ECONOMICS QUESTIONS

1. Who defines economics as the study of mankind in the ordinary business of life? A) Adams Smith B) Lionel
Robbins C) David Ricardo D) Alfred Marshall
2. Economics is called a social science because it is? A) A dismal science B) studies human behavior C) commercial
in nature D) all of the above
3. An economic analysis aimed at explaining what a phenomenon should be comes under the? A) inductive B)
deductive C) normative D) positive
4. The term scarcity refers to -------- a) available resources b) want c) limited available resources d)
unlimited available resources
5. If a kilogram of beef is N250 and a kilogram of fish is N200, what is the opportunity cost of buying 10 kilograms
of beef a) N2500 b) N2000 c) 12.54kg d) 50kg
6. The ranking of one’s need in order of relative importance is -------- a) means b) scale of preference c) choice d)
demand
7. Scarcity in economics means that resources? a) are not enough to share among the producers of goods and
services b) needed to satisfy human want are limited c) are never enough to share among consumers of goods
and services d) required to meet our essential need are unlimited
8. Which of the following is a measure of central tendency? a) Median b) Graph c) Percentile d) Variance
9. Which of the following is not a measure of dispersion? a) Mean deviation b) Arithmetic mean c) Range d)
Variance
10. A trader sold N14000 on Monday, Nx on Tuesday, N10000 on Wednesday and N16000 on Thursday. If his mean
amount is N15000 how much did he sell on Tuesday? a) N24000 b) N15000 c) N40000 d) N20000
11. The downward slope of the production possibility curve shows that? a) More of both commodities can be
produce without reallocation b) The economy is dwindling c) All nations are producing at full capacity d) There is
opportunity cost of producing more of one commodity.
12. An output below the production possibility boundary indicates that-------- a) Output is over produced b)
Resources are more than enough for production c) Resources are maximized d )Resources are been under-
utilized.
13. When all factors are reduced by half, the production possibility curve will shift------- a) Upward b) Downward c)
Inward d) Outward.
14. Where is Nigeria located on the production possibility curve? a) Outside the boundary b) On the boundary c)
Inside the boundary d) It is indeterminate
15. Any point on the production possibility curve signifies ---------- a) inefficient utilization of resources b) maximum
satisfaction c) efficient utilization of resources d) unattainable combination.
16. An economy where prices are determined by the market forces of demand and supply is? a) Deregulated
economy b) Command economy c) Centrally planned economy d) Regulated economy
17. The problem of how goods shall be produce in an economy implies choices between? a) Necessities and luxuries
b) Foods and cash crops c) Capital and consumer goods d) Labour and capital intensive method.
18. The price of goods and services in a capitalist economy is determined by? a) The consumer b) The producer c) The
consumer and producer d) the forces of demand and supply.
19. An economic problem arises when a) Manufactured goods are in short supply b) Scarcity and choice are involved
c) Money is in short supply d) Buyers and sellers are few
20. What will happen to business firm that fail to answer the question of “for whom to produce”? a) Poor inter-
personal relationship with customers b) poor patronage c) government interference d) excess supply
21. Which of the following will occur when the market is unstable? a) Price will fluctuate b) Demand will remain
static c) Unemployment will surely fall d) Prices will remain static
22. One disadvantage of mixed economy is ----------- a) absence of competition b) private sector competition c)
that it takes the features of capitalism and socialism d) government interference on consumer sovereignty.
23. In which of the following economies system is the consumer referred to as THE KING? a) Planned economy b)
mixed economy c) traditional economy d) free market economy.
24. The price of a commodity is determined by? a) The supplier b) the interaction of demand and supply c) the
quantity of goods demanded d) the quantity of goods supply.
