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