UNIVERSITY OF IBADAN, IBADAN. POST-UTME PRACTICE QUESTIONS & ANSWERS ECONOMICS

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1 UNIVRSITY OF IN, IN. POST-UTM PRTI QUSTIONS & NSWRS ONOMIS 1..is the term that describes the cost of one product in terms of forgone production/acquisition of others. () Marginal cost () Production/acquisition cost () Optimum cost () Opportunity cost () Implicit cost 2. n activity does not have a cost when () the activity does not require the giving up of any other activity or thing () the government pays for it () it is carried out by a nongovernmental organisation () it is not priced () it is easy to undertake. 3. hoices arise on account of () numerous wants () enough money to undertake effective demand () scale of preference () human wants being numerous but the time, money and influence to satisfy them are limited. () needs 4. conomics is best defined as () the study of allocation of resources to satisfy human wants () the study of human behaviour in the process of buying and selling () study of how nations grow and improve their welfare () the study of how to allocate scarce resources to satisfy human wants () all of the above. 5. conomics may be described as () the study of demand and supply of things in our environment () the study of production and distribution () the study of human behaviour in the allocation of scarce resources () the study of the employment of labour, capital, land and capital () the study of money and banking. 6. From an economics point of view, an activity does not have cost when () someone else pays for it () the returns are greater than costs () the choice involves given up nothing () government pays for it () it is paid for from gift 7. Opportunity cost is a term which describes () initial cost of setting up a business venture () a study of the ways man devices to satisfy his unlimited wants from limited resources () cost of one product in terms of forgone production of others () the mandatory equivalent of the utility of a commodity () cost related to an optimum level of production 8. Scarcity in economics means () a period of scarce things () when things are costly to acquire () monopolisation of available resources by a few () nationalisation of natural resources such as petroleum in Venezuela () none of the above. 9. Which of these is the real cost of satisfying any want in the sense of the alternative that has to be forgone () variable cost () opportunity cost () total cost () prime cost () marginal cost 10. conomic analyses and conclusions can be divided into () consumption and production () positive and normative () microeconomics and macroeconomics () demand and supply () none of the above 11. Which of the following is NOT a measure of central tendency? () mean () median () Mode () average () standard deviation 12. Which of the following is NOT a measure of dispersion () standard deviation () mean deviation () variance () range () mean 13. normal good with close substitutes is likely to have its price elasticity of demand () between zero and one () equal to unity () greater than unity () less than unity () none of the above 14. emand for a factor of production is () composite demand () ajoint demand () a derived demand () an elasticity of demand () cross elasticity of demand 15. Given emand function: Q d = 5P + 10; Supply function: Q s = 7P 5. If the price is at N5, the excess demand is () 35 () 30 () 10 () 5 () 65 1

2 UNIVRSITY OF IN, IN. POST-UTM PRTI QUSTIONS & NSWRS ONOMIS 16. If an increase in the price of a commodity leads to an increase in total revenue, then it follows that the demand for the commodity is () normal () elastic () inelastic () abnormal () unitary 17. If the price of a commodity rises, the quantity demanded of the commodity remains the same, then the demand for the commodity is () static () infinitely elastic () externally determined () perfectly inelastic () perfectly elastic 18. The impact of a change in the price of commodity on the quantity demanded of commodity is best explained using the concept of () price-elasticity of demand () cross-price elasticity of demand () income elasticity of demand () elasticity of substitution () -price elasticity of demand for 19. The change that is due to a movement from one supply curve to another along the same price is called () change in supply () change in quantity supplied () elasticity change () control price effect () change in equilibrium quantity 20. When the supply of a commodity is fixed, its price elasticity of supply is said to be () perfectly elastic () perfectly inelastic () undefined () elastic () inelastic 21. Given emand function: Q d = 5P + 10; Supply function: Q s = 7P 5. The equilibrium quantity is () 50 () 55 () 75.5 () 47.5 () In market economies, resources are allocated through the () government authorities () price system () banking system () central planning bureau () revenue allocation formula 23. In the operation of market forces, the market is in equilibrium at the point where () demand and supply curve intersects in more than one point () the excess in the market can be conveniently stored () excess demand is positive () demand and supply curves intersect () excess demand is negative 24. The basic feature of a market economy is () the reduction in the power of sellers () the enthronement of consumer sovereignty () the dismantling of barriers to trade () the perfectly elastic price for every transaction () the intersection of demand and supply curves 25. The following are the conditions that must be fulfilled for price determination XPT () market merger () market segmentation () demand elasticities () product differentiation () none of the above 26. The main function of price mechanism is to () limit consumer demand () enable producers make profits ()allocate scarce resources among competing ends () ensure consumer sovereignty () achieve excess capacity 27. When government intervenes in price-setting, the regulated price is usually () higher than the last price () lower than the last price () higher than the equilibrium price () lower than the equilibrium price () higher than the ceiling price 28. firm achieves least cost in production by substituting factors until () their factor prices are equal () their marginal products are equal to the factor prices () their marginal products are each equal to zero () the ratios of their marginal product equals the ratio of their prices () none of the above 29. production possibility curve shows () how much of resources a society uses to produce a particular commodity () the rate of inflation () the rate of unemployment in an economy () the various combinations of the commodities that can be produced () all of the above 2

