OAU Economics 2008/2009 Past Questions

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

Economics is founded on the principle that:

A.Human wants are more than human wants
B.Material things are more than human wants
C.Human wants are limitless while the means to satisfy them are limited
D.Human needs are easy to define

The capital economic system is characterized by all the following except:

A.Private ownership of the means of production
B.Equitable distribution of income and wealth
C.Capital accumulation
D.Markets and prices co-ordinate economic activities

If the equation relating consumption (C) to income (Y) is C = N7,500 + 0.2Y, then

A.consumption is inversely related to income
B.consumption is the independent variable and income is the dependent variable
C.If income is N15,000, the consumption is N10,500
D.if consumption is N30,000, then income is N10,000

The reason for the law of demand can best be explained in terms of:

A.supply
B.complementary goods
C.the rationing function of prices
D.diminishing marginal utility

The demand curve for the pure monopolists is

A.perfectly price elastic
B.perfectly price inelastic
C.downsloping
D.upsloping

Which of the following statements is correct? The Central Bank

A.Prints the country's currency
B.handles the collection of debts owned to the government
C.lends money to businessmen
D.issues the country's currency

Which of the following is not a basic assumption underlying the theory of consumer behaviour.

A.Consumers prefer more to less
B.consumers are rational
C.consumers are willing to make choices
D.consumers make consistent choices.

The slope of the budget constraint

A.change as the marginal rate of satisfaction changes
B.is the ratio of the prices of the two goods?
C.is the ratio of the budget of total utility?
D.equal one, since the consumer can buy combination along the budget constraint

Disposable income equals

A.personal income less business profits
B.personal income less taxes and subsidies
C.personal income less taxes plus subsidies
D.national income plus transfer payments.

The 'terms of trade' means

A.the trade agreement between two countries
B.the difference in the volumes of exports of two countries
C.the value of a unit of export in relation to the value of a unit of import
D.none of the above

The burden of tax on a commodity whose demand is infinitely inelastic

A.is zero
B.will be borne by both buyers and sellers
C.Will be borne by buyers alone
D.Will be borne by sellers alone

Inflation can be curbed by

A.increasing aggregate demand
B.paying higher wages
C.reducing aggregate demand
D.a deficit budget

The supply and demand for goods and services are influenced by the

A.super markets
B.entrepreneurs
C.mechanism of the law
D.price mechanism

In a sole proprietorship, the decisions are made by the

A.Government
B.Board of Director
C.Shareholder's Conference
D.Owner

Which of the following are direct taxes?

A.Income and company taxes
B.Sales taxes
C.Commodity taxes
D.Excise duties

A producer sustains a loss in the short run if

A.Marginal revenue is less than price
B.Price is less than average cost
C.Marginal cost is less than marginal revenue
D.average variable cost is less than average cost

Money market differs from capital market in that it.

A.deals with short-term loans while capital market deals with long term funds
B.deals with money only while capital market deals with capital as well
C.is limited in scope while capital market is not
D.uses interest rates while capital market does not

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 two commodities that can be produced

The situation in which the total amount of government spending exceeds total revenues is called a:

A.balanced budget
B.budget surplus
C.budget deficit
D.fiscal surplus

The maximization of profit tends to be the driving force in the economic decision making of:

A.entrepreneurs
B.workers
C.consumers
D.legislators

Which of the following equations is the correct one about Net National Product (NNP)?

A.NNP = Gross National Product (GNP) - Depreciation
B.NNP = Gross National Product (GNP) + Net incomes form abroad
C.NNP = Gross Domestic Product (GDP) - Depreciation
D.NNP = Gross Domestic Product (GDP) - Net incomes from abroad.

Middlemen in an economy perform the function of

A.protection
B.hoarding
C.distribution
D.exchange