February 16, 2022
INSTRUCTION: Each question is followed
by four options lettered A to D. Choose the correct option for each question.
1.
Economic
problems arise in all societies because
a.
Resources
are mismanaged by leaders
b.
There
is no proper planning
c.
Resources
are not in adequate supply
d.
The
services of economists are not employed
2.
Which
of the following is not emphasized in the production possibility curve?
a.
Scarcity
of resources
b.
Economic
development
c.
Inefficiency
in the use of resources
d.
Unemployment
of labour
3.
The
organization of productive factors is the responsibility of the
a.
management
b.
entrepreneur
c.
production
manager
d.
labour
union
4.
producers
operating in free market economy are more efficient as a result of
a.
the
existence of competition
b.
the
very few number of participants
c.
the
commitment of the shareholders
d.
government’s
regulation of their activities
5.
In a pie chart, the population of a city is
represented by the sector 45o. if the country has a population of 10
million people, then the city’s population is
a.
0.0045
million
b.
4.5
million
c.
1.25 million
d.
16
million
6.
A
downward sloping demand curve means that
a.
Total
revenue declines as price is lowered
b.
Demand
falls as output rises
c.
Demand
falls as output falls
d.
Price
must be lowered to sell more.
7.
If the
price of commodity X rises and consumers shift to commodity Y, then commodities
X and Y are
a.
substitutes
b.
complements
c.
inferior
goods
d.
bought
together
8.
Goods
whose demand vary directly with money income are called
a.
Inferior
goods
b.
Complementary
goods
c.
Substitute
goods
d.
Normal
goods
9.
An
exceptional demand curve can result from
a.
Increase
in price of raw materials
b.
Increase
in the size of the population
c.
Expectation
of future price increase
d.
Change
in taste of the consumer
10. Palm oil and palm kernel are in
a.
Joint
supply
b.
Competitive
demand
c.
Competitive
supply
d.
Complementary
demand
11. Which of the following is true about the
supply of land? it
a.
Is
higher in the urban than in rural area
b.
Varies
with time
c.
Rises
with demand
d.
Is
fixed
12. The
backward bending supply curve of labour indicates
a.
An
abnormal supply situation
b.
The
law of supply
c.
That
labour supply and wages are directly related
d.
That
the elasticity of supply is uniform
13. Supply curve parallel to X axis indicates
a.
Fairly
elastic supply
b.
Infinitely
elastic supply
c.
Fairly
inelastic supply
d.
Perfectly
inelastic supply
14. If the marginal utility of a commodity is
equal to its price, then
a.
The
consumer is in equilibrium
b.
More
of the commodity can be consumed
c.
Total
utility is always equal to its price
d.
The
market is not in equilibrium
15. A price floor is usually fixed
a.
At the
equilibrium and causes no shortage
b.
Above
the equilibrium and causes shortage
c.
Below
the equilibrium and causes surpluses
d.
Above
the equilibrium and causes surpluses
16. A market is in equilibrium when
a.
There
is no government intervention
b.
The
demand is the same as the supply
c.
Buyers
and sellers are free to sell more goods
d.
There
is no free entry and exit
17. A firm’s average cost decreases in the
long-run because of
a.
Increasing
return to scale
b.
Diminishing
average returns
c.
Decreasing
marginal returns
d.
Decreasing
average fixed cost
18. The larger a firm, the lower its cost of
production. This statement explains the
a.
Law of
diminishing returns
b.
Concept
of economies of scale
c.
Law of
comparative cost advantage
d.
Theory
of division of labour
Use the table below to answer questions 19 & 20
|
Quantity |
0 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
|
Total cost |
20 |
25 |
28 |
30 |
35 |
55 |
92 |
135 |
19. The
total fixed cost is
a.
$ 7.00
b.
$
30.00
c.
$
20.00
d.
$
135.00
20. At
output level 5, the total variable cost is
a.
$ 5.00
b.
$
20.00
c.
$
55.00
d.
$
35.00
21. In the long-run, a firm must shut down if
its average revenue is
a.
Greater
than average cost
b.
Less
than average variable cost
c.
Equal
to the minimum average cost
d.
Equal
to the average cost
22. Public limited liability companies are
democratic in nature because
a.
Government
appointees are members of the board
b.
They
are run by elected public officers
c.
Electoral
principles are adopted in the day-to-day management
d.
Shareholders
elect the board of directors
23. In the event of bankruptcy, owners of
joint-stock companies lose
a.
Their
private properties
b.
Both
company and private assets
c.
Only
the capital invested
d.
Only
their dividends
24. Wholesalers play an important role in the
distribution of goods and services because they
a.
Located
very close to the consumers
b.
Finance
both producers and retailers
c.
Pass
information on from retailers to consumers
d.
Sell
in small units to consumers
25. If worker at the food canteen cannot sell
during the holidays, this is an example of
a.
Structural
unemployment
b.
Frictional
unemployment
c.
Seasonal
unemployment
d.
Residual
unemployment
26. Positive checks as envisaged by Thomas
Malthus can be prevented if
a.
Death
rate is reduced
b.
