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PES SS1 Economics (OBJ) 3rd Term Exam 2025/2026
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  • 1. Cost means the amount of __ spent to produce goods or services.
A) Time
B) People
C) Money
D) Machines
  • 2. The total cost of producing a good is the sum of --- and ---cost.
A) Good and Bad cost
B) Big and Small cost
C) Old and New cost
D) Fixed and Variable cost
  • 3. Cost that does not change with level of output is called __.
A) Variable cost
B) Total cost
C) Average cost
D) Fixed cost
  • 4. Example of fixed cost is __.
A) Fuel for machines
B) Wages of workers
C) Rent of factory
D) Raw materials
  • 5. Cost that changes directly with output is called ---.
A) Social cost
B) Variable cost
C) Fixed cost
D) Opportunity cost
  • 6. Example of variable cost is ---.
A) Cost of raw materials
B) License fee
C) Insurance premium
D) Salary of manager
  • 7. Total cost is calculated as ---.
A) TC= Fixed cost / Variable cost
B) TC=Fixed cost + Variable cost
C) TC= Fixed cost * Variable cost
D) TC= Fixed cost - Variable cost
  • 8. The cost of the next best alternative forgone is called ---.
A) Private cost
B) Opportunity cost
C) Marginal cost
D) Average cost
  • 9. The cost of producing one additional unit of output is ---.
A) Average cost
B) Total cost
C) Marginal cost
D) Fixed cost
  • 10. Average Cost is equal to ---.
A) FC + VC
B) TC - Quantity
C) TC * Quantity
D) TC / Quantity
  • 11. An economic system is the way a country organizes and manages its ---.
A) Resources and production of goods and services
B) Religion
C) Sports
D) Schools
  • 12. In a capitalist economy, the means of production are owned by ---.
A) Private individuals
B) The community
C) The government
D) Foreigners only
  • 13. A major feature of capitalism is ---.
A) Equal distribution of wealth
B) Profit motive
C) Government controls everything
D) No competition
  • 14. Which country practices capitalism?
A) Cuba
B) China before 1978
C) United States of America
D) North Korea
  • 15. In socialism, the major means of production are owned by ---.
A) Religious leaders
B) No one
C) The state or government
D) Private individuals
  • 16. A feature of socialism is ---.
A) Private ownership of factories
B) Profit maximization
C) Competition
D) Equal distribution of wealth
  • 17. Socialism aims to reduce ---.
A) Jobs
B) Inequality and exploitation
C) Food production
D) Education
  • 18. A mixed economy combines features of ---.
A) Capitalism and Socialism
B) Socialism and Communalism
C) Capitalism and Communalism
D) None of the above
  • 19. Nigeria operates a --- economic system.
A) Pure Socialism
B) Communalism
C) Pure Capitalism
D) Mixed Economy
  • 20. A feature of communalism is ---.
A) Private ownership
B) Profit motive
C) Competition
D) Self-help and cooperation
  • 21. A practical example of diminishing marginal utility is ---.
A) Buying more cars
B) Working more hours
C) Saving more money
D) Eating more and more rice at a sitting
  • 22. The law of diminishing marginal utility helps to explain ---.
A) Cost of production
B) The law of supply
C) Government revenue
D) The law of demand
  • 23. If TU from 3 oranges = 30 utils and TU from 4 oranges = 36 utils, then MU of the 4th orange = ---.
A) 36 utils
B) 6 utils
C) 30 utils
D) 9 utils
  • 24. The formula for Marginal Utility is ---.
A) MU = TU * Quantity
B) MU = TU - Quantity
C) MU = TU + Quantity
D) MU = Change in TU / Change in Quantity
  • 25. Utility can be measured in units called ---.
A) Kilos
B) Dollars
C) Naira
D) Utils
  • 26. When Marginal Utility becomes negative, Total Utility ---.
A) Decreases
B) Remains constant
C) Increases
D) Becomes zero
  • 27. When Marginal Utility becomes zero, Total Utility is at its ---.
A) Negative
B) Zero
C) Maximum
D) Minimum
  • 28. Which of these best explains the law of diminishing marginal utility?
A) The 5th cup of water gives more satisfaction than the 1st cup
B) The 1st cup of water gives more satisfaction than the 5th cup
C) Water has no utility
D) All cups give equal satisfaction
  • 29. If TU increases at a decreasing rate, MU is ---.
A) Increasing
B) Zero
C) Negative
D) Decreasing
  • 30. The two main types of utility are ---.
A) Total Utility and Marginal Utility
B) Private and Social Utility
C) Cost and Revenue Utility
D) Fixed and Variable Utility
  • 31. Price determination in a free market is done through the interaction of __.
A) Cost and Revenue
B) Government and firms
C) Demand and Supply
D) Buyers and sellers
  • 32. The price at which quantity demanded equals quantity supplied is called __.
A) Equilibrium price
B) Market price
C) Controlled price
D) Fixed price
  • 33. At equilibrium price, there is __.
A) Surplus
B) Shortage
C) No excess demand or supply
D) High inflation
  • 34. If demand increases and supply remains constant, equilibrium price will __.
A) Become zero
B) Remain the same
C) Fall
D) Rise
  • 35. If supply increases and demand remains constant, equilibrium price will __.
A) Remain the same
B) Double
C) Rise
D) Fall
  • 36. A situation where quantity demanded is greater than quantity supplied leads to __.
A) Surplus
B) Shortage
C) Equilibrium
D) Glut
  • 37. A situation where quantity supplied is greater than quantity demanded leads to __.
A) Price control
B) Shortage
C) Equilibrium
D) Surplus
  • 38. The forces that bring the market back to equilibrium are __.
A) Price mechanism
B) Advertising
C) Government policy
D) Taxation
  • 39. In the diagram of demand and supply, equilibrium is where the __ curves intersect.
A) Private and Social
B) Demand and Supply
C) Cost and Revenue
D) Fixed and Variable
  • 40. If the price is above equilibrium price, there will be __.
A) Black market
B) Excess demand
C) Excess supply
D) Shortage
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