ECONOMIC REVISION QUESTIONS COMPILED BY MOHAMMED ABU SHAIBU

Question One

The demand for a firm’s product is presented as Qd = 28 – 4p. Prices over the period are $2.50;
$3.50; $4.50; $5.50 and $7.00. Calculate:

1. the quantity demanded at each price;

2. the total revenue at each price;
3. (i) what is the coefficient of price elasticity of demand when price increased from
$2.50 to $3.50?
(ii) is the demand elastic or inelastic ?

(iii) state the reason for your answer in 1(c)ii.

Question two

The table below shows the national income of a country in 1998. Use the data to answer the
questions that follow:

ITEMS $ MILLIONS
Personal consumption expenditure 640.00
Gross Private Domestic Investment 180.00
Government expenditure 220.00
Exports of goods and services 175.00
Imports of goods and services 202.00
Subsidies 48.00
Indirect business taxes 322.00
Consumption of fixed capital 115.00
Net property income from abroad 80.00

1. Define Gross Domestic Product (GDP)

2. Calculate the:
i. Gross Domestic Product (GDP)
ii. Gross National Product (GNP)
iii. Net National Product (NNP)
3. Determine the National Income at factor cost from the Net National Product
(NNP).

Question three

a. Define free trade.

b. State any two reasons why free trade exists.
c. Describe any four instruments of trade restriction.

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ECONOMIC REVISION QUESTIONS COMPILED BY MOHAMMED ABU SHAIBU

Question four

a. What is meant by the value of money?

b. State any four qualities of money.
c. Explain the motives for holding money.

Question five

a. Differentiate between natural growth rate of population and rate of growth of

population.
b. Explain any five measures that the government of your country can adopt to check the
high rate of population growth

Question Six

a. In what four ways can a monopoly arise?

b. With the aid of a suitable diagram, explain how the monopolist
achieves equilibrium in the short run.

Question seven

a. What is subsistence farming?

b. State any two objectives of agricultural policies in West Africa.
c. Outline any four ways through which agricultural production can be improved in West
Africa.

Question Eight

a. Briefly explain the following concepts:

i. Economic development;
ii. Economic development planning.
b. Highlight any five reasons why the West African countries engage in development
planning.

Question Nine

a. What is a minimum wage?

b. Distinguish between money wage and real wage.
c. Outline any four reasons for the difference in wages paid to different categories of
workers

Question Ten

a. What are external economies of scale?

b. Describe any four external economies of scale.

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ECONOMIC REVISION QUESTIONS COMPILED BY MOHAMMED ABU SHAIBU

c. State any three limitations to the growth of firms.

Question Eleven

a. Highlight any four features of cooperative societies.

b. Identify any four sources of finance available to business enterprises in your country.

Question Twelve
The table below represents a traveller's consumption of bottles of Coca-Cola. Study the table
carefully and answer the questions that follow.

No of Total Utility Marginal Utility

bottles
1 15 15
2 29 F
3 42 13
4 D 12
5 65 G
6 75 H
7 E 0

(a) Complete the missing figures D, E, F, G and H.

(b) Draw the demand curve for the traveller's consumption of Coca-Cola.
(The use of a graph sheet is essential).
(C) Explain the law of diminishing marginal utility as the basis for the slope of the traveller's
demand curve.

Table below represents the cost function of a poultry farm. The price of a crate of egg. is
$21. Use the information contained in the table to answer the questions that follow.

Quantity of Total Cost

eggs(in
crates)
0 50
1 55
2 62
3 75
4 96
5 125
6 162
7 203
8 248

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ECONOMIC REVISION QUESTIONS COMPILED BY MOHAMMED ABU SHAIBU

(a) What is the fixed cost of the farm?

(b) (i) Calculate the marginal cost at each level of output
(ii) What is the profit maximizing output of the farm?
(c) Draw the demand curve for the farm.

Question thirteen

With an appropriate illustration, explain the circumstance in which an increase in output of a

producer would
(a) decrease his sales revenue;
(b) increase his sales revenue.

Question fourteen

a) What is the equilibrium of a consumer?

(b) Explain how a consumer attains equilibrium in spending his income.

Question fifteen
(a) Explain with examples, the following types of production:
Primary;
Secondary;
Tertiary.
(b) Give two reasons why primary production pre-dominates in developing countries

Question Sixteen

(a) What is a partnership?

(b) State any two advantages and any two disadvantages of a partnership

Question Seventeen

a) What is privatization?
(b) Give four reasons for government participation in economic activities in your country

Question Eighteen

a) Distinguish between location of industries and localization of industries.

