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PES SS2 Economics 3rd Mock
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  • 1. Economics Is regarded as a science because
A) its subject matter studies human behaviour
B) It adopts scientific method in making its analysis
C) its issues are relevant for national development
  • 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) raw material
B) fuel
C) machinery
  • 4. In a market economy,the problem of what goods to produced is solved primarily by
A) producers of consumer goods
B) directives of the government
C) the pattern of consumers spending
  • 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) cost of production
B) taxation
C) the level of technology
  • 8. Effective supply is the total amount of a commodity
A) offered for sale at a market price
B) from a single producer
C) produced for the market
  • 9. Price elasticity of supply can be influenced by the following factors except
A) nature of the product
B) time period
C) cost of production
  • 10. Increase in the supply of a product can be caused by
A) increase in the price of a product
B) a fall in the cost of production
C) increase in the income of consumers
  • 11. A rational consumer will purchase a product whose price is
A) equal to his total utility
B) less than his total utility
C) equal to his marginal utility
  • 12. Parallel market are usually the results of
A) excess supply
B) price legislation
C) inadequate information
  • 13. Another term for equilibrium price is
A) price fall
B) market clearing price
C) demand price
  • 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) can concentrate on all goods
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 both price and output
B) he determines either price or output
C) his average revenue cost is horizontal
  • 19. Equity shares form the bulk of the capital of a
A) public company
B) statutory company
C) private firm
  • 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) labour force
C) supply of labour
  • 22. Which of the following is an implication of a large population
A) increase in food supply
B) decrease in cost of living
C) decrease in standard of living
  • 23. In an industrial area, the location of an industry is largely influenced by ?
A) extent of the division of labour
B) internal economies
C) external economies
  • 24. Which of the following is a threat to the existence of middlemen
A) consumers cooperative society
B) producers cooperative society
C) sales agents
  • 25. Which of the following is a transfer of income
A) rent
B) pensions
C) interest
  • 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) inflation
B) devaluation
C) deflation
  • 28. A measure of the value of money in an economy is
A) total level of savings
B) size of workers
C) general price
  • 29. One of the major function of money is
A) stable in value
B) store of value
C) medium of exchange
  • 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) capital gain 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) savings and investment
B) importation of more consumers goods
C) early marriage
  • 34. Infant industries can be described as
A) newly established industries
B) industries enjoying tax holidays
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) coal
B) rice
C) iron ore
  • 37. The negative effect of mining in West Africa does not include
A) land degradation
B) pollution of water bodies
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) scarcity of resources
B) unemployment of labour
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 falls
B) demand falls as output rises
C) prices must be lowered to sell more
  • 42. Goods whose demand vary directly with money income are called
A) normal goods
B) inferior goods
C) complementary 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) competitive demand
B) joint supply
C) complementary demand
  • 45. Which of the following is true about supply of land?
A) It varies with time
B) It rises with demand
C) It is fixed
  • 46. A supply curve parallel to the X -axis indicates
A) fairly elastic supply
B) perfectly inelastic
C) infinitely elastic supply
  • 47. A market is in equilibrium when
A) there is no free entry and exit
B) there is no government intervention
C) the demand is the same as the supply
  • 48. In the long-run, a firm must shutdown if the average revenue is
A) less than average variable cost
B) greater than average variable cost
C) equal to the average 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 transaction motive
B) a precautionary motive
C) a speculative motive
  • 52. The stock exchange is an example of the
A) money market
B) commodity market
C) capital 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) reducing tarrifs
B) adding to export group
C) increasing local production
  • 56. The stock exchange is an example of the...
A) labour market
B) money 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) money supply increases
B) customers increase their borrowing
C) borrowing is discouraged
  • 59. The major employer of labour in developing countries is
A) secondary sector
B) tertiary sector
C) primary sector
  • 60. Income is redistributed when the rich are progressively taxed and _________
A) subsidy is provided on petroleum products
B) more private schools are established
C) more public goods are provided
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