25. In any economics system, which of the following is not an economic problem? a) what goods and services to
produce b) for whom to produce goods and services c) how to ensure the economy can grow overtime d) what
technique of production to adopted
26. If Qd = 28 – P, Qs = 8 + 3P. Calculate the equilibrium price. A) 2 B) 5 C) 9 D) 10
27. If investment is N60, government expenditure N50, consumption 100 + 0.75Y, export N80 and import N50. What
is the equilibrium level of national income? a) N860 b) N760 c) N960 d) N660
28. At what point is the perfect competitor at equilibrium a) MC = MR = AR b) MC = AC c) AC = MR = AR d) all of the
above.
29. One effect of maximum price legislation is a) black market b) unemployment c) excess supply d) price increase
30. An inferior good is one? a) Whose quality is low b) which is consumed by the poor c) whose demand rises as
income fall d) whose demand rises as inferiority
31. The demand for factor of production is? A) complementary B) competitive C) composite D) derived
32. If the price of a commodity rises from N2 to N2.50 and its supply increase from 100 to 120, then the coefficient
of elasticity of supply -------------- a) 0.25 b)0.8 c) 2.5 d) 1.25
33. The cross elasticity of demand for complementary goods is? a) Normal b) positive c) negative d) constant
34. The demand for petrol at N65.00 per liter was 330 000 liters per day but the price rose to N75.00 per liter, the
quantity demanded dropped to 220 000 liters. What is the coefficient of price elasticity of demand. A) 2.17 b)
2.27 c) 0.17 d) 2.36
35. If two commodities are good substitutes for one another e.g ovaltine and bourvita, an increase in the demand of
one will reduce the demand of the other. This type of demand is called? a) Composite demand b) competitive
demand c) elastic demand d) inelastic demand
36. A normal demand curve a) is concave to the origin b) convex to the origin c) is parallel to the x-axis d) parallel
to the y-axis
37. Demand in economics is synonymous with a) need b) wants of consumer b) all goods demanded in the market d)
wants support with the ability to pay
38. The theory of consumer behavior is based on all the following assumptions except? a) consumer is irrational b)
consumer taste remains constant c) consumer has budget constraint d) consumer aims at maximizing his utility.
39. When total utility is at maximum point, marginal utility is --------? a) zero b)decreasing c) increasing d)
constant
40. Production can be defined as? a) the creation of something b) the rendering of services by professionals c) the
manufacturing of goods d) the creation of utility
41. Decreasing return to scale implies that if all factors of production are double, output will be a) more than double
b) less than double c) double unchanged d) single unchanged
42. Rent and interest are reward to a) labour and capital respectively b) land only c) capital only d) land and
capital respectively
43. As a firm expands, it enjoys some advantages called a) variable proportion b) diminishing return c) internal
economies of scale c) decreasing return to scale
44. External economies refers to the a) cost-saving advantages a firm enjoys by being close to other firms in the
same industry b) disadvantages to a firm that is close to other firm c) economies of large scale d) economies of
small scale.
