1. In which of the following situations would economists use the word equity?

a.Society is getting the most it can from its scarce resources.

b.Those in society who have the least will receive the most.

c.Each member of society has the same income.

d.The benefits of society\’s resources are distributed fairly among society\’s members

2. When does a rational decision maker take an action?

a.only if the marginal benefit is greater than both the average cost and the marginal cost

b.only if the marginal benefit is greater than the marginal cost

c.only if the marginal benefit is less than the marginal cost

d.only if the average benefit is greater than the average cost

3. How does the “invisible hand” direct economic activity?

a.through central planning

b.through government regulations

c.through advertising

d.through prices

4. For what reason do both households and societies face many decisions?

a.because wages for households and therefore society fluctuate with business cycles

b.because populations may increase or decrease over time

c.because people by nature tend to disagree

d.because resources are scarce

5. For most students, what is the largest single cost of a university education?

a.the wages given up to attend school

b.transportation, parking, and entertainment

c.room and board

d.tuition, fees, and books

6. What does economics study?

a.how to increase production

b.How firms make profits

c.the government\’s role in society

How society manages its scarce resources

7. When society requires that firms reduce pollution, what happens?

a.There is a tradeoff only if some firms are forced to close.

b.There is no tradeoff for society as a whole, since the cost of reducing pollution falls only on the firms affected by the requirements.

c.There is no tradeoff, since everyone benefits from reduced pollution.

d.There is a trade-off because of reduced incomes to the firms\’ owners, workers, and customers

8. When government policies such as the welfare system try to help the neediest members of society, what happens?

a.It reduces charitable contributions in an economy.

b.It causes market failure to occur.

c.It increases the productivity of the needy in the society.

d.It increases equity and reduces efficiency

9. When government policies such as the welfare system try to help the neediest members of society, what happens?

a.It reduces charitable contributions in an economy.

b.It causes market failure to occur.

c.It increases the productivity of the needy in the society.

d.It increases equity and reduces efficiency

10. What does efficiency mean?

a.Society is conserving resources in order to save them for the future.

b.Society has lessened its dependence on foreign energy sources.

c.Society is getting the most it can from its scarce resources

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11. What does a point on a country\’s production possibilities frontier represent?

a. a combination of two goods that an economy will never be able to produce.

b.a combination of two goods that an economy can produce using some of its resources and technology.

c.a combination of two goods that an economy may be able to produce sometime in the future with additional resources and technology.

d.a combination of two goods that an economy can produce using all available resources and technology

12. If a decrease in income increases the demand for a good, what is the good called?

a. an inferior good

b.a complementary good

c.a substitute good

d.a normal good

13. What are two causes of market failure?

a. incorrect forecasts of consumer demand and foreign competition

b. externalities and market power

c. externalities and foreign competition

d. market power and incorrect forecasts of consumer demand

14. Which of the following would NOT shift the demand curve for a good or service?

a. a change in expectations about the price of the good or service

b. a change in income

c. a change in the price of a related good

d. a change in the price of the good or service

15. Which of the following is NOT a reason for the government to intervene in the market?

a.to promote efficiency

b.to enforce property rights

c.to promote equity

d.to protect an industry

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16. When evaluating differences or similarities between an increase in supply and an increase in quantity supplied, what do we know?

a.The former is a movement along the curve and the latter is a shift of the curve.

b.shifts of the supply curves.

c.Both move along the curve.

d.The former is a shift of the curve and the latter is a movement along the curve

17. Suppose that a decrease in the price of X results in less of good Y sold. What are X and Y called?

a.substitute goods

b.complementary goods

c.normal goods

d.inferior goods

18. Which chain of events occurs in the correct order?

a. Quantity supplied increases, price increases, demand increases

b. Demand increases, quantity supplied increases, price increases.

c. Demand increases, price increases, quantity supplied increases

d. Price increases, demand increases, quantity supplied increases

19. If goods A and B are complements, what will result from an increase in the price of A?

a.more of good A sold

b.less of good B sold

c.no difference in the quantity sold of either good

d.more of good B sold

20. If the price of a substitute to good X increases, what will happen?

a.Demand for good X will decrease.

b.Demand for good X will increase

c.Market price of good X will decrease.

d.Quantity demanded for good X will increase.

