SCHOOLS

YEAR 12 MOCK 2 UNIFIED EXAMINATION

2018/2019 ACADEMIC SESSION
SUBJECT: ECONOMICS TIME: 2 HOURS 30 MINUTES
PAPER 1: MULTIPLE CHOICE QUESTIONS
1. Economics is best described as the study of
A. the wealth of nations
B. how man consumes his products
C. how man provides for his everyday needs.
D. the distribution of wealth.
2. Productive resources can also be called
A. principle of production
B. factors of production
C. items of production
D. labour and material resources.
3. If the estimated population of a state, which occupies a land area of 7,500 square
kilometer was 225,000, calculate the population density.
A. 0.033
B. 0.33
C. 35
D. 30
4. The three determinants of the size and growth of population are:
A. birth rate, death rate and migration.
B. disaster, propensity and education.
C. family planning, birth control and medical services.
D. tradition, custom and religion.
5. The theory of diminishing marginally utility states that: as more unit of a commodity
is consumed, the
A. satisfaction from an extra unit decreases
B. satisfaction from extra unit rises.
C. satisfaction from an extra unit remains constant
D. total satisfaction from the good remain the same.
6. The active population of a country determines the size of its
A. economic resources
B. national income
C. labour force
D. gross domestic product.
7. If goods P and Q are jointly demanded, an increase in the price of P will likely
A. leave the demand for Q constant but reduce the quantity demanded of P
B. reduce the quantity demanded of P but increase the price of Q
C. increase in the quantity supplied of Q.
D. decrease the quantity demanded of Q.

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 8. The gap between demand and supply curves above the equilibrium price is called
A. normal demand
B. excess supply
C. equilibrium quantity
D. abnormal demand
9. A major function of the price mechanism is that it determines the
A. allocation of resources
B. amount of national savings
C. population of the country
D. number of goods to be taxed
10. Which of the following determinants of supply cannot be predicted easily?
A. price of the commodity
B. new techniques of production
C. natural emergencies
D. mobility of labour
11. If the co-efficient of elasticity of demand is 1.5, then the demand is
A. fairly inelastic
B. perfect
C. elastic
D. inelastic
12. When the marginal utility of a product is zero, the total utility is
A. at its maximum
B. upward -sloping
C. downward-sloping
D. at minimum.
13. In the long run all factors of production are
A. expensive
B. variable
C. durable
D. fixed
14. The slope of the transformation curve indicates the
A. opportunity cost of producing one commodity for another.
B. opportunity cost of producing two commodities at a time
C. sale of the plant to other investors
D. decrease in the cost of production.
15. Which of the following is regarded as fixed cost?
A. expenditure on raw materials
B. expenditure on fuel
C. expenditure on power
D. cost of building
16. Revenue is described as the
A. cost of good multiplied by the quantity sold
B. price of good multiplied by the quantity sold.
C. quantity of good plus chase price
D. quantity supplied less quantity sold

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17. A business outfit is said to be a Public Limited Company when it
A. is owned by government
B. operates as a public corporation.
C. is run by the public
D. sells its shares to members of the public
18. Economic freedom is a basic feature of
A. Market Economy
B. Command Economy
C. Industrialized Economy
D. Developing Economy.
19. The monopolist can determine
A. price and output
B. price only
C. output only
D. price or output
20. A market situation with a large number of firms selling closely related but
differentiated products is
A. monopolistic competition
B. perfect competition
C. monopoly
D. monopsony
21. Equilibrium under perfect competition requires that
A. MC = MR but AR < AC
B. MR = MC = AR = AC
C. AC = AR < MC
D. TR < TC
22. The purely competitive firm should close down when its price less than its
A. Average Variable Cost
B. Total Fixed Cost
C. Average Total Cost
D. Marginal Cost
23. During a sale by auction, the price in which goods are finally sold is mostly determined by
A. competition between buyers and sellers
B. competition among buyers
C. competition among sellers
D. government policy
24. Which of the following does not affect a country’s population?
A. Birth Rate
B. Death Rate
C. Emigration
D. Unemployment
25. Trade unions in West Africa have achieved the following for their workers except
A. increase wages
B. better condition of service
C. competitive determination of wage rate
D. improved welfare facilities

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26. The employers demand curve for labour is represented by the
A. marginal product curve of labour
B. total product curve of labour
C. average produce curve of labour
D. total cost curve of labour.
27. Agriculture plays a dominant role in our country because
A. it is the main source of energy
B. it employs more than 50% of the total labour force
C. it supplies all industrial inputs
D. there are large plantations of cocoa, groundnut and palm oil.
28. The main objective of specialization is to
A. allocate resources
B. limit workers skill
C. increase the use of labour
D. increase productivity
29. An industry can be defined as
A. several firms producing different commodities
B. group of firms producing similar commodities
C. different firms producing equal number of commodities
D. many firms producing for export
30. The principle of comparative cost advantage was propounded by
A. David Ricardo
B. Alfred Marshal
C. J. S Mill
D. Adam Smith
31. The national income of a country can be estimated through the use of
A. Output Approach
B. Input Approach
C. Empirical Approach
D. Estimated Approach.
Use the table below to answer questions 32 and 33
Items $ Million
Final consumption expenditure 500
Gross private investment 150
Government Purchases 300
Depreciation 25
Net factor income -10
32. The gross domestic product (GDP) is equal to
A. $825m
B. $925m
C. $940m
D. $950m
33. The net capital formation is
A. $115m
B. $125m
C. $915m
D. $925m

