Your answers are shown below

1. The main concern of economists is to

• allocate scarce resources to satisfy human wants
• satisfy all human wants
• redistribute income between the rich and the poor
• control the growth of population

2. Productive resources can also be called

• principle of production
• factors of production
• items of production
• labour and material resources

3. Production covers all the following except when

• utility is created
• a good is manufactured
• a commodity is consumed
• individual wants are satisfied

4. Data presented in tables are usually arranged in .

• charts and graphs
• rows and columns
• graphs and rows
• columns and charts

5. The theory of diminishing marginal utility states that as more units of a commodity are consumed, the

• satisfaction from an extra unit decreases
• satisfaction from an extra unit rises
• satisfaction from an extra unit remains constant
• total satisfaction from the good remains the same

6. Which of the following factors does not cause a change in demand?

• Taste and fashion
• Vagaries of weather
• Price of other commodities
• Price of the commodity

7. If goods P and Q are jointly demanded, an increase in the price of P will likely

• leave the demand for Q constant but reduce tne quantity demanded of P
• reduce the quantity of P but increase the price of Q
• increase the quantity supplied of Q
• decrease the quantity demanded of Q

8. The gap between demand and supply curves above the equilibrum price is

• normal demand
• excess supply
• equilibrium quantity
• abnormal demand

9. A major function of the price mechanism is that it determines the

• allocation of resources
• amount of national savings
• population of the country
• number of goods to be taxed

10. Which of the following determinants of supply cannot be predicted easily?

• Price of the commodity
• New techniques of production
• National emergencies
• Mobility of labour

11. If the co-efficient of elasticity of demand is 1.5, then the demand is

• fairly inelastic
• perfectly elastic
• elastic
• inelastic

12. Small scale enterprises are important in a country because

• they usually produce goods for the dependants
• they provide after-sales services only to the rich
• the prices of their products are fixed
• they render personalized services to the consumers

13. In the long run all factors of production are

• expensive
• variable
• durable
• fixed

14. The transformation curve slope indicates the

• opportunity cost of producing one commodity for another
• opportunity cost of producing two commodities at a time
• sale of the plant to other investors
• decrease in the cost of production

15. Which of the following is regarded as fixed cost?

• Expenditure on raw materials
• Expenditure on fuel
• Expenditure on power
• Rent on land

16. Revenue is the

• cost of good multiplied by the quantity sold
• price of good multiplied by the quantity sold
• quantity of good plus purchase price
• quantity supplied less quantity sold

17. A business outfit is said to be a public limited company when it

• is owned by government
• operates as a public corporation
• is run by the public
• sells its shares to members of the public

18. The main characteristics of an ordinary share are

• maximum risk, fixed dividends, voting rights
• maximum risk, fixed dividends, no voting rights
• maximum risk, variable dividends, voting rights
• minimum risk, fixed dividends, no voting rights

19. The monopolist can determine

• price and output
• price only
• output only
• price or output

20. A market situation with a large number of firms selling closely related but differentiated products is

• monopolistic competition
• perfect competition
• monopoly
• monopsony

21. Equilibrium under perfect competition requires that

• MC = MR but AR < AC
• MR = MC = AR = AC
• AC=ARD.
• TR < TC

22. The purely competitive firm should close down when its price is less than its

• average variable cost
• total fixed cost
• average total cost
• marginal cost

23. During a sale by auction, the price at which the good is finally sold is determined mostly by

• competition between buyers and sellers
• competition among buyers
• competition among sellers
• government policy

24. Which of the following does not affect a country’s population?

• Birth rate
• Death rate
• Emigration
• Unemployment

25. The trade unions in West Africa have achieved the following for the workers except

• increased wages
• better condition of service
• competitive determination of wage rate
• improved welfare facilities

26. The employers’ demand curve for labour is represented by the

• marginal product curve of labour
• total product curve of labour
• average product curve of labour
• total cost curve of labour

27. Agriculture plays a dominant role in our country because

• it is the main source of energy
• it employs more than 50% of the total labour force
• it supplies all industrial inputs
• there are large plantations of cocoa, groundnut and palm oil

28. The main objective of specialization is

• allocate resources
• limit workers’ skill
• increase the use of labour
• increase productivity

29. Industry can be defined as

• several firms producing different commodities
• group of firms producing similar commodities
• different firms producing equal number of commodities
• many firms producing for export

30. Which of the following is a disadvantage of large scale production?

• Market economies
• Managerial economies
• Impersonal organization
• Division of labour

31. The national income of a country can be estimated through the

• output approach
• input approach
• empirical approach
• census approach

32. Use the table below to answer questions 32 and 33.

Items $ Million
1 Final consumption expenditure 500
2 Gross private investment 150
3 Government purchases 300
4 Depreciation 25
5 Net factor income -10

The gross domestic product (GDP) is equal to

• $825 m
• $925 m
• $940 m
• $950 m

33. The net capital formation is

• $115 m
• $125 m
• $915 m
• $925 m

34. A medium of exchange which is generally acceptable is

• barter
• a cheque
• government bond
• money

35. Since money is demanded for what it can buy, the demand is said to be

• derived
• joint
• composite
• complementary

36. The supply of money in the economy includes

• bank notes only
• bank notes and coins
• bank notes and bank deposits
• bank notes, coins and bank deposits

37. The indicator of the value of money is

• the general price level
• the equilibrium price
• consumers’ income
• the interest rate

38. A continuous fall in the general price level is called

• recession
• depression
• deflation
• stagflation

39. The Central Bank can restrict credit through

• depreciation of assets
• granting overdraft
• direct investment
• open market operation

40. Creation of money by commercial banks is done by

• increasing the cash ratio
• printing money
• lending to borrowers
• issuing cheques

41. Public finance is basically an analysis of the

• income and expenditure of government
• expenditure patterns of government
• current and capital receipts of government
• current and capital expenditure of government

42. A major use of taxation is to

• control population growth rate
• influence people’s spending habits
• control money supply
• create bank credits

43. A tax which is expressed as a given absolute sum of money per unit of a commodity is known as

• a specific tax
• a direct tax
• an indirect tax
• a value added tax

44. All indirect taxes tend to be

• progressive
• regressive
• certain
• equitable

45. Which of the following will have a more destabilizing effect on the economy?

• A tax on the prices of vehicles
• A tax on petrol
• A decrease in the supply of vehicles
• Moderate increase in wages

46. An important feature of economic development is

• population explosion
• reduction in exports
• high literacy level
• low exports

47. Trade among nations is desirable because it

• enables people in a country to know those in other countries
• makes it possible for people in a country to enjoy the goods and services produced in other countries.
• enables residents in a country to understand the language of residents of other countries
• makes it possible for a country to have the currencies of other countries

48. Invisible trade refers to trade in

• services
• goods and services
• tangible goods
• crude oil

49. Balance of payment surplus implies that the value of the country’s

• exports exceeds its imports
• imports exceeds its exports
• exports is equal to its imports
• terms of trade is constant

50. The Economic Commission for Africa is an agency of the

• Organization of African Unity
• African Development Bank
• European Union
• United Nations Organization

ANSWERS

1. A
2. B
3. D
4. B
5. A
6. D
7. C
8. B
9. A
10. C
11. C
12. D
13. B
14. B
15. D
16. B
17. D
18. C
19. D
20. A
21. B
22. C
23. B
24. D
25. D
26. A
27. B
28. D
29. B
30. B
31. A
32. D
33. C
34. D
35. A
36. D
37. A
38. C
39. D
40. C
41. A
42. C
43. D
44. B
45. B
46. C
47. B
48. A
49. A
50. D