1. Economics is regarded as a science because it?

A. Studies laws that govern human behavior
B. Uses scientific method to explain human behavior ✔
C. Makes use of controlled experiments to explain human behavior
D. Makes use of machines to study human behaviour

Explanation:
Economics applies scientific methods to study and explain human choices and behavior.

2. Which of the following can be described as land?

A. Forest ✔
B. Diamond
C. Roads
D. Crude oil

Explanation:
Land refers to natural resources provided by nature.

3. An outward shift of the production possibility curve shows that?

A. Production is shifting to the left
B. Resources are under-utilized
C. Economic growth has taken place ✔
D. Factors of production are moving outward

Explanation:
Outward shift → more output possible → economic growth.

4. The following constitute the criteria for identifying an economic system except?

A. Ownership of resources
B. Scarcity of resources ✔
C. Method of decision making
D. Motivation for production

Explanation:
Scarcity exists in all economies; not a distinguishing criterion.

5. A disadvantage of the mean as measure of central tendency is that?

A. Is affected by extreme values ✔
B. Can only be used for continuous data
C. Cannot be used to measure qualities of a population
D. Cannot be determined in group data

Explanation:
Mean is sensitive to very high or low values.

6. Which of the following is not an effect of many middlemen in the chain of production?

A. Shortage of commodities
B. Low retail prices ✔
C. Hoarding of goods
D. High retail prices

Explanation:
Many middlemen usually increase prices, not lower them.

7. If the price of flour rises, then bread

A. Demand curve will shift to the left while supply curve shifts to the right
B. Supply curve will shift to the left ✔
C. Supply curve will shift to the right
D. Demand curve will shift to the right while supply curve remains unchanged

Explanation:
Higher flour price → higher production cost → supply decreases.

8. Which of the following is not a reason for abnormal demand?

A. Price of the commodity ✔
B. Goods of ostentation
C. Giffen goods
D. Rare commodity

Explanation:
Abnormal demand arises due to factors other than price, like Giffen or luxury goods.

9. Increase in production subsidies will shift

A. Demand curve to the left
B. Supply curve to the right ✔
C. Both supply and demand curves to the left
D. Supply curve to the left & demand curve to the right

Explanation:
Subsidy reduces production cost → increases supply → rightward shift.

10. The market supply curve slopes upward from left to right indicating that?

A. Producers pay high taxes
B. Two commodities can be supplied simultaneously
C. At a lower price, less is supplied ✔
D. At a lower price, more is supplied and demanded

Explanation:
Law of supply: quantity supplied ↑ as price ↑.

11. If a given change in price brings a proportionately larger change in quantity demanded, the

A. Demand is relatively price elastic ✔
B. Demand is relatively price inelastic
C. Price elasticity of demand is unitary
D. Price elasticity of demand is constant

Explanation:
Elastic demand → quantity changes more than price.

12. Government revenue will increase if taxes are levied on goods with?

A. Perfectly elastic demand
B. Fairly elastic demand
C. Perfectly inelastic demand ✔
D. Unitary elastic demand

Explanation:
Inelastic demand → consumers bear tax without reducing quantity demanded much.

13. If the price of a commodity Z falls and a consumer buys less of it, then commodity Z is a

A. Necessity
B. Good of ostentation ✔
C. Normal good
D. Giffen good

Explanation:
Ostentation (Veblen) goods → demand rises as price rises; demand falls if price drops.

14. In order to calculate total utility (TU) from given levels of marginal utility (MU), one has to

A. Subtract MU from TU
B. Add MU from the various levels ✔
C. Multiply MU by the initial TU
D. Divide current MU by previous MU

Explanation:
TU is the sum of all MUs at each consumption level.

15. Which of the following will not affect the market price of a commodity?

A. Increase in demand
B. Change in taste
C. Intersection of demand and supply ✔
D. Increase in supply

Explanation:
Market price is determined by equilibrium, not merely the intersection as a factor.

16. All the following are methods of determining prices except?

A. Maximum pricing
B. Rationing ✔
C. Minimum pricing
D. Auctioning

Explanation:
Rationing is allocation, not pricing.

17. The law of diminishing marginal returns relates to?

A. Total utility
B. Average utility
C. Total product
D. Marginal utility ✔

Explanation:
Additional units of input eventually produce smaller additional output (marginal product).

18. Total cost is obtained by?

A. Adding up marginal cost at each level
B. Dividing total cost of output at each level
C. Adding up average variable cost at each level
D. Adding total variable cost and total fixed cost ✔

Explanation:
$TC = TFC + TVC$

19. By adding all marginal products at each level of employment of the variable input, we obtain a value equal to

A. Average product
B. Total product ✔
C. Average variable cost
D. Total cost

Explanation:
Total product = sum of marginal products.

20. Which of the following curves is not U-shaped?

A. Marginal cost curve
B. Average fixed cost curve ✔
C. Average total cost curve
D. Average variable cost curve

Explanation:
AFC continuously falls; not U-shaped.

21. Which of the following business organizations is likely to experience disagreements between management and shareholders?

A. Co-operative society
B. Sole trader
C. Partnership
D. Joint-stock company ✔

Explanation:
Shareholder interests may conflict with management in joint-stock companies.

22. Which of the following is not a method of controlling monopoly?

A. Preventing mergers
B. Indigenization
C. Privatization ✔
D. Imposing high profit tax

Explanation:
Privatization transfers ownership to private sector; not a control method.

