2. Economics is the study of human behavior as it relates to the A. efficient allocation of resources B. production of goods C. operation of companies D. generation of income

A is correct. The central goal of economics is to ensure efficient allocation of scarce resources among competing ends

3. The downturn in the prices of shares on stock markets is a highlight of A. efficient allocation of resources B. the invisible hand C. the regulatory nature of the market D. generation of income

B is correct  the invisible hand refers to the price mechanism which is the forces of demand and supply on the stock market the interplay of demand and supply determine share prices  the higher the demand for the share the better the prospect of an increase in share prices

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4 if X bar = 6 and N =6, determine the value of Ɛfx A. 36 B. 1 C. 12 D. 72

A is correct

Click on the link for comprehensive solution

5. The standard deviation of a set of data is A. Always measured from the mode B. The most representative of averages C. Always measured from incomplete data D. A measure of dispersion

D is correct. In economics we have different tools for forecasting. We divide this into measure of location or measure of cereal tendency (this include the mean, the median and the mode), the measure of dispersion or variability (which include mean deviation, variance and standard deviation) and the measure of partition (quartile, percentile and dencile)

6. The mean is the best measure of central tendency because it.  A. Is not affected by extreme values in a data B. Is a midpoint value in an array of data C. Is a balancing point in an observation D. Can be calculated from incomplete data

C is correct

7. The most popular sizes of dresses and shoes are determined by the A. Range B . Mean C. Mode D. Median

 C is correct. Mode is the most frequently occurring number.

8. If the demand for a good is more elastic than its supply the tax burden is borne A. Equally by consumers and producers B. More BT producers C. More by consumers D. More by retailers and producers

 B is correct. Upload that video

9. If the price of a commodity with elastic  demand increases, the revenue accruing to the producer will A. Double B. Increase C. Be constant D. Decrease

D is correct .when a good has elastic demand it means that the consumer can do without it because there are alternatives. Therefore any attempt to raise prices will lead to lower demand for the commodity

10. An excess demand for beans will result from A. An increase in the price of beans B. An increase in the supply of beans C. A decrease in the price of beans D. A decrease in the supply of beans

D is correct. Upload that excess demand video

 11. Consumer surplus tends to be higher when demand is A. Perfectly elastic B. Elastic C. Inelastic D. Unitary elastic

B is correct. Recall that when demand is elastic the consumer bears less of the tax burden therefore he benefits more

12. Then law if diminishing marginal utility explains why A. The slope of normal demand curve is negative B. An abnormal demand curve slopes upwards C. The slope of a normal demand curve is positive D. The consumption of inferior goods increase with income

B is correct. Note: any time you see the word ordinality/ordinal theory, the first thing that should come to mind is order means ranking. The ordinal school believes that utility cannot be measured in monetary terms rather preferences are ranked. The school of thought that believes utility can be measured in monetary terms is the cardinal school

13. The derivation of the demand curve is based on the law of diminishing marginal utility I. E the higher the quantity the lower the utility accruing to the consumer.

A is correct .

14.. if a consumer plans to spend 120k on four oranges but spent 80k, his consumer surplus is A. N 1.50  B. N 0.40 C. N 1.00 D. N 2.00

B is correct  

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15. A set of factors that can shift the supply curve are changes in A. Weather , price and  technology B. Technology , weather and population C. Technology, price and taste D. Population, price and taste

B is correct. Recall that a shift in supply or demand is caused by other factors affecting demand or supply other than the price of the commodity (commodity own price)

16. If the coefficient of price elasticity of supply is greater than one, the supply is said to be A. Perfectly elastic B. Fairly elastic  C. Infinitely elastic D. Fairly elastic

 B is correct.