3 UNIVRSITY OF IN, IN. POST-UTM PRTI QUSTIONS & NSWRS ONOMIS 30. rightward shift in the production possibility frontier may be due to () use of inferior inputs () inefficiency () improvement in production techniques and practices () changes in the product mix () changes in consumer taste 31. irect payment incurred for producing a commodity is called () implicit cost () real cost () opportunity cost () due cost () explicit cost 32. iseconomies of scale can be caused by the following XPT () managerial inefficiency () increased resource-cost () large market () inefficient business environment () technology 33. iseconomies of scale operates when () doubling inputs brings about more than proportionate increase in output () doubling inputs leads to a doubling of output () doubling input brings about less than proportionate increase in output () decrease in profit () increase in revenue 34. conomic efficiency means () obtaining maximum output from available resources () equitable distribution of nation s resources () carrying out production without any waste () producing the maximum output from available resources at the lowest possible cost () efficient utilisation of the nation s resources. 35. xternal economies are () the advantages accruing to firm as a result of its expansion () the advantages accruing to one firm as a result of the existence of other firms in the same locality () benefits derived by a firm as a result of its own external economies policy () economies reaped only by firms that are externally focused () bound to increase the cost of production 36. If a firm doubles its output and its costs increase by 60%, the firm is experiencing () increasing costs () economies of scale () decreasing returns () decreasing costs () none of the above 37. In economics, production is complete when () Goods are produced in the factories () Goods are sold to the wholesaler () Goods and services are produced by the government () Prices are fixed for goods and services () Goods and services finally reach the consumer 38. In the study of economics, land, labour, capital and entrepreneur are referred to as factors of production. These factors produce commodities only if they are () profitable to the production process () purchased for the purpose of production () combined in the production process () produced adequately for the production process () brought into factory 39. Production that takes place within the production possibility curve is said to be () inefficient () possible () with increased output () x-efficient () pareto-compliant 40. The act of combining factor inputs in order to obtain specific output is known as () factor procurement () manufacturing () investment () industrialisation () production 41. The additional output obtained by using one more unit of a factor is called () marginal income () additional product () marginal revenue () average product () marginal physical product 42. The amount of labour a producer hires relative to other factor input depends on the () price of labour or its wage () price of labour, machinery and other inputs () price of machinery () price of other inputs () type of machinery 3

4 UNIVRSITY OF IN, IN. POST-UTM PRTI QUSTIONS & NSWRS ONOMIS 43. The concept of economic efficiency primarily refers to () obtaining the maximum output from available resources at the lowest possible cost () conservation of our petroleum resources () equity in the distribution of the nation s wealth () producing without waste () none of the above 44. The law of diminishing returns often operates in the () long run () short run () medium term () small scale production () none of the above 45. The main economic objective behind the production of goods and services in an economy is to () maximise profits () satisfy human wants () become self-reliant () create job opportunities () make people wealthy 46. The residual of production which accrues to the ownership of land after all other expenses have been met is called () wages () profit () rent () interest () discount 47. verage fixed cost is () average total cost less the sum of average variable cost () half the sum of all costs () total fixed cost divided by the level of output () total fixed cost plus marginal cost () total variable cost divided by output 48. verage fixed cost is a rectangular hyperbola () since unit cost increases as output increases () unit cost increases as output decreases () unit cost decreases as output increases () unit cost remains the same as output increases () none of the above 49. Long run cost is U-shaped because of the operation of () economies of scale on the left hand side and diseconomies of scale on the right hand side () diseconomies of scale on the left and right hand sides () economies of scale on the left and right hand sides () constant return to scale () diseconomies of scale of the left hand side and economies of scale of the right hand side 50. Marginal cost is the cost () the lowest cost of producing goods () the cost of production of the most efficient firm in an industry () the cost of production of the most inefficient firm in an industry () the cost of production of the last unit of goods produced by a firm () the cost of production at which minimum profit is obtained by the firm 51. Which of the following is NOT part of the fixed cost of a firm () interest on loans () rent on buildings () depreciation reserves () management expenditure () wages 52. Which of the following is used to describe a payment representing a surplus in excess of transfer earnings? () interest rates () opportunity costs () economic rent () indirect costs () wages 53. perfectly competitive firm produces the most profitable output where its () marginal revenue equals average cost () price equals average cost () price equals marginal cost () marginal cost equals marginal revenue () average revenue equals average cost 54. dvertising is the main technique used for effecting in a monopolistic competition () market segmentation () product differentiation () price () profit () supply 55. Output of a monopolist is usually determined at a point where () P=M () MR=M () R= () marginal cost is rising () marginal revenue is rising 4

