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