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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 subject matter studies human behaviour
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) transportation and entertainment
C) the wages given up to attend the university
  • 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) producers of consumer goods
B) the pattern of consumers spending
C) directives of the government
  • 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) 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) cost of production
B) taxation
C) the level of technology
  • 8. Effective supply is the total amount of a commodity
A) produced for the market
B) offered for sale at a market price
C) from a single producer
  • 9. Price elasticity of supply can be influenced by the following factors except
A) cost of production
B) time period
C) nature of the product
  • 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) demand price
B) price fall
C) market clearing price
  • 14. When a firm is enjoying internal economies of scale, its
A) total cost of production is increasing
B) average revenue and marginal revenue decreases
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 revenue
B) marginal cost
C) total fixed cost
  • 17. The amount of money that a firm receives from the sales of it's output is called
A) total revenue
B) total cost
C) total profit
  • 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) public limited company
B) public corporation
C) partnership
  • 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) decrease in cost of living
B) increase in food supply
C) decrease in standard of living
  • 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) sales agents
B) consumers cooperative society
C) producers cooperative society
  • 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) measure output as a factor cost
B) avoid multiple counting of output
C) add net factor income from abroad
  • 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) medium of exchange
B) stable in value
C) store of value
  • 30. The function that distinguishes commercial banks from the central bank is that the former
A) services the public debts
B) accepts deposit from the public
C) lender of last resort
  • 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) low life expectancy
C) income inequality
  • 33. One way of speeding up the economic development of a country is by encouraging
A) importation of more consumers goods
B) savings and investment
C) early marriage
  • 34. Infant industries can be described as
A) newly established industries
B) industries producing baby products
C) industries enjoying tax holidays
  • 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) resources are not in adequate supply
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) labour union
B) management
C) entrepreneur
  • 41. A downward sloping demand curve means that
A) prices must be lowered to sell more
B) demand falls as output falls
C) demand falls as output rises
  • 42. Goods whose demand vary directly with money income are called
A) normal goods
B) complementary goods
C) inferior goods
  • 43. An exceptional demand curve can result from
A) expectation of future price increase
B) increases in price of the consumer
C) change in taste of the consumer
  • 44. Palm oil and palm kernel are in
A) competitive demand
B) complementary demand
C) joint supply
  • 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) 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) greater than average variable cost
B) equal to the average cost
C) less than average variable cost
  • 49. If workers at the school canteen sell during the holidays, this is an example of
A) structural unemployment
B) residual unemployment
C) seasonal 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) money market
B) capital market
C) commodity market
  • 53. The fundamental economic problem in every society is
A) the large number of the unemployed
B) inadequate supply of money
C) corruption and mismanagement
  • 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) capital market
B) labour market
C) money market
  • 57. Nations engage in international trade because of the difference in
A) fixed cost
B) comparative cost
C) variable 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 public goods are provided
B) more private schools are established
C) subsidy is provided on petroleum products
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