UTME CBT FREE Practice Test – Economics (Questions with Answers and Explanations)

An improvement in technology will enable the country product at _______

A. X   B. V   C. Z   D. V

The primary objective of the NDIC is to ______

(A) give protection to the CBN against fraud
(B) provide regulation guiding the finance houses
(C) give protection to banks against fraud
(D) give protection to bank depositors.

If the demand for a product with a perfectly elastic supply increases, there will be ______

A. an increase in price and quantity offered
B. an increase in quantity offered but price will remain the same
C. a reduction in price and quantity offered
D. an increase in price but a reduction in quantity offered for sale

ECOWAS has taken a giant step towards economic integration by ______

A. presenting a united front against foreign economic exploiters
B. introducing a common currency for travellers
C. holding frequent meetings at various state capitals
D. increasing economic stability among member states.

The monetary control instrument most effectively used by the Central Bank of Nigeria is the ____

A. open market operation   B. margin requirement   C. reserve ratio   D. discount rate

An advantage of large-scale farming over peasant farming is in the area of ______

A. providing research and massive employment of labour
B. redistributing national income to various regions of the country
C. encouraging the use of traditional implements
D. encouraging urban-rural migration.

Which of the following is not a form of money?

A. Coins    B. Bank notes    C. Bank balance    D. Bank deposit

Ranking is the method used in measuring _____

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

In order to build up its capital stock, the typical less developed country should ideally ______

A increase total savings
B. depend on handouts from foreigners
C. nationalise all foreign concerns
D. impose tariffs on imports

From the table above, find the values of E and F respectively.

A. 27 and 1    B. 68 and 12   C. 28 and 5   D. 12 and 19

When price is set below equilibrium, this will lead to _____

A. an increase in the quantity supplied
B. anew equilibrium
C. a decrease in the quantity supplied
D. a fall in price.

All the following are features of optimum population except _____

A. full employment of available resources.
B unlimited amount of unexploited resources.
C. maximum per capita production and income.
D. high standard of living.

An accurate census figure is an important tool for planners in _______

A. providing employment
B. sitting industries
C. providing social amenities
D. allocating resources.

One reason why small scale businesses are very common in West Africa is that

A. they can easily float shares.
B their management boards are easily formed.
C. their initial capital is easy to raise.
D. their dividend payments are very regular.

If the quantity demanded of a commodity increases from 20 to 30 when there is an increase
in price from N 4 to N 5, the elasticity of demand is _______

A. 0     B. 1     C. 2     D. 5

If the country’s GNP in the current year is N 65 billion and the GNP in the base year is N 50 billion, the GNP deflator is ______

(A) 130.0   (B) 30.0   (C) 15.0   (D) 1.3.

Which of the following is not a direct tax?

A. Company income tax     B. Capital tax     C. Purchase tax     D. Personal income tax

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

The introduction of tariffs and quotas

A. reduce the prices of imports.
B. increase the demand for locally made goods.
C. discourage domestic industries from becoming more efficient.
D. reduce the prices of locally made goods.

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.

The term ‘Near money’ is best described as _______

A. a financial instrument that is readily convertible to cash
B. government financial instrument that is-convertible to cash
C. time deposits with low interest rates
D. a financial asset that is convertible to cash

The best method of production in an under populated country is ______

A. labour-intensive    B. labour-extensive   C. land-intensive   D. capital-intensive

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.

Visible balance is also known as _______

A. terms of trade.    B. balance of payments.    C. balance of trade.    D. capital balance.

In a centrally planned economy, the economic problem of deciding what to produce is dependent on ______

(A) average profit   (B) state command   (C) average cost   (D) relative prices.

One of the roles of the NNPC in the production and refining of crude oil is to ______

(A) secure maximum government revenue and regulate price
(B) prevent the smuggling of petroleum products
(C) satisfy the domestic consumption of petroleum products
(D) protect the local operators in the petroleum industry.

The profit of a monopolist can be eliminated where price equals ______

A. AFC   B. MC   C. AC   D. AVC.

Short-term loans for investment are usually obtained through the _______

A. stock market   B. development banks   C. money market   D. capital market.

Which of the following is not true of the occupational distribution of the labour force in West Africa?

A. A large percentage of the labour force is engaged in agriculture
B. Agriculture is the most important occupation in West Africa
C. The manufacturing sector employs a large percentage of the population
D. Agriculture does not constitute an important source of paid employment

A co-operative society is a ______

A. finance house.
B. self-help business organization.
C. public corporation.
D. non-democratic business organization.

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

A normal supply curve is usually positively sloped because the relationship between

A. a price and supply is positive
B. demand and price is positive
C. supply and price is negative
D. price and demand is negative

The major objective of a revenue allocation formula in a country is to _____

A. share revenue between the different tiers of government
B. divert revenue from areas of surplus to areas to need
C. ensure the financial viability of the country
D. share revenue between the public and private sectors

In the table above, the price of commodity y is N 2 and that of x is N 1 while the individual has an income of N 12. Determine the combination of the two commodities the individual should consume to maximize his utility.

A. 6y and 4x   B. 3y and 6x   C. 5y and 5x   D. 3y and 3x

In the short run, a firm’s marginal cost curve above the point of shut-down is its _______

(A) demand curve   (B) revenue curve   (C) cost curve  (D) supply curve.

Which of the following will not retard economic development in West Africa?

A. Dependence on imports     B. Population control     C. High level of illiteracy     D. Low level of savings

If the demand curve facing a firm is sharply downward sloping, the firm is likely to be ______

A. a monopolistic competitor as it can have a limited influence on price
B. a monopolist as it can have a great influence on price
C. a perfect competitor as it cannot influence the market price
D. an oligopoly as it can collude with other firms to have some influence on price

A decrease in the demand for a product X resulted in a decrease in the demand for another product Y. The demand for X and Y is ______

A. derived.    B. composite.    C. joint.    D. competitive.

Net national income is _______

A. gross national income minus depreciation
B. gross domestic product plus net income from abroad
C. nominal national income deflated by the price level
D. gross national income divided by the total population

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