45. Long-run production is called --- a) return to scale b) economies of scale c) large scale production d) diminishing
return
46. Abstention from the consumption which enables capital to be produced is called ---- a) savings b) production c)
accumulation d) opportunity cost
47. The VC is a) TC/FC b) FC + AC c) TC + FC d) TC – FC
48. If the average cost and average revenue of a product are N80 and N96 respectively and 240 units were
produced, what is the profit made? a) N3840 b) N16 c) N38.40 d) N38400
49. The notion of long-term and short-term period is responsible for grouping costs into a) fixed and variable b)
implicit and explicit c) average and total d) capital and running
50. If the total cost of producing 600 units of a product is N21000 and the average variable cost is N19, what is the
average fixed cost? a) N16 b) N35 c) N9600 d) N21
51. An increase in the price will lead to A. a parallel shift outward B. A rotational shift inward C. A
rotational shift outward D. A parallel shift outward
52. Suppose that the equilibrium price of an article is N5.00 but the government fixes the price by law at N4.00, the
supply will be A. The same as equilibrium supply B. Greater than equilibrium supply C. Less than the equilibrium
supply D. Determined later by government
53. Budget deficit means A. That a country is buying more than is selling B. That a country is selling more than is
buying C. That a government is spending more than in takes in taxation D. That a government is spending less
than it takes in taxation E. That a government is spending as much as it takes in taxation
54. When elasticity is zero, the demand curve is A. Perfectly elastic B. Perfectly inelastic C. Concave D. Downward
slopping E. Circular
55. The following is NOT a reason for the existence of small firms A. Scale of production is limited by size of the
market B. Expansion brings diminishing returns C. Large firms can carter for wide markets D. Small firms can
provide personal services
56. Inferior goods are referred to in Economics as goods A. Whose quality is low B. Consumed by very poor people
C. Whose consumption falls when cunsumers' income rises D. Which satisfy only the basic needs E. None of the
above
57. Malthus became famous through his theory which may be stated simply A. the death rate may become so high
that people may not be able to produce B. population may outgrow the means of subsistence C. people will
eventually decide not to have children D. migration of people from one place to another may leave some parts
of the world barren E. all of the above
58. A commercial bank is unique in that it is only the institution that A. makes loans to private people and
businessmen B. accept deposits C. can store peoples' valuables D. can transfer money from one place to another
for its customers E. saves money through the granting of credits
59. Which is an example of an invisible item in the trade Account of Ghana? A. Export of Cocoa from Ghana
B. Import of oil from Nigeria C. A gift of a Peugout 504 by a firm in Nigeria to a firm in Ghana D. Payment for
shipping and insurance by a Ghanaian company to companies outside Ghana E. None of the above
60. Which is NOT a direct effort to increase Agricultural production in Nigeria? A. Operation feed the Nation
B. Nigerian Youth Service Corps C. Increased loans to farmers and cooperatives D. Research in Agric & Extension
services E. Mechanization of Agriculture
61. If a company doubles all its inputs and discovers that its output is more than doubles, we can say that the
company is experiencing A. Increasing Marginal utility B. Diseconomies of scale C. Increasing costs D. Constant
returns to scale E. Increasing returns to scale
62. Price control cannot work in Nigeria because A. the population is too large B. the policemen hate to arrest
people C. while it is fairly easy to control producers and importing firms, smaller distributors are too many to be
controlled D. control cannot work under military rule E. too many things are produced in the country
63. The foreign exchange market is a market where A. graded commodities like wheat, flour, etc are sold and bought
B. currencies are sold and bought C. treasury bills are sold and bought D. government bonds are sold and bought
E. treasury certificates are sold
64. Which of the following financial assets consist of the lowest rate of interest in Nigeria? A. commercial bills B. call
money C. treasury bills D. development loan stocks E. deposits with the federal savings bank
65. The effect of the demand for product A caused by a change in the price of a product B is called? A. cross-
elasticity of demand B. elasticity of supply C. competitive demand D. composite demand E. joint demand
66. Which of the following can be regarded as a liability of a commercial bank? A. advances B. deposits C. treasury
bills D. overdrafts E. cash
67. A Tax which takes a higher percentage from higher incomes is called? A. a regressive tax B. a progressive tax C. a
proportional tax D. an indirect tax E. a direct tax
68. Which of the following statements is true? A. A proportional tax is one which takes from high income people a
larger fraction of their income than it takes for low income people B. taxes on commodities of services which can
be shifted elsewhere are usually called direct taxes C. The sole proprietor is a legal entity D. the influence of
demand on price will be smallest on the short run E. the cost of production is the most important determining