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21. In a simple circular-flow diagram, how are total income and total expenditure interrelated?

a.They are equal only when all goods and services produced are sold.

b.They are always equal because of accounting rules.

c.They are seldom equal because of the dynamic changes that occur in an economy.

d.They are always equal because every transaction has a buyer and a seller

22. If real GDP doubles and the GDP deflator doubles, what will happen to nominal GDP?

a.It will stay the same.

b.It will triple.

c.It will double.

e. It will quadruple

23. How is GDP computed?

a.Add up the market values of all final goods and services produced within a country in a given period of time.

b.Add up the quantities of all final goods and services

c.Add up the cost of producing final goods and services

d.Use weights determined by a survey regarding how much people value different sorts of goods and services to compute GDP as a weighted average

24. If one wants to know how the material well-being of the average person has changed over time in a given country, which of the following should one look at?

a.the growth rate of real GDP per person

b.the level of real GDP

c.the growth rate of real GDP

d.the growth rate of nominal GDP

25. How is Nigerian GNP calculated from Nigerian GDP?

a.by including income earned by Nigerian citizens abroad and excluding income earned by foreigners in Nigeria

b.by excluding income earned by Nigerian citizens abroad

c.by including income earned by foreigners in Nigeria and excluding income earned by Nigerian citizens abroad

d.by including income earned by foreigners in Nigeria

26. What is the difference between nominal and real GDP? 

a.Nominal GDP values production at market prices, while real GDP values production at the cost of the resources used in the production process.

b.Nominal GDP values production at constant prices, while real GDP values production at current prices.

c.Nominal GDP consistently underestimates the value of production, while real GDP consistently overestimates the value of production.

d.Nominal GDP values production at current prices, while real GDP values production at constant prices

27. In computing GDP, what is investment?

a.spending on capital equipment, inventories, and structures, excluding household purchases of new housing

b.spending on real estate and financial assets

c.spending on stocks, bonds, and other financial assets

d.spending on new capital equipment, inventories, and structures, including new housing

28. Which of the following best defines a transfer payment?

a. a form of government spending that is not made in exchange for a currently produced good or service

b.government spending on imported goods

c.payments to governments, other than taxes

d.money that Nigerian citizens working abroad send back to their families in Nigeria

29. Suppose that the incomes of buyers in a particular market for a normal good decrease and there is also a reduction in input prices. What do we expect to occur in this market?

a.The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous

b.Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.

c.The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous.

d.Both equilibrium price and equilibrium quantity would increase.

30. What is the relationship between income and expenditure for an economy?

a.Income equals expenditure

b.Income is less than expenditure.

c.Income is greater than expenditure.

d.Income could be greater or less than expenditure.

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31. Choices are made with consideration for _______ derivable from a particular good or services at a particular time.

Ans. Satisfaction

32. ________ elastic demand occurs when the quantity demanded dropped to zero with a little price change.

Ans. Perfectly

33. The more satisfied she derived the less the additional or extra ____s he will get when compared with the previous units consumed.

Ans. Utility  

34. As far as basic economics is concern, it assumes that people act rationally so as to gain the most benefit for themselves especially when benefit is compared with the associated _____.

Ans. Costs

35. Price _______is the direct opposite of price ceiling. This is when the government interferes in the market by setting a minimum price that can be charge on a particular product or services.

a. Ceiling

b. Roof

c. Apex

d. Floor  

36. A ______ is defined as one particular product (or the product and its close substitutes and

complements) and the economic interactions of individuals; who own, produce, trade and consume this product.

a. Venture

b. Market

c. Intermediary

d. Business

37. According to law of demand when prices rise, quantity demanded is expected to ____ ceteris paribus

a. Fall  

b. Increase

c. Crash

d. Deplete

38. Extra utility is referred to by economist as______ utility.

a. Added

b. Supplus

c. Increamental

d.  Marginal

39. Marginal utility is the additional satisfaction or utility derived from consumption of addition units of a product. Extra satisfaction derived from further consumption of a good especially from the last unit of it that was ________.

a. Supplied

b. Accquired

c. Consumed

d. Purchased

40. Elasticity has a concept that is use to quantify the response in one variable when there is _____ in another variable.

a. Movement

b. Adjustment

c. Slide

d. change

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41. ______ is a means of measuring how quantity demanded or supplied of a product react to changes change in price

and other determinant

Ans. Elasticity

42. Classically, economics as a science of wealth. _______, the father of economics, in his book titled: ‘An Enquiry into the Nature and Causes of Wealth of Nations’, state economics as the science of wealth.