5 UNIVRSITY OF IN, IN. POST-UTM PRTI QUSTIONS & NSWRS ONOMIS 56. Product homogeneity is one of the characteristics of () perfect competition () monopoly () monopolistic competition () oligopoly () competition 57. Which of the following is compatible with a firm in a purely competitive market? () demand is inelastic () demand is infinitely elastic () marginal cost is falling () price is greater than marginal cost () price is less than marginal cost 58. The difference between gross national product and net national product is equal to () Gross investment () Net investment () Net foreign income () apital depreciation () Net and gross 59. The difference between the Gross omestic Product and the Gross National Product is the () llowance for total depreciation () Total interest payments () Total tax and interest payments () Net income from abroad () none of the above 60. The multiplier is defined as () The ratio of the change in income to the change in investment () The change in investment divided by the change in income () 1/(MP) () 1/(1-MPS) () Process of multiplying initial increase in income 61. decrease in aggregate spending in an economy will ultimately lead to () oom () eflation () Inflation () Recession () stagnation 62. Money serves well as a store of value in an environment devoid of () unemployment () bank robbery () development-oriented central/reserve bank () inflationary pressure () substitutes like TMs, cheques and bank draft. 63. The ability of deposit money banks to create money is mainly affected by () reserve ratio () liquidity ratio () capital base () monetary policy rate () all of the above 64. document that shows the details of government revenue and expenditure in a year is called () budget () development plan () rolling plan () perspective plan () financial plan 65. The basic fiscal relation that exists among the three tiers of government in Nigeria is () national budget appropriation () State-Local Government joint account () revenue allocation from the federation account () federal road projects () federal character principle 66. The biggest source of government revenue in Nigeria is () Mining rents and royalties () ompany income tax () Import duties () xport duties () Petroleum profits tax 67. major obstacle to economic development is () rise in industrial output () Low farm productivity () Free trade () Ineffective trade unions () corruption 68. sustained increase in the per capita income of a country over a period of time is called () conomic growth () conomic development () Structural change () Stagflation () Sustainable income growth 69. In recent years, Nigerian economy has been registering a spectacular growth in. Sector in the last ten years. () agriculture () education () telecommunication () transport () distribution 5

6 UNIVRSITY OF IN, IN. POST-UTM PRTI QUSTIONS & NSWRS ONOMIS 70. Nigeria, being a developing frican country in the sub-sahara, has put together a development blue-print called Vision 20:2020 which can ensure that the country becomes () one of the 20 developed countries by the year 2020 () an frican economic Tiger by the year 2020 () one of the 20 largest economies in the world by the year 2020 () one of the 20 largest economies in sub-saharan frica by the year 2020 () one of the 20 largest economies in the developing world by the year The major objective of economic growth is to () Redistribute income and other benefit of growth () qualize opportunity for education and employment () Increase aggregate expenditure on goods and services () Increase the real per capita income () Increase access to education 72. The most common index used for measuring development is () The level of literacy () Per capita income () Nutritional levels () Population growth rate () International development index 73. Which is NOT a direct effort to increase agricultural production in Nigeria? () Operation Feed the Nation () Nigerian Youth Service orps () Increased loans to farmers and cooperatives () Research in griculture and extension services () Mechanization of agriculture 74. Which of the following sectors of the economy is estimated to be the largest employer of labour in the country? () onstruction () griculture () istribution () Mining and petroleum () Transport and communications 75. Industries contribute to national economic development because they () Utilize local raw material () mploy an increasing number of labour () Provide recreational facilities () Use modern machines which replace human labour () ll of the above 76. Infant industries are () aby food and baby clothing factories () Those which are introducing new products () ases of arrested development () Industries temporarily protected by tariffs barriers until mature enough to compete on world markets () Industries that are allowed to remain permanent cases of adolescence 77. The export-promotion strategy is aimed at producing () onsumer goods originally imported () Machinery for industries () More goods for exports () More goods for domestic consumption () Increasing export of goods needed in developed countries 78. Which of the following is NOT an advantage of localization of industries? () Reaping of external economies () evelopment of a pool of skilled labour for the industry () evelopment of subsidiary industries () evelopment of organized markets () Growth of conurbations 79. The crucial factors which determines the location of petroleum refineries in Nigeria are availability of raw materials and () apital () Political consideration () Nearness to source of power () Labour () vailability of seaports 80. The petroleum industry in Nigeria is () The sole source of the nation s revenue () The oldest industry in the country () The mainstay of the economy () factor in the decline in the nation s foreign reserves () In the hand of NNP 81. In a limited liability company, the greatest risk is borne by () Shareholders debentures () ompany executives () Ordinary shareholders () Preference shareholders () oard of directors 6

