ECONOMICS SS 2 THIRD TERM EXAM

4. Economics is often described

1. The basic concern of
as a science because
economists is to
A. Laboratory experiments
A. create human wants
are performed
B. satisfy all human wants
B. Its operations are
C. redistribute income so that
according to natural laws
is used correctly
C. It uses scientific methods
D. allocate scarce resources
to explain observed
to satisfy human wants
D. It makes use of field work.

2. 'Economics is a science which

5. The market price of a
studies human behaviours as
commodity is determined by
a relationship between ends
the
and scarce means which
A. Total number of people in
have alternative uses. 'Ends'
the market
here refers to
B. Total demand for the
A. resource commodity
B. wants C. Quantity of demand and
C. choice supply
D. output
D. Interaction of demand
and supply.
3. The basic economic
problems of the society
6. The price system refers to
include
the system by which
A. what to produce, how and
A. The government controls
whom
prices in the economy
B. how to produce, market
B. Prices tend to rise to a
and consume
general level
C. scarcity, choice and
C. Price allocates resources
opportunity cost
between consumer goods
D. production, consumption
and producer goods
and utility
 D. Government allocates
resources to consumers
and producers.
7. A review of the occupational
distribution of the population
from time to time helps us to
know the
A. rate at which the
population grows
B. the number of people that
makes up the labour force
C. efficiency of the working
population
D. industries which are
becoming less important
8. The equilibrium position of a
firm is attained
A. when MC = AR
B. when MC = PC
C. when MC = MR
D. when AC = AR
9. In which of the following
economic system is the
consumer referred to as ‘The
King’?
A. Planned economy
B. Mixed economy
C. Traditional economy
D. Free Market economy
10. Which of the following
are resources for holding
money instead of investing it?
I. Transaction motive II.
Precautionary motive III.
Speculative motive IV.
Liquidity motive
A. I and II only
B. I and III only
C. I, II and III only
D. I, II and IV only.
11. It is a general belief
that inflation in West Africa is
caused by all the factors
listed below except
A. excessive bank lending
B. budget deficit
C. rising incomes
D. excess supply
12. All the following are
specific examples of indirect
tax except
A. purchases tax
B.  poll tax
C. export duty
D. excise duty
13. Demand in Economics
is synonymous with
A. needs
B. wants of the consumer
C. all goods demanded in the
market
 D. wants supported with
ability and willingness to pay
14. A rational consumer
tends to do all the following
except
A. buying more at a high
price than at a low price
B. buying more at a low price
than at a high price
C. buying at utility
maximization
D. reacting to price changes
15. A firm that charges
different price of goods or
services that have same
technical qualities is called
A. a perfect competitor
B. a monopsony
C. an oligopoly
D. a discriminating monopoly
16. Time deposit has the
same meaning as
A. current account
B. demand deposit
C. deposit account
D. bank deposit
17. The Joint Stock
Company can be a company
whose minimum
membership is
A. 2
B. 7
C. 10
D. 20
18. The notion of short-run
and long-run periods is
responding for grouping cost
into
A. fixed and variable
B. implicit and explicit
C. average and total
D. capital and running
19. when a country has a
large labour force, it is
beneficial to use a method of
production which is
A. capital intensive
B. land intensive
C. labour intensive
D. mechanical intensive
20. The concentration of
industries in one place is
referred to as
A. location of industries
B. multiplication of industries
C. pluralization of industries
D. localization of industries
21. One major function of
the Central Bank is to
A. mint money
B. control and regulate
money supply
 C. act as a medium of
exchange
D. create money
22. The amount of money
to be created by commercial
banks is actually influenced
by the
A. legal reserved ratio
B. external reserve
C. external borrowing
D. bank deposits
23. The monetary system
that requires a double
coincidence of wants is
known as the
A. gold standard
B. barter system
C. commodity system
D. gold exchange standard
24. A movement along the
demand curve for some
goods may be caused by a
change in
A. consumer income
B. the price of goods
C. consumers taste
D. the price of other goods
25. A government treasury
bill is a form of debt
instrument which falls due
for repayment after
A. 3 months
B. 9 months
C. 2 years
D. 5 years
26. An increase in the rice
harvest, all things being
equal, may cause____________
A. Price to increase
substantially.
B. Price to fall substantially.
C. Demand to fall
substantially.
D. Farmer's incomes to be
more than doubled
27. The coefficient of price
elasticity of supply of land is
usually____________
A. One
B. Greater than one
C. Zero
D. Less than one.
28. When market supply
increases , the equilibrium
price_________
A. Rises and quantity falls.
B. Falls and quantity rises.
C. And quantity increase
D. And quantity fall.
29. The law of diminishing
returns is applicable to
the__________
 A. fixed inputs of production.
B. variable factors of
production.
C. plants and machinery of
the firm.
D. equipment and other
capital.
30. Non-economic factors
that influence the location of
firms include ________
A. the existence of required
materials for production
B. availability of population
of buyers
C. adequate supply of power,
good road and rail network
D. the activities of politicians
in deciding location of firms
31. Which of the following
is not an argument for the
policy of privatization in West
Africa?
A. To make businesses more
profitable
B. Government is able to
participate and control the
operation of the privatized
businesses
C. Members of the public are
able to acquire shares
D. It encourages the inflow of
capital and expertise from
local and foreign sources
32. An increase in cash
ratio by the central bank
will_______
A. Increase the supply of
money.
B. Increase banks lending
C. Encourage borrowing.
D. Reduce the supply of
money.
33.which of the following market
structure are imperfect in
competition. I monopoly II
duopsony III oligopoly
A. II and III only
B. I and II only
C. I and III only
D. I, II and III only
34. Changes in the value of
money can be measured by
A. The distributors
B. A price index
C. A demand index
D. A supply index
35. which of the following
is a bank's responsibility to
it's shareholders?
A. making profits
B. creating money
C. paying high interest rate
D. preventing inflation
36. Development banks 40. The reward for
mainly provides debenture holders of a
A. savings account facilities company is
for a developing economy A. Dividends
B. foreign exchange facilities B. Fixed interest
for importers and exporters C. Wages
C. capital for development of D. Profits
specific sectors
D. capital for the 41. When the government
development of special initiate measures to make an
banks organization in which it has
substantial interest more
37. Who bears the greater profit oriented, such a
burden of the indirect tax business is described as
when the demand for a being
commodity is inelastic? The A. Indigenized
A. wholesaler B. Restructured
B. entreprenuer C. Commercialized
C. retailer D. Privatized
D. consumers
42. Short-term loans can
38. Which of the following be sourced from
is the most liquid asset? ________________ bank
A. Silver A. Micro-finance
B. Bank deposit B. Development
C. Cheques C. Central
D. Goods in warehouse D. Mortgage

