ECONOMICS FIRST TERM EXAMINATION SS 3

FIRST TERM

Examination malpractices may lead to a repeat of the subject or suspensions don’t be involved.

SUBJECT:           

ECONOMICS   

TIME ALLOWED: 2HRS       

  CLASS:           S.S 3

 

INSTRUCTION: Answer five questions in all, one question from section A and any four questions from section B.

Note: You are reminded of the importance of clarity of expression and orderly presentation of relevant materials.

Note: All questions carry equal marks.

 

SECTION A (3 hours)

Answer one questions only from this section

1. The output and cost of production of rice (in bags) are presented in the table below. Use the information in the table to answer the questions that follow.

Output of rice (in bags)	1	2	3	4	5
Total variable cost (TVC) $	0	5	7	10	20
Total cost (TC) $	7	12	14	17	27

 

• Calculate the
• Average fixed cost (AFC) at the output levels 0,2 and 4
• Marginal cost (MC) at all levels of output

 

• If the price of a bag of rice were $10
• Calculate the profit/loss at all levels of output
• At what output level(s) is the maximum profit made ?
• Draw the marginal cost curve (the use of graph sheet is essential)

 

2. The table below shows the scale of preference of a student – Mr. Smith whose disposable income is $7.00. use the information in the table to answer the questions that follows.

Items needed	Prices ($)
Textbooks Shirts Shoes Trousers Notebook School fees Mattress	5.00 2.00 3.00 3.00 1.00 7.00 10.00

• (i) what will Mr. Smith spend his money on ?

(ii) Explain your answer in 2(a)(i).

• (i) what is the opportunity cost of MR. Smith’s decision in 2(a)(i)

(ii) explain your answer in 2(a)(i)

• (i) if Mr. Smith’s disposable income increases to $10.0 , what will he spend it on ?

(ii) what is the opportunity cost of the decision in 2(c)(i) ?

• Define “scale of preference” and “opportunity cost”
• What is the importance of a scale of preference ?

 

 

SECTION B

 

3. (a) what is :

• Peasant farming
• Commercial farming ?

(b) describe five ways in which agriculture contributes to the economic development of your country

 

4. (a) distinguish between small scale production and large scale production

(b) describe any five internal economics of large scale production

5. (a) explain any four benefits of industrial development in an economy

(b) outline any four measures that will encourage industrial growth in your country

6. (a) differentiatiate between direct and indirect taxation .

(b) highlight any five advantages of indirect taxation to developing countries.

 

7(a) Distinguish between location of industries and localization of economics   (5 marks)

(b) Describe any three advantages and any two disadvantages of locating industries in rural areas    (15 marks)

8(a) What is incidence of taxes?   (4 marks)

(b) Explain any four principles of taxation   (16 marks)

9(a) Explain the function of money as a (i) measure of value (5 marks)  (ii) Store of value  (5 marks)

(b) Show how inflation affects these two functions of money               (10 marks)

10(a) What is commercial bank?     (4 marks)

(b) Describe any four ways by which the central Bank controls the amount of credit given by the commercial bank.

(16 marks)

11. Explain any five objectives of the Economic Community of West Africa States (ECOWAS) (20 marks)

12(a) Outline any three problems of the Organization of Petroleum Exporting Countries (OPEC)       (12 marks)

(b) What remedies have been adopted to curtail any two of the problems?

(8 marks)

OBJECTIVE TEST (50 minutes)

1. Which of the following is an economic activity? A. Attending a town’s meeting
2. A visits to the stadium C. Payment of school fees D. Arresting a petty thief
3. The reward for land as a factor of production is A. Interest B. Rent   C. Wages
4. Dividend
5. The three broad categories of production are A. Direct, secondary and extrusive
6. primary, tertiary, direct C. primary, secondary and tertiary
7. secondary, primary and indirect
8. A carpenter’s consumer goods include
9. a kilogram of rice II. 3 pairs of shoes III. 4 pairs of sacks               IV. 3 screw – drivers
10. I and IV only B. I, II, III and IV C. I, II and IV only     D. I, II and III only
11. In a capitalist system, the means of production are owned and controlled by. (a) the government B. politician C. private individuals     D. the workers
12. Mixed economy refers to a system in which the means of production are controlled by (a) private enterprise and the governments B. private individual C. The governments only(d) the workers and business man
13. An economic good is described as a good which A. yield utility and commands a price (b) is useful and occupies a space C. is in high demand and transferable (d) has unlimited supply
14. The concept of opportunity cost is important to the firm because it(a) determines the prices of the firm’s product B. increases the level of output of the firm(c) lead to maximum satisfaction of the consumers D. guides firms in allocating resources
15. As a firms expands, it enjoys some advantages called(a) variable proportions B. diminishing marginal returns C. internal economies of scale(d) decreasing of reforms to scale
16. Division of labour is limited by A. the size of the market B. the productivity of capital(c) cost of production D. the factors of production
17. An entrepreneur is likely to make more profits when. (a) expenditure is more than revenue B. competition charge lower prices (c) cost per unit output falls D. quality of output reduces
18. Natural growth rate is A. birth rate less death rate B. death rate less migration(c) death rate plus birth rate D. birth rate plus migration
19. A major effect of ageing population is A. reduced labour force(b) rise in prices of commodities C. reduced infrastructure D. neglect of agriculture
20. One of the problems associated with the middle man in the distribution of goods is that he (a) buys in large quantities B. hoards good C. grants credit to the retailer (d) sells variation of goods
21. The distribution of goods is said to be completed when it reaches the (a) whole sellers B. consumer C. retailer   D. manufacturer
22. The gap between demand and supply curves below the equilibrium price indicates (a) excess demand B. excess supply C. equilibrium quantity D. equilibrium price
23. Demand for inferior goods is an example of A. expansion of demand(b) contraction of demand C. individual demand D. abnormal demand
24. When a change in price does not affect the quantity demanded of a commodity, the price elasticity of demand is A. fairly in-elastic B. infinitely inelastic  C. perfectly inelastic   D. unitary elastic

Use the table below to answer questions 19 -21.

