1. Human wants are

A. limited

B. scarce

C. unlimited

D. in grades


2. The difference between the money cost and the real cost of any item is that

A. real cost is the alternative forgone while the money cost is the actual amount paid for buying the item

B. the real cost is the opportunity cost, while the money cost is the marginal cost

C. money cost is the opportunity, cost while the real cost is the actual cost in monetary terms

D. money cost is always greater than the real cost


3. The production possibility curve (PPC) indicates that as more of one good is produced.

A. less of the other goods is produced

B. the same quantity of the other good is produced

C. more of the other good is produced

D. none of the other good is produced


4. An arrangement of data in rows and columns is referred to as

A. graph

B. bar chart

C. pie chart

D. table


5. A normal demand curve slopes

A. downward from left to right

B. upwards from right to left

C. downwards from right to left

D. upwards from left to right


6. The co-efficient of income elasticity of demand for inferior goods is

A. positive

B. equal to one

C. less than one

D. negative

7. If a 20% rise in price of Whiskey leads to a 30% increase in quantity demanded of Schnapps, the cross elasticity of demand is

A. 3.0

B. 2.5

C. 2.3

D. 1.5


8. Palm oil and palm kernel have

A. competitive supply

B. excess supply

C. joint supply

D. composite supply


9. A supply curve which is vertical has an elasticity co-efficient of

A. 0.0

B. 0.5

C. 1.5

D. 2


10. If the current price of an apple is twice that of last year, it implies that the value of money is

A. stable

B. falling

C. rising

D. getting stronger


11. Price fixed above the equilibrium is to

A. protect agricultural producers

B. discourage agricultural producers

C. lower the price of agricultural producers

D. favour consumers


12. A consumer purchasing a commodity X will maximize his satisfaction if

A. Px = MUx

B. Px ≥ MUx

C. Px > MUx

D. Px < MUx


13. When total utility is constant, it means marginal utility is

A. increasing

B. zero

C. decreasing

D. one


14. A rational consumer is one who

A. spends his income to maximize satisfaction

B. is not influenced by advertisement

C. behaves in a particular way all the time

D. knows the price of all goods and buys the cheapest


15. Which of the following is not true about land?

A. the supply is fixed

B. land is mobile

C. it is subject to diminishing returns

D. land is heterogeneous


16. The type of production that involve the tapping and harnessing of natural resources is

A. primary production

B. secondary production

C. tertiary production

D. industrial production


17. Which of the following does not change in the short run?

A. Variable cost

B. marginal cost

C. total cost

D. fixed cost


18. The resource used in production are called

A. variable inputs

B. factors of production

C. capital for production

D. fixed inputs


19. A firm will shut down in the long run if its earning is

A. less than normal profit

B. greater than normal profit

C. equal to super normal profit

D. less than super normal profit

20. A market structure where profit is maximized when marginal revenue, marginal cost and price are equal is known as

A. perfect competition

B. monopoly

C. oligopoly

D. imperfect competition


21. In which of the following markets does a firm have power to make super normal profits both in the short run and long run?

A. Monopoly

B. Duopoly

C. Oligopoly

D. Monopsony


22. If there are no barriers to entering a market, it means that

A. anyone can become a buyer or a seller

B. unwanted goods can always enter the market

C. the market becomes a dumping ground

D. the goods are not inspected


23. A firm's main aim is to

A. survive the business

B. maximize profits

C. increase its market share

D. satisfy the ambition of its managers


24. One good reason for the elimination of middle men is that they

A. cause increase in price

B. help in price stability

C. grade and blend goods

D. are too many


25. The increase in population growth in big cities is referred to as

A. settlement

B. migration

C. industrialization

D. urbanization


26. Frictional unemployment can be reduced by

A. encouraging the use of restraining schemes

B. removing barriers to labour mobility

C. restricting the introduction of new technology

D. lowering the level of wages paid to young people


27. If the labour force of a country is 2.5 million and 2 million are employed , what is the unemployment rate?

A. 0.2%

B. 20%

C. 200%

D. 250%


28. The grouping of the population according to the economic activities people engage in is

A. age distribution

B. sex distribution

C. geographical distribution

D. occupational distribution


29. Natural growth rate of population can be defined as the

A. difference between birth rate and death rate

B. number of births in a year

C. increase in the population growth in a year

D. difference between the total population and the death rate


30. Which of the following is not a consequence of increased unemployment?

A. a fall in tax revenue for the government

B. a reduction in trade union's influence

C. a fall in death rate

D. an increase in the labour force


31. The following are features of subsistence agriculture except

A. little capital

B. processing of raw materials

C. small allotments of land

D. use of crude oil


32. Which of the following is not true of small companies? They

A. cannot benefit from economies of scale

B. are a good source of new jobs

C. can satisfy demand in specialist markets

D. have a good record of technical innovation


33. The effect of privatization on the industrial sector of a country is that it

A. ensures efficiency

B. discourages efficiency

C. leads to decrease in output

D. leads to liquidation


34. The production strategy used in an over-populated country is

A. import substitution

B. capital intensive

C. labour intensive

D. first come first employed


35. National income is used to measure

A. a country's population size

B. a country's economic growth

C. the human level of development

D. the flow of imports to a country


36. A tax is regressive if the

A. rate of tax is constant at all income levels

B. rate of tax decrease as income increases

C. rate of tax increases as income increases

D. tax is direct rather than indirect


37. When a country's net income from abroad is added to its total output, the result is

A. gross domestic product

B. net national product

C. gross national product

D. net domestic product


38. A fall in national output will necessitate

A. a rise in expenditure on imports

B. a rise in the level of savings

C. an increase in the consumption of expenditure

D. a rise in the standard of living


39. The demand for money to take advantage of changes in bond prices is the

A. unforeseen motive

B. transaction motive

C. speculative motive

D. precautionary motive


40. Cost push inflation is caused by a

A. rise in the cost of production

B. decrease in the transportation cost

C. rise in demand for goods

D. decrease in the cost of production


41. Deposit held in a commercial bank are part of

A. money supply

B. transfer payments

C. ordinary shares

D. treasury bills


42. One profitable form of business undertaken by the commercial banks is

A. the issuing of cheques

B. the payment of standing order

C. lending money to borrowers

D. accepting cheques from customers


43. When governments wants to discourage consumption, they tax goods whose demand is

A. price inelastic

B. abnormal in nature

C. price elastic

D. normal in nature


44. a rise in government expenditure can lead to

A. higher inflation

B. higher unemployment

C. lower profits for industries

D. lower importation of raw materials by industries


45. Tariff is used to protect domestic industries by making foreign goods relatively

A. cheaper in the domestic market

B. more expensive in the domestic market

C. more expensive in the International market

D. cheaper in the international market