Second Term Examination Economics SS 2 – Exam Questions

CRN INTERNATIONAL SCHOOL 

ECONOMICS 

SECOND TERM EXAMINATION 

SENIOR SECONDARY SCHOOL SS 2

SECTION A

Answer all questions

 

1. A market equilibrium exists when ____________________.

(a) no buyer goes home empty handed

(b) demand and supply are increasing

(c) demand and supply are equal

(d) the price is fluctuating

 

2. The amount of goods offered to the market at respective prices and presented in a table is called ____________________.

(a) price schedule

(b) supply schedule

(c) scale of preference

(d) demand schedule

 

3. Productive resources can also be called ____________________.

(a) principles of production

(b) factors of production

(c) items of production

(d) labour and material resources

 

4. If the coefficient of elasticity of demand is 1.5, the demand is ____________________.

(a) fairly inelastic

(b) perfectly elastic

(c) elastic

(d) inelastic

 

5. If 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 the 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.

6. The slope of supply curve is ____________________.

(a) horizontal

(b) uniform

(c) positive

(d) vertical

 

7. Data presented in tables are usually arranged in ____________________.

(a) charts and graphs

(b) rows and columns

(c) graphs and rows

(d) columns and charts

 

8. A supply curve which is vertical has an elasticity coefficient of ____________________.

(a) 0

(b) 0.5

(c) 1.5

(d) 2

 

9. If a 6% increase in price results in more than 6% decrease in quantity supplied, supply can regarded as ____________________.

(a) elastic

(b) unitary elastic

(c) perfectly inelastic

(d) perfectly elastic

 

10. Any price below the equilibrium price will lead to ____________________.

(a) increase in supply

(b) excess demand

(c) equality of demand and supply

(d) decrease in demand

11. Opportunity cost is defined as the ____________________.

(a) money cost

(b) cost of production

(c) real cost

(d) fixed cost

 

12. In Economics, a market is defined as any ____________________.

(a) agreement made for consumers to buy all they need

(b) agreement to sell commodities at low prices

(c) arrangement made for producers to sell all their goods

(d) arrangement where the buyers and sellers are in contact.

 

13. In the long run, factors of production are considered to be ____________________.

(a) at maximum

(b) fixed

(c) variable

(d) increasing

 

14. A shift in the supply curve indicates ____________________.

(a) exceptional supply

(b) change in supply

(c) change in quantity supplied

(d) elasticity of supply

 

15. The allocation of goods and services in a free market economy is performed by ____________________.

(a) the price system

(b) the banking system

(c) the central planning body

(d) government budgets

16. An excise tax is imposed on goods ____________________.

(a) smuggles into the country

(b) manufactured locally

(c) imported into the country

(d) seized by Customs officials

 

17. A tax is regressive if the ____________________.

(a) rate of tax is constant at all income levels

(b) rate of tax decreases as income increases

(c) rate of tax increases as income increases

(d) tax is direct rather than indirect.

 

18. The market price of a commodity is normally determined by the ____________________.

(a) law of demand

(b) interaction of the forces of demand and supply

(c) total number of people in the market

(d) total quantity of the commodity in the market.

 

19. Taxes levied on commodities are ____________________.

(a) direct taxes

(b) indirect taxes

(c) poll taxes

(d) investment taxes

 

20. One disadvantage of direct tax is that

(a) government revenue is reduced.

(b) price of essential commodities fall.

(c) people are discouraged from additional work.

(d) firms make more profits.

 

Section B

Answer four (4) questions

 

QUESTION 1

a. The weekly data refer to the market schedule for grape in a town.

From the schedule given above:

(i) state the price of grape fruit and the quantity demanded and supplied at equilibrium.

(ii) What happens to supply and demand at a price below the equilibrium price?

(iii) What happens to supply and demand at a price above the equilibrium price?

(iv) Express the situation in the above table in the form of a diagram.

 

b. The demand and supply equations for a commodity (in a free market) are given as Qd=10-2P

Qs=4P-8, given that P is in Naira, Qd and Qs are in kg, determine

(i) the equilibrium price

(ii) the equilibrium quantity

(iii) If the price (P) were to be N400, what will be the excess supply?

(iv) If the price were fixed at N1:00, what will be the excess demand?

 

QUESTION 2

a. Carefully distinguish between changes in supply and quantity supplied.

 

b. State the law of supply.

 

c. Explain the nature of the supply curve.

 

d. Define Market according to economics.

 

e. Define supply schedule.

 

QUESTION 3

a. Outline five factors that determine supply.

 

b. outline 3three importance of price system.

 

QUESTION 4

a. What is a tax?

 

b. For what purpose might a government impose taxation?

 

c. What is tax incidence?

 

d. What are progressive, regressive and proportional taxes?

 

QUESTION 5

a. Explain the qualities of good tax system.

 

b. What are:

(i) direct taxes

(ii) indirect taxes

 

c. What type of tax yields more revenue to the government of your country and why?

 

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