1. The study of Economics becomes necessary because of the

• large population size of the world
• scarcity of resources
• opportunity cost of goods and services
• need to satisfy every desire of man

2. The concept of opportunity cost is also referred to as

• social cost
• real cost
• fixed cost
• variable cost

3. Choice is necessitated by

• demand and supply
• cost of production
• production possibility curve
• scarcity of resources

4. A type of unemployment which occurs due to technological progress is called

• frictional unemployment
• residual unemployment
• structural unemployment
• mass unemployment

5. All the following are features of market economies except

• competition among producers
• demand and supply forces guiding production decisions
• that profit motive is paramount
• public ownership of capital

6. The economic system which relies mainly on the price mechanism for the allocation of scarce resources is known as

• capitalist economic system
• command economic system
• combined economic system
• traditional economic system

7. In a capitalist economy, resources are

• collectively owned
• jointly owned
• privately owned
• communally owned

8. An economic system where the central planning authority determines what goods to produce and in what quantity is known as a

• market economy
• socialist economy
• welfare economy
• traditional economy

9. The main objective of setting up a private business organization is to

• protect the interest of the owners
• promote exports.
• provide infrastructure
• maximize profits

10. The demand and supply functions of a commodity are given as follows: Qd = 20-2p Qs = 6p-12 Where P = price in naira, Qd = Quantity demanded and Qs = Quantity supplied. The equilibrium price is

• 2 Naira
• 4 Naira
• 6 Naira
• 20 Naira

11. The type of demand that exists between torchlight and battery is

• competitive demand
• complementary demand
• composite demand
• independent demand

12. When the price of a commodity increases and the quantity demanded also increases, this is a case of

• exceptional demand
• derived demand
• competitive demand
• joint demand

13. If a fall in price of one commodity leads to an increase in the supply of another commodity, both commodities have

• composite supply
• joint supply
• competitive supply
• short run supply

14. At a co-efficient of price elasticity of supply of 0.5, supply is

• perfectly inelastic
• inelastic
• perfectly elastic
• elastic

15. If in the short-run commodity X and commodity Y are supplied jointly, which of the following is correct?

• An increase in demand for X will increase supply of Y
• An increase in demand for X will leave the supply of Y unchanged
• An increase in demand for Y will raise the price of X
• An increase in demand for X will cause less of Y to be produced

16. If an increase in earnings leads to more of a commodity being demanded, the good is said to have

• positive income elasticity
• negative income elasticity
• positive cross elasticity
• negative cross elasticity

17. Interaction of supply and demand for labour determines

• production
• income
• wage
• profit

18. Government fixing of prices below the equilibrium point is aimed at protecting the

• sellers
• industries
• distributors
• consumers

19. A consumer maximizes his utility in consuming a good ‘x’ when

• Mux = Px
• Px > Mux
• Price is falling
• Mux > Px

20. The relationship between Marginal Product (MP) and Average Product (AP) is such that they are equal when

• Average Product is maximum
• Average Product is minimum
• Marginal Product is maximum
• Marginal Product is increasing.

21. Who among the following is the intermediary between the producer and the retailer?

• Agent
• Wholesaler
• Consumer
• Distributor

22. Which of the following sectors is most capital intensive?

• Insurance
• Petroleum
• Commerce
• Tourism

23. A society that operates below the production possibility curve is using its productive resources

• optimally
• efficiently
• inefficiently
• maximally

24. Labour can be efficient when there are

• adequate tools to work with
• high levels of employment
• limited vacancies
• government restrictions

25. What accounts for the ‘U-shape’ of the short run average cost (AC) curve?

• The law of variable proportions
• Increasing returns to scale
• Decreasing use of inputs
• Changing output during the production period

26. Which of these is true of a perfect competitor?

• P=ARB.
• P>AR = MR
• P=MRD.
• P = AR = MR

27. One advantage of a sole proprietorship is that

• it can be managed without conflicts
• the sole proprietor raises money from the public.
• it makes an increase in the volume of business possible
• there is no limit to the number of people who may bring in capital

28. Which of the following is a condition necessary for a perfect market?

• The goods are heterogeneous
• There is preferential treatment
• There is a large number of buyers and sellers
• Buyers and sellers are easily influenced

29. A market in which a single price obtains for a product is known as

• a product market
• a capital price market
• an imperfect market
• a perfect market

30. What is the effect of pursuit of higher education on the size of labour force?

• It makes labour force to be defective
• It brings higher wage rate
• It increases the size of labour force
• It reduces the size of labour force

31. The population density of town Y made up of 50 square kilometre land area and 100 million people is

• 50 000 people per square kilometre
• 0.2 million people per square kilometre
• 0.5 million people per square kilometre
• 2 million people per square kilometre

32. Manufacturing involves the process of

• making goods available
• providing finished products
• changing items to new states
• producing capital goods only

33. Disposable income is total income

• less tax
• divided by tax
• plus tax
• multiplied by tax

34. Use the information below to answer questions 34 to 36. Depreciation = $40,000 Gross Domestic Product = $100,000 Factor Payments to Foreigner$20,000 Factor Receiptsfrom Abroad $25,000. The Gross National Product is equal to

• $40,000
• $50,000
• $105,000
• $125,000

35. The National Income is equal to

• $45,000
• $60,000
• $65,000
• $195,000

36. The Net Domestic Product is

• $55,000
• $60,000
• $140,000
• $165,000

37. Which of the following is specialized in lending money for the purpose of developing real estate?

• Merchant banks
• Mortgage banks
• Discount houses
• Commercial banks

38. The marketing of government securities by the Central Bank is termed

• retail banking
• open market operations
• selective credit control
• credit creation

39. Which one of the following serves as a banker’s bank?

• Commercial Bank
• The Mortgage Bank
• The Central Bank
• Development Bank

40. The tax imposed on goods manufactured within a country is

• an excise tax
• a capital gains tax
• profit tax
• a sales tax

41. Government expenditure on the construction of roads and bridges is

• recurrent expenditure
• capital expenditure
• supplementary expenditure
• variable expenditure

42. Fiscal policy is associated with

• taxation and government expenditure
• re-structuring of the banks
• injection of more money into the economy
• reduction in economic activities

43. The need for development planning arises largely from the fact that

• aggregate savings exceed aggregate consumption
• aggregate consumption equals aggregate savings
• productive resources are in excess of the demand for them
• productive resources are scarce relative to the demand for them

44. Economic development is reflected in

• scarcity of capital
• increase in the price level
• decline in agricultural production
• increase in productive capacity

45. Terms of trade may be defined as the

• trade between one country and another
• relationships between country’s receipt from others and payment to others
• rate at which a countryâ€s exports exchange for imports
• difference between the value of exports and imports

46. The terms of trade is described as unfavourable when

• the price of imports rise relative to those of exports
• the price of exports rise relative to those of imports
• the net income from abroad does not change
• the value of exports exceeds those of imports

47. Expenditure by foreign tourists in a country will be recorded as

• invisible exports
• official transfers
• transfer income
• visible exports

48. One major aim of a cartel is to

• increase production
• regulate output through quota system
• have a joint account
• share profits equally

49. The five countries that established the Organization of Petroleum Exporting Countries (OPEC) are

• Nigeria, Iraq, Venezuela, Kuwait and Ghana
• Saudi Arabia, Kuwait, Sierra Leone, Iran and Iraq
• Algeria, Kuwait, Venezuela, Iran and The Gambia
• Kuwait, Venezuela, Iran, Iraq and Saudi Arabia

50. The headquarters of the African Development Bank (ADB) was originally located at

• Cotonou
• Harare
• Abidjan
• Lagos

ANSWERS

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