the cost of production of the last or extra unit of goods produced by a firm
2
The price mechanism
Answer
(A)
regulates supply and demand
3
In a free market economy, the rationing of scarce goods is done principally by?
Answer
(C)
the price mechanism
4
Scale of preference shows
Answer
(D)
consumer's wants in order of priority
5
There is unemployment of resources when production is
Answer
(A)
within the production possibility curve
6
A major characteristic of natural resources is they
Answer
(C)
are free gifts of nature
7
A major disadvantage of a capitalist economy is that it
Answer
(D)
worsens income inequality among the citizens
8
The mining sector of an economy contributes 60% to the Gross Domestic Product(GDP). If the GDP is $540, what is the contribution of the mining sector?
Answer
(C)
$ 324.00
9
The increase in the demand for a commodity may lead to a decrease in the demand for another if both are
Answer
(D)
in competitive demand
10
The demand curve for goods of ostentation is usually
Answer
(B)
positively sloped
11
PN equals average revenue or marginal revenue cure of
Answer
(C)
a perfectly competitive firm
12
If the quantity demanded of a commodity increases from 20 units to 30 units when there is an increase in price from $4.00 to $5.00, the elasticity of demand is
Answer
(C)
2.00
13
The supply curve of a locally-produced good may shift to the right if
Answer
(B)
government increases subsidies
14
In perfectly elastic supply, the supply curve
Answer
(B)
is horizontal
15
A country's budget allocation to various sectors of the economy is shown in the pie chart above...
Use it to answer this question.
If the budget of the country was $7,200, how much is allocated to Education?
Answer
(A)
$2,400.00
16
A country's budget allocation to various sectors of the economy is shown in the pie chart above...
Use it to answer this question
What is the ratio of expenditure on health to Agriculture if the yearly budget is 7200?
Answer
(B)
3:4
17
A consumer of a single commodity is in equilibrium when
Answer
(B)
he equates marginal utility and price
18
If the government imposes a minimum price on a commodity
Answer
(A)
market surplus occurs
19
A minimum price legislation is also called
Answer
(B)
price floor
20
Which of the following factors is not a cause of diminishing returns?
Answer
(D)
Technological innovations
21
In manufacturing, division of labour may be hindered by
Answer
(B)
low level of technology
22
The production cost that varies inversely with output is the
Answer
(D)
average cost
23
A firm that closes down will still incur
Answer
(B)
fixed cost
24
The sufficient condition for a firm to be in equilibrium is that the
Answer
(D)
marginal cost curve cuts the marginal revenue curve from below
25
Cooperative societies are formed mainly to
Answer
(C)
promote and maintain the welfare of members
26
A disadvantage of a jont-stock company is
Answer
(D)
limited control in management by shareholders
27
The middlemen is responsible for
Answer
(D)
breaking the bulk
28
A major function of the retailer is to
Answer
(B)
break bulk and sell products in small units
29
A positive effect of a rapid population increase is
Answer
(C)
a wider market for goods and services
30
Which of the following factors may not affect the efficiency of labour?
Answer
(C)
Race and colour of workforce
31
The type of unemployment found among workers who leave their jobs in search of other jobs is termed
Answer
(C)
frictional unemployment
32
The main objective of marketing boards is to
Answer
(C)
stabilize the incomes of cash crop farmers
33
The point x inside the ppc indicate?
Answer
(C)
some resources are idle
34
Which of the following industries will add more value to primary products?
Answer
(C)
Mining industry
35
Gross National Product (GNP) less the provision for the wear and tear of assets is the
Answer
(B)
net national product
36
An example of transfer payments in national income accounting is
Answer
(B)
unemployment allowance paid to the citizens
37
Increasing national income without effective control of population size in a country can lead to
Answer
(D)
underutilization of resources
38
An example of commodity money is
Answer
(D)
silver
39
If inflation is anticipated, people may
Answer
(B)
spend more money
40
If the Central Bank increases its bank rate
Answer
(C)
the supply of money may be reduced
41
Commercial banks are different from development banks in that the latter
Answer
(D)
do not deal in foreign currencies
42
The use of the bank rate, cash ratio and open market operations constitute
Answer
(B)
monetary policy
43
Fiscal policy measures imply a change in
Answer
(D)
government revenue and expenditure to regulate an economy
44
Economics problems arise in all societies because
Answer
(C)
resource are not in adequate supply
45
Which of the following is not emphasized in a product possibility curve?