(b) Describe any three advantages and any two disadvantages of locating industries in rural
areas.

Question Nineteen

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ECONOMIC REVISION QUESTIONS COMPILED BY MOHAMMED ABU SHAIBU

(a) Explain the function of money as a

(i) measure of value;
(ii) store of value.
(b) Show how inflation affects these two functions of money.

Question Twenty

a. What is a commercial bank?

b. Describe any four ways by which the Central Bank controls the amount or-credit given
by the commercial banks.

Question Twenty-One

a. What is incidence of taxes?

b. Explain all four principles of taxation.

Question Twenty-Two

The supply situation for rice in country X over a period is as shown in the table below. Use the
information in the table to answer the questions that follow:

Periods Price (1) Quantity Supplied

(bags)
December 2004 30 100
January 2007 40 150
April 2009 50 160

i. Calculate the coefficient of price elasticity of supply for rice between December 2004
and January 2007.
ii. Is the supply of rice elastic or inelastic? Give a reason for your answer.
iii. State any three reasons which may cause an increase in the supply of rice.

Question Twenty-Three

The following are the loans granted by a Commercial bank to different categories of individuals.
Use the information to answer the questions that follow:

Bakers $8,000; Farmers $8,000; Miners $7,000; Retailers $5,000;

Tailors $4,000; Teachers $6,000; Drivers $4,000; Fishermen $3,000.

(a) Arrange the information in the form of a table grouping the individuals into:

1. Primary sector;
2. Secondary Sector;

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ECONOMIC REVISION QUESTIONS COMPILED BY MOHAMMED ABU SHAIBU

3. Tertiary Sector.

(b) Express the loan to each sector as a ratio of the total loan granted.
(c) Present the total loans granted to the sector in a simple bar chart. (use of graph sheet is
essential).

Question Twenty-Four

a. What is a centrally planned economy?

b. Outline any four features of a capitalist economy?

Question Twenty-Five

1. What is international trade?

2. Explain any four advantages of international trade.

Question Twenty-Six

Outline any five reasons why small scale firms are common in West Africa.

Question Twenty-Seven

a. Explain with examples, the terms competitive demand and complementary demand.
b. With the aid of diagrams, analyse the effect of a decrease in the import duty on cars on
the price and consumption of petrol.

Question Twenty-Eight

a. Differentiate between shares and debentures.

b. Identify any four problems encountered by farmers in raising capital.

Question Twenty-Nine

a. Describe the following types of co-operation societies.

(i) consumers’ co-operative;
(ii) producers’ co-operative;
(iii) thrift and credit co-operative.

b. Highlight any two problems faced by co-operative societies in West Africa.

Question Thirty

a. What is economic development?

b. Outline any five features of a developing economy.

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ECONOMIC REVISION QUESTIONS COMPILED BY MOHAMMED ABU SHAIBU

Question Thirty-One

(a) Outline any three objectives of the African Development Bank.

(b) State any two achievements of the African Development Bank.

Question Thirty-Two

Explain how the following factors will affect the demand for a commodity X:

a. a decrease in the price of a complement Y;

b. an increase in consumers’ disposable income;
c. a decrease in the supply of a substitute P;
d. an increase in income tax.

Question Thirty- Three

a. State and explain the law of comparative cost advantage.

b. Give two limitations of the law as a theory of international trade.

Question Thirty- Four

(a) Define money.

(b) State the three motives for holding money.
(c) Mention two determinants of each of the motives for holding money.

Question Thirty-Five

(a) Distinguish between economic activities and an economic system.

(b) Explain the following terms:
i. production;

ii. distribution;

iii. consumption

Question Thirty-Six

a) Define
(i) elasticity of demand;
(ii) price elasticity of demand.

(b) State any four determinants of price elasticity of demand.

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ECONOMIC REVISION QUESTIONS COMPILED BY MOHAMMED ABU SHAIBU

(c) Draw curves illustrating

(i) fairly elastic demand;
(ii) perfectly inelastic demand.

Question Thirty-Seven

a. Define market in economics.

b. State any three features of a monopoly.
c. Outline any three sources of monopoly power.

Question Thirty-Eight

a. With the aid of a diagram, explain a minimum price.

b. State any five measures by which a minimum price for an agricultural produce can be
made effective.

Question Thirty-Nine

a. What is a supply schedule?

b. Using an example, show how a market supply schedule of a product is obtained from
individual supply schedules.
c. State three examples of exceptional demand.

