ECO 101 Past Questions and Answers

1. The factor of production which represents innovation and risk‑taking is
   A. Entrepreneurship
   B. Capital
   C. Land
   D. Labour
   Answer: A
2. Which of the following is NOT true of positive economics?
   A. Concerned with what actually happened
   B. Concerned with what will happen
   C. About what ought to happen
   D. An objective science
   Answer: C
3. In the short run, the total cost equals the fixed cost of production when output is
   A. Increasing
   B. Decreasing
   C. Zero
   D. Constant
   Answer: C
4. Effective demand occurs when the consumer is
   A. Maximising satisfaction
   B. Willing and able to pay
   C. Able to locate the seller promptly
   D. Able to bargain for a cheaper price
   Answer: B
5. The output per unit of a variable factor employed is referred to as
   A. Marginal product
   B. Total product
   C. Average product
   D. Variable factor
   Answer: A
6. Which of the following factors is NOT a determinant of demand?
   A. The consumers’ income
   B. The price of related good
   C. The consumers’ taste
   D. The cost of production
   Answer: D
7. Which of the following is NOT capable of shifting the demand curve to the right?
   A. An increase in consumer income
   B. A fall in commodity’s own price
   C. An increase in the number of consumers
   D. A fall in the price of a complement
   Answer: B
8. At the point where the budget line is tangent to an indifference curve, the consumer
   A. Prefers only one of the two goods
   B. Derives the maximum satisfaction possible
   C. Obtains the minimum satisfaction from the two goods
   D. Derives zero satisfaction from the two goods
   Answer: B
9. If a price ceiling is set below the equilibrium price, there will likely be
   A. Excess demand for the commodity
   B. Shortage of the commodity
   C. Excess supply of the commodity
   D. Rationing of the commodity
   Answer: A
10. The man‑made resource which is used in a production process is called
    A. Entrepreneur
    B. Wages
    C. Labour
    D. Capital
    Answer: D
11. Which of the following is not a factor of production?
    A. Land
    B. Labour
    C. Money
    D. Capital
    Answer: C
12. Which of the following statements is normative?
    A. Large government deficits cause an economy to grow more slowly
    B. People work harder if the wage is higher
    C. The unemployment rate should be lower
    D. Printing too much money causes inflation
    Answer: C
13. If an increase in the price of blue jeans leads to an increase in the demand for board shorts, then blue jeans and board shorts are likely to be
    A. Inferior goods
    B. Normal goods
    C. Negatively related
    D. Substitutes
    Answer: D
14. If an increase in consumer incomes leads to a decrease in the demand for camping equipment, then camping equipment is
    A. A normal good
    B. A Giffen good
    C. An inferior good
    D. A substitute good
    Answer: C
15. Majority of the people of Buchanan in Liberia engage in fishing as a means of livelihood. This economic activity can be grouped under ……………….. type of production
    A. Tertiary production
    B. Industrial production
    C. Manufacturing production
    D. Primary production
    E. Construction production
    Answer: D
16. A good for which an increase in income leads to a decrease in consumption is called a/an ……………………………
    A. Normal good
    B. Luxury good
    C. Capital good
    D. Necessary good
    E. Inferior good
    Answer: E
17. The study of aggregate economic variables is the primary concern of ………………………………………
    A. Microeconomics
    B. Labour economics
    C. Managerial economics
    D. Macroeconomics
    E. Industrial economics
    Answer: D
18. The simplest and most common form of business organisation in West Africa is ……………………………………
    A. Sole proprietorship
    B. Partnership
    C. Cooperative society
    D. Public limited company
    E. Corporation
    Answer: A
19. The necessary condition for profit maximisation is ………………
    A. TR = TC
    B. MR = MC
    C. MC = AC
    D. MR = AR
    E. AC = AVC
    Answer: B
20. The market structure in which abnormal profit is possible in both the short‑run and the long‑run is ……………………………………………
    A. Perfect competition
    B. Monopolistic competition
    C. Monopoly
    D. Duopoly
    E. Oligopoly
    Answer: C
21. The change in Total Product (TP) resulting from the use of additional unit of a variable factor is referred to as …………………………………..
    A. Total output
    B. Average output
    C. Marginal product
    D. Productivity index
    E. Diminishing utility
    Answer: C
22. The definition of Economics as a Social Science subject which studies human behaviour as a relationship between ends and scarce means which have alternative uses was expressed by ………………………………………
    A. Lionel Robbins
    B. Adam Smith
    C. Alfred Marshall
    D. David Ricardo
    E. John Maynard Keynes
    Answer: A
23. A collection of ranked indifference curves is called ……………………………………..
    A. Budget line
    B. Isoquant curve
    C. Consumer surplus
    D. Utility map
    E. Indifference map
    Answer: E
24. A market structure where barriers to entry are difficult that it is impossible for new firms to enter the market is called ………………………………………..
    A. Oligopoly
    B. Monopoly
    C. Duopoly
    D. Perfect competition
    E. Monopsony
    Answer: B

MORE LOADING…

Network Bhad 😫