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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) geography
D) economics
  • 2. Economics is best defined as the study of
A) how to make profit
B) human behaviour as a relationship between ends and scarce means
C) money and banking
D) the production of goods only
  • 3. Who is regarded as the father of modern economics?
A) John Keynes
B) David Ricardo
C) Adam Smith
D) Karl Marx
  • 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) political economics
B) business economics
C) macro-economics
D) micro-economics
  • 6. The term 'choice' in economics arises because
A) wants are limited
B) resources are scarce
C) goods are abundant
D) people are greedy
  • 7. Which of these best describes opportunity cost?
A) The next best alternative forgone
B) cost of production
C) The total benefit gained
D) The amount of money spent
  • 8. Wants are said to be unlimited because
A) money is scarce
B) governments are corrupt
C) new wants keep arising
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) waste resources
B) ignore opportunity costs
C) spend carelessly
D) make rational decisions
  • 11. Government studies economics mainly to
A) formulate good policies
B) exploit the poor
C) raise salaries
D) increase corruption
  • 12. Economics contributes to national development by
A) discouraging production
B) Helping efficient resource use
C) encouraging waste
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) determining market trends
B) producing advertisments
C) increasing wages automatically
D) printing money
  • 15. The basic economic problems arise because
A) prices are low
B) population is high
C) governments are weak
D) wants are unlimited and resources are limited
  • 16. 'What to produce' refers to
A) type of goods to produce
B) choice of techniques
C) location of production
D) cost of production
  • 17. 'How to produce' refers to
A) the total output
B) the method or technique of production
C) who will consume the goods
D) the time of production
  • 18. 'For whom to produce' means
A) hiring workers
B) determining the cost
C) choosing who gets the goods and services
D) deciding what to export
  • 19. Which of the following helps solve the basic economic problems?
A) Choice
B) Scarcity
C) Inflation
D) Trade unions
  • 20. Production in economics means
A) manufacturing only
B) selling goods at a market
C) buying and storing
D) creating goods and services to satisfy human wants
  • 21. The major aim of production is to
A) reduce exports
B) create employment
C) increase population
D) satisfy human wants
  • 22. The process that changes raw-materials into finished goods is called
A) exchange
B) distribution
C) consumption
D) manufacturing
  • 23. Primary production involves
A) mining, farming and fishing
B) advertising
C) banking and insurance
D) transport and trade
  • 24. Secondary production includes
A) banking
B) teaching
C) farming
D) manufacturing
  • 25. Tertiary production involves
A) construction
B) mining
C) service industries
D) manufacturing
  • 26. When goods are moved from factory to consumers, this is
A) production
B) consumption
C) distribution
D) exchange
  • 27. Which of these is a form of indirect production?
A) self-cooking
B) Tailor sewing for pay
C) Washing your own clothes
D) Building your own house
  • 28. The reward for the successful organization of production is
A) profit
B) rent
C) wage
D) interest
  • 29. How many major factors of production are there?
A) Five
B) Four
C) Two
D) Three
  • 30. The reward for land is
A) Rent
B) profit
C) wage
D) interest
  • 31. Land as a factor of production refers to
A) all natural resources used in production
B) soil only
C) capital
D) buildings and machines
  • 32. Labour refers to
A) land
B) all human efforts used in production
C) buildings
D) machines
  • 33. The reward for labour is
A) wage
B) interest
C) profit
D) rent
  • 34. Capital is important in production because it
A) decreases output
B) causes scarcity
C) increases efficiency
D) reduces unemployment
  • 35. The entrepreneur is responsible for
A) making government policies
B) earning rent
C) providing only labour
D) organizing and managing the factors of production
  • 36. The reward for the entrepreneur is
A) interest
B) rent
C) profit
D) wage
  • 37. Which of the following IS NOT a reward of any factor of production?
A) Interest
B) Subsidy
C) Rent
D) Profit
  • 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) combined in the production process
B) purchased for the purpose of production
C) brought into the factory
D) profitable to the production process
  • 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 needs are easy to define
B) human wants are limitless while the means to satisfy them are limited
C) human wants are more than human wants
D) material things are more than human wants
  • 41. An example of circulating capital used by an entrepreneur is
A) electric power
B) pipe-borne water
C) factory building
D) raw materials
  • 42. Immobility of land in the geographical sense is applicable ONLY to
A) vegetation and it's products
B) all natural resources
C) fishes in water bodies
D) land as the earth surface
  • 43. Which of the following factors of production is the most mobile?
A) Capital
B) Land
C) Entrepreneur
D) Labour
  • 44. The act of combining factor inputs in order to obtain specific output is known as
A) manufacturing
B) production
C) industrialization
D) factor procurement
  • 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) it provides money which is essential for the growth of business
D) most tasks can be done with bare hands
  • 46. Which of the following factors of production consists of man-made goods?
A) Capital
B) labour
C) Entrepreneur
D) Land
  • 47. Which of the following IS NOT regarded as labour?
A) Immobility of labour
B) Skillful effort
C) Mental effort
D) Physical effort
  • 48. Choice is necessary because resources
A) are limited
B) are available
C) are available
D) are scarce
  • 49. Economic problems arise because of
A) corruption in high places
B) the creation of artificial scarcity
C) the absence of skilled labour
D) inadequate resources
  • 50. Which of the following is a basic economic problem of a society?
A) What to produce
B) Scarcity
C) level of inflation
D) Price of commodity
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