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PES SS2 Economics 3rd Mock
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  • 1. Economics Is regarded as a science because
A) It adopts scientific method in making its analysis
B) its issues are relevant for national development
C) its subject matter studies human behaviour
  • 2. The opportunity cost of a worker going to the university is
A) tuition fee and books
B) the wages given up to attend the university
C) transportation and entertainment
  • 3. Which of the following item is not an option of circulating capital
A) fuel
B) raw material
C) machinery
  • 4. In a market economy,the problem of what goods to produced is solved primarily by
A) the pattern of consumers spending
B) directives of the government
C) producers of consumer goods
  • 5. The difference between demand and want is in the
A) ability to pay for the commodity
B) ability to pay for the commodity
C) desire for the commodity
  • 6. Which of the following is an example of derived demand
A) mobile phone
B) labour
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) produced for the market
B) from a single producer
C) offered for sale at a market price
  • 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 income of consumers
B) a fall in the cost of production
C) increase in the price of a product
  • 11. A rational consumer will purchase a product whose price is
A) less than his total utility
B) equal to his marginal utility
C) equal to 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) demand price
C) price fall
  • 14. When a firm is enjoying internal economies of scale, its
A) average revenue and marginal revenue decreases
B) total cost of production is increasing
C) average cost of production decreases as output increases
  • 15. The specialisation of labour enhances production because people ?
A) can save time and produce more
B) become experts in all areas of production
C) can concentrate on all goods
  • 16. Which of the following can be added to a firm's profit to obtain total revenue
A) total fixed cost
B) marginal cost
C) total revenue
  • 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 both price and output
B) his average revenue cost is horizontal
C) he determines either price or output
  • 19. Equity shares form the bulk of the capital of a
A) public company
B) private firm
C) statutory company
  • 20. If a state owned firm is sold through the stock market,the organization becomes
A) partnership
B) public corporation
C) public limited company
  • 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) labour force
B) demand of labour
C) supply of labour
  • 22. Which of the following is an implication of a large population
A) decrease in cost of living
B) decrease in standard of living
C) increase in food supply
  • 23. In an industrial area, the location of an industry is largely influenced by ?
A) external economies
B) extent of the division of labour
C) internal economies
  • 24. Which of the following is a threat to the existence of middlemen
A) producers cooperative society
B) sales agents
C) consumers cooperative society
  • 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) avoid multiple counting of output
B) add net factor income from abroad
C) measure output as a factor cost
  • 27. Which of the following is most likely to be of a benefit to a debtor
A) deflation
B) devaluation
C) inflation
  • 28. A measure of the value of money in an economy is
A) size of workers
B) general price
C) total level of savings
  • 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) accepts deposit from the public
B) services the public debts
C) lender of last resort
  • 31. Direct taxes include
A) capital gain tax
B) specific tax
C) excise duty
  • 32. Which of the following is not a feature of underdevelopment
A) high productivity
B) income inequality
C) low life expectancy
  • 33. One way of speeding up the economic development of a country is by encouraging
A) early marriage
B) savings and investment
C) importation of more consumers goods
  • 34. Infant industries can be described as
A) industries enjoying tax holidays
B) newly established industries
C) industries producing baby products
  • 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) pollution of water bodies
B) land degradation
C) re afforestation in rural communities
  • 38. Economic problems arises in all society because
A) resources are mismanaged by leaders
B) there is no proper planning
C) resources are not in adequate supply
  • 39. Which of the following is not emphasized in a production possibility curve
A) economic development
B) scarcity of resources
C) unemployment of labour
  • 40. The organization of productive factors is the responsibility of the
A) management
B) labour union
C) entrepreneur
  • 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) complementary goods
B) normal goods
C) inferior 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) complementary demand
B) joint supply
C) competitive demand
  • 45. Which of the following is true about supply of land?
A) It varies with time
B) It is fixed
C) It rises with demand
  • 46. A supply curve parallel to the X -axis indicates
A) perfectly inelastic
B) infinitely elastic supply
C) fairly elastic supply
  • 47. A market is in equilibrium when
A) there is no government intervention
B) there is no free entry and exit
C) the demand is the same as the supply
  • 48. In the long-run, a firm must shutdown if the average revenue is
A) equal to the average cost
B) less than average variable 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) wages and salaries
B) rent
C) profits
  • 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) capital market
C) money market
  • 53. The fundamental economic problem in every society is
A) the large number of the unemployed
B) corruption and mismanagement
C) inadequate supply of money
  • 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) adding to export group
B) reducing tarrifs
C) increasing local production
  • 56. The stock exchange is an example of the...
A) capital market
B) money market
C) labour market
  • 57. Nations engage in international trade because of the difference in
A) comparative cost
B) variable cost
C) fixed cost
  • 58. What happens when the central bank increases bank rate in an economy?
A) borrowing is discouraged
B) money supply increases
C) customers increase their borrowing
  • 59. The major employer of labour in developing countries is
A) primary sector
B) secondary sector
C) tertiary sector
  • 60. Income is redistributed when the rich are progressively taxed and _________
A) more private schools are established
B) subsidy is provided on petroleum products
C) more public goods are provided
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