ECN 101 BY MUMPRAYERS

MASSIVE SUCCESS IS THE GOAL

These are NOT likely questions or expected questions for ECN 101, these are just practice
questions so as to brush our knowledge about what we must have read from the textbook.
It's very imperative for everyone to have read the notes and textbooks intensively and
comprehensively and use this to practice not relying or using this for the knowledge of
answering the questions in the test and examination. Massive success is the goal. Thank you

1. ………is an individual that produce goods and services a) firm b)

industry c) government d) households

2. Who defined economics as the study of ‘nature and causes of wealth

of nations’ a) Alfred Marshall b) Lionel Robbins c) Adam Smith

3. Human wants are ……..while resources are……..a) limited / unlimited

b) unlimited / limited c) limited / limited d) unlimited / unlimited

4. Ends in economics means……a) resources b) wants c) urges d)

scarcity

5. ........is an open market place where securities and other financial

instruments are traded a) trade b) international trade c) exchange

6. The concentration of a group of similar firms in a particular area is

called…..a) location of industry b) localization of industry c) industry
d) group of industry
7. Economics is said to be…….a) science b) social science c) applied
science d) life science

8. Economics is a social science because it uses….a) only deductive

method b) both deductive and inductive methods c) only inductive
method

9. ………..deals with the smaller aggregate of the economy like the

behavior of individual consumer, firms or group of firms a)
microeconomics b) macroeconomics c) minute economics

10. The following are the economics unit except a) household b)

firm c) entrepreneur d) economist

11. .......is the practice of exchange of things with others for mutual
benefits a) equal exchange b) balance of exchange c) reciprocity

12. ………is the transformation of raw materials or semi-finished

goods into finished goods to satisfy human wants a)
manufacturing b) production c) exchange

13. .........refers it to as price theory while..... refers to as market

theory a) Adam Smith / Lionel Robbins b) David Richardo / Adam
Smith c) Adam Smith / David Richardo
14. ……….is any free gift of nature a) land b) capital c) labour

15. ……..involves the extraction of raw materials from the soil a)

primary production b) secondary production c) tertiary production

16. Initially, ……..is greater than ……… a) AP / MP b) MP / AP

c) TP / MP d) AP / TP

17. The major problem of barter trade is…..a) indivisibility b)

double coincidence of want c) non-monetary

18. ……..is a measure of value of a product a) asset b) return c)

price

19. ……..is a list of individual wants in order of their priority a)

scarcity b) demand schedule c) individual demand d) scale of
preference

20. ……..is the money spent to purchase a product a) money cost

b) direct cost c) cost d) true cost
21. MP will be equal to AP when a) AP is maximum b) MP is
minimum c) AP is minimum d) MP is maximum

22. ……….is expressed in terms of alternative forgone a) cost b)

opportunity cost c) marginal cost

Items Price
needed (#)

Exercise 100
book

Biro 50

Textboo 60
k

Sandals 130

Shirts 90

Eraser 10

The table above is Westminster scale of preference and he has a

disposable income of #150.
23. What is Westminster opportunity cost a) textbook only b)
textbook and shirt only c) textbook and sandals d)textbook, sandals,
shirts and eraser

24. If Westminster disposable reduces to #100, what is his money

cost a) exercise book only b) biro and textbook c) biro only

25. What is Westminster opportunity cost when his disposable

income is #100 a) biro and eraser only b) textbook only c) biro only
d) sandals only

26. Opportunity cost is also known as……a) real cost b) money cost
c) direct cost d) cost

27. Any price fixed below the equilibrium point will cause...a)
excess demand b) excess supply c) fixed supply

28. ……has to do with the mental and physical efforts or skills

utilized into the production process a) labour b) entrepreneur c)
capital d) manpower

29. ........is refer to as optimal state a) rationality of consumer b)

consumer maximum satisfaction c) balance of payment d)
equilibrium
30. The following are the basic economic problems except a) how
to produce b) what to produce c) where to produce d) for whom to
produce e) efficient allocation of resources

31. When TP is at maximum, MP is…….a) constant b) zero c)

falling d) rising

32. …….are goods that are meant for the production of further
goods and services a) durable goods b) industrial goods c) capital
goods

