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Economics 2 QUIZ STUDY
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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 consumers' income rises
D. Which satisfy only the basic needs

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

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

Bond holders are treated more favourable than shareholder because
A. They are not liable for the companies losses
B. They control the management
C. They greater voice in the electing board of the directors
D. none of the above

If two commodities are good substitutes for one another, e.g butter and margarine, an increase in the demand for one will reduce the demand for the other. This type of demand is called
A. composite demand
B. elastic demand
C. derived demand
D. competitive demand

One of the reason why the condition of supply of a commodity may change is
A. a change in real income
B. changes in the technique of production
C. a change of fashion or taste
D. change in population

when the demand curve shift to the right it indicate that a larger quantity is demanded at each price. This is caused by one of the following
A. a fall in income
B. a rise in the price of a complement
C. a change in taste against this commodity
D. none of the above

A 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 as much as it takes in taxation

When elasticity is zero, the demand curve is
A. Perfectly elastic
B. Perfectly inelastic
C. Downward slopping
D. circular

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. All of the above

A commercial bank is unique in that it is only the institution that
A. can transfer money from one place to another for its customers
B. accept deposits
C. makes loans to private people and businessmen
D. can store peoples' valuables

Which is an expression 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

Which of the following is not true of optimum population?
A. It is possible for densely populated country to be under populated if it has insufficient labour to make the most effective use of its other factors
B. The quantity of labour which combined with the other factors gives the minimum output is known as optimum population
C. The quantity of labour which combined with the other factors, gives the maximum output, is known as optimum population
D. The test for over-population is whether it exceed the optimum

Production covers all but one of the following activities:
A. the provision of some kind of service e.g retailing
B. changing the form of a good from the raw material to the finished product
C. changing the situation of a good as for example , from a factory in Lagos to a retail shop in portharcourt
D. the use of good and services to satisfy individual wants

When the price of a commodity is below the equilibrium price the quantity demanded will exceed the quantity supplied Such a situation is referred to as
A. elastic supply
B. excess supply
C. derived demand
D. none of the above

The central bank controls the activities of other banks by all but one of the following
A. The use of bank rate
B. The purchase or sale of government bonds on the open market
C. special deposit
D. taxation

By utility we mean
A. usefulness
B. power of satisfying a want
C. beneficial
D. consumable

Which of the following is not an indirect tax?
A. excise duty
B. company tax
C. import duty
D. export duty

Average cost is
A. the total cost of production
B. overhead cost
C. cost of producing a unit of output
D. variable cost

opportunity cost is the
A. price of scarce goods
B. resources required for making a commodity
C. cost of luxury goods
D. alternative forgone in other to satisfy a want

The quantity supplied of a commodity increases best when
A. Production increases
B. Demand increases
C. Price of the commodity increases
D. Population of the country increases

The country will be over populated when
A. the rate of birth is high
B. the death rate is low
C. the growth rate is high
D. population is increasing more than resources in the country

The value of money is generally measured in reference to
A. the interest rate charged on bank loans
B. the general price level
C. the size of countries gold stock
D. the level of economic development in a country

The 'terms of trade' means
A. the trade agreement between two countries
B. the difference in the volumes of exports of two countries
C. the value of a unit of export in relation to the value of a unit of import
D. None of the above

Which is the most liquid of the following financial assets held by an individual?
A. Outstanding balance on the current account of a commercial bank
B. A credit balance on a savings account
C. A crossed postal order
D. An insurance policy

The price mechanism
A. regulates supply and demand
B. rations the consumers
C. rewards the producers
D. allocates scarce resources

Price control indicate the following
A. price is fixed at equilibrium level
B. price is fixed above equilibrium level
C. price is not fixed but determined by demand and supply
D. price is fixed below equilibrium level

An economic arises when?
A. manufactured goods are in short supply
B. money is in short supply
C. buyers are many
D. scarcity and choice are involved

Mr. A earns N300 and pays N15 in tax. Mr. B earns N100 and pays N6 in tax. This tax system can be described as?
A. proportional tax
B. progressive tax
C. competitive tax
D. regressive tax

If the price of a commodity falls and the quantity purchased of it does not rise, the commodity can be described as
A. normal
B. scarce
C. inferior
D. superior

Which is NOT a direct effort to increase Agricultural production in Nigeria?
A. Operation feed the Nation
B. Nigerian Youth Service Corps
C. Research in Agric & Extension services
D. Mechanization of Agriculture

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

If a company doubles all its inputs and discovers that its output more than doubles, we can say that the company is experiencing
A. Increasing Marginal utility
B. Increasing costs
C. Constant returns to scale
D. Increasing returns to scale

Which of the following financial assets consist the lowest rate of interest in Nigeria?
A. commercial bills
B. call money
C. treasury bills
D. development loan stocks

The effect of the demand of a 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. joint demand

Which of the following can be regarded as a liability of a commercial bank?
A. advances
B. deposits
C. treasury bills
D. overdrafts

The largest liability appearing in the book of a commercial bank is
A. cash
B. deposits
C. loans and advances
D. capital and reserves

The Lagos clearing house is
A. a commodity market
B. an import licensing centre
C. a cheque sorting centre
D. another name for the Lagos stock exchange