Ans. Adam Smith

43. Positive Economics refers to a science which is based on data and ____.

a. Statistics

b. Facts

c. Figures

d. Digits

44. ______economics is described as a science based on opinions, values, and judgment.

Ans. Normative  

45. _____ is defined as the rate at which a commodity is exchanged for money or other units of exchange.

a. Cost

b. Imprest

c. Income

d. Price 

46. Price tends to rise when there is little supply of goods and_____.

a. Commodities

b. Purchases

c.  Services

d. Items

47. Price is defined as the rate at which a commodity is ______for money or other units of exchange.

Ans. Exchanged  

48. Positive economics is descriptive, but normative economics is prescriptive.

Ans. Positive

49. ______ this problem refers to selection of appropriate technique of production, that is, how to combine resources in other to produce goods and service in a more efficient way and at a minimum cost.

Ans. How to Produce

50. A combination of resources (factors) implies a technique of_____.

Ans.  Production

51. The _____ definition economic is narrowed the scope of economics to science that deals with only material wealth.

a. Oligopolist

b. Economist

c. Classical

d. Neo classical

52. _______ is a science with laws that has universal validity (the law of demand, law of diminishing marginal utility), etc. Some people do not regard economics as a science because there is no scope for experimentation.

a. Economics

b. Commerce

c. Business

d. Statistics

53. Alfred Marshal state economics as the study of mankind in the ordinary business of life, examining the part of individual and its social action relating to the attainment and use of material for individual well-being.

a. Tutor Ayo

b. Alfred Marshal

c. Mustapha Aliko

d. Jonathan Agip

54. In line with Sustainable _____ Goals (SDGs).

a. Development

b. Increamnet

c. Diversification

d. Improvement

55. Economics as a subject is dynamic with continuous growth. Alfred Marshall separated it from _______.

Ans. Political Economy

56. A market is said to have reached _____ price when the supply of goods matches demand.

Ans. Equilibrium  

57. A market in _______ demonstrates three characteristics: the behavior of agents is consistent, there are no incentives for agents to change behavior, and a dynamic process governs equilibrium outcomes.

a. Shift

b. Indifference

c. Equilibrium

d. Movement

58. Economics is a science because it is a systematized body of knowledge in which economic facts are studied and analyzed.

Ans. Systematized

59. The following factors affects Demand except ______

a. Households’ income

b. Prices of related commodities

c. Households’ preference and taste

d. Income

60. Determination of prices of commodity is known as “price theory” in economics. This theory is the ______ of microeconomics and it is basically connected to the theory of demand and supply.

a. Determinant

b. Backbone

c. Fronter

d. Pivot Point

61. The word ______ has Greek origin, ‘mono’ in Greek means ‘one’ while ‘polist’ mean ‘seller’.

a. Oligopoly

b. Duopoly

c. Monoplistic

d. Monopoly

62. When MC <AC, it pulls AC _______

a. Up

b. Falt

c. Slants

d. Down  

63. When MC=AC, AC remains _______.

a. Indifferent

b. Constant

c. Fixed

d. In-discriminating

64. The functional relationship between the market demand of a particular commodity and the factors influencing it is defined as the __________.

Ans. Market Demand Function

65. _________ has to do with the problem of allocation of resources among different goods and services. It involves selection of what should be produced and in what quantity in order to satisfy consumer wants as best as possible using the available resources.

Ans. What to produce

66. ______ this is the total amount of output produced from combination of certain inputs with a particular production technology.

Ans. Total output (TO)

67. _________ overall sum of revenue generated from total product sold (Q x P).

Ans. Total revenue (TR)

68. _______ is defined as the rate at which a consumer is willing to substitute one good for the other.

Ans. Marginal Rate of Substitution (MRS)

69. Indifference _____is premised on the fact that though consumers are limited by their income and price of the goods, however their objective is utility maximization.

a. Line

b. Analogue

c. Curve

d. Pointers

70. _______ overall sum of total fixed and variable costs incurred in the production process (TFC +TVC).

Ans. Total cost (TC)