39. The monopolist power 43. If the quantity demand

can be controlled by the
government through
A. Price legislation
B. Import restrictions
C. Output control
D. Consumption control
of a particular commodity is
represented by the function
Qd = 30 – 2P, what is the
quantity demanded at the
price of #12?
A. 6 units
 B. 8 units 47. The average utility of
C. 10 units the quantity consumed when
D. 12 units four units are consumed is
use the table below to answer A. 6
questions 45-47. B. 8
Quantity Total Utility C. 12
consumed D. 48
1 25
2 31 48. Diminishing marginal
3 40 utility sets in at
4 48 quantity…………………..
5 55 A. 1
B. 2
44. The marginal utility at C. 3
the fourth quantity D. 4
consumed is
A. 12
B. 9 49. The cost incurred by
C. 8 using both fixed and variable
D. 6 factor of productions is
A. Fixed cost
45. What is the median of B. Total cost
the average utility? C. Marginal cost
A. 40 D. Average cost
B. 25
C. 20 50. The demand for a
D. 13 commodity not directly for
immediate consumption but
46. The range marginal for the production of another
utility is commodity is
A. 5 A. Competitive demand
B. 8 B. Joint demand
C. 10 C. Composite demand
D. 12 D. Derived demand
 ECONOMICS PAPER 2
THEORY QUESTIONS
SECTION A
Answer only one question from this section.

1. The table below shows the budgetary allocation of a country to

selected sectors of the economy in a particular year. Study the table
carefully and answer the questions that follows.
Sectors Amount ($Millions)
Education 6,250
Mining 2,150
Agriculture 4,300
Communication 2,400
Health 2,900
(a) Present the information contained in the table in form of a pie
chart. (show your workings clearly).
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6marks

(b) What is the range of the budgetary allocation in pie?

(show workings)

2marks
(c) Which of the two sectors combined received half of the budget?

1mark
(d) Explain the concept of budget surplus and budget deficit.
 (WASSCE 2008)
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2marks
(e) What is pool tax?

1mark

2. The table below shows the tax payment of four income earners in a
year. Use the information in the table to answer the questions that
follow:
Income Income Base Tax Payments Tax Payments
Earners A B
# # #
Miss. Tobi 15,000 1,500 1,200
Ms. Okafor 25,000 2,500 2,000
Mrs. Ibe 32,000 3,200 2,240
Mr. Paul 60,000 6,000 3,000

show workings where necessary.

(a) Determine the percentage tax rate paid by:

I. Miss Tobi in columns A and B

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1mark
II. Mr. Paul in columns A and B
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1mark
III. Ms. Okafor in column B
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1
/2mark
IV. Mrs. Ibe in column B
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1
/2mark

(b) i. Identify the systems of taxation employed in columns A and B.

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2marks
II. Mention the income earner that has the least burden of tax under
column A and B.
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1mark
(c)i. If government increases its rate of taxation to 15% flat rate, how
much revenue will be generated from the payees?
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3marks
ii. At 15% flat rate taxation, calculate the total and each disposable
income of the tax payers.
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3marks
(WASSCE 2003).

SECTION B
Answer any four questions from this section.

3. What are the instruments used by the central bank to control the other
banks (WASSCE 2001) 12 Marks

4. (a) Distinguish between perfect market and a monopolistic market.

6marks
(b) Monopolists are seen to be bones on the neck of the consumers.
Discuss how the bones can be removed. (WASSCE 2001)

6marks

5. (a) What is market economy? 4marks

(b) Highlight the features of market economy (WASSCE 2002)

8marks

6. Explain any four of the following terms:

I. Nationalization
II. Indigenization
III. Export substitution strategy
IV. Joint venture
V. Limited liability (WASSCE 2002) 12marks

7. (a) Differentiate between subsistence farming and commercial farming.

4marks
 (b) State four features of mechanized farming. 4marks
(c) outline two positive and two negative effects of mining on the
economy of West African countries. (WASSCE 2020) 4marks

8. Distinguish between the following:

I. Loan and overdraft
II. Needs and wants
III. Savings account and current account 12marks

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