Mock Examination Economics SS 3 – Exam Questions









Answer all questions


1. The study of Economics enables individuals to _________________.

(a) change jobs

(b) be stingy

(c) evade tax

(d) make rational decisions


2. Most of the problems of economics arise as a result of _________________.

(a) competing demands for scarce resources

(b) increase in demand for more goods and services

(c) the desire of producers to supply more goods and services

(d) the need to reduce the level of poverty


3. The reward to capital as a factor of production is _________________.

(a) rent

(b) wage

(c) interest

(d) commission


4. The amount of satisfaction obtained from the consumption of a commodity at a particular time is called _________________.

(a) marginal utility

(b) diminishing utility

(c) total utility

(d) average utility


5. Inferior goods are __________________________________.

(a) goods that are generally in short supply

(b) goods that are no longer in demand

(c) goods whose demands fall as income increases

(d) goods whose price falls as demand increases


6. 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


7. In the normal market situation, when the price of a commodity rises, the

(a) demand of the commodity will rise



(b) demand for the commodity

(c) supply of the commodity wil be constant

(d) supply of the commodity will fall


8. The main difference between a private and a public enterprise is the _________________.

(a) amount of profit realized

(b) mode of operation

(c) objective of the business

(d) ownership structure


9. The equilibrium level of output of a monopolist is determined at a point where __________________________________.

(a) marginal cost equals average revenue

(b) marginal cost equals average cost

(c) marginal cost equals marginal revenue

(d) marginal revenue equals average cost


10. Which of the following is a legal tender in West Africa?

(a) treasury bills

(b) share

(c) credit card

(d) currency


11. The tendency for prices to rise while the value of money falls is known as ……..

(a) bills of exchange

(b) inflation

(c) depreciation

(d) deflation


12. The motive for holding money for investing in securities is referred to as ………..

(a) transactionary

(b) speculative

(c) accumulation

(d) deflationary


13. The difference between the gross national product (GNP) and the gross domestic product (GDP) is _________________.

(a) total interest payment

(b) net income generated internally

(c) total national savings

(d) net income from abroad


14. Where the burden of a tax finally rests is called ………………………………..

(a) tax object

(b) tax rate

(c) incidence of taxation

(d) system of taxation


15. What must be added to variable cost to give total cost?

(a) Average total cost



(b) Average variable cost

(c) Fixed cost

(d) Marginal cost


16. In a situation where demand is perfectly elastic, imposition of a tax on a commodity to raise its price will result in_________________.

(a) consumers increasing their demand for the product

(b) consumers demand for the product remaining unchanged

(c) consumers shifting completely to substitute products

(d) suppliers increasing the supply of the product


17. Which of the following is a characteristic of monopoly?

(a) many sellers

(b) homogenous commodity

(c) single seller

(d) perfect knowledge


18. Which lf the following is a middleman in the chain of distribution?

(a) an entrepreneur

(b) a producer

(c) a banker

(d) a retailer


19. Labour can be efficient where there are _________________.

(a) adequate tools to work

(b) high level of employment

(c) limited vacancies

(d) government restrictions


20. Which of these is true of a perfect competition?

(a) P=AR<MR

(b) P>AR=MR

(c) P=MR<AK

(d) P=AR=MR


21. The role of government in promoting agricultural development includes the following except _________________.

(a) paying the wages of farmers



(b) establishing and funding research

(c) formulation of policies

(d) provision of rural infrastructures


22. The following are advantages of large scale agriculture except _________________.

(a) use of simple implements

(b) use of sophisticated implements

(c) increase in unemployment

(d) integration of crop and animal farming


23. The total stock of money available for use in an economy is _________________.

(a) a function of money

(b) a characteristic of money

(c) the demand for money

(d) the supply of money


24. Dumping means the selling of goods in a foreign market at a price that is _________________.

(a) below the home market price

(b) above the home market price

(c) equal to the home market price

(d) able to clear the home market


25. A rational consumer is one who _________________.

(a) spends his income to maximize satisfaction

(b) is not influenced by advertisement

(c) who behaves in a particular way all the time

(d) knows the prices of all goods and buys the cheapest


26. 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


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

(a) Variable cost

(b) Marginal cost

(c) Total cost

(d) Fixed cost


28. A firm’s main aim is to _________________.

(a) survive in business



(b) maximize profits

(c) increase its market shares

(d)satisfy the ambitions of its managers


29. 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


30. 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%


31. 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 import to a country


32. The process of increasing the real per capita income and effecting changes in various sectors of the economy is known as _________________.

