SET C 7.

A Market dominated by three giant firms has the

following supply functions: S = P + 160
1. Economics is considered as a sciences because it S = P + 40,
A. Deals with the physical environment S = 3P + 40
B. Studies the behavior of human beings The market supply function of this product is:
C. Uses the scientific method
D. Deals with other sciences A. 8P + 240
B. 490 + 2P
2. Profit maximizing output least cost output are C. 12P + 200
the same in: D. 7P + 240
A. Monopoly only Question 8 et 9 are based on table 1 which show the
B. Monopolistic competition only demand and supply of a good.
C. Perfect competition only
D. Perfect competition and monopoly Price (FCFA) Demand (Kg) Supply (Kg)
100 10 2
3. Which of the following statements is true about a
200 8 4
purely command economy?
300 6 6
A. The wages of all workers are equal
400 4 8
B. Profit motive does not exist
C. Goods do not have price 8. It the government sets a minimum price of 400
D. Consumer sovereignty exists FCFA and wants to maintain that level of
production, how much will she spend at this
Questions 4 and 5 are based on the population
current price level so as to avoid stock piling.
data of a given country for a particular year.
A. 1 200 FCFA
Number of births = 800 000 B. 1 600 FCFA
Number of infant deaths aged 0-12 months C. 1 800 FCFA
= 10 000 children D. 3 200 FCFA
Number of people in the non-working age group 9. Suppose the price of this good rises from 300
= 24 million FCFA to 400 FCFA, what will be the nature of
Total population = 40 million people price elasticity of demand?
4. Given that 12 million people are gainfully A. Perfectly inelastic
employed, what is the activity rate of this B. Elastic
country? C. Inelastic
A. 37,5% D. Unitary
B. 50% 10. At the point of technical optimum of a firm,
C. 50% average product is:
D. 75% A. Maximum
5. The infant mortality rate per thousand for this B. Falling
population would be: C. Rising
A. 25 D. Negative
B. 20
C. 12.5 Question 11 and 12 are based on table 2 below
D. 2.5 Total cost
Prices (FCFA) Quantity (kg)
(FCFA)
6. If the MU of good X<MU of good Y price of
57 1 60
good X price of good Y
55 2 116
Then the consumer would:
54 3 170
A. Be in equilibrium 52 4 218
B. Transfer expenditure from good X to good Y 51 5 255
C. Transfer expenditure from good Y to good X 46 6 270
D. Exhaust his budget in buying goods X and Y 44 7 296
40 8 332
11. What is the marginal revenue associated with 17. When a public company issues new shares by
the sale of the fourth kg output? writing to is existing shareholders offering
them the chance of buying these new shares in
A. 46 FCFA proportion of their existing shareholdings, this
B. 54 FCFA is referred to as:
C. 20 FCFA
D. 2 FCFA A. Placing
B. Rights issue
12. At what level of output will this firm break C. Offer for sale
even? D. Issue by tender
A. 3kg
B. 5kg 18. The real aim of production is to:
C. 7kg
A. Create material goods
D. 8kg
B. Provides basic necessities
13. Public relations in marketing mean building C. Satisfy peoples wants
good relations with: D. Eliminate poverty

A. Consumers 19. Debentures for which the assets of the company

B. Supplies are offered as security are known as:
C. Shareholders
A. Redeemable debentures
D. All of the above
B. Irredeemable debentures
14. Consumer sovereignty solves which of the C. Naked debentures
following central issues in economics? D. Mortgage debentures

A. How will goods be produced? 20. In the momentary period the price of a good
B. Who will produce the goods? rises by the full extent of the increase in
C. What goods will be produced? demand because:
D. For whom will the goods be produced?
A. Supply is limited to the quantities available
15. Self-interest as a characteristic of a market in the market
economy implies that: B. Supply can be increased by using more
units of variable factor
A. Each unit in the economy attempts to do C. Supply can be increased by varying both
what is best for it the fixed and variable factor.
B. Individuals are free to buy and hire D. Producers hold large stocks of the good.
economics resources
C. Owners of land capital may use these 21. The pricing policy where a firm reduces the
resources as they see fit price of is product in the short run so as to
forces competitors out of the industry are
D. Workers are free to enter and leave any
known as:
occupation for which they are qualified
A. Skimming pricing
16. One of the motives of horizontal integration is B. Limit pricing
to: C. Predatory pricing
A. Rationalize production D. Market penetration pricing.
B. Diversify output 22. "An increased propensity to save in an economy
C. Safeguard delivery of raw materials may lead to a fall in realized savings." This
D. Secure an adequate number of market describes the:
outlets.
A. Paradox of wealth
B. Paradox of value
 C. Paradox of thrift Questions 28 and 29 are based on table 3 which
D. Paradox of interest. shows the value of inputs and outputs of firms at
different stages of production.
23. The use of work stoppage, working to rule and
ban on overtime work by a trade union in order
to support its demand for higher wages and
better working conditions is called: Cost of Value of
Stage of
intermediate output
production
A. Collective bargaining goods (FCFA) (FCFA)
B. Arbitration Farming 0 200 000
C. Conciliation Milling 200 000 500 000
D. Industrial action. Baking 500 000 1 000 000
Retailing 1 000 000 1 400 000
24. Piece rates as a system of wage payment is most
appropriate where: 28. What is the value of the final output?
A. 1 000 000 FCFA
A. It is more difficult to measure work done.
B. 400 000 FCFA
B. Work is easily measure
C. 1 400 000 FCFA
C. Work cannot be done in a hurry
D. 3 100 000 FCFA
D. Quality of work done is more important than
quantity. 29. The value added by retailers is equal to:
A. 1 000 000 FCFA
25. When land has only on use, all of is income is
B. 400 000 FCFA
economic rent because
C. 1 400 000 FCFA
A. Its transfer earnings are positive D. 3 100 000 FCFA
B. There is zero opportunity cost.
Questions 30 and 31 based on figure 1
C. It is nonspecific
D. It has alternative uses. 30. What is the value of marginal propensity to
consume?
26. In 2009, the Gross Domestic product (GDP) of
A. 0,4
a country was 10 000million FCFA and the price
B. 0,5
index was 100. In 2012, the GDP increased to
C. 0,6
12,075 million FCFA and the price index rose to
D. 0,7
105. What is the percentage increase in real
GDP? 31. Calculate the value of income induced
consumption at income level 5 000 M. FCFA.
A. 5%
B. 12% A. 800 M FCFA
C. 15% B. 4 000 M FCFA
D. 20,75 C. 3 000 M FCFA
D. 2 000 M FCFA
27. Mr. Neng has just bought a new house. In
national income accounting this transaction is
32. Which of the following is an injection into the
considered as:
circular flow of income?
A. Fixed investment
A. Construction of a petroleum industry
B. Inventory investment
B. Purchase of foreign goods
C. Consumption of semi durable goods
C. Retained profits by firms.
D. Consumption of durable goods.
D. Payment of value added tax.

