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PES SS2 Economics 3rd Mock
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  • 1. Economics Is regarded as a science because
A) its issues are relevant for national development
B) It adopts scientific method in making its analysis
C) its subject matter studies human behaviour
  • 2. The opportunity cost of a worker going to the university is
A) transportation and entertainment
B) tuition fee and books
C) the wages given up to attend the university
  • 3. Which of the following item is not an option of circulating capital
A) machinery
B) raw material
C) fuel
  • 4. In a market economy,the problem of what goods to produced is solved primarily by
A) the pattern of consumers spending
B) producers of consumer goods
C) directives of the government
  • 5. The difference between demand and want is in the
A) desire for the commodity
B) ability to pay for the commodity
C) ability to pay for the commodity
  • 6. Which of the following is an example of derived demand
A) labour
B) mobile phone
C) textbook
  • 7. A right ward shift in the supply of a commodity is brought about by an increase in
A) the level of technology
B) cost of production
C) taxation
  • 8. Effective supply is the total amount of a commodity
A) offered for sale at a market price
B) produced for the market
C) from a single producer
  • 9. Price elasticity of supply can be influenced by the following factors except
A) cost of production
B) nature of the product
C) time period
  • 10. Increase in the supply of a product can be caused by
A) increase in the price of a product
B) increase in the income of consumers
C) a fall in the cost of production
  • 11. A rational consumer will purchase a product whose price is
A) equal to his total utility
B) equal to his marginal utility
C) less than his total utility
  • 12. Parallel market are usually the results of
A) price legislation
B) excess supply
C) inadequate information
  • 13. Another term for equilibrium price is
A) market clearing price
B) price fall
C) demand price
  • 14. When a firm is enjoying internal economies of scale, its
A) average revenue and marginal revenue decreases
B) average cost of production decreases as output increases
C) total cost of production is increasing
  • 15. The specialisation of labour enhances production because people ?
A) can concentrate on all goods
B) can save time and produce more
C) become experts in all areas of production
  • 16. Which of the following can be added to a firm's profit to obtain total revenue
A) total fixed cost
B) total revenue
C) marginal cost
  • 17. The amount of money that a firm receives from the sales of it's output is called
A) total profit
B) total revenue
C) total cost
  • 18. Which of the following is true of monopolist
A) he determines either price or output
B) his average revenue cost is horizontal
C) he determines both price and output
  • 19. Equity shares form the bulk of the capital of a
A) private firm
B) statutory company
C) public company
  • 20. If a state owned firm is sold through the stock market,the organization becomes
A) partnership
B) public limited company
C) public corporation
  • 21. The total number of people of working age who are willing and prepared to work at a given age wage rate is the
A) demand of labour
B) supply of labour
C) labour force
  • 22. Which of the following is an implication of a large population
A) increase in food supply
B) decrease in standard of living
C) decrease in cost of living
  • 23. In an industrial area, the location of an industry is largely influenced by ?
A) internal economies
B) extent of the division of labour
C) external economies
  • 24. Which of the following is a threat to the existence of middlemen
A) producers cooperative society
B) consumers cooperative society
C) sales agents
  • 25. Which of the following is a transfer of income
A) pensions
B) interest
C) rent
  • 26. The value added method used in measuring national income is to
A) measure output as a factor cost
B) add net factor income from abroad
C) avoid multiple counting of output
  • 27. Which of the following is most likely to be of a benefit to a debtor
A) inflation
B) devaluation
C) deflation
  • 28. A measure of the value of money in an economy is
A) total level of savings
B) general price
C) size of workers
  • 29. One of the major function of money is
A) store of value
B) medium of exchange
C) stable in value
  • 30. The function that distinguishes commercial banks from the central bank is that the former
A) lender of last resort
B) accepts deposit from the public
C) services the public debts
  • 31. Direct taxes include
A) specific tax
B) excise duty
C) capital gain tax
  • 32. Which of the following is not a feature of underdevelopment
A) income inequality
B) high productivity
C) low life expectancy
  • 33. One way of speeding up the economic development of a country is by encouraging
A) early marriage
B) importation of more consumers goods
C) savings and investment
  • 34. Infant industries can be described as
A) industries enjoying tax holidays
B) industries producing baby products
C) newly established industries
  • 35. Modern international trade is based on the principle of
A) absolute cost advantage
B) comparative advantage
C) terms of trade
  • 36. Which of the following resources is renewable
A) iron ore
B) rice
C) coal
  • 37. The negative effect of mining in West Africa does not include
A) re afforestation in rural communities
B) land degradation
C) pollution of water bodies
  • 38. Economic problems arises in all society because
A) resources are not in adequate supply
B) resources are mismanaged by leaders
C) there is no proper planning
  • 39. Which of the following is not emphasized in a production possibility curve
A) unemployment of labour
B) scarcity of resources
C) economic development
  • 40. The organization of productive factors is the responsibility of the
A) management
B) entrepreneur
C) labour union
  • 41. A downward sloping demand curve means that
A) demand falls as output rises
B) prices must be lowered to sell more
C) demand falls as output falls
  • 42. Goods whose demand vary directly with money income are called
A) inferior goods
B) complementary goods
C) normal goods
  • 43. An exceptional demand curve can result from
A) increases in price of the consumer
B) expectation of future price increase
C) change in taste of the consumer
  • 44. Palm oil and palm kernel are in
A) joint supply
B) competitive demand
C) complementary demand
  • 45. Which of the following is true about supply of land?
A) It rises with demand
B) It is fixed
C) It varies with time
  • 46. A supply curve parallel to the X -axis indicates
A) fairly elastic supply
B) infinitely elastic supply
C) perfectly inelastic
  • 47. A market is in equilibrium when
A) the demand is the same as the supply
B) there is no government intervention
C) there is no free entry and exit
  • 48. In the long-run, a firm must shutdown if the average revenue is
A) less than average variable cost
B) equal to the average cost
C) greater than average variable cost
  • 49. If workers at the school canteen sell during the holidays, this is an example of
A) seasonal unemployment
B) structural unemployment
C) residual unemployment
  • 50. The largest component of national income in developing countries consist of
A) profits
B) rent
C) wages and salaries
  • 51. Holding money to take care of contingencies is
A) a speculative motive
B) a transaction motive
C) a precautionary motive
  • 52. The stock exchange is an example of the
A) commodity market
B) money market
C) capital market
  • 53. The fundamental economic problem in every society is
A) inadequate supply of money
B) corruption and mismanagement
C) the large number of the unemployed
  • 54. The poorer the country, the larger the percentage of labour force engaged in _______
A) agriculture
B) mining
C) trading
  • 55. Which of the following is not a method of reducing balance of payments deficits?
A) increasing local production
B) adding to export group
C) reducing tarrifs
  • 56. The stock exchange is an example of the...
A) money market
B) labour market
C) capital market
  • 57. Nations engage in international trade because of the difference in
A) variable cost
B) comparative cost
C) fixed cost
  • 58. What happens when the central bank increases bank rate in an economy?
A) customers increase their borrowing
B) money supply increases
C) borrowing is discouraged
  • 59. The major employer of labour in developing countries is
A) tertiary sector
B) secondary sector
C) primary sector
  • 60. Income is redistributed when the rich are progressively taxed and _________
A) more public goods are provided
B) subsidy is provided on petroleum products
C) more private schools are established
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