FUTA Economics 2006/2007 Past Questions

Practice each question, then open it to see the full details.

Question 1

A production possibility curve shows

A.How much of the resources of society are used to produce a particular commodity
B.The rate of inflation
C.The rate of unemployment in the economy
D.The various combinations of commodities that can be produced

Objective

Question 2

Which of the following best describes the concept of opportunity cost?

A.A special bargain or sale at below market price
B.costs for inputs tend to go up as we use more of them
C.Goods that are not produced in order to produce more of another good
D.A cost that constantly decreases.

Objective

Question 3

Choice in economic life is necessitated by

A.The need to construct scale of preference
B.The opportunity cost of consumption
C.Unlimited wants
D.Scarcity of economic resources

Objective

Question 4

In economics analysis, a statement is said to be normalized if it

A.Relates to value judgment
B.Is contradictory
C.Is incorrect
D.Can be tested scientifically.

Objective

Question 5

The degree of specialization is limited by the

A.Marginal cost exceeding marginal revenue
B.Extent of the market
C.Availability of specialized skills and machinery
D.Disadvantage of standardization,

Objective

Question 6

Which of these statements describes a mixed economy?

A.The government and the private sector interact in solving the basic economic problems
B.The invisible hand solves the basic economic problems
C.The government produces and distributes
D.Society answers the question "what", "why" and for "whom" questionis only through the market system

Objective

Question 7

Which of the financial institutions is charged with the formulation of monetary policies in Nigeria?

A.The Lagos state stock exchange
B.The Nigeria deposit insurance
C.The Central Bank of Nigeria
D.The Abuja commodity exchange

Objective

Question 8

The primary function of non-financial institutions is to

A.Manage investment portfolio for government
B.Mobilize saving for investment
C.Grant loans to banks
D.Receive deposits from banks.

Objective

Question 9

In drawing an individual's demand curve for a commodity, which of the is NOT kept constant?

A.Price for substitutes
B.Price of complementary goods
C.Price of the commodity under
D.Individual money income

Objective

Question 10

Given that beef and fish are substitutes, a rise in the price of beef relative to that of fish will

A.Induce greater demand for beef
B.Induce greater demand for fish
C.Induce lower demand for fish
D.Equate demand for beef and fish

Objective

Question 11

The main function of price mechanism is to

A.Ensure consumer sovereignty function of price rnecha0 to
B.Enable producers make profit
C.Allocate scarce resources among compelling ends
D.Limit consumer demand.

Objective

Question 12

Production in Economics can be defined as the

A.Totality of producing, buying and consuming
B.Transformation of raw materials and services in order to provide ultimate utility
C.Transformation of raw materials and services in order to make maximum profits
D.Production of goods and services for consumption

Objective

Question 13

Gresham's law in economics shows that

A.Bad money drives good money out of circulation
B.Good money drives bad money out of circulation
C.Gold must be available to maintain the value of paper money
D.The price level varies directly with the quantity of money

Objective

Question 14

Given that the cash reserve ratio is 10%, what is the maximum amount of money that the banking system can create from an initial cash deposit of#1000.00?

A.#100.00
B.#1000.00
C.#9,000.00
D.#10,000.00

Objective

Question 15

The most important economic characteristic differentiating commercial banks from other financial institutions is their

A.Functions as a safe and profitable store place for savings
B.Role in financing balance of payments deficits
C.Status as an intermediary between savers and borrowers
D.Ability to create and destroy money.

Objective