(a) economic acceleration

(b) economic development

(c) economic integration

(d) economic growth


33. Development plans in West Africa tend to deviate from their targets mainly due to

(a) political instability

(b) lack of manpower

(c) high population growth rate

(d) low level of education


34. The balance of trade is _________________.

(a) an annual statement showing transactions

(b) the relationship between a country’s visible exports and import

(c) the relationship between a country’s receipt from visible and invisible trade

(d) an account that shows a country’s payments to other countries


35. The difference between the number of immigrants and emigrants is _________________.

(a) natural growth rate



(b) natural increase

(c) net migration

(d) census


36. A decrease in demand for a product X resulted in a decrease in the demand for another product Y. The demand for X and Y is _________________.

(a) derived

(b) composite

(c) joint

(d) competitive


37. An arrangement in which the debts of a company can only be paid from its assets implies _________________.

(a) unlimited liability

(b) transferred liability

(c) limited liability

(d) capital liability


38. Which of the following best describes the mode? The _________________.

(a) observation with the highest frequency

(b) average of two middle numbers

(c) items that occupies the middle position

(d) difference of two extreme values


39. If a 6% decrease in price results in more than 6% decrease in quantity supplied, supply can be regarded as _________________.

(a) elastic

(b) unitary elastic

(c) perfectly inelastic

(d) perfectly elastic


40. If a particular consumer derives total utility of 22 utils having consumed 4 units of a given product, the average utility will be _________________.

(a) 88 utils

(b) 18 utils

(c) 5.5 utils

(d) 3.5 utils


41. When depreciation is deducted from gross national product, the result is _________________.

(a) total national income

(b) gross national product

(c) net national income

(d) net domestic product


42. In open market operations, what the central bank sells or buys are ………………

(a) shares



(b) debentures

(c) securities

(d) equities


43. When there is improvement in a country’s terms of trade, It means that the country’s _________________.

(a) exports are cheaper relative to import

(b) imports are cheaper relative to exports

(c) volume of imports has declined

(d) volume of export has declined


44. A shift of the demand curve to the right when the supply curve remains constant, implies that

(a) both price and quantity demanded will increase

(b) only price increases

(c) both price and quantity demanded will decrease

(d) the price falls


45. Which of the following are direct taxes?

(a) sales tax

(b) excise duties

(c) income and company tax

(d) tariff duties


46. Which of the following does not increase the population of a country?

(a) an increase in birth rate

(b) a decrease in death rate

(c) emigration

(d) early marriage


47. The comparative cost doctrine of international trade means specialization in production according to _________________.

(a) absolute cost advantage

(b) absolute cost disadvantage

(c) comparative cost disadvantage

(d) comparative cost advantage


48. International trade is different from internal trade because of the _________________.

(a) manufactured goods involved

(b) currency ddifferentials

(c) homogeneity of products

(d) heterogeneity of products


49. The full meaning of OPEC is _________________.

(a) Oil and Petroleum Exporting Countries



(b) Original Petroleum Exporting Companies

(c) Organization of Petrol Exporting Countries

(d) Organization of Petroleum Exporting Countries


50. ECA means _________________.

(a) economic commission of Afriaca

(b) economic community of Africa

(c) Exporting countries of Africa

(d) economic conference of Africa




Answer one question only from this section.



The quantity of fertilizer (in bags) used by twenty farmers in one year is shown in the following distribution, 2, 4, 5, 5, 4, 8, 6, 7, 6, 2, 4, 5, 6, 6, 7, 10, 12, 10, 5 and 6.


(a) the mean

(bi) the mode

(b) the median of the distribution



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

(a) the equilibrium price and

(b) the equilibrium quantity



(c) if the price (P) were to be N4.00, what will be the excess supply?

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




Answer four (4) questions only,



a. Explain the following terms and show the relationship between them.

(i) Primary production

(ii) Secondary production

(iii) Tertiary production


b. Explain fully when a production is said to be completed.


c. Differentiate clearly between consumer goods and producer goods. Give at least two examples of each.



a. Scarcity is the central problem of economics. Explain.


b. Distinguish clearly between opportunity cost and money cost.



a. What are the factors hindering the establishment of industries in most rural areas in West Africa? Give at least 5 points.


b. Distinguish between the location and localization of industry.



Write short notes on:

(a) budget surplus


(b) budget deficit


(c) recurrent abd capital expenditure


(d) balanced budget



a. Distinguish between the following pairs of concepts;

(i) GNP and GDP



(ii) NNP and NDP

(iii) NNI and GNI

(iv) National income and per capital income


b. What is meant by:

(i) the cost of living

(ii) the standard of living?


c. In what ways are these two terms related?



a. Examine briefly the origin of ECOWAS.


b. What advantages will your country derive from active participation of the ECOWAS?.


Best of Luck