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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) the wages given up to attend the university
B) tuition fee and books
C) transportation and entertainment
  • 3. Which of the following item is not an option of circulating capital
A) machinery
B) fuel
C) raw material
  • 4. In a market economy,the problem of what goods to produced is solved primarily by
A) directives of the government
B) the pattern of consumers spending
C) producers of consumer goods
  • 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) taxation
B) cost of production
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) a fall in the cost of production
B) increase in the income of consumers
C) increase in the price of a product
  • 11. A rational consumer will purchase a product whose price is
A) equal to his marginal utility
B) less than his total utility
C) equal to his total 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) demand price
B) price fall
C) market clearing price
  • 14. When a firm is enjoying internal economies of scale, its
A) average cost of production decreases as output increases
B) total cost of production is increasing
C) average revenue and marginal revenue decreases
  • 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 cost
C) total revenue
  • 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) statutory company
B) private firm
C) public company
  • 20. If a state owned firm is sold through the stock market,the organization becomes
A) public corporation
B) partnership
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) 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) sales agents
B) consumers cooperative society
C) producers 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) add net factor income from abroad
B) avoid multiple counting of output
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) deflation
C) devaluation
  • 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) 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) services the public debts
B) lender of last resort
C) accepts deposit from the public
  • 31. Direct taxes include
A) capital gain tax
B) excise duty
C) specific tax
  • 32. Which of the following is not a feature of underdevelopment
A) low life expectancy
B) income inequality
C) high productivity
  • 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 producing baby products
B) industries enjoying tax holidays
C) newly established industries
  • 35. Modern international trade is based on the principle of
A) comparative advantage
B) terms of trade
C) absolute cost advantage
  • 36. Which of the following resources is renewable
A) rice
B) iron ore
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) unemployment of labour
C) economic development
  • 40. The organization of productive factors is the responsibility of the
A) entrepreneur
B) labour union
C) management
  • 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) expectation of future price increase
B) change in taste of the consumer
C) increases in price 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 is fixed
B) It rises with demand
C) It varies with time
  • 46. A supply curve parallel to the X -axis indicates
A) perfectly inelastic
B) fairly elastic supply
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) residual unemployment
C) structural unemployment
  • 50. The largest component of national income in developing countries consist of
A) profits
B) wages and salaries
C) rent
  • 51. Holding money to take care of contingencies is
A) a transaction motive
B) a speculative motive
C) a precautionary motive
  • 52. The stock exchange is an example of the
A) capital market
B) commodity market
C) money market
  • 53. The fundamental economic problem in every society is
A) corruption and mismanagement
B) inadequate supply of money
C) the large number of the unemployed
  • 54. The poorer the country, the larger the percentage of labour force engaged in _______
A) mining
B) agriculture
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) money market
C) labour market
  • 57. Nations engage in international trade because of the difference in
A) variable cost
B) fixed cost
C) comparative 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) primary sector
B) secondary 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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