17. If a commodity X is a by-product of commodity Y, this implies that both commodities are A. In competitive supply B. In composite supply C. Jointly supplied D. In excess supply

 C is correct

18.  In perfect competition, price is determined by the A. Government B. Sellers C. Buyers D. Market

D is correct. A perfect market is a market structure in which market participants (buyers absolutely sellers) cannot influence the prevailing market price. In other words the market mechanism determine the market price

19. In order room reduce hardship faced by consumers due to high prices, government can introduce A. Maximum prices B. Commodity boards C. Minimum prices D. Price control boards

A is correct. The price celling is used to control prices of commodity this is what we call price control or legislation (the act of the government fixing the price of essential commodities)

20. Average product is less than marginal product when A. There is constant return to scale B. There is increasing returns to scale C. There is decreasing returns to scale D. Diminishing returns set in

C is correct. Although option B is external economies of scale but it is assumed that the firm enjoys from its own activities first (internal economies of scale)

21. A firm enjoying economies of scale is said to be A. Reducing average cost as production increases B. Benefitting from the activities of other firms C. Maximizing profits as production increases D. Having an upward sloping average cost curve

C is correct. Note if the average cost curve is rising the firm is experiencing discontinues of scale. Ordinarily the cost is supposed to reduce as production increases

22. The riding portion of the long run average cost curve of a firm is an indication that is experiencing A. Increasing efficiency B. Economies of scale C. Diseconomies of scale D. increasing marginal returns

 A is correct

23. An industry’s supply curve is more likely to be elastic when firms are A. Enjoy free entry and exit B. Operating full capacity C. Operating below capacity D. Maximizing profits

 A is correct

24. One of the characteristics of monopolistic competition is that A. There is mobility of factors of production B. No single seller dominates the market C. Consumers have perfect knowledge of price D. The firm are price takers

B is correct. Note monopolistic competition combines the features of perfect market and imperfect market

25. The demand curve for factors of production A. Is perfectly elastic B. Slopes upwards C. Slopes downwards D. is perfectly inelastic

C is correct. Recall that a downward sloping demand curve indicates that the higher the lower the volume of productive factors that will be used

26. An agreement among firms on price and segmentation is termed A. Cartel B. Collusion C. Haggling D. Specialization

B is correct. Collusion is an agreement between firms on the volume of outputs (quota), price and other relevant determinants   necessary for the actualization of their respective goals

27. In national uncomfortable accounting, tax is determined by the A. Level of income B. Level of consumption C. Level of investment D. Rate of savings

A is correct. Taxes are imposed on income often than not. A tax on consumption is to encourage more savings

28. A decrease in aggregate spending in an economy will ultimately lead to A. Boom B. Inflation C. Deflation D. Recession

C is correct when aggregate demand (AD) is less than aggregate supply (AD <AS) we have deflation and when AD is greater than AS we have inflationary tendencies

29. If MPC is 0.7 while government expenditure increased by N150m, the equilibrium national income is A. N214 million B. N45 million C. N150 million D. N500 million

D is correct  click on the link below

30. The function of money which makes division of labour possible is it A. Unit of account B. Store of value C. Medium of exchange D. Standard of deferred of payment

C is correct

31. By buying treasury bill, the central bank of Nigeria intends to A. increase money supply in the economy B. Reduce the cash reserve ratio for banks C. Reduce money supply in the economy D. Increase the capital base of commercial banks

A is correct. Note if the central bank buys securities from the public they will pay for it and the public will have more money with them. However, if the central bank sells to the public they will be collecting (mopping up) the money in circulation and the money with the public will reduce

32. The velocity of money is represented as A. money supply/ real GDP B. nominal GDP/ money C. real GDP/ money D. real GDP/ nominal GDP

B is correct. The original formula is GDP = velocity × money supply. Note that velocity of money is the rate are which money changes hand (move from one person’s hand to another)

33. One function of commercial bank is A. Maintaining stable price on the economy B. Regulating monetary policies C. Granting loans to customers D. Issuing bank notes and coins

 C is correct. Note that all other functions mentioned above are the duties of the central bank

