KINDLY REFER TO CHAPTER 1 A, B, C, D & E OF THE COMPREHENSIVE VIDEO LECTURES AND READ THE TOPICS BELOW BEFORE YOU ATTEMPT THE QUESTIONS THAT FOLLOW.

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1 KINDLY REFER TO CHAPTER 1 A, B, C, D & E OF THE COMPREHENSIVE VIDEO LECTURES AND READ THE TOPICS BELOW BEFORE YOU ATTEMPT THE QUESTIONS THAT FOLLOW. CIS ECONS LEVEL 2 WEEK 1 TOPICS: MICROECONOMIC CONCEPTS AND PRINCIPLES BASIC FOUNDATION OF MARKET ACTIVITIES (a) Concepts of demand and supply: laws of demand and supply; exception to the laws; determinants of demand and supply, relationships between change in quantity demanded/supplied and change in demand/supply. (b) The concepts of equilibrium in demand and supply. (c) Elasticity of demand and supply: Price elasticity, income elasticity and cross elasticity. Factors affecting elasticity. Applications of elasticity to consumption, product pricing, and distribution or sales. STARRY GOLD ACADEMY , , info@starrygoldacademy.com, Page 1

2 (d) Definition of industry (e) Location and localization of industry (f) Factors that influence location of industry in Nigeria with appropriate examples. (g) Industrial concentration advantages and disadvantages (h) Forms of business enterprises advantages and disadvantages. REVIEW QUESTIONS OBJECTIVES 1. The policy of intervening in the exchange market to offset temporary fluctuations in the exchange rate is referred to as: A. Flexible exchange rate system. B. Fixed exchange rate system. C. Arbitrated float. D. Managed or dirty float. STARRY GOLD ACADEMY , , Page 2

3 2. A payment made by the government which forms a wedge between the price consumers pay and the costs incurred by producers, such that price is less than the marginal cost is referred to as the: A. Consumer s surplus. B. Producer s surplus. C. Transfer payment. D. Subsidy. 3. When a price floor is imposed above the market equilibrium: A. A shortage will result B. A surplus will result C. There is no impact on the market D. Supply will increase 4. When government sets the price of a good below the equilibrium price, the result will be: STARRY GOLD ACADEMY , , info@starrygoldacademy.com, Page 3

4 A. A surplus of the good. B. A shortage of the good. C. An increase in the demand for the good. D. A decrease in the supply of the good. 5. Real wages would decline if the: A. Price of goods and services rose more rapidly than nominal - wage rates. B. Prices of goods and services rose less rapidly than nominal wage rates. C. Prices of goods and services and wages rates both rose. D. Prices of goods and services and wage rates both fell. 6. If exchange rates float freely, the exchange rate for any currency is determined by the: A. Demand for and the supply of it. B. Demand for it. C. Supply of it. STARRY GOLD ACADEMY , , info@starrygoldacademy.com, Page 4

5 D. Official reserves that back it. 7. If a monopolist engages in price discrimination rather than charging all buyers the same price, its: A. Profits and its output are greater. B. Profits and its output are smaller. C. Profits are greater and its output is smaller. D. Profits are smaller and its output is greater. 8. The policy of intervening in the exchange market to offset temporary fluctuations in the exchange rate is referred to as: A. Flexible exchange rate system. B. Fixed exchange rate system. C. Arbitrated float. D. Managed or dirty float. 9. When all factor are reduced by half, the production possibility curve will shift A. outwards STARRY GOLD ACADEMY , , info@starrygoldacademy.com, Page 5

6 B. inwards C. downwards D. upwards 10. Amount of goods offered to the market at respective prices and presented in a table is called A. price schedule B. supply schedule C. scale of preference D. demand schedule 11. At the equilibrium price, quantity demanded is A. greater than supplied B. equal to quantity supplied C. less than quantity supplied STARRY GOLD ACADEMY , , info@starrygoldacademy.com, Page 6

7 D. equal to excess supply 12. The transfer of ownership of a public enterprise to individuals and firms is called A. commercialization B. nationalization C. privatization D. restructuring 13. Distribution of goods and services is hindered by A. good road network B. efficient storage facilities C. too many middlemen D. adequate market information 14. Mining is an example of A. primary production STARRY GOLD ACADEMY , , info@starrygoldacademy.com, Page 7