Answer
(D)
Unemployment of labour
46
Producers operating in a free market economy are more efficient as a result of
Answer
(A)
the existence of competition
47
In a pie chart, the population of a city is represented by 45. If the country has a population of 10 million people, then the city's population is?
Answer
(C)
1.25 million
48
A downward sloping demand curve means that
Answer
(D)
price must be lowered to sell more
49
If the price of commodity X rises and consumers shift to commodity Y, then commodities X and Y are
Answer
(A)
substitutes
50
An exceptional demand curve can result from
Answer
(C)
expectation of future price increase
51
Palm oil and palm kernel are in
Answer
(A)
joint supply
52
A supply curve parallel to the X-axis indicates
Answer
(B)
infinitely elastic supply
53
If the marginal utility of commodity is equal to its price, then
Answer
(A)
the consumer is in equilibrium
54
A price floor is usually fixed
Answer
(D)
above the equilibrium and causes surpluses
55
A firm's average cost decreases in the long-run because of
Answer
(A)
increasing returns to scale
56
In the long-run, a firm must shut down if its average revenue is
Answer
(B)
less than average variable cost
57
In the event of bankruptcy, owners of joint-stock companies lose
Answer
(C)
only the capital invested
58
Wholesalers play an important in the distribution of goods and services because they
Answer
(B)
finance both producers and retailers
59
If workers at the school canteen cannot sell during the holidays, this is example of
Answer
(C)
seasonal unemployment
60
Positive check as envisaged by Thomas Malthus can be prevented if
Answer
(D)
there is natural calamities
61
Which of the following factors is not a reason for farmers' unstable incomes?
Answer
(A)
dependence on too many crops
62
Local firms can help in reducing unemployment in a country when
Answer
(B)
imports of substitutes are reduced
63
The largest component of national income in developing countries consist of
Answer
(D)
wages and salaries
64
A baker bought flour and other ingredients for S250.00, spent S52.00 on distribution, sold the bread for S320.00. The value added by the baker.
Answer
(C)
$18.00
65
In a country with large population of full-time house wives, national income
Answer
(B)
figures will be grossly over-stated
66
Demand-pull inflation is likely to be caused by
Answer
(D)
increasingly large budget deficit
67
Holding money to take care of contingencies is
Answer
(C)
a precautionary motive
68
If a housewife has meat and wants tomatoes, she must find someone who has tomatoes to give and wants meat. This concept is described as
Answer
(D)
double coincidence of wants
69
The stock exchange is an example of the
Answer
(D)
capital market
70
What happens when the central bank increases the bank rate in an economy
Answer
(A)
borrowing is discouraged
71
In order to increase revenue, government should tax commodities for which demand is
Answer
(B)
price inelastic
72
The figure above shows change in demand for commodity x which is a normal good. Use it to answer the questions that follows
Which of the following caused the change in demand from D0 D0 to D2 D2?
Answer
(B)
Rise in the price of a substitute
73
Which of the following activities will not lead to economic growth?
Answer
(D)
Massive importation of consumer goods
74
Nation engage in external trade because of difference in
Answer
(A)
comparative cost
75
Which of the following forms of economic integration is a member nation free to impose duty against non-members
Answer
(A)
Customs union
76
The pie chart above represents the total population of a school of 1,200. The shaded area of 60º shows the population of the underaged pupils.
What is the population of the matured students?
Answer
(C)
1000
77
What type of price elasticity of demand is the diagram above representing?
Answer
(A)
perfectly inelastic demand
78
The curve labelled x is the
Answer
(B)
total product curve
79
The line labelled M in the diagram above represent
Answer
(B)
fixed cost
80
The International Bank for Reconstruction and Development(IBRD) performs the following functions except-------