33. The basic assumption underlying the accelerator

theory is that changes in investment depend on the:
 A. Level of business confidence. 38. This question is based on figure 2. Which type of
B. Rate of changes in the rate of interest. fax structure is represented by figure2?
C. Level of changes of savings. Consumption M.
C
D. Rate of changes in consumer expensing. FCFA

Y=C
34. If the marginal propensity to consumer of all
3 600
consumers in a closed economy with government
is 0, 8, then a rise in taxation of 4 000 M FCFA
will cause national income to: 3 000

A. Remain constant
B. Rise by 4 000 MFCFA 0 4 000 5 000 Income M. FCFA
C. Fall by 4 000 MFCFA
D. Rise by less than 4 000 MFCFA A. Progressive
B. Regressive
35. This question is based on table 4 which shows the C. Proportional
speculative demand for money in a given economy. D. Indirect.
Table 4. 39. Which of the following is an example of an
Rate of interest automatic stabilizer?
(%) 8 7 6 5 4
A. Family allowance
Speculative
demand (million 6 000 5 000 4 200 3 700 3 400 B. Defence expenditure
FCFA) C. Expenditure on education.
D. Unemployment benefits.
At the current level of national income, the
40. A country has a progressive income tax system.
community wishes to hold 1 000 million FCFA for
transaction purposes and 800 Million FCFA for The first 10 000 FCFA earned is tax free. The after
precautionary purposes. If the government wishes to the next 20 000 FCFA of earned income is taxed at
achieve an equilibrium interest rate of 6 %, what will 40%. A person earns 30 000FCFA how much tax
be the money supply in this economy? will he pay?
A. 3 700 million FCFA A. 4 000 FCFA
B. 4 200 million FCFA B. 3 000 FCFA
C. 2 000 FCFA
C. 6 000 million FCFA
D. 1 000 FCFA
D. 7 900 million FCFA
41. A country will experience a reduction in the current
36. Which of the following is liability of a
account deficit of its balance of payment if:
commercial bank?
A. Its level of Gross National product rises
A. Treasury bills.
relative to foreign Gross National product.
B. Operational balances at the central bank
B. Its prices fall relative to foreign prices.
C. Advances to customers
C. The domestic price of the foreign currency fall.
D. Customers sight deposits.
D. It lowers its tariffs.
37. A fall in the value of money will likely.
42. If speculators believe the dollar is goings to
A. Stimulate production. appreciate against the FCFA, they will likely;
B. Force down the rate of interest on loans.
A. Purchase the dollar
C. Change the distribution of income in favour of
B. Purchase FCFA
fixed earners.
C. Sell the dollar.
D. Improve the demand for exports in the foreign
D. Wait until the appreciation occurs.
markets
43. If upon joining a customs union, a country D. Resistance to change.
switches from producing a particular commodity itself
to buying it from another member country which 49. Strategic management in an organization is
produces it more cheaply, this is known as: undertaken by:

A. Trade diversion A. Top management

B. Trade creation. B. Middle level management
C. Greater o-operation. C. First-line management
D. Loss of economic independence. D. Plant management

44. What change would best indicate that a country 50. External economies of scale arise essentially from:
has experienced economic development? A. Firms’ individual policies.
A. An improvement in the country’s real Gross B. Efficient use of resources
Domestic product. C. Government economic policy
B. An increase in the country’s real Gross D. Localization of industry.
Domestic Product.
C. An appreciation of the country’s currency
D. An improvement in the standard of living of
the population.

45. Which of the following is least likely to be a

government policy objective?

A. A balance budget
B. Price stability
C. Economic growth
D. Full employment

46. An outward shift of a production possibilities

curve may likely be caused by.

i. An increased use of idle resources

ii. Discovery and exploitation of natural resources
iii. Reallocation of resources.
A. i, ii and iii C. i and iii ii and iii
B. i and iii D. i only

47. A main limitation of the Philips curve is:

A. Creeping inflation.
B. Suppressed inflation
C. Hyperinflation
D. Stagflation.

48. When a manager makes carefully thought out

changes in an organization in anticipation of
possible problems or opportunities that change
might bring it is known as:

A. Reactive change
B. Proactive change
C. Psychological aspects change.