Advanced level 2025 South West mock Economics 1
Advanced level 2025 South West mock Economics 1
- Which of the following is true about a command economy?
A. Profit is the main motivating factor.
B. Resources are privately owned.
C. There is some degree of consumer sovereignty.
D. The role of the price mechanism is absent.
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Question 2 is based on the figure 1 below which shows a production possibilities curve.
- Figure 1
- Cereal
- Capital
- Cotton
- If this economy decides to produce at point Z
A. the economy has not achieved full employment
B. the economy is producing both food and clothing
C. the maximum output of cotton is being produced.
D. the economy can survive by importing cereal.
- The spill-over undesirable effects of production are known as
A. private costs.
B. economic costs.
C. external costs.
D. social costs.
- Which of the following population theories has an optimistic view about population increase?
A. the Boserup theory
B. the Malthusian theory
C. the Demographic Transition theory
D. the Revisionist theory
- A commodity that consumers may undervalue but the government believes it to be ‘good’ for them is known as a
A. demerit good.
B. public good.
C. merit good.
D. collective good.
- An increase in Gross Domestic Product at Factor Cost could result from
A. a decrease in exports.
B. an increase in indirect taxes.
C. a decrease in property income paid abroad.
D. an increase in subsidies.
- The amount of money the government needs to borrow each year when government’s expenditure exceeds its income is called:
A. crowding-out effect.
B. public sector net cash requirement.
C. national debt.
D. government final consumption.
- When a specific rate of unemployment co-exists with a zero rate of inflation, the economy is said to be experiencing
A. casual unemployment.
B. structural unemployment.
C. natural rate of unemployment.
D. full employment.
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Question 9 is based on Figure 2 below which shows the equilibrium of a firm (producer).
- Figure 2
- Isoquant
- Labour
- Identify the line AB?
A. isoprofit curve
B. isocost curve
C. indifference map
D. indifference curve.
- The supply of labor in Cameroon can be increased if
A. there is a reduction in the minimum wage.
B. government proclaims holidays.
C. there is an increase in the retirement age.
D. people do not have the right skills.
- Which of the following is NOT used when measuring national income with the income method?
A. imputed charges for non-traded capital.
B. stock depreciation.
C. capital consumption.
D. ownership of dwelling.
- The national debt is considered reproductive to an economy when
A. it goes to finance a vaccination campaign to the country’s labor force.
B. it generates income.
C. it is contracted from internal sources.
D. it goes to finance current consumption.
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Question 13 is based on the diagram below.
- Tax Revenue
- 0
- The above diagram is an illustration of:
A. the Engel curve.
B. the trade cycle.
C. the Laffer curve.
D. the Philips curve.
- When the Long run average cost curve is falling, it means the firm is experiencing
A. increasing returns to scale.
B. increasing returns.
C. decreasing returns to scale.
D. increasing returns.
- When a factor of production is relatively elastic in supply, its
A. economic rent will be greater than transfer earnings.
B. economic rent will be zero.
C. transfer earnings will be greater than economic rent.
D. economic rent will be equal to transfer earnings.
- What does the slope of a budget line indicate?
A. the marginal rate of substitution.
B. the marginal rate of technical substitution.
C. the price ratio of both goods.
D. the product of prices of both goods.
- Consider a machine that costs 10million FCFA and is expected to earn an investor a return of 10million FCFA at the end of its lifespan of one year. What would be the investment decision if the rate of interest is 10%?
A. invest.
B. do not invest.
C. indifferent.
D. observe the market demand.
- In a situation of shortage in the commodity market, the main function of price mechanism would be to:
A. allocate economic resources.
B. ration resources.
C. signal to businessmen on profitability.
D. reward factors of production.
- A two-sector economy has a total consumption spending of 100millionFCFA + 0.8Yd and investment of 200 million FCFA. What is the value of savings at equilibrium in this economy?
A. 200 million FCFA.
B. 560 million FCFA.
C. 300 million FCFA.
D. 1500 million FCFA
- A physical increase in stocks odcurs when :
A. stocks on the 1st of January exceed stocks on 31st December.
B. stocks on the 31st of December less than stocks on 1st of January.
C. stocks on the 1st of January slightly more than stocks on 31 December.
D. stocks on the 31st of December exceeds stock on 1st of January.
- The principle that people with higher income should pay higher tax rates implies
A. certainty.
B. impartiality.
C. vertical equity.
D. horizontal equity.
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Questions 21 and 22 are based on the Figure 3 below.
