(2025) Economics Jan/Feb First Series Trial Questions (set 1)

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1. Scale of preference shows

a) Incomes of consumers in order of size b) Utilities enjoyed by consumers c) Opportunity cost of goods consumed d) Consumers wants in order of priority

2. There is unemployment of resources when production is

a) Within the production possibility curve b) Outside the production possibility curve c) Along the production possibility curve d) Adequate to meet market demand

3. A major characteristic of natural resources is that they

a) Are unlimited in supply b) Have high cost of production c) Are free gifts of nature d) Do not command any price

4. A major disadvantage of a capitalist economy is that

a) Leads to low production of goods and services b) Requires large number of officials to operate c) Considers individuals consumers' satisfaction d) Worsens income inequality among the citizens

5. The mining sector of an economy contributes 60% to the Gross Domestic Product (GDP). If the GDP is 540 naira, what is the contribution of the mining sector?

a) 90.00 naira b) 180.00 naira c) 324.00 naira d) 350.00 naira

6. The increase in the demand for a commodity may lead to a decrease in the demand for another if both are

a) In complementary demand b) Of the same quality c) In composite demand d) In competitive demand

7. The demand curve for goods of ostentation is usually

a) Negatively sloped b) Positively sloped c) Vertical d) Horizontal

8. Which of the following factors is not a cause of change in demand? Changes in

a) Taste and fashion b) Income distribution c) Price of the commodity d) The size of the population

9. If the quantity demanded of a commodity increases from 20 units to 30 units when there is an increase in price from 4.00 naira to 5.00 naira, the elasticity of demand is

a) 0.50 b) 0.65 c) 2.00 d) 2.50

10. The supply curve of a locally-produced good may shift to the right if

a) There is an increase in taxes on inputs b) Government increases subsidies c) Rural-urban migration is encouraged d) The price of the commodity increases

11. In perfectly elastic supply, the supply curve

a) Is vertical b) Is horizontal c) Slopes upward d) Slopes downward

12. An increase in the price of commodity X led to a fall in the supply of Commodity Y. Commodities X and Y are

a) Competitive goods b) Composite goods c) Jointly supplied d) Derived goods

13. The production of rice and yam on the same farmland is an example of

a) Joint supply b) Composite supply c) Competitive supply d) Market supply

14. A consumer of a single commodity is in equilibrium when

a) He can equate his demand with price b) He equates marginal utility and price c) He equates his marginal and total utilities d) His marginal utility is equal to zero

15. If the government imposes a minimum price on a commodity

a) Market surplus occurs b) The market will be cleared in the short-run c) Excess demand occurs d) Government regulation is no longer needed

16. A minimum price legislation is also called

a) Price ceiling b) Price floor c) Price control d) Price mechanism

17. Which of the following factors is not a cause of diminishing returns?

a) Increase in variable inputs b) Land fragmentation c) Constant technology d) Technological innovations

18. In manufacturing, division of labour may be hindered by

a) Excessive demand for the product b) Low level of technology c) Excess supply of labour d) Increase in the export of goods

19. The production cost that varies inversely with output is the

a) Total fixed cost b) Marginal cost c) Average fixed cost d) Average cost

20. A firm that closes down will still incur

a) Variable cost b) Fixed cost c) Total cost d) Marginal cost

21. The sufficient condition for a firm to be in equilibrium is that the

a) Firm must show that it is profitable b) Marginal cost must be equal to average revenue c) Marginal revenue curve is above the average revenue curve d) Marginal cost curve cuts the marginal revenue curve from below

22. Cooperative societies are formed mainly to

a) Assist producers to maximize their profits b) Encourage thrift and credit among members c) Promote and maintain the welfare of members d) Break the monopolies of private companies

23. A disadvantage of a joint-stock company is

a) Unlimited liability b) Limited liability c) Lack of continuity when a shareholder dies d) Limited control in management by shareholders

24. The middleman is responsible for

a) Providing research facilities b) Purchasing raw materials c) Designing the product d) Breaking the bulk

25. A major function of the retailer is to

a) Grant credit to the wholesaler b) Break bulk and sell products in small units c) Reduce cost of distribution d) Generate demand for products through advertisement

26. A positive effect of a rapid population increase is

a) An excessive budget deficit b) A reduction in standard of living c) A wider market for goods and services d) A higher dependency ratio

27. Which of the following factors may not affect the efficiency of labour?

a) Education and training b) Provision of welfare services c) Race and color of workforce d) Quality of other factor inputs

28. The type of unemployment found among workers who leave their jobs in search of other jobs is termed

a) Seasonal unemployment b) Structural unemployment c) Frictional unemployment d) Cyclical unemployment

29. The main objective of marketing boards is to

a) Accumulate revenue for government b) Educate farmers on pricing of cash crops c) Stabilize the incomes of cash crop farmers d) Provide warehousing facilities

30. The use of mass advertising media will enable a firm to enjoy

a) Managerial economies b) Financial economies c) Marketing economies d) Welfare economies

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