7 UNIVRSITY OF IN, IN. POST-UTM PRTI QUSTIONS & NSWRS ONOMIS 82. In a public company, shares are () Sold to one person only () istributed freely () dvertised to members of the public for subscription () isposed off by the hief xecutive () none of the above 83. The advantage of the sole proprietorship is as follows: () It is always successful () ontinuity is no problem () ontrol and supervision is under one man () Funds are easy to obtain () Inter-generational equity is assured 84. The maximum number of shareholders for a limited liability company is () Twenty () Seven () Five () Infinite () Limited to the number of individuals that are interested 85. Population density refers to () ensely populated urban centres () The total area divided by the total population () ensely populated rural areas () The total population divided by the total area () ll of the above 86. To calculate the annual natural growth rate of a country s population, one has to know the country s annual birth rate and () The size of that country () The rate of immigration into that country () The population census of that country () The annual death rate () The gross domestic product (GP) of the country 87. Which of the following is not true of the theory of optimum population?. It is possible for a densely populated country to be under-populated if it has insufficient labour to make the most effective use of its other factors. The quantity of labour, which combines with other factors, gives the minimum output, is known as optimum population. The quantity of labour, which combined with the other factors, gives the maximum output, is known as optimum population. The test of over-population is whether it exceeds the optimum. It is possible for a thinly populated country to be overpopulated if it has a poor supply of other factors 88. Which of the following is the standard concept of measuring and analyzing population growth? () The rate of natural increase () The net migration rate () The rate of population increase () The fertility rate () ll of the above 89. Which of these would NOT increase the population of a country? () Increase in death rate () ecrease in birth rate () migration () Migration () etter medical facilities 90. n improvement in the Nigeria s terms of trade should () Lead to a fall in cost of her imports in terms of what she must sacrifice to obtain them () Make made-in-nigeria goods cheaper to buy () Increase Nigeria s domestic output of commodities () Lead to an increase in her exchange rates () Lead to an increase in Nigeria s exports of petroleum 91. y trade by barter, we mean () Trade done by people in the villages () xchange of goods for money () International trade () xchange of goods for goods () The trade of the Middle ges 92. Gains from trade depends on () omparative advantage () bsolute advantage () istributive cost advantage () bsolute cost advantage () None of the above 93. International and inter-regional trade differ primarily because () omparative advantage is relevant to the former but not to the latter () Products flow easily within regions of a country () There are different resource supplies among countries of the world () Of regulations from GTT () None of the above 7

8 UNIVRSITY OF IN, IN. POST-UTM PRTI QUSTIONS & NSWRS ONOMIS 94. Surplus in the balance of payments lead to () Inflation or increasing prices generally () Increase in foreign reserves () ecrease in foreign reserves () Government budget surplus () None of the above 95. The expression Terms of Trade is used to describe () The quality of exports () The direction of foreign trade () Terms of purchase on deferred payment basis () The rate at which exports exchange for imports () Import licensing 96. The quantity of a currency that exchanges for a unit of another currency is called its () exchange value () barter value () exchange rate () market price () unit price 97. Under a system of freely floating exchange rates, an increase in the international value of a country s currency will cause () its exports to rise () its imports to rise () gold to flow into that country () its currency to be in surplus () devaluation 98. When a currency loses its value due to a government action to fix the quantity of the currency that exchanges for another currency, there is () devaluation () depreciation () inflation () fiscal deficit () none of the above 99. Which of the following items in the alance of Payments ccount is an invisible transaction? () Imports of cars () xport of cocoa () xport of crude petroleum () Tourism () Import of building materials 100. major trading problems facing OWS is () The absence of common currency () Political instability () High poverty level () Non-implementation of decisions () Trade-related political crisis in Ivory coast 8