UTME CBT FREE Practice Test – Economics


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Given the supply function: P = ¼(Qs + 10) , when P = N 10, what is Qs?

A. 20   B. 15   C. 50   D. 30


Disposable income is the same thing as ________

A. personal income minus personal saving
B. personal income minus taxes
C. national income minus depreciation
D. exports minus imports


The labour force of a country can be determined by examining the _____

A. age structure of the population
B. sex distribution of the population
C. geographical distribution of the population
D. occupational distribution of the population.


Import substitution aims at ______

(A) substituting agricultural products with industrial ones
(B) substituting imports with agricultural exports
(C) the diversification of industries
(D) improving the balance of payments.


Which of the following is not a function of an insurance company?

A. Pooling resources together against risks.
B. Mobilization of funds through premiums collected.
C. Encouragement of investment by security of capital.
D. Collection of deposits from the public for investment.


Which of the following will enhance productivity in an economy?

A. The use of obsolete capital.
B. Technological change.
C. Expansion of land under cultivation.
D. An increase in the labour force.


A condition in which official and autonomous exchange rates coexist is ______

A. dual exchange rate system
B. managed floating rate system
C. market determined exchange rate system
D. multiple exchange rate system.


A consumer surplus measures the ______

A. benefits derived from consuming a cheap commodity
B. excess of total expenditure over total utility
C. difference between marginal utility and marginal cost
D. excess of marginal utility over price.


A major disadvantage of the arithmetic mean is that it is ______

A. not useful for large data
B. not table for further statistical analysis
C. cumbersome to determine the actual value
D. affected by extreme data.


All economic systems must decide what to produce because

A. resources are not available.
B. consumers want maximum satisfaction.
C. resources are limited in supply.
D. producers want maximum profit.


In the balance of payments of a country, tourism is classified under ______

A. capital account.    B. invisible trade.    C. merchandise trade.    D. official reserves.


The financial institution that specializes in risk spreading is called _______

A. an investment bank.
B. a development bank
C. an insurance company.
D. the stock exchange.


The lowering of the exchange rate between a country’s currency and other currencies is known as _____

A. the foreign exchange rate     B. deflation     C. exchange control     D. none of the above.


Given that Qd = 80 - 2p where Qd is quantity demanded and p is the price, what quantity would be demanded when the price p is $3?

A. 86 units    B. 80 units    C. 76 units    D. 74 units.


Occupational mobility as applied to factors of production means the ease by which ____

A. factors can be transferred from one form of use to another
B. resources can be transferred from one place to another
C. resources can be transformed from one form to another
D. factors can be transferred from one place to another


A country is said to be overpopulated when _____

A. the resources are more than enough to cater for the population
B. the size of the population is greater than the annual budget
C. the resources are inadequate to cater for the population
D. there are too many able-bodied men and women in the country.


Which of the following is not an indirect tax?

A. Excise duty    B. Company tax    C. Import duty    D. Export duty


To compare the standard of living among nations, the most widely used economic indicator is the

A. real domestic output
B. real gross national income
C. real per capita income
D. per capita nominal income


Division of labour means ______

A. dividing the labour into different categories
B. splitting the process of production into different parts to be completed by each person
C. dividing the goods and services into different sections
D. assigning different duties to labourers


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. joint demand     C. excess supply     D. none of the above.


An increase in the circulation of money without a corresponding increase in output will lead to _____

A. a rise in income levels   B. stagflation   C. deflation   D. inflation.


National income estimates can be used to ______

(A) differentiate between the rich and the poor in a country
(B) prepare a country’s annual budget
(C) project the level of a country’s economic development
(D) compare a country’s growth rate with that of another over a period of time.


The economic policy of deregulation is aimed at encouraging _______

(A) a monopolistic market structure
(B) a duopolistic market structure
(C) a competitive market structure
(D) an oligopolistic market structure.


A scientific approach in economic analysis entails ______

(A) a deductive method only
(B) both inductive and normative methods
(C) a normative method only
(D) both inductive and deductive methods.


The type of monopoly that develops as a result of granting patent right is known as _____

A. natural monopoly.    B. state monopoly    C. legal monopoly.    D. discriminating monopoly.


A typical corporate form of business organization is owned by _________

A. presidents of the country
B. shareholders
C. the general manager and the executives of the business concern
D. a local government


The transfer of public shareholding in corporations to private enterprises is ______

A. concession    B. incorporation    C. commercialization    D. privatization.


Which of the financial institutions cannot direct loans to individuals?

A. The Agricultural Bank     B. The Industrial Bank     C. The Central Bank     D. The Co-operative Bank



What is the percentage contribution of services to the national income?

A. 15%   B. 10%    C. 54%   D. 24%


Optimum population enables an economy to attain the highest level of ______

A. industrial development   B. income per head    C. revenue generation   D. economic development


The biggest source of government revenue in Nigeria is ______

A. mining rents and royalties
B. company income tax
C. petroleum profit tax
D. export duties


A student has N 30.00 with which to buy a ruler costing N 18.00 and an exercise book costing N 25.00. If he buys the exercise book, his opportunity cost is _____

(A) the ruler    (B) the exercise book    (C) N 25.00    (D) N 18.00


Insurance companies invest mainly in instruments traded on the _______

(A) capital market   (B) commodity market   (C) money market   (D) open market.


The expression ‘Terms of Trade' is used to describe ______

A. the quality of exports
B. the direction of foreign trade
C. terms of purchase on deferred payment basis
D. the rate at which exports exchange for imports


An arrangement in which the debts of a company can only be paid from its own assets implies ______

A. unlimited liability.    B. transferred liability.    C. limited liability.    D. capital liability.


General rise in the price level induced by increased price of inputs is referred to as

A. run-away inflation.      B. cost-push inflation.      C. demand-pull inflation.     D. imported inflation.


The Malthusian theory of population growth is often said to be ________

(A) ambiguous    (B) oversimplified   (C) pessimistic    (D) optimistic.


The effect of an increase in the personal income tax is to ________

A. reduce unemployment
B. raise the absolute price level
C. reduce the disposable income
D. distort the economy


Which of the following features best describes peasant agriculture in West Africa? It ______

A. specializes in the production of one crop.
B involves the use of small farm holdings.
C. is a capital-intensive system of farming.
D. is mostly associated with tree crops.


One of the major factors militating against industrialization in Nigeria is the _____

A. inadequacy of infrastructural facilities
B. absence of government participation
C. frequent breakdown of equipment
D. failure to get foreign partners and Supporters.


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