Question Forty

a. Describe the output method of measuring the gross domestic product of a country.
b. How is the net national product at factor cost obtained from gross domestic product?
c. State two problems associated with the output method.

Question forty-One

The output and cost of production of rice (in bags) are presented in the table below. Use the
information in the table to answer the questions that follow:

Output of rice (in

bags
0 1 2 3 4
Total Variable
Cost(TVC) $
0 5 7 10 20

Total Cost(TC) $ 7 12 14 17 27

a. Calculate the
b. Average Fixed Cost (AFC) at output levels 0, 2 and 4.

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ECONOMIC REVISION QUESTIONS COMPILED BY MOHAMMED ABU SHAIBU

c. Marginal Cost (MC) at all levels of output.

d. If the price of a bag of rice were $ 10, calculate the profit/loss at all levels of output.
at what output level(s) is the maximum profit made?
e. Draw the marginal cost curve (the use of graph is essential).

Question forty-two

The table below shows the scale of preference of a student – Mr. Smith whose disposable income
is $ 7.00. Use the information in the table below to answer the questions that follow:

Items needed Price ($)

Textbook 5.00

Shirt 2.00

Shoes 3.00

Trouser 3.00

Notebook 1.00

School fees 7.00

Mattress 10.00

a. (i) What will Mr. Smith spend his money on?

(ii) Explain your answer in in 2(a) (i).

b. (i) What is the opportunity cost of Mr. Smith’s decision in 2(a)(i) ?

(ii) Explain your answer in 2(b) (i).
c. (i) If Mr. Smith’s disposable income increases to $ 10.00, what will he spend it on?
(ii) What is the opportunity cost of the decision in 2(c)(i)?
d. Define “scale of preference” and “opportunity cost”.
e. What is the importance of a scale of preference?

Question Forty-Three

(a) What is:

(i) Peasant farming;
(ii) Commercial farming?

(b) Describe five ways in which agriculture contributes to the economic development of your
country?

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ECONOMIC REVISION QUESTIONS COMPILED BY MOHAMMED ABU SHAIBU

Question Forty-four

a) Distinguish between small scale production and large scale production.

(b) Describe any five internal economies of large scale production.

Question Forty-five

a. Explain four benefits of industrial development in an economy.

(b) Outline any four measures that will encourage industrial growth in your country.

Question Forty-Six

a) Differentiate between direct and indirect taxation.

(b) Highlight any five advantages of indirect taxation to developing countries.

Question Forty-Seven

a. What is competitive supply?

(b)With the aid of illustrations, differentiate between a supply schedule and a supply curve.
(c) Explain how the supply of a commodity is affected by the following:

(i) an improvement in technology;

(ii) a rise in input prices;
(iii) a rise in the price of other commodities;
(iv) an increase in government subsidies on production.

Question Forty-Eight

a. State two characteristics of monopolistic competition

b. With the aid of diagram(s), explain why a firm in monopolistic competition is unable to earn
abnormal profits in the long run.
c. Differentiate between natural monopoly and legal monopoly.

Question Forty-Nine

a. Highlight the difference between creeping inflation and hyper-inflation.

b. List any four negative effects of inflation.
c. Outline four ways in which the government of your country can control inflation.

Question Fifty

a. What is perfect competition?

b. With the aid of diagrams, compare the short run equilibrium position of a perfect
competitor and an imperfect competitor.

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ECONOMIC REVISION QUESTIONS COMPILED BY MOHAMMED ABU SHAIBU

c. State any two features of an imperfect market.

Question Fifty-One

a. Distinguish between cash ratio and special deposit.

b. Explain how cash ratio and special deposits are used as instrument of monetary policy.
c. Describe any two instruments of fiscal policy in West Africa.

Question Fifty-Two

a. Outline any four problems of barter economy.

b. How has the introduction of money solved the problems outlined in 12(a) above?

Question Fifty-three

The cost function of a firm which produces plastic plates is shown in the table below.
Use the information in the table to answer the questions that follow:

Total Variable Total Cost Average Cost Marginal

Output Cost (TC) (AC) Cost
(in (TVC) (MC)
cartons)
0 - 100 -
1 250 350 350 -
2 450 P 275 200
3 575 675 R 125
4 600 700 175 25
5 675 Q 155 75
6 825 925 S 150

(a) (i) What is Average Fixed Cost (AFC)?

(ii) Calculate the average fixed cost at output levels 1 to 6.

(b) Calculate the values P, Q, R and S.

(c) Why does the average fixed cost decline as output increases?

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