23. Feature distinguishing public limited company from private limited company?

A. Perpetual existence
B. Limited liability
C. Legal entity
D. Sale of shares to the public ✔

Explanation:
Public limited companies can sell shares publicly.

24. Inflation may occur if there is?

A. Excess supply over demand
B. Increase in productivity
C. Excessive demand with limited supply ✔
D. Increased government spending in depressed economy

Explanation:
Demand-pull inflation occurs when demand exceeds supply.

25. Frictional unemployment occurs when?

A. Change in production technique
B. Job seekers lack information where jobs exist ✔
C. Bad weather prevents work
D. Job seekers have disabilities

Explanation:
Frictional unemployment = short-term job search delays.

26. Which of the following will increase the demand for labour?

A. Increase in wage rate
B. Labour's demand for output ✔
C. Low wage rate
D. Low marginal productivity

Explanation:
Labour demand depends on output demand, not wages.

27. One reason for low agricultural productivity in most West African countries is that?

A. Farmers are not capable of producing cash crops
B. It does not provide income to farmers with large families
C. Farmers find it difficult getting help from financial institutions ✔
D. It is not the only source of raw materials for agro-based industries

Explanation:
Limited access to credit constrains agricultural productivity.

28. The movement of labour from one grade to an entirely different grade is an example of?

A. Industrial labour mobility
B. Horizontal occupational mobility
C. Vertical occupational mobility ✔
D. Geographical mobility

Explanation:
Vertical mobility = moving to a higher or lower occupational level.

29. Ten bags of wheat bought for \$50 by a flour miller were sold for \$65. VAT 5% = ?

A. \$7.50 ✔
B. \$3.25
C. \$2.25
D. \$0.75

Explanation:
Value added = 65−50 = \$15. VAT = 5% of 15 → $0.05 \times 15 = 0.75$? Wait let's recalc carefully: VAT = 5% of selling price = $0.05 \times 65 = \$3.25$. Actually, correct answer = B. ✅

30. Which of the following is not a strong basis for trade unions demand for higher wages?

A. Company is making higher profit
B. Productivity of workers has increased
C. Members of the union have high qualifications
D. Commodity produced by the workers is very essential ✔

Explanation:
Trade unions rely on profits, productivity, and essential nature of goods to demand higher wages; workers’ qualifications alone is not sufficient.

31. The difference between the gross domestic product (GDP) and gross national product (GNP) is?

A. Depreciation
B. Transfer payment
C. Net income from abroad ✔
D. Direct taxes

Explanation:
GNP = GDP + Net income from abroad. Difference arises due to income earned by citizens abroad minus income earned by foreigners domestically.

32. Location of firms of an industry is not influenced by?

A. Availability of raw material
B. Existence of other firms
C. Nearness to the source of money supply ✔
D. Government policy

Explanation:
Location depends on raw materials, markets, labour, and policy; access to money supply does not directly affect location.

33. In national income accounting, the term "net" is used to indicate that a value

A. Includes income of foreigners
B. Includes income of citizens
C. Includes depreciation
D. Excludes depreciation ✔

Explanation:
Net = after deducting depreciation.

34. Which of the following best describes token money?

A. Money in the vaults of commercial banks
B. Currency and coins in circulation
C. Money with face value higher than its material content ✔
D. Coins and notes made of poor quality material

Explanation:
Token money has nominal value greater than its intrinsic material value.

35. An industry is best described as?

A. Firm that sells a set of closely related commodities
B. Factory that produces different lines of products
C. Group of firms that sells a closely related set of products ✔
D. Industrial concern that is into production and selling of goods

Explanation:
An industry is a group of firms producing similar or related products.

36. In developing countries, a larger percentage of the labour force is employed in the?

A. Trade sector
B. Tertiary sector
C. Primary sector ✔
D. Secondary sector

Explanation:
Agriculture (primary sector) employs most workers in developing economies.

37. The main item traded on a stock exchange market is

A. Treasury bills
B. Travellers cheque
C. Foreign currencies
D. New shares ✔

Explanation:
Stock exchanges mainly trade shares of companies.

38. The proportion of commercial banks' total assets kept in the form of highly liquid assets is known as

A. Demand deposit
B. Fixed deposit
C. Cash ratio ✔
D. Moral suasion

Explanation:
Cash ratio = liquid assets ÷ total assets. It measures liquidity of banks.

EXPECTED REVENUE

ITEMS	Amount($m)
Rent and Royalty	75.00
Company income tax	150.00
Custom and excise duties	300.00
Personal income tax	80.00
Fees and fines	60.00
Value added tax	100.00

39. What is the total revenue from indirect taxes?

Indirect taxes = Custom & Excise Duties + Value Added Tax = \$300 + \$100 = \$400 m
A. \$686.00 m
B. \$400.20 m ✔
C. \$135.80 m
D. \$100.00 m

Explanation:
Indirect taxes are taxes levied on goods/services.

40. What is the total revenue from non-tax sources?

Non-tax revenue = Rent & Royalty + Fees & Fines = \$75 + \$60 = \$135 m
A. \$400.20 m
B. \$375.20 m
C. \$135.80 m ✔
D. \$75.00 m

Explanation:
Non-tax revenue comes from government charges, fines, and rents.