33. ……..is a type of production of goods and services for family

consumption only a) direct production b) indirect production c)
primary production

34. When TP is decreasing ,MP is……a) positive b) negative c)

constant d) decreasing

35. The total monetary value of goods and services produced in a

country is called…..a) GNP b) GDP c) NNP d) NP
36. All points on the PPC shows that…..a) there is
underemployment b) there is full employment c) there is
unattainable output level

37. ……..is the total quantity of a commodity produced a) total

product b) average product c) fixed product

38. The process of fixing maximum price is known as……a) price

ceiling b) price floor c) highest price d) above equilibrium

39. ……..is the slope of the total product a) fixed product b)

marginal product c) total product

40. When AP is rising, MP is………a) below it b) above it c) constant

41. PPC means…….a) Production Perfect Curve b) Product Possible

Combinations c) Production Possibility Curve d) Production
Possibility Combination

42. MP curve cuts AP at the point where……a) AP is maximum b)

AP is minimum c) MP is maximum d) MP is minimum
43. MP will be equal to AP when…….a) MP is maximum b) AP is
maximum c) MP is minimum d) AP is minimum

44. …….is the total monetary value of goods and services produced
by citizens of a country residing in the country or out of the country
a) GNP b) GDP c) NNP

45. Any point inside the PPC means that……a) resources are not
fully utilized b) resources are fully utilized c) technology is fixed d)
unattainable

46. …....is refers to as risk taker a) enterprenuer b) entrepreneur

c) intrapreneur

47. The reward for labour is….a) wage b) rent c) interest

48. Any point outside the PPC is……a) the optimal level b)
underutilized c) fully utilized d) unattained output level

49. One of the following will lead to the attainment of points above
the production possibility curve (PPC) a) efficient use of power b)
improvement in level of technology c) effective government policy
50. …….are man-made resources used for production a) money b)
capital c) machinery d) technology

51. …….uses demand and supply to determine the appropriate price

point for a good or service a) equilibrium b) theory of price c)
pricing

52. ……..is an additional product produced as a result of a variable

factor added a) marginal product b) average product c) average
product

53. ………is the movement of labour from one place to another in

response to the difference in wages a) occupational mobility of
labour b) national mobility of labour c) geographical mobility of
labour

54. Minimum price will lead to……..while maximum price will lead t
o……a) excess demand / excess supply b) excess supply / excess
demand c) equilibrium / disequilibrium

55. …..are prices that appear to support a certain level of demand

a) price points b) pricing strategy c) equilibrium d) price system
56. ……..refers to the functional relationship between the quantity
(output) and factors of production (input) a) demand function b)
supply function c) production function d) output function

57. ……..is the siting of industry in a particular area a) localization

of industry b) location of industry c) siting of industry

58. The bedrock of all economic problems is…….a) unlimited want

b) unlimited resources c) scarcity of resources

59. Minimum price are usually set for……a) luxury goods b)

agricultural commodities c) essential goods

60. The process by which forces of demand and supply interact to

fix the price of a commodity is referred to as……a) market price b)
maximum price c) price mechanism d) regulated price

61. …….is the theoretical aspect of thinking in economics a)

inductive reasoning b) deductive reasoning c) normative reasoning

62. ………is a legal price set above the equilibrium market price a)
minimum price b) market clearing price c) maximum price
63. …….is how much a firm is willing to offer for sale a) demand b)
supply c) sales

64. GDP at market price = GDP at factor cost +…….a) subsidy –

indirect tax b) indirect tax – subsidy c) capital consumption –
subsidy

65. Net income from abroad is……a) total money received from
abroad b) country currency used in abroad c) net difference of
export and import

66. ……is the estimating of the value of current GDP with current
price a) nominal GDP b) real GDP c) actual GDP

67. …….method involves the addition of all the income received by

all the factors of production a) output approach method b)
expenditure approach method c) income approach method

68. ……is the difference the output value and the input value a)
output difference b) net output c) intermediate output d) value
added
69. In a 2 closed sector economy, GDP is…..a) C+I+G b)
C+I + (X-M) c) C+I+G + (X-M) d) C+I

