salaries
B) it is highly mobile
C) it’s efficiency depends on its size
D) it is an active factor
  • 19. The pursuit of private profits is a feature of
A) capitalist economies
B) socialist economies
C) statutory corporations
D) command economies
  • 20. A major feature of the socialist economic system is
A) freedom of choice for consumers.
B) determination of price by market forces.
C) private ownership of productive inputs.
D) setting of production targets by public authorities.
  • 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) 150°
B) 16.6°
C) 300°
D) 60°
  • 22. Price elasticity of demand is the responsiveness of quantity demanded to a change in
A) price of another product
B) demand for the product
C) price of the product
D) income of the buyer
  • 23. When total revenue increases as price falls, the coefficient of price elasticity of demand is
A) greater than one
B) less than one
C) one
D) zero
  • 24. If the quantity demanded of rice de- creased from 150 bags to 100 bags, the percentage change in quantity demanded is
A) 80%
B) 65%
C) 33.3%
D) 30%
  • 25. The law of demand will not hold when
A) size of the population changes
B) income and consumers increase
C) rare commodities are involved
D) normal goods 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 decrease in the price of milk
B) a favorable weather condition
C) a change in taste in favour of milk
D) an increase in income of consumers
  • 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) competitive demand
B) composite demand
C) complementary demand
D) derived demand
  • 28. Other things being equal, an increase in the demand for land in the short-run will cause an increase in the
A) supply only
B) price and supply
C) price only
D) quantity supplied only
  • 29. If the coefficient of price elasticity of supply of a commodity is 0.8, then supply is
A) fairly elastic
B) fairly inelastic
C) perfectly elastic
D) perfectly inelastic
  • 30. The negative slope of the demand curve is best explained by
A) diminishing returns to scale
B) consumer’s choice
C) increasing return to scale
D) diminishing marginal utility
  • 31. Minimum price legislation is used to protect the interests of
A) foreign companies
B) small scale producers
C) government
D) consumers
  • 32. Which of the following best explains diseconomies of scale? Increase in output causes the
A) firm to be de-stabilized
B) average cost to rise
C) marginal revenue to fall
D) marginal cost to fall
  • 33. In the short-run, a firm can increase output by
A) changing its organizational structure
B) increasing the size of its machines
C) increasing the quantity of raw materials
D) purchasing more equipments
  • 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) $15
B) $8
C) $10
D) $4
  • 35. Firms in perfect competition break even in the long-run because
A) marginal revenue is greater than marginal cost at all levels.
B) new firms can not enter the market due to copyright laws.
C) profits are not enough to repay traders' loans.
D) more firms can enter the industry due to attractive prof its.
  • 36. The government policy that encourages public corporations to operate profitably is
A) liberalization
B) commercialization
C) indigenization
D) nationalization
  • 37. Warehousing of goods in the process of distribution is the function of
A) departmental stores
B) retailers
C) supermarkets
D) wholesalers
  • 38. The supply of labour to an occupation will tend to rise when
A) there are less monetary benefits
B) holiday entitlement is cut
C) unemployment benefit rises
D) welfare packages improve
  • 39. In determining the growth of a country's population, infant mortality is a component of
A) immigration rate
B) net migration
C) fertility rate
D) death rate
  • 40. The low productivity per worker in agriculture experienced in West African countries is due to
A) the presence of many extension workers
B) laziness on the part of farmers
C) the use of simple traditional implements
D) the law of increasing returns to scale
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