Marriage
is abolished
c.
More
hospitals are built
d.
Moral
restraint is adopted
27. Which of the following factors is not a
reason for farmers’ unstable incomes?
a.
Dependence
on too many crop
b.
Poor
storage facilities
c.
Adverse
weather conditions
d.
Recession
in the world
28. Local firms can help in reducing
unemployment in a country when
a.
Land
acquisition becomes centralized
b.
Imports
of substitution are reduced
c.
Waste
in the is eliminated
d.
Subsidies
to firms are decreased
29. An industry is described as a group of
firms
a.
That
provides jobs for many people
b.
Which
uses advance technology in production
c.
Which
produces similar products
d.
That
provides jobs for few people
30. A baker bought flour and other ingredients
for $250.00, spent $ 52.00 on distribution sold the bread for $ 320.00. The
value added by the baker is
a.
$
302.00
b.
$
52.00
c.
$
18.00
d.
$
622.00
31. In a country with large population of
full-time housewives, national income
a.
Will be composed of goods produced by women
b.
Figures
will be grossly over-stated
c.
Statistics
will be difficult to calculate
d.
Figures
will be grossly under-estimated
32. Holding
money to take care of contingencies is
a.
A
speculative motive
b.
A
transactions motive
c.
A
precautionary motive
d.
An
expansionary motive
33. Demand-pull inflation is likely to be
caused by
a.
An
increase in the cost of factor inputs
b.
Increase
in the income tax rate.
c.
Increase
in bank lending rate
d.
Increasing
large budget deficit
34. If a housewife has meat and wants tomatoes.
She must find someone who has tomatoes to give and want meat. This concept is
described as
a.
Scale
of preference
b.
Opportunity
cost
c.
Complementary
demand
d.
Double
coincidence of want
35. The stock exchange market is an example of
the
a.
Labour
market
b.
Money
market
c.
Commodity
market
d.
Capital
market
36. An electrical engineer who is teaching
Physics in secondary school is said to be
a.
underemployed
b.
unemployed
c.
fully
employed
d.
technologically
unemployed
37. One benefit a country can derive from the
extraction of crude oil is increase in
a.
population
b.
employment
c.
money
supply
d.
demand
for import
38. Which of the following cannot be classified
as a natural resource?
a.
Iron
rod
b.
Wild
life
c.
Solar
energy
d.
Gold
39. The following are characteristics of
labour, except that it
a.
Is
immobile
b.
Needs
motivation
c.
Receives
wages and salaries
d.
Controls
other factors of production
40. Goods consumed out of habit have
a.
Elastic
demand
b.
Inelastic
demand
c.
Unitary
elastic demand
d.
Perfectly
elastic demand
THEORY
1.
The
utility schedule of a consumer for a brand of ice cream is shown in the table
below. Use the information to answer the
questions that follow:
|
Units
consumed (Q) |
Total utility
(TU) |
Marginal
utility (MU) |
|
0 |
0 |
- |
|
1 |
10 |
10 |
|
2 |
19 |
R |
|
3 |
P |
6 |
|
4 |
30 |
5 |
|
5 |
31 |
S |
|
6 |
Q |
0 |
|
7 |
29 |
-2 |
a.
Calculate
the values of P,Q,R and S.
b.
Given
that the price of ice cream is $1.00 per unit, at what level of consumption is the consumer at equilibrium?
c.
Using a graph sheet, draw the marginal utility
curve.
2.
The
table below represents the cost function of a poultry farm. The price of a
crate of egg is $21. Use the information contained in the table to answer the
questions that follows.
|
Quantity of
eggs (in crates) |
Total Cost
(in $) |
|
0 |
50 |
|
1 |
55 |
|
2 |
62 |
|
3 |
75 |
|
4 |
96 |
|
5 |
125 |
|
6 |
162 |
|
7 |
203 |
|
8 |
248 |
a.
What
is the fixed cost of the farm?
b.
(i)
Calculate the marginal cost at each level of output. (ii) What is the profit
maximizing output of the farm?
c.
Using
graph sheet, draw the demand curve for the farm.
3.
a. Define
optimum population.
b. In what three
ways can rapid population growth slow down the rate economic development?
c. Describe any three
measures that can be adopted to control rapid population growth.
4.
a. Differentiate
between unemployment and underemployment.
b. With one
example each, explain the following:
(I) seasonal unemployment.
(ii) structural unemployment.
(iii) frictional unemployment.
(iv) cyclical unemployment.
5.
a.
What are state-owned enterprises?
b. State any three
reasons for the establishment of state-owned enterprises.
c. Highlight any four
problems associated with state-owned enterprises.
6.
a. (i)
What is trade union? (ii) Outline any two weapons used by trade union to
achieve their objectives
b. Describe any four functions of trade unions.
7.
a.
What is Money?
b. Identify
any three problems associated with
trade by barter.
c. Explain
any three ways by which the advent
of money has solved the problems of
the barter system.
8.
a.
What is a centrally planned economy?
b. (i) Outline any four features of a capitalist economy. (ii) Outline any four features of a socialist economy.