UTME CBT FREE Practice Test – Economics (Score 70% and Above and WIN FREE Airtime)

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An improvement in technology will enable the country product at _______

A. X   B. V   C. Z   D. V

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

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

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

The equilibrium wage in an economy is determined by the ______

(A) public service   (B) workers’ union   (C) rate of inflation   (D) supply and demand for labour.

One of the reasons why the conditions 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. changes in the price of the commodity itself

Marginal cost is _______

A. the lowest cost of producing goods
B. the cost of production of the most efficient firm in an industry
C. the cost of production of the most inefficient firm in an industry
D. the cost of production of the last or extra unit of goods produced by a firm

If aggregate demand is lower than total output in an economy, national income will _____

A. be constant   B. be at equilibrium   C. increase   D. fall.

Price mechanism determines the prices of commodities through ______

A. auctioning   B. market forces   C. the sales of treasury bills   D. government legislation.

A greater burden of the taxes on essential goods is borne by the ____

A. lower income group   B. higher come group    C. contract workers    D. newly recruited workers

What does X represent?

A. Recessionary gap   B. GNP gap.   C. Inflationary gap.   D. Deflationary gap.

Under conditions of perfect competition, a firm’s supply curve is determined by its ______

(A) total cost curve   (B) marginal cost curve   (C) variable cost curve   (D) fixed cost curve.

Which of the following items In the Balance of Payments Account is an invisible transaction?

A. Import of cars    B. Export of cocoa    C. Export of crude petroleum    D. Tourism

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

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

A. 20   B. 15   C. 50   D. 30

A combination of factors responsible for a shift from D0D0 to D1D1 are ______

A. consumers income and change in technology
B. price of the commodity and weather conditions
C. consumers income and population size
D. consumers taste and change in price.

The precautionary demand for money is determined by _______

A. the rate of interest   B. the level of savings   C. the level of income   D. general price level.

External finance for a limited liability company is mainly sourced through ______

(A) the leasing of equipment   (B) the issuing of shares   (C) trade credits   (D) bank loans

One of the problems arising from the localization of industries is _______

A. high prices of output
B. the exportation of output
C. the scarcity of foreign exchange
D. structural unemployment.

From the table above, calculate the price elasticity of supply.

A. 0.50   B. 0.80   C. 2.00   D. 1.25

Ranking is the method used in measuring _____

A. marginal utility   B. ordinal utility   C. cardinal utility   D. total utility.

If the country is currently producing at point Y, it can increase production of producer goods by _____

A. W   B. X   C. Z   D. V

A change from one industry to another by a worker is an example of ______

A. geographical mobility   B. horizontal mobility    C. professional advancement    D. vertical mobility.

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

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

In a closed economy, the marginal propensity to consume is 0.6 and the average propensity to consume is 0.8. The value of the multiplier is ______

(A) 2.5   (B) 2.6   (C) 2.7   (D) 2.4

Opportunity cost is a term which describes _______

A. the initial cost of setting up a business venture
B. cost of one product in terms of foregone production of others
C. the monetary equivalent of the utility of a commodity
D. costs related to an optimum level of production

Which of the following sectors of the economy is estimated to be the largest employer of labour in the country?

A. Construction     B. Agriculture     C. Distribution     D. Mining and petroleum

Which of the following is not a component of National Income at factor cost?

A. Wages earned by doctors
B. Rent paid to landlords
C. Indirect taxes
D. Undistributed company profits

The solution to the problem of double coincidence of wants requires a buyer and a seller whose demands are precisely _______

(A) competitive    (B) composite   (C) supplementary   (D) complementary.

At 60 units of output, the AVC is _____

A. N 2.50   B. N 1.50   C. N 90.00   D. N 150.00

Which of the following is not an indirect tax?

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

The average total cost when 20 units are produced is _____

A. N 20.00   B. N 23.00   C. N 13.00   D. N 15.00.

Inflation can be curbed by ________

A. increasing aggregate demand
B. paying higher wages
c. increasing government expenditure
D. reducing aggregate demand

The long-run average cost curve is called a planning curve because it shows what happens to cost when _____

A. a bigger size of plant is built
B. different sizes of plant built
C. variable inputs are increased
D. fixed factors are increased

Given that Qd = 40-2P and Qs = 6P+24, calculate the equilibrium price.

A. N 4   B. N 2   C. N 36  D. N 16

Which of the following is NOT strictly included in the study of Economics?

A. The study of wants
B. The study of choice
C. Whether a particular want satisfies a good or bad purpose
D. The study of scarcity

The benefits that accrue to a firm as a result of an improvement in the industry it belongs to are called _____

(A) internal economies of scale
(B) economies of scale
(C) market economies
(D) external economies of scale.

Given a base year and the price index of 175% the following year, which of the following will arise?

A. The cost of living decreases in that year
B. The cost of living remains unchanged
C. The value of money rises by 75%
D. The value of money falls by 75%.

An indicator of growth in an economy over a period of time is the ______

A. GDP gap   B. GDP at factor cost    C. GDP at market price   D. GDP deflator.

The loading of crude oil at the terminal is an activity in the ______

A. downstream sector of the oil industry
B. upstream and downstream sectors of the oil industry
C. upstream sector of the oil industry
D. midstream and upstream sectors of the oil industry.

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