- Figure 3
- Food (Tons)
- 80
- 70
- 60
- 50
- 20
- 0
- 0
- 30
- 60
- 90
- 120
- 150
- 180
- 210
- 240
- 270
- Cars (Units)
- What is the value of export following complete specialization?
A. 120 units of cars.
B. 180 units of cars.
C. 80 units of food.
D. 60 units of food.
- How many units of cars will exchange for one unit of food?
A. 2 units of cars.
B. 3 units of cars.
C. 1/5 units of cars.
D. 120 units of cars.
- Which of the following is a financial resource and facility used by countries to solve BoP disequilibrium?
A. fiat money
B. convertible currency
C. international liquidity
D. fiduciary issue
- The tendency for unemployed persons to remain unemployed so as to continue benefiting from unemployment allowances is known as
A. unemployment spiral
B. unemployment trap
C. mass unemployment
D. voluntary unemployment
- In a society where potatoes are considered as Giffen good, a fall in the price of potatoes will more likely result to
A. fall in the quantity demanded for potatoes.
B. increase in quantity demanded for potatoes.
C. increase in demand for potatoes.
D. decrease in demand for potatoes.
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Question 27 is based on the information on table 1 below:
- Table 1
- | Output(kg) | 0 | 20 | 30 | 40 | | :——— | :—– | :—– | :—– | :—– | | TC(FCFA) | 12,000 | 15,000 | 36,000 | 42,000 |
- What is the average variable cost at output 30?
A. 800 FCFA.
B. 400 FCFA.
C. 1200 FCFA.
D. 12000 FCFA.
- Which of the following factors will influence the demand for idle balances?
A. the size of transactions.
B. the interval of payment.
C. the general price level.
D. the rate of interest.
- Given the Fisher’s equation MV=PT. The average number of times a unit of currency changes hands is captured by:
A. M.
B. P.
C. V.
D. T.
- Those who do not benefit from inflation include:
A. debenture holders.
B. real asset owners.
C. business men.
D. borrowers.
- A Country which is interested in the long-term wellbeing of its citizens should
A. produce an equal proportion of consumer and capital goods.
B. dedicate more resources to consumption
C. dedicate more resources to investment.
D. produce more consumer goods than capital goods.
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Question 32 is based on Figure 4 below.
- Figure 4
- Price (FCFA)
- 80
- 50
- 40
- 20
- Quantity
- What is the value of consumer surplus?
A. 1, 600 FCFA
B. 1,000 FCFA
C. 300 FCFA.
D. 600 FCFA.
- The Injections in an open economy without government include:
A. consumption and investment.
B. Investment and exports.
C. government spending and investment.
D. taxes and government spending.
- The best option available in preserving the value of money is to:
A. keep in savings account.
B. buy government securities.
C. purchase gold.
D. buy durable consumer goods.
- Which of the following speculators would sell shares because of an anticipated fall in share prices?
A. bull.
B. bear.
C. stag.
D. broker.
- Variable costs of production are also known as
A. indirect costs.
B. Supplementary.
C. direct costs.
D. overhead costs.
- An employer will successfully resist the demand for wage increase by a trade union when
A. the trade union has a sound financial strength.
B. there is an increase in the proportion of labor cost to the total costs.
C. the job is very risky.
D. the marginal revenue product of labor increases.
- Which of the following securities do not have a fixed rate of return?
A. debentures.
B. ordinary shares.
C. preference shares.
D. treasury bills.
- According to the Marginal efficiency of capital theory, the relationship between interest rate and investment is
A. inverse.
B. direct.
C. linear.
D. independent.
- Which of the following is a consequence of a rapidly increasing ageing population?
A. increase demand for education.
B. increase demand for healthcare.
C. increase demand for housing.
D. increase pressure on available resources.
- When the interest rate is increasing, the demand for money for the idle balance will
A. Increase.
B. remain constant.
C. decrease.
D. increase and later fall.
- Which of the following is an internal source of growth of firms?
A. plough back profit.
B. hire purchase.
C. integration.
D. cartels.
- Money which only exists in electronic form and stored in electronic devices like computers is:
A. Foreign currency.
B. Bank deposits
C. digital currency.
D. fiduciary issue.
- The formula C+I+G+X measures:
A. Total Final Expenditure at market prices.
B. Total Domestic Expenditure at factor cost.
C. Gross Domestic Expenditure.
D. Gross National Expenditure.