 

Price (dollars)	Quantity supplied in units
5	60
3	30

 

19. The percentage change in supply is A. 20 B. 30    C. 40    D. 50
20. The percentage change in price is in A. 10 B. 20     C. 30        D. 40
21. The elasticity of supply is A. infinite B. equal to me  C. less than one (d) equal to zero
22. Which of the following cost curve is not u-shaped? The (a)marginal cost curve (b)average fixed cost curve (c)average total cost curve (d)average variable cost curve
23. For both the monopolist and the perfectly competitive firm, profit maximizing output occurs as the point where the (a) marginal cost curve cuts the marginal revenue from below (b) marginal revenue curve cuts the marginal output from above (c) marginal cost curve intersects the X – axis (d) marginal revenue curve intersects the Y-axis
24. The market structure in which the operators are many and none of them can influence the price is A. imperfect market B. perfect market     C. oligopolistic market (d) stock market
25. One main benefit of partnership is (a) the possibility of raising funds on the stock exchange B. the possibility of attracting twenty or more members C. that members can specializes in various functions (d) that it enjoys its own separate legal entity
26. Joint ventures are partnerships involving A. the poor and the rich B. employers and workers C. government an private investors   D. multinationals and individuals
27. The value of money is best determined by A. input-output ratio B. the purchasing power (c) the importance people attach to it D. economies of scale
28. Which of the following will be an effect of inflation? (a) wage earners will gain B. borrowing of money will be restricted (c) money lenders will gain D. borrowers of money will gain
29. Government can control inflation by A. printing of more money (b) reducing the rate of taxes C. reducing the level of expenditure (d) establishing more banks
30. The market consist of a network of dealers where currencies can be bought and sold is known as (a) capital market B. foreign exchange market C. commodity market  D. the stock market
31. Open market operation (OMO) means the (a) provision of credit facilities by commercial banks (b) provision of credit facilities by the mortgage banks (c) buying and selling of government securities by the central bank (d) procedure for the establishment of commercial bank
32. Which of the following is an advantage of localization of industry? (a) Development of subsidiary firm B. creation of parallel markets (c) development of slums D. attraction of foreign capital
33. Which of the following will ensure efficiency in the industrial sector of your country? (a) Indigenization B. Privatization C. Nationalization   D. Liquidation
34. The number of people who are qualified to work and who offer themselves for employment are called A. Migrant labour B. Working population  C. Labour turnover (d) Mobility labour
35. Given the formula for the national income multiplier as k = 1

1-MPC,

MPC       = 0.75, and an increase in government expenditure from N 20 billion to N 35 billion. Calculate the charge in the level of national income

1. N140 billion B. N 80 billion C. N 75 billion    D. N 60 billion
2. The formula for calculating price index is
3. Current price x 100

Base year          1

 

1. Base year price x 100

Current price        1

1. current price x base year price

100

1. current price x 100

Weighed price       1

37. When the general price level persistently falls, the rate of unemployment (a) rises B. stagnates C. rapidly reduces         D. equals natural growth rate
38. Taxes levied on commodities are A. direct taxes B. indirect taxes (c) poll taxes D. investment taxes
39. The act of selling goods in foreign markets of prices below those charged at home market is called A. exchange B. dumping    C. specialization  D. exporting
40. One disadvantage of direct taxes is that (a) governments revenue is reduced B. price of essential commodities fall (c) people are discouraged from additional work D. Firms make more profits
41. International trade is an application of the principle of (a) industrial production B. Mass production C. regional production  (d) Comparative cost advantage
42. Trade among West Africa countries is poor because the (a) countries are self sufficient B. communication links are weak (c) number of banks is insufficient D. people are not enterprising
43. A policy by which government restrict the amount of foreign currencies bought and sold is known as A. devaluation B. credit control   C. exchange control D. export promotion
44. Which of the following items is under the capital account of a balance of payments? (a) Repayment of foreign loans B. Visible imports C. Invisible exports  D. Cocoa exports
45. Development planning which takes an overall view of the economy is describes as (a) Aggregate economic planning B. Disaggregate economic planning (c) sectorial economic planning D. system economic planning
46. The national income of a country can be estimated by the (a) cost-benefit method B. distribution method C. expenditure method D. consumption method
47. The difference between Gross Domestic Product (GNP) and Gross National product (GNP) is A. depreciation B. Domestic investment abroad  C. Foreign investment at home (d) Net income from abroad
48. Which of the following is excluded when estimating national income?(a) dividends B. wages and salaries C. transfer payments    D. Profits
49. The Economic community of West African states (ECOWAS) has been slow in achieving its objectives because of A. political instability in member state (b) the activities of multinationals C. inadequately personnel at the secretariat (d) inadequately international support
50. A major achievement of the Organization of Petroleum Exporting countries (OPEC) is that (a) crude oil price has increased tremendously (b) petroleum products prices have remained low.