factor of supply in the long run
69. Which of the following is not a form of elasticity of demand A. Elastic B. cross C. income D.
price
70. Goods whose demand reduces as price reduces are known as ------------ A. giffen B. inferior C. normal D.
luxury
 Use the table below to answer question 50 to 54
Quantity (Units) Total utility Average utility Marginal utility
1 5 5 5
2 12 6 T
3 M 8 12
4 24 6 S
5 20 N -4
71. The value for M is ------------ A. 24 B. 20 C. 7 D. 18
72. The value for T is -------------- A. 17 B. 7 C. 6 D. 18
73. The value for S is --------------- A. 1 B. 0 C. 30 D. 13
74. What unit shows the point of saturation A. 2nd B. 3rd C. 4th D. 5th
75. What is the value for N? A. 20 B. 5 C. 4 D. 13
76. ECOWAS and OPEC were founded in what year? A. 1960 and 1975 B. 1945 and 1922 C. 1975 and
1990 D. 1975 and 1960
77. A closed economy is refer to as --------------- A. open economy B. spendrift C. government economy D.
autarky
78. The elasticity of supply of perishable goods is?A. unitary B. inelastic C. zero D. elastic
79. A shift in supply curve indicates that a different quantity will be supplied at each possible price because?
A. consumers are willing to pay higher prices B. supply is facing competition C. other factors than price
have changed D. price has changed
80. The ranking of a consumer’s need in order of importance is termed A. An opportunity cost B. Economies of
scale C. A scale of preference D. The making of choice
81. If price of a commodity rises from N2.00 to N4.00 and its supply increases from 100 to 125, them the co-efficient
of elasticity of supply is A. 0.025 B. 0.24 C. 0.22 D. 0.25
82. Economics has a respectable place in social sciences because? A. it deals with government revenue and
expenditure B. it studies inflation C. it redistribute income D. it studies human behavior
83. Economics deals with ------------- A. government revenue and expenditure B. allocation of scares resources to
satisfy human want C. inflation and interest rate D. none of the above
84. When resources are owned and controlled by a central authority. It is known as ------------ A. capitalism B.
socialism C. mixed economy D. feudal system
85. The individual ownership of economics resources is called -------------- A. communism B. capitalism C.
Socialism D. none of the above
86. ------------------ determined how to produce in any economy A. government B. private individuals C.
industrialists D. labour and capital methods
87. What to produce in a socialist economy is decided by the ------------- A. soldiers B. entrepreneurs
C. central planner D. individuals
88. --------------- reasoning deals with “what is” A. normative B. economic C. positive D. formative
89. --------------- reasoning deals with “what should be” or “what ought to be” A. economic B. positive C.
formative D. normative
90. The drawing of conclusion based on observed facts is --------------- A. positive B. inductive C.
normative D. deductive
91. ----------------- is the commonly used of measures of central tendency A. mean B. median C. mode
D. standard deviation
92. The difference between the highest value and the lowest value in a set of data is ------------ A standard deviation
B. variance C. Range D. mode
93. If the variance of a set of data is 169. Calculate the standard deviation A. 84.5 B. 13 C. 338 D. 28561
94. The middle item is an observation is the ------------ A. mode B. median C. mode D. Range
95. The demand for any factor of production is an example of ------------ demand A. derived B.
complementary C. composite D. competitive
96. The demand for money is an example of ---------- demand A. derived B. composite C. complementary
D. competitive
97. Calculate the price elasticity of demand from the table below
Price (N) Quantity (Units)
50 600
30 800
A. 0.83 B. 1.25 C. 2.27 D. 0.05
98. Which of the following will lead to a change in the demand for Milo? A. price B. income C. resources
D. none of the above
99. Which of the following will lead to a change in the quantity demand for Milo? A. price of Bourvita B. price
C. taste and preference D. income
100. Goods whose demand fall as income increases are called ------------ A. normal goods B. inferior goods
C. giffen goods D. luxuries
101. Two major cost curves use to determine the supply curve of a firm are A. MC and AC B. AC and AVC B.
MC and AVC D. AFC and AVC
102. ------------- is use to measure the standard of living of people living in the country A. GDP at market price B.
