2023 IJMBE Economics Paper III
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The long-run as used in economics implies a period:
a) Long enough for both fixed and variable factors of production to change b) Of 25 years c) Of one financial year d) Long enough for fixed factors of production to change
Answer: a) Long enough for both fixed and variable factors of production to change -
The theory of a firm employing marginal labour at a point at which the marginal or extra product is equal in value to the marginal wage is called:
a) Economic rent b) Geographical mobility c) Closed shop d) The marginal product theory of labour
Answer: d) The marginal product theory of labour -
Output is increasing at a decreasing rate in which of the stages?
a) Stage III b) Stage II and I c) Stage II d) Stage III and II
Answer: c) Stage II -
The major fiscal policy instruments in Nigeria are:
a) Taxation, tariff, public expenditure b) Taxation, tariff, foreign exchange c) Taxation, tariff, interest rate d) Taxation, tariff, imports
Answer: a) Taxation, tariff, public expenditure -
Socialist mode of planning is based on:
a) Development plan b) Rolling plan c) Central plan d) Perspective plan
Answer: c) Central plan -
Agro-allied industry involves:
a) Production enterprise on the farm b) Production on a joint stock basis c) Production of only cash crops d) Production of only food crops
Answer: a) Production enterprise on the farm -
Which of the three stages in the law of variable proportion is the most important?
a) Stage III b) Stage IV c) Stage I d) Stage II
Answer: d) Stage II -
The curve which shows different combinations of labour and capital that can produce the same level of output is called:
a) Iso-cost b) Isoquant c) MP curve d) AP curve
Answer: b) Isoquant -
A production technique is labour intensive when it uses:
a) Half of capital input b) Less labour in relation to capital c) Less of capital in relation to labour d) Equal amount of labour and capital
Answer: c) Less of capital in relation to labour -
Increasing returns to scale occur when:
a) The firm is operating below the optimum size b) The expansion of a firm produces economies and greater efficiency c) Optimum factor combination or proportion is attained d) All of the above
Answer: b) The expansion of a firm produces economies and greater efficiency -
When the quantity of a good does not change at all as price changes, demand is said to be:
a) Perfectly inelastic b) Unit elasticity c) Perfectly elastic d) Elastic
Answer: a) Perfectly inelastic -
A downward pressure on the price of a commodity toward the equilibrium results from:
a) Increase in demand b) Decrease in demand c) Decrease in supply d) B and C
Answer: b) Decrease in demand -
Under the gold standard, a surplus of payment means:
a) A shipment of gold away from the surplus country b) An inflow of gold into the country having a surplus c) A general fall in prices d) Increased mining of gold
Answer: b) An inflow of gold into the country having a surplus -
In deductive economics, economists usually:
a) Go from theory to fact b) Go from facts to theory c) Go from theory to thinking d) Go from theory to synthesis
Answer: a) Go from theory to fact -
Which of these does not belong?
a) Deregulation b) Foreign exchange c) Hedging d) Arbitrage
Answer: a) Deregulation -
Which of these economists is a strong advocate of fiscal policy?
a) Adam Smith b) J.M. Keynes c) David Ricardo d) Karl Marx
Answer: b) J.M. Keynes -
The rate at which one input can be substituted for another and still maintain the same level of output is called:
a) Marginal rate of technical substitution b) Marginal rate of technical arbitration c) Marginal rate of technical substitutability d) Marginal rate of technical labour
Answer: a) Marginal rate of technical substitution -
In market structure, monopoly means:
a) One seller with close substitute goods b) One seller with no close substitute good c) One seller with complementary goods d) All of the above
Answer: b) One seller with no close substitute good -
If a firm can sell as much as it wishes at a given market price, that firm is:
a) An industry b) A competitive firm c) A monopolist d) An oligopolist
Answer: b) A competitive firm -
Ricardo’s law of comparative advantage is based on:
a) The law of diminishing return b) The law of increasing relative costs c) The law of diminishing marginal utility d) The opportunity cost theory
Answer: d) The opportunity cost theory -
If the production possibility curve of an economy moves from a point inside the curve onto the frontier:
a) The economy has increased the efficiency of production of housing b) The economy has increased the efficiency of production of food c) The economy has put to work previously idle resources d) The economy has moved to a more full employment position
Answer: c) The economy has put to work previously idle resources -
The fundamental problem of economics is:
a) Achieving money income b) Scarcity of productive resources c) Establishment of prices of goods d) Scarcity of electricity
Answer: b) Scarcity of productive resources -
If the demand curve for product B shifts to the right as the price of product A declines, it can be concluded that:
a) A and B are substitute goods b) A and B are complementary goods c) A is an inferior good and B is a superior good d) A is a superior good and B is an inferior good
Answer: b) A and B are complementary goods -
GNP can be measured by:
a) The total value of all intermediate goods produced in the economy b) The total market value of final goods produced in the economy c) The total value of all sales in the economy d) None of these
Answer: b) The total market value of final goods produced in the economy -
Which of the following is not a leakage in the circular flow of income?
a) Import of a Datsun car b) Personal saving c) Export of crude petroleum d) Indirect company tax
Answer: c) Export of crude petroleum -
Suppose the government imposes a price support above equilibrium on the market for grains; the amount of grains that farmers will desire to market is determined by the supply curve at that support price.
