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