8 B. secondary production C. tertiary production D. advanced production 15. Which of the following is not a reason for establishing public enterprises A. discouraging investors B. opening up neglected parts of the country C. effective control of natural monopoly D. rapid economic development 16. One characteristic of labour is that it is A. fixed in supply B. fixed in demand C. mobile D. untrainable 17. A business outfit is said to be public limited company when it A. is owned by government STARRY GOLD ACADEMY , , info@starrygoldacademy.com, Page 8

9 B. operates as public corporation C. is run by the public D. sells shares to members of the public 18. When the price of a commodity increases and the quantity demanded also increases, this is a case of A. derived demand B. competitive demand C. joint demand D. exceptional demand 19. In a situation where the finished products of an industry is fragile, bulky and perishable, such an industry should be located close to it s A. raw materials B. market C. labour supply D. power supply 20. In a public company, entrepreneurial functions are performed by the STARRY GOLD ACADEMY , , info@starrygoldacademy.com, Page 9

10 A. workers B. shareholders C. creditors D. board of directors 21. A priority rating of aggregate individual wants is called A. scarcity B. opportunity cost C. choice D. scale of preference 22. The establishment of industries in rural areas will help to reduce A. urban-rural migration B. urban-urban migration STARRY GOLD ACADEMY , , info@starrygoldacademy.com, Page 10

11 C. rural-urban migration D. rural-rural migration 23. Public enterprises are established mainly to A. make goods available in the markets B. compete with foreigners in the industrial sector C. provide essential services to members of the public D. make profits for the governments 24. One of the undesirable features of a free float exchange rate system is: A. Exchange rate volatility B. Higher economic uncertainty C. International transactions becoming a risky business D. All of the above 25.The ultimate objectives of Economics is to A. Make effort to understand how the economy works STARRY GOLD ACADEMY , , info@starrygoldacademy.com, Page 11

12 B. Decide under what circumstances should the government intervene in the economy C. Organize production at the lowest cost D. Make the best use of scarce resources 26. Labour- Intensive strategy of industrialization emphasizes the use of A. Steam energy in the process of production B. Manual method of production C. Hydro-electric power D. Synthetic raw materials 27. The production factors whose entire world supply is fixed is A. Capital goods B. Skilled labour C. Land D. Enterpreneur 28. The most widely known definition of Economics was adduced in what year? A STARRY GOLD ACADEMY , , Page 12

13 B C D The equilibrium position of a firm is attained when A. MC = AR B. MC = MR C. AC = AR D. AR = MR 30. The major factor for locating the Portland Cement Factory at Ewekoro in Nigeria is the availability of A. Market B. Unskilled Labour C. Electricity D. Raw Materials THEORY STARRY GOLD ACADEMY , , info@starrygoldacademy.com, Page 13

14 1. There are different meanings and definitions that have been given to the term-economics by different scholars over the years. Give at least five (5) of such definitions. 2. Briefly explain the basic concepts of economics with relevant examples. 3. Distinguish clearly between microeconomics and macroeconomics with relevant examples. List and briefly explain other notable branches of Economics known to you. 4. Explain succinctly the major fundamental problems of Economics. 5. Write short notes on the following; a. Socialist economic system b. Capitalist economic system c. Mixed economic system 6. adifferentiate between a firm and an industry. b. What do you understand by Location of an industry? c. List and explain the major factors to be considered in sitting industry in a given place. STARRY GOLD ACADEMY , , info@starrygoldacademy.com, Page 14

15 7. awhat is Demand? Highlight the major factors that determine it. b. What is supply? Itemize the factors that determine it. c. Explain the term Equilibrium price. d. Given that demand and supply functions; Qd = 42 2p and Qs = p. i. calculate the Qd and Qs when the price is N1, N3, N5, N7 and N9. ii. From the results obtained in (i) above, construct demand and supply schedules. iii. What is the equilibrium price and quantity? 8.Write short notes on the following; a. price elasticity of demand b. cross price elasticity of demand c. income elasticity of demand. STARRY GOLD ACADEMY , , info@starrygoldacademy.com, Page 15

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