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Exam_Economics_Question_SS1
Contributed by: Salami
  • 1. The study of how people make choices in the use of scarce resources is known as
A) sociology
B) political science
C) economics
D) geography
  • 2. Economics is best defined as the study of
A) the production of goods only
B) human behaviour as a relationship between ends and scarce means
C) how to make profit
D) money and banking
  • 3. Who is regarded as the father of modern economics?
A) Karl Marx
B) David Ricardo
C) John Keynes
D) Adam Smith
  • 4. The central concept in economics is
A) money
B) demand
C) utility
D) scarcity
  • 5. The branch of economics that studies the whole economy is
A) macro-economics
B) political economics
C) business economics
D) micro-economics
  • 6. The term 'choice' in economics arises because
A) goods are abundant
B) wants are limited
C) resources are scarce
D) people are greedy
  • 7. Which of these best describes opportunity cost?
A) The total benefit gained
B) The next best alternative forgone
C) cost of production
D) The amount of money spent
  • 8. Wants are said to be unlimited because
A) governments are corrupt
B) new wants keep arising
C) money is scarce
D) man's resources are few
  • 9. The economic problem of scarcity means
A) there are not enough resources to satisfy wants
B) prices are always high
C) there too many goods
D) consumers are rich
  • 10. The study of economics helps individuals to
A) spend carelessly
B) ignore opportunity costs
C) make rational decisions
D) waste resources
  • 11. Government studies economics mainly to
A) formulate good policies
B) raise salaries
C) exploit the poor
D) increase corruption
  • 12. Economics contributes to national development by
A) encouraging waste
B) discouraging production
C) Helping efficient resource use
D) increasing inequality
  • 13. Knowledge of economics helps a consumer to
A) make wise spending decisions
B) waste resources
C) buy more than needed
D) avoid saving
  • 14. Economist help businesses by
A) increasing wages automatically
B) printing money
C) producing advertisments
D) determining market trends
  • 15. The basic economic problems arise because
A) population is high
B) wants are unlimited and resources are limited
C) prices are low
D) governments are weak
  • 16. 'What to produce' refers to
A) location of production
B) type of goods to produce
C) choice of techniques
D) cost of production
  • 17. 'How to produce' refers to
A) who will consume the goods
B) the time of production
C) the method or technique of production
D) the total output
  • 18. 'For whom to produce' means
A) deciding what to export
B) determining the cost
C) choosing who gets the goods and services
D) hiring workers
  • 19. Which of the following helps solve the basic economic problems?
A) Choice
B) Inflation
C) Trade unions
D) Scarcity
  • 20. Production in economics means
A) buying and storing
B) creating goods and services to satisfy human wants
C) selling goods at a market
D) manufacturing only
  • 21. The major aim of production is to
A) increase population
B) reduce exports
C) satisfy human wants
D) create employment
  • 22. The process that changes raw-materials into finished goods is called
A) manufacturing
B) distribution
C) exchange
D) consumption
  • 23. Primary production involves
A) advertising
B) banking and insurance
C) mining, farming and fishing
D) transport and trade
  • 24. Secondary production includes
A) manufacturing
B) banking
C) teaching
D) farming
  • 25. Tertiary production involves
A) service industries
B) construction
C) manufacturing
D) mining
  • 26. When goods are moved from factory to consumers, this is
A) consumption
B) exchange
C) distribution
D) production
  • 27. Which of these is a form of indirect production?
A) Tailor sewing for pay
B) self-cooking
C) Washing your own clothes
D) Building your own house
  • 28. The reward for the successful organization of production is
A) profit
B) wage
C) rent
D) interest
  • 29. How many major factors of production are there?
A) Two
B) Three
C) Four
D) Five
  • 30. The reward for land is
A) Rent
B) profit
C) interest
D) wage
  • 31. Land as a factor of production refers to
A) all natural resources used in production
B) buildings and machines
C) soil only
D) capital
  • 32. Labour refers to
A) machines
B) land
C) buildings
D) all human efforts used in production
  • 33. The reward for labour is
A) rent
B) profit
C) interest
D) wage
  • 34. Capital is important in production because it
A) causes scarcity
B) reduces unemployment
C) decreases output
D) increases efficiency
  • 35. The entrepreneur is responsible for
A) making government policies
B) organizing and managing the factors of production
C) earning rent
D) providing only labour
  • 36. The reward for the entrepreneur is
A) rent
B) interest
C) profit
D) wage
  • 37. Which of the following IS NOT a reward of any factor of production?
A) Profit
B) Rent
C) Subsidy
D) Interest
  • 38. In the study of economics land, labour, capital and entrepreneur are referred to as factors of production. These factors produce commodities only if they are
A) profitable to the production process
B) combined in the production process
C) purchased for the purpose of production
D) brought into the factory
  • 39. Production resources can also be called
A) labour and material resources
B) items of production
C) factors of production
D) primary productive
  • 40. Economics is founded on the principle that
A) human wants are more than human wants
B) material things are more than human wants
C) human wants are limitless while the means to satisfy them are limited
D) human needs are easy to define
  • 41. An example of circulating capital used by an entrepreneur is
A) raw materials
B) electric power
C) pipe-borne water
D) factory building
  • 42. Immobility of land in the geographical sense is applicable ONLY to
A) all natural resources
B) fishes in water bodies
C) land as the earth surface
D) vegetation and it's products
  • 43. Which of the following factors of production is the most mobile?
A) Entrepreneur
B) Capital
C) Land
D) Labour
  • 44. The act of combining factor inputs in order to obtain specific output is known as
A) manufacturing
B) production
C) factor procurement
D) industrialization
  • 45. Capital as a factor of production is important because
A) it enables us to carry out tasks which cannot be done by human effort only
B) people can work without capital
C) most tasks can be done with bare hands
D) it provides money which is essential for the growth of business
  • 46. Which of the following factors of production consists of man-made goods?
A) Capital
B) labour
C) Land
D) Entrepreneur
  • 47. Which of the following IS NOT regarded as labour?
A) Skillful effort
B) Mental effort
C) Physical effort
D) Immobility of labour
  • 48. Choice is necessary because resources
A) are limited
B) are scarce
C) are available
D) are available
  • 49. Economic problems arise because of
A) inadequate resources
B) the creation of artificial scarcity
C) the absence of skilled labour
D) corruption in high places
  • 50. Which of the following is a basic economic problem of a society?
A) What to produce
B) Scarcity
C) Price of commodity
D) level of inflation
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