1. The study of economics becomes necessary because of the

A. large population size of the world

B. scarcity of resources

C. opportunity cost of goods and services

D. needs to satisfy every desire of man


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

A. social cost

B. real cost

C. fixed cost

D. variable cost


3. Choice is necessitated by

A. demand and supply

B. cost of production

C. production possibility curve

D. scarcity of resources


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

A. frictional unemployment

B. residual unemployment

C. structural unemployment

D. mass unemployment


5. All the following are features of market economies except

A. competition among producers

B. demand and supply force guiding production decision

C. that profit motive is paramount

D. public ownership of capital


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

A. capital economic system

B. command economic system

C. combined economic system

D. traditional


7. In a capitalist economy, resources are

A. collectively owned

B. jointly owned

C. privately owned

D. 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

B. socialist economy

C. welfare economy

D. Traditional economy


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

A. protect the interest of the owners

B. promote exports

C. provide infrastructure

D. maximize profits


10. The demand and supply function of a commodity are given as below.

Qd = 20 - 2p

Qs = 6p - 12

Where p = price in naira, Qd = Quantity demanded and Qs = Quantity supplied. The equilibrium price is

A. 2 Naira

B. 4 Naira

C. 6 Naira

D. 20 Naira


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

A. competitive demand

B. complemetary demand

C. composite demand

D. joint demand


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

A. exceptional demand

B. derived demand

C. competitive demand

D. joint demand


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

A. composite supply

B. joint supply

C. competitive supply

D. short run supply


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

A. perfectly inelastic

B. inelastic

C. perfectly elastic

D. elastic


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

A. An increase in demand for X will increase supply of Y

B. An increase in demand for X will leave the supply of Y unchanged

C. An increase in demand for Y will raise the price of X

D. An increase in demand for X will cause less of Y to be produced


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

A. positive income elasticity

B. negative income elasticity

C. positive cross elasticity

D. negative cross elasticity


17. The interaction of supply and demands for labour determines

A. production

B. income

C. wage

D. profits


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

A. sellers

B. industries

C. distributors

D. consumers


19. A consumer maximizes his utility in consuming a good 'X' when

A. Mux = Px

B. Px > Mux

C. price is falling

D. Mux > Px


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

A. average product is maximum

B. Average product is minimum

C. Marginal Product is maximum

D. Marginal Product is increasing


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

A. agent

B. wholesaler

C. consumer

D. distributor


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

A. insurance

B. petroleum

C. commerce

D. tourism


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

A. optimally

B. efficiently

C. inefficiently

D. maximally


24. Labour can be efficient when there are

A. adequate tools to work with

B. high level of employment

C. limited vacancies

D. government restrictions


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

A. the law of variable proportions

B. increasing returns to scale

C. decreasing use of inputs

D. change output during the production period


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

A. P = AR < MR

B. P > AR = MR

C. P = MR < AR

D. P = AR = MR


27. One advantage of a sole proprietor is that

A. it can be managed without conflicts

B. the sole proprietor raises money from the public

C. it makes an increase in the volume of business possible

D. there is no limit to the number pf people who may bring in capital


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

A. the goods are heterogenous

B. there is preferential treatment

C. there is a large number of buyers and sellers

D. buyers and sellers are easily influenced


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

A. a product market

B. a capital price market

C. an imperfect market

D. a perfect market


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

A. it makes labour force to be defective

B. it brings higher wage rate

C. it increases the size of labour force

D. 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

A. 50,000 people per square kilometre

B. 0.2 million people per square kilometre

C. 0.5 million people per square kilometre

D. 2 million people per square kilometre


32. Manufacturing involves the process of

A. making goods available

B. providing finished products

C. changing items to new states

D. producing capital goods only


33. Disposable income is total income

A. less tax

B. divided by tax

C. plus tax

D. multiplied by tax

Use the information below to answer these questions 34 to 36

Depreciation = $40,000

Gross Domestic Product = $100,000

Factor Payments to Foreigners = $20,000

Factor Receipts from Abroad = $25,000


34. The Gross National Product is equal to

A. $40,000

B. $50,000

C. $105,000

D. $125,000


35. The National Income is equal to

A. $45,000

B. $60,000

C. $65,000

D. $195,000


36. The Net Domestic Product is

A. $55,000

B. $60,000

C. $140,000

D. $165,000


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

A. merchant banks

B. mortgage banks

C. discount houses

D. commercial banks


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

A. retail banking

B. open market operation

C. selective credit control

D. credit creation


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

A. Commercial banks

B. The Mortgage Bank

C. The Central Bank

D. Development Bank


40. The tax imposed on good manufacture within a country is

A. an excise tax

B. a capital gain tax

C. profit tax

D. a sales tax


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

A. recurrent expenditure

B. capital expenditure

C. supplementary expenditure

D. variable expenditure


42. Fiscal policy is associated with

A. taxation and government expenditure

B. re-structuring of the banks

C. injection of more money into the economy

D. reduction in economic activities


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

A. aggregate savings exceeds aggregate consumption

B. aggregate consumption equals aggregate savings

C. productive resource are in excess of the demand for them

D. productive resource are scarce relative to the demand for them


44. Economic development is reflected in the

A. scarcity of capital

B. increase in the price level

C. decline in the agricultural production

D. increase in productive capacity


45. Terms of trade may be define as the

A. trade between one country and another

B. relationship between country's receipt from others and payment to others

C. rate at which a country's export exchange for imports

D. different between the value of export and imports


46. The terms of trade is described as unfavourable when

A. the price of imports rises relative to those of exports

B. the price of exports rises relative to those of imports

C. the net income from aabroad does not change

D. the value of exports exceeds those of imports


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

A. visible exports

B. official transfers

C. transfer income

D. divisible exports


48. One major aim of a cartel is to

A. increase production

B. regulate output through quota system

C. have a joint account

D. share profits equally


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

A. Nigeria, Iraq, Venezuela, Kuwait and Ghana

B. Saudi Arabia, Kuwait, Sierra Leon, Iran and Iraq

C. Algeria, Kuwait, Venezuela, Iran and The Gambia

D. Kuwait, Venezuela, Iran Iraq and Saudi Arabia


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

A. Cotonou

B. Harare

C. Abidjan

D. Lagos