per capita income C. GDP D. GDP at factor cost
103. The indifference curve of the consumer behaviour is synonymous to ----------- in the production theory A.
budget line B. Isocost C. Isoquant D. marginal rate of substitution
104. The difference between what a consumer plan to pay and what he actually paid is called ------- A. consumer
surplus B. economic rent C. consumer difference D. all of the above
105. The water-diamond paradox as introduce by Adam Smith explain ----------- A. scaricity B. value in use and
value in exchange C. production D. consumer behavior
106. At equilibrium, the MRS is equal to ---------- A. 0 B. 1 C. negative D. positive
107. According to the cardinal utility, utility can be A. measured B. rank C. shaded D. consumed
108. If as a result of fall in price of the commodity X, the quantity demanded of commodity Y falls, then
commodities X and Y are A. complementary B. Completive C. luxuries D. substitutes
109. The supply curve for labour is -------------- A. positive B. negative C. backward bending D. all of the above
110. The continuous and persistence increase in the general price level is referred to as A. inflation B.
increment C. deflation D. taxation
111. Which of the following is an element of injection A. savings B. import C. government expenditure D. tax
112. The best method use to measure national income accounting is? A. income method B. output method C.
expenditure method D. graphical method

Use the table below to answer question 66 to 70

Fixed factor (land) Variable factor Total product (TP) Average product Marginal product
(labour) (AP) (MP)
5 1 5 5 5
5 2 Z 6 7
5 3 U 8 12
5 4 40 V 16
5 5 40 8 W
5 6 38 6 -2
5 7 35 5 X
113. The value for U is ----------- A. 12 B. 24 C. 10 D. 0 E. -3
114. The value for V is ----------- A. 12 B. 24 C. 10 D. 0 E. -3
115. The value for W is ----------- A. 12 B. 24 C. 10 D. 0 E. -3
116. The value for V is ------------ A. 12 B. 24 C. 10 D. 0 E. -3
117. The value for Z is ------------ A. 12 B. 24 C. 10 D. 0 E. -3
118. Minimum price legislation will lead to -------------- A. excess supply B. excess demand C. shortage in
supply D. hoarding
119. The fixing of price above the equilibrium is known as --------------- A. minimum price B. maximum price
C. price mechanism D. price determination
120. Price ceiling is commonly refer as? A. price legislation B. maximum price C. minimum price D.
price floor
121. The marginal rate of technical substitution of the production theory is similar to --------------- of the consumer
theory? A. marginal rate of substitution B. indifference curve C. budget line D. marginal utility
122. The invisible hand is related to the following except -------------------- A. international trade B. market
forces C. demand and supply D. price mechanism
123. -------------- law operates in the short run A. diminishing return B. return to scale C. constant RTS D.
decreasing RTS
124. -------------- law operates in the long run A. variable proportion B. diminishing return C. return to scale