34. A strategy for curving unemployment is to A. Implement government stabilization  policy B. Increases taxes and decrease government expenditure  C. Increase government expenditure and  decrease taxes D. Ensure even distribution of job opportunities

C is correct. when the government embark on projects the populace benefit from it because they would be engaged in achieving this goal

35. In Nigeria, the huge public debt is as a result of A. Balanced budgeting B. Deficit budgeting C. Surplus budgeting D. Zero budgeting

 B is correct. Budget deficit occurs when government expenditure is more than government revenue. The difference between this is the public debt

36. National development plans in Nigeria fail mainly because of A. Over dependence on foreign aids B. Inadequate funding of projects C. Poor implementation strategies D. Shortage of skilled manpower

C is correct. Implementation problem is a major cog in the wheel of Nigeria’s development

37. The ultimate aim of agricultural policies in Nigeria is to achieve A. Food sufficiency B. Industrialization C. Full employment D. Industrial capacity utilization

A is correct

38. Government can boost agricultural output is Nigeria primarily by A. Embarking on buffer stock programmes B. Placing embargo on food importation C. Granting subsidies on farm inputs D. Placing farmers on monthly income

C is correct. Buffer stock are stock that are kept in other to meet swings in demand or future demand they are also called safety stock

39. Localization of industries refers to the A. Spread of firms producing different product B. Siting of industries near the market C. Concentration of firms of an industry D. Siting of firms producing different products

C is correct. Location of industry is the siting of an industry in a particular place while localization is the concentration of an industry in a particular area. For example most Nigerian commercial banks headquarters are located in Marina, Lagos.

40. in developing countries, government influence the location of industries in order to A. Spread development B. Redistribute wealth C. Encourage entrepreneurs D. Encourage industries to earn high profits

A is correct

41. A disadvantage of Nigeria’s dependence on imported petroleum products is the A. Instability in the demand for the products B. Dominance of multinational firms C. Instability in the supply of the product D. Poor maintenance of the refineries

 C is correct

42 . The maximum number of shareholders for a limited liability company is A. Twenty B. Five C. Seven D. Infinite

D is correct.  For a public limited liability company there must be a minimum of 7 shareholders and no maximum (infinite) and for a private limited liability company there must be a minimum of 2 shareholders and a maximum of fifty shareholders

43. The primary motive for an individual engaging in production is to A. Make profit B. Satisfy basic humans C. Redistribute wealth D. Puts inputs into use

B is correct

44 . What is the population growth rate in 2003? A. 33.3% B. 11.0% C. 20% D. 50.0%

D is correct

45. The percentage of working population in 2002 is A.50% B. 8% C. 25% D. 80%

D is correct

46. One of the characteristics of free trade zone is A. Common tariff against non-member countries B. Different trade policies of non-member countries C. Free factor mobility within zone D. Harmonization trade among member countries

D is correct

47. If Nigeria imports vehicles from Japan, the transaction will appear as a A. Debit on Japan‘s balance of payments B. Credit on Japan’s  balance of payment C. Credit on Nigeria’s  balance of payment D. Credit on Nigeria’s balance of payment

B is correct. Recall your trial balance idea debit all expenses and credit all income

48. One of the objectives of ADB is to A. Provide subsidies on imported goods member counties B. Mobilize short -term loans C. Promote economic and social development of members countries D. Provide technical assistance to only poor member countries

C is correct

49. The choice of the method of production in an economy is determined by the A. Level of income B. Level of technical know-how C. Rare of population growth D. Availability of natural resources

B is correct. There are two techniques of production which are labour intensive technique and capital intensive technique

50. The amount of labour hired depends on the A. Number of skilled labour available B. Skill of labour C. Marginal productivity of labour D. Price of other inputs

 C is correct. Hiring of labour depends on the additional output it can help produce.

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Bolujoko Olumayowa

Bolujoko is an academic and business enthusiasts who is giving in to knowledge sharing through exposing compatriots (students) the reason behind certain concept using illustration they can relate with.

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