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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) the wages given up to attend the university
B) transportation and entertainment
C) tuition fee and books
  • 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) 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) textbook
C) labour
  • 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) from a single producer
B) offered for sale at a market price
C) produced for the market
  • 9. Price elasticity of supply can be influenced by the following factors except
A) nature of the product
B) cost of production
C) time period
  • 10. Increase in the supply of a product can be caused by
A) a fall in the cost of production
B) increase in the price of a product
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) inadequate information
B) price legislation
C) excess supply
  • 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 cost of production decreases as output increases
B) average revenue and marginal revenue decreases
C) total cost of production is increasing
  • 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) marginal cost
B) total fixed 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 cost
C) total revenue
  • 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) 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) supply of labour
B) labour force
C) demand of labour
  • 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) external economies
B) internal economies
C) extent of the division of labour
  • 24. Which of the following is a threat to the existence of middlemen
A) sales agents
B) producers cooperative society
C) consumers cooperative society
  • 25. Which of the following is a transfer of income
A) interest
B) pensions
C) rent
  • 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) store of value
B) stable in value
C) medium of exchange
  • 30. The function that distinguishes commercial banks from the central bank is that the former
A) accepts deposit from the public
B) lender of last resort
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) 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) early marriage
B) importation of more consumers goods
C) savings and investment
  • 34. Infant industries can be described as
A) industries producing baby products
B) industries enjoying tax holidays
C) newly established industries
  • 35. Modern international trade is based on the principle of
A) absolute cost advantage
B) terms of trade
C) comparative advantage
  • 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) re afforestation in rural communities
C) land degradation
  • 38. Economic problems arises in all society because
A) there is no proper planning
B) resources are mismanaged by leaders
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) economic development
C) unemployment of labour
  • 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) 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) inferior goods
C) normal goods
  • 43. An exceptional demand curve can result from
A) increases in price of the consumer
B) change in taste of the consumer
C) expectation of future price increase
  • 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 is fixed
B) It rises with demand
C) It varies with time
  • 46. A supply curve parallel to the X -axis indicates
A) infinitely elastic supply
B) fairly 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 free entry and exit
C) there is no government intervention
  • 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) residual unemployment
B) structural 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 transaction motive
B) a precautionary motive
C) a speculative 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) 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) trading
B) agriculture
C) mining
  • 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) labour market
B) money market
C) capital 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) customers increase their borrowing
B) money supply increases
C) borrowing is discouraged
  • 59. The major employer of labour in developing countries is
A) secondary sector
B) primary sector
C) tertiary sector
  • 60. Income is redistributed when the rich are progressively taxed and _________
A) subsidy is provided on petroleum products
B) more public goods are provided
C) more private schools are established
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