D. none of the above
125. When TP is falling, the MP is ---------- A. rising B. falling C. positive D. negative
126. When the TP is rising the AP and MP are ---------------- respectively A. rising and falling B. rising and rising
C. falling and rising D. falling and falling
127. A graph that shows the combination of two factor inputs that will yield the same quantity of output is called
-------------- A. isoquant B. isocost C. indifference curve D. budget line
128. The change in quantity demanded for a commodity as a result of change in income is called ---------- elasticity
A. cross B. price C. income D normal
129. The price elasticity for inelastic product is ---------------- A. greater than 1 B. equal to 1 C. less than 1 D.
zero
130. The elasticity of demand for salt is ----------- A. perfectly elastic B. perfectly inelastic C. fairly elastic D.
fairly inelastic
131. An horizontal demand curve posit ------------ ----------- A. perfectly elastic B. perfectly inelastic C. fairly
elastic D. fairly inelastic
132. When MP is zero, TP is ------------- A. falling B. rising C. peak D. zero
133. Given the consumption function as C = a + by, where b = 0.8. Calculate the multiplier. A. 1.25 B.
1.8 C. 5 D. 2
134. If C = 100 + 0.5Y, investment and government expenditure is given as 10M and 22M respectively. Calculate
the level of income. A. 270M B. 264M C. 184M D. none
135. The minimum number to start a joint stock company is ----------------
136. The two main cost curves use to determine the supply curve are ------------
137. The cross elasticity of demand for competitive goods is -----------------
138. The cross elasticity of demand for complementary goods is --------------
139. The income elasticity of demand for normal goods is ----------------------
140. The cross elasticity of demand for inferior goods is ----------------
141. Goods whose demand rise as price rises is ------------------
142. Goods whose demand fall as price falls is ------------------
143. Goods whose demand falls as income rises and vice versa is -----------------------
144. AC and AVC are ---------------- shaped
145. A firm will shut down at what point?
146. The demand curve of a perfect competitor is -----------
147. The demand curve of monopolist is ------------------
148. The supply curve of a perfect competitor is ---------------
149. The supply curve of a monopolist is ---------------
150. Another word for artificial scarcity is -------------
151. The fixing of price below the equilibrium is called ---------------
152. the excess satisfaction a consumer derived from the consumption of a commodity is called -------
153. the part of commodity enjoyed but not paid for is called -----------------------
154. --------------------states that as more variable factor is applied to a fixed factor, output keeps increasing but
gets to a point beyond which it starts to declined
155. -------------- price legislation is to protect low income earners
156. -------------- price legislation is to protect agricultural produces
157. The summation of marginal product is ---------------
158. The summation of marginal utility is -----------------
159. The summation of marginal cost is -------------------
160. The summation of marginal revenue is --------------
161. The forgone alternatives to satisfy a given want is called --------------
162. The accountant view cost from the -------------- cost perspective
163. The economist view cost from the ------------- cost perspective
164. The complete equation of perfect competitor equilibrium is -----------------
165. The break even for a firm is ----------------
166. The break- even point is the ------------ rule
167. Any point inside the PPC indicate ----------------
168. Any point outside the PPC indicate --------------
169. Any point on the PPC indicate -------------
170. An outward shift of the PPC shows that -------------------
171. An economy that participate in export and import is called -----------------
172. Economics is in the realm of social sciences because, it studies ---------------
173. Economics shows the relationship between ends and --------------------
174. The persistence and continuous increase in the general price level is known as ---------------
175. Increase in the price of goods accompanied by an increase in the cost of production is -----
176. The cross elasticity of demand for a monopoly product is --------------------
177. From the shut down point of a MC curve to the top of the curve is the -------- curve of a firm
178. There are ---------- types of price elasticity of demand
179. Given the mpc as 0.5, calculate the multiplier
180. The summation of a country’s current account, capital account and official settlement account is
------------------
181. An account where all kinds of international currencies are kept is called -------------
182. The types of inflation that arises when demand is greater than supply is called ---------------
183. Autarky economy is called --------------- economy
184. Spendrift economy is called ---------------- economy
185. ----------------- economy uses C + I + G + (x – m)
186. The intrinsic value of money is the ------------- value
187. The use of government revenue and expenditure to regulate the economic activities is called ------------------
188. Expansionary and contrasionary policy are component of ----------------- policy
189. -------------- monetary policy is use during inflation
190. -------------- monetary policy is use during deflation
191. Given C = 10 + .05Y, I = 10, G = 10. Calculate the equilibrium level of income
192. Given the MPC as 0.8, and the government expenditure changes by 20 million. Calculate the change in
income.
193. The percentage ratio of export price and import price is -------------------
194. The absolute cost advantage was introduced by whom?
195. The comparative cost advantage was introduced by whom?
196. An economic policy that focuses on one part of the economy or country is called ---------------
197. A market where short term securities are traded is called --------------
198. A market where long tern security are traded is called -------------
199. ------------- is the regulator of money market
200. ------------- is the regulator of capital market