Tax which takes a higher percentage from a higher income is called?
A. a regressive tax
B. a progressive tax
C. an indirect tax
D. a direct tax

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 foreign firms, smaller distributors are too many to be controlled
D. too many things are produced in the country

The biggest source of government revenue in Nigeria is
A. mining, rents and royalties
B. company income tax
C. import duties
D. petroleum profit tax

Disposable income is the same thing as
A. personal income minus personal savings
B. personal income minus taxes
C. exports minus imports
D. savings plus investments

Which of the following type of capital is not rewarded by dividends?
A. Ordinary shares
B. Preference shares
C. participating preference shares
D. debentures

Which of these is not usually the function of a wholesaler?
A. Transport
B. Storage
C. After-sale services
D. Branding

Net national income is
A. Gross national income minus depreciation
B. gross national income divided by the total population
C. gross national product plus subsidies minus indirect taxes
D. gross domestic product plus net income from abroad

If Mr A earns N2,000 a year while Mr B earns N8,000 but Mr a pays N200 in tax per annum while Mr B pays N400, such a tax is
A. Progressive
B. Indirect
C. Regressive
D. Proportional

Which of the following is not an asset of a commercial bank?
A. cash
B. money at call
C. treasury bills
D. reserve funds

Which of the following is not a component of national income at factor cost?
A. Wages earned by doctor
B. Rent paid to landlords
C. Indirect tax
D. Interest on loan

Which of the following assets of the commercial bank does not yield revenue?
A. Money in the tills of the bank
B. money at call
C. Treasury certificates
D. Treasury bills

Which would you NOT consider an agro-based industry in Nigeria?
A. a yam floor mill
B. a poultry industry
C. a fertilizer plant
D. none of the above

Which is NOT a function of Central Bank in West Africa
A. Dealing in foreign exchange
B. Issuing of currency
C. Accounting deposit from private customers
D. Acting as bankers bank

Nigeria earns the major part of her foreign exchange from the export of?
A. manpower to another countries
B. crude oil
C. petroleum products
D. palm oil and cocoa

Which would you NOT consider an advantage of one-man business?
A. freedom of action
B. limited liabilities
C. Quick decision-making
D. Personal contact with customers

The function of money as a standard of deferred payments
A. Make possible for an individual to build up store of many things for future use
B. Makes it possible for payment to be postponed from the present to a future date
C. Facilitate the exchange of goods
D. Makes easy calculations possible

The process by which West African countries attempt to reduce the import of manufactured goods by encouraging firms to produce these goods at homes is known as?
A. industrialization
B. export-promotion
C. import-substitution
D. import-expansion

Which of the following does NOT belong in respect of the quantity of money?
A. Durability
B. Portable
C. Identifiable by all
D. Measure of value

Government budget can be described as the sum of?
A. Indirect tax, direct tax, and loans expected within a financial year
B. Planned recurrent expenditure and planned investment expenditure
C. Planned capital expenditure for a development plan within a plan period
D. Planned expenditure and expect revenue within a financial year

An economy in which both the public and the private sectors contribute substantially to the growth of output is?
A. a socialist economy
B. a capitalist economy
C. a mixed economy
D. an industrial economy

Progressive income tax can be expressed as
A. tax that falls as income rises
B. tax that rises as income falls
C. tax that is independent of income
D. tax that rises as income rises

Economics is a science which deals basically with
A. the factors of production
B. allocation of scarce resources
C. the gross domestic product (GDP)
D. national income

Which of the following statements is true?
A. A proportional tax is one which takes from high income people a higher fraction of their income than it takes for low income people
B. The sole proprietor is a legal entity
C. the influence of demand on price will be smallest on the short run
D. the cost of production is the most important determining factor of supply in the long run

Marginal cost is
A. Lowest cost of producing goods
B. The cost of production of the most efficient firm in the industry
C. Cost of production of the most inefficient firm in the industry
D. The cost of production at which the minimum profit is obtained by the firm

Which of the following is not a form of business organization
A. A sole proprietorship
B. Cartel
C. Partnership
D. Joint stock

As consumption of beer increases is marginal utility to a drinker will
A. Increase
B. Remain constant
C. Fluctuate
D. Decrease

The expression 'terms of trade' is used to describe
A. The rate at which export exchange for imports
B. Quality of export
C. Terms of purchase on deferred payment basis
D. The direction of foreign trade

If the demand of a product with perfectly elastic supply increase there will be
A. An increase in price and quantity offered
B. A reduction in price and quantity offered
C. An increase in quantity offered but price will remain the same
D. An increase in quantity offered but a reduction in price

Economics is called a social science because it is
A. A branch of social studies
B. A dismissal science in the Malthusian sense
C. A study of the ways man devises to satisfy his unlimited wants from unlimited resources
D. The study of human wants by the means of scientific method of observation

Which of the following is a term used to describe a payment representing a surplus in excess of transfer costs?
A. Interest rates
B. Opportunity costs
C. Economic rent
D. Indirect costs

Less developed countries obtain foreign reserve mainly from the export of
A. Manufactured goods
B. Processed and semi processed commodities
C. Invisible items
D. Primary product

By 'trade by barter', we mean
A. Trade done by people in the village
B. Exchange of goods for money
C. International trade
D. Exchange of goods for goods

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