70. NNP = a) GNP + depreciation b) GNP – capital consumption

c) GDP – depreciation d) NNP at factor cost

71. ……..is refers to a collection of buyers and sellers who interact,

and to the possibility for sales and purchases that result from that
interaction a) marketing b) market c) sales point d) e-trading

72. .......is that part of the income left after personal income tax is
deducted a) income b) basic income c) tax free income d)
disposable income

73. Income per capita is....... a) National Income / Population b)

GDP / Price of Goods c) National Income / Average Income

74. GDP at factor prices = GDP at market cost a) add taxes and
subtract subsidies b) add subsidies and less taxes c) add
subsidies and tax d) less subsidies and taxes

75. Thefollowing are not included in NI computation except... a)

pensions b) income on property c) gifts d) money given to
housewife
76. Aprice floor is usually fixed….a) at the equilibrium and causes no
shortage b) above the equilibrium and causes surplus c) below the
equilibrium and causes surplus d) above the equilibrium and causes
surplus

77. …….moves from generalities to specific conclusions while …….moves

from specific to generalities conclusions a) deductive reasoning /
inductive reasoning b) inductive reasoning / deductive reasoning c)
positive economics / normative economics

78. Legacyconcept makes perfect graphic designs. Legacy concept

owner is a student, therefore all students makes perfect graphic
designs. This is refers to as…..a) inductive reasoning b) deductive
reasoning c) normative reasoning d) positive economics

79. ………is
a legal price set above the equilibrium market price a)
minimum price b) market clearing price c) maximum price

80. Thefederal government has closed the border, the prices of rice will
surely rise. This statement is…..a) inductive reasoning b) deductive
reasoning c) normative reasoning d) positive economics
 PRICE (#) QUANTITY QUANTITY
DEMANDED SUPPLIED

1000 120 0

2000 100 10

3000 80 20

4000 60 30

5000 40 40

6000 20 50

7000 0 60

81. The equilibrium price is……a) #40 b) #5000 c) #4000 d) #30

82. At price #2000, excess demand is…..a) 100 units b) 10 units c) 90

units d) 110 units

83. The equilibrium quantity is….a) 40 units b) 4000 units c) 5000 units
d) 60 units

84. Any price above the equilibrium price will lead to…..a) excess
demand b) excess supply c) shortage demand

85. ……is when the market demand curve intercept the market supply
curve a) market equilibrium b) equilibrium point c) equilibrium
demand d) equilibrium curve

86. Westminster is a doctor. Westminster is cute, therefore all doctors

are cute. This is……….. a) deductive method b) inductive method c)
positive economics d) normative economics
87. Nigerian youths are lazy’. Westminster is a Nigerian, so therefore he
is a lazy youth. This reasoning is called….. a) deductive method b)
inductive method c) positive economics d) normative economics

88. ………shows the various combinations of two goods that can be

produced in a country when all available resources are fully and
efficiently utilized a) allocation of resources b) economic system
c) production possibility curve

89. Thefollowing are the economics unit except a) household b) firm

c) government d) economist

90. The bank area in the University of Ilorin centered at one area is
known as..... a) location of industry b) localization of industry c)
internationalization of industry d) industrialization
 ECN 101 BY MUMPRAYERS
MASSIVE SUCCESS IS THE GOAL

1. A 2. C 3. B 4. B 5. C 6. B 7. B 8. B 9. A 10. D

11. C 12. B 13. C 14. A 15. A 16. B 17. B 18. C 19. D 20. A

21. A 22. B 23. A 24. A 25. C 26. A 27. A 28. A 29. D 30. C

31. B 32. C 33. A 34. B 35. B 36.B 37. A 38. A 39. B 40. B

41. C 42. A 43. B 44. A 45. A 46. B 47. A 48. D 49. B 50. B

51. B 52. A 53. C 54. B 55. A 56. C 57. B 58. C 59. B 60. C

61. B 62. A 63. B 64. A 65. C 66. A 67. C 68. D 69. D 69. D 70. B

71. B 72. D 73. A 74. A 75. B 76. B 77. A 78. A 79. A 80. D

81. C 82. C 83. A 84. B 85. A 86. B 87. A 88. C 89. D 90. B