Answer: The quantity supplied at the support price (as indicated on the corresponding supply curve point) -
The effect of government interference with a price floor above equilibrium is to:
a) Create a surplus of grains b) Increase supply c) Decrease supply d) None of the above
Answer: a) Create a surplus of grains -
If the price support is effective, the income of grain producers will:
a) Decrease b) Increase by the net gain in producer revenue above the original equilibrium c) Increase by a smaller area d) Increase by a different area
Answer: b) Increase by the net gain in producer revenue above the original equilibrium -
A market is said to be purely competitive if:
a) The product is standardized b) No individual seller has control over the market price of the product c) There is a very large number of independent sellers d) All of the above
Answer: d) All of the above -
In equilibrium, a firm that is a competitor in its output market but a monopolist in the labour market will pay a wage rate:
a) Equal to the marginal revenue product b) Less than the marginal revenue product c) Impossible to determine from the information given d) Greater than the marginal revenue product
Answer: b) Less than the marginal revenue product -
Under the Soviet planning system:
a) Each enterprise draws up its own plan which the central authorities then combine into one big plan b) Plans are drawn up in final form at the center and handed down to enterprises in finished form c) The planning process takes place at the enterprise and is given to the central authorities to modify d) The planning process begins at the center and suggestions for modifications are made at the enterprise
Answer: b) Plans are drawn up in final form at the center and handed down to enterprises in finished form -
A profit-maximizing firm produces the level of output at the point where:
a) Marginal cost crosses the average variable cost b) Marginal cost equals marginal revenue c) Average fixed cost equals marginal revenue d) All of the above
Answer: b) Marginal cost equals marginal revenue -
A dual economy is one in which:
a) There exists a modern industrialized sector as well as a traditional sector b) There exists a traditional sector and government sector c) There exists an agricultural sector and a monetary sector d) None of the above
Answer: a) There exists a modern industrialized sector as well as a traditional sector -
The Organization of Petroleum Exporting Countries (OPEC) is an example of:
a) Perfect competition b) Duopoly c) Cartel d) Monopsony
Answer: c) Cartel -
Which of the following will not cause an increase in the supply of guinea corn?
a) An improvement in guinea corn farm technology b) A fall in the price of farm machinery c) A decrease in the price of millet d) General improvement in farm technology
Answer: c) A decrease in the price of millet -
Choice is necessary because:
a) Goods are many and varied, and one must therefore choose b) One cannot consume everything c) Resources are scarce relative to wants d) All of the above
Answer: c) Resources are scarce relative to wants -
Which of the following is not a factor reward?
a) Wages b) Rent c) Interest d) Premium
Answer: d) Premium -
Which of the following is not an advantage of division of labour?
a) Increased productivity b) Monotony c) Efficiency d) Development of specialized machinery
Answer: b) Monotony -
When production is based on free enterprise, firms seek to maximize:
a) Profit b) Output c) Innovation d) Sales
Answer: a) Profit -
In computing national income, we should exclude:
a) Wages b) Rent on property c) Pensions d) Salaries
Answer: c) Pensions -
Which among the following is the correct chain of distribution?
a) Manufacturer → wholesaler → retailer → consumer b) Manufacturer → wholesaler → consumer → retailer c) Manufacturer → retailer → wholesaler → consumer d) Manufacturer → consumer → wholesaler → retailer
Answer: a) Manufacturer → wholesaler → retailer → consumer -
Which of the following combinations represents leakages from the circular flow of income?
a) Interest and profit b) Wages and rent c) Taxes, saving and import d) Imports, exports and earnings from tourism
Answer: c) Taxes, saving and import -
What is meant by “a withdrawal” in national income determination theory?
a) Money withdrawn from the central bank b) Money withdrawn from commercial banks c) Undistributed profits d) Maintenance allowance paid to students
Answer: c) Undistributed profits -
What is likely to happen when the demand for Nigeria’s exports increases?
a) Supply of Nigeria’s exports will increase b) Demand for the Naira will fall c) Fall in the external value of the Naira d) Rise in the external value of the Naira
Answer: d) Rise in the external value of the Naira -
The relationship between quantity demanded and price of Giffen goods is:
a) Proportional b) Inverse c) Positive d) Parallel
Answer: c) Positive -
An upward pressure on the price of a commodity towards the equilibrium results from:
a) Increase in demand b) Decrease in demand c) Increase in supply d) Decrease in supply
Answer: a) Increase in demand -
The unit price of a firm’s output in an imperfect market is similar to its:
a) Marginal revenue b) Average revenue c) Marginal product d) Average product
Answer: b) Average revenue -
Among the disadvantages of monopoly is that it leads to:
a) Higher output and lower prices b) Lower output and higher prices c) Higher output and higher prices d) Lower output and lower prices
Answer: b) Lower output and higher prices -
Which of the following describes “oligopoly”?
a) A few sellers in the market b) A few buyers in the market c) Many sellers in the market d) Many buyers in the market
Answer: a) A few sellers in the market -
An economy that uses price for allocating resources is called:
a) Controlled economy b) Liberal economy c) Free market economy d) Socialist economy
Answer: c) Free market economy