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34. If the Marginal Propensity to Save (MPS) in a two sector economy is 0.1, what will
be the change in the national income, if investment is increased by N10m?
A. N100m
B. N9m
C. N10m
D. N90m
35. If money is demanded for what it can buy, the demand is said to be
A. derived
B. joint
C. composite
D. complementary
36. A consumer maximizes his utility in increasing good X when
A. Mux = Px
B. Px > Mux.
C. Price is falling.
D. Mux > Px.
37. The indicator of the value of money is
A. the general price level
B. the equilibrium price
C. consumers’ income
D. the interest rate.
38. A continuous fall in the general price level is called
A. Recession
B. Depression
C. Deflation
D. Stagflation
39. The Central Bank can restrict credit through
A. depreciation of assets
B. granting overdraft
C. direct investment
D. Open Market Operation.
40. Creation of money by commercial banks is done through
A. increasing the cash ratio
B. printing of money
C. lending to borrowers
D. issuing cheques
41. Public finance is basically an analysis of the
A. income and expenditure of government
B. expenditure patterns of government
C. current and capital receipts of government
D. current and capital expenditure of government
42. The major use of taxation is to
A. control population growth rate
B. influence people’s spending habits
C. control money supply
D. create bank credit

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43. A tax which is expressed as a given absolute sum of money per unit of a commodity
is known as a/an
A. specific tax
B. direct tax
C. indirect tax
D. value added tax
44. All indirect taxes tend to be
A. progressive
B. regressive
C. certain
D. equitable
45. Which of the following will have a more destabilizing effect on the economy?
A. A tax on the prices of vehicles
B. A tax on petrol
C. A decrease in the supply of vehicles
D. Moderate increase in wages
46. An important features of economic development is
A. population explosion
B. reduction in export
C. high literacy level
D. low exports
47. Trade among nations is desirable because it
A. enables people in a country to know those in other countries
B. makes it possible for people in a country to enjoy the goods and service
produced in other countries
C. enables residents in a country to understand the language of resident
of other countries
D. makes it possible for a country to have the currencies of other countries.
48. Invisible trade refers to trade in
A. services
B. goods and services
C. tangible goods
D. crude oil
49. Balance of payment surplus implies that the value of the country’s
A. export exceeds its imports
B. imports exceed its exports
C. exports is equal to its imports
D. terms of trade is constant
50. A country’s import price index in 2009 was 50 and her index of export price was 70.
Calculate the country’s terms of trade
A. 140%
B. 20%
C. 120%
D. 71.4%

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 SCHOOLS
YEAR 12 MOCK 2 UNIFIED EXAMINATION
2018/2019 ACADEMIC SESSION
SUBJECT: ECONOMICS
NAME UNIT

PAPER 2: THEORY QUESTIONS

SECTION A
Answer only one question from this section
1. The table below represents the cost function of a poultry farm. The price per crate is $21.
Use the information on the table to answer the questions that follow.

Quantity of Egg Total Cost

(In crates) (In $)
0 50
1 55
2 62
3 75
4 96
5 125
6 162
7 203
8 248
a. Calculate the marginal cost of each unit of output 4 marks

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b. Draw the demand curve for this farm. 6 marks

c. What is the profit maximizing output level of this firm? State the reason for your answer
4 marks

d. With the aid of diagram, describe the following:

i. Average Revenue 3 marks

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 ii. Marginal Revenue 3 marks

2. a. Find the values of letters A, B, C, D, E, F, G, H, I and J in the table below.

Unit of Fixed Variable Total Average Marginal

output Cost (N) Cost (N) Cost (N) Cost (N) Cost (N)
1 A 100 120 120 -
2 B 160 E G I
3 20 C 210 70 30
4 20 260 280 70 70
5 20 280 300 H 20
6 20 D F 90 J
5 marks

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b. With the aid of diagram, briefly describe the following:
i. Marginal Cost 2 ½ marks

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ii. Variable Cost 2 ½ marks

iii. Total Cost 2 ½ marks

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 iv. Supply Curve 2 ½ marks

v. Average Fixed Cost 2 marks

c. Define the profit of a firm. 3 marks

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 SECTION B
Answer four Questions from This Section
3. a. State two feature of:
i. Perfect competition; 2 marks

ii. Monopolistic competition. 2 marks

b. what does it mean for a firm to be a:

i. Price Taker; 2 marks

ii. Price Maker 2 marks

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c. Explain the following source of monopoly power:
i. Acts of parliament; 3 marks

ii. Copyright 3 marks

iii. Natural monopoly 3 marks

iv. Cartel. 3 marks

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4. a. What is Public Recurrent Expenditure? 3 marks

b. Give four reasons for the rapid increase in government expenditure in your country.

8 marks

c. Define the term Limited Liability. 3 marks

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 d. Explain three problems of Statutory Public Corporations in your country. 6 marks

5. Explain the following systems of agriculture as practiced in your country:

a. Subsistence Farming 4 marks

b. Co-Operative Agriculture 4 marks

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 c. Plantation Agriculture 4 marks

d. Mechanized Agriculture 4 marks

e. Peasant Farming 4 marks

6. a. What is Economic Integration? 4 marks

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b. State two features of:
i. Free Trade Area; 4 marks

ii. Common Markets. 4 marks

c. Highlight two advantages and two disadvantages of:

i. Custom Union; 4 marks

ii. Economic Union. 4 marks

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7. a. What is a market? 4 marks

b. Explain four main features of Perfectly Competitive Market 10 marks

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 c. Give three reasons why the governments of West African Countries have found the
policy of privatization attractive. 6 marks

8. a. Explain the term Internal Economies of Scale. 2 marks

b. Explain four economies of scale a firm enjoys as it grows in size. 8 marks

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c. Outline five effects of high dependency ratio in Nigeria. 10 marks

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