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