Economics Exam Questions for SS2 Second Term with Answers

You’re welcome to our school exams series where we provide you with termly examination questions in different subjects. In today’s post, we will focus on Economics exam questions. We will cover Economics exam questions for SS2 Second term with answers. This means that we’ll be providing you with answers to the questions at the end. Also, you will get a few success tips on how to pass Economics examinations with flying colors. Remember to use the comments sections if you have questions, and don’t forget to join our Free Online Tutorial Classes on YouTube. (Subscribe to the Channel)

Introduction to Economics as a School Subject

Before we venture into Past Economics Exam Questions for SS2 Second term, here’s a brief introduction to the subject:

Economics is a social science that helps students understand how people, businesses, and governments make choices about the use of limited resources to satisfy human wants. It teaches learners about production, distribution, and consumption of goods and services, as well as concepts like demand, supply, money, and national income.

As a school subject, Economics develops students’ analytical and decision-making skills. It also prepares them to understand current economic issues such as inflation, unemployment, and budgeting—knowledge that is useful for personal life, business, and further studies in the social sciences.

Economics Exam Questions for SS2 Second Term

Economics Exam Questions for SS2 Second Term are divided into two parts:

• Part A
• Part B

The first part, namely, Part A is the objective test, and students are expected to attempt all questions in the section. Part B is the theory part, and students are expected to answer only one question from Section A and any three questions from Section B. (Total of 7 essay/theory answers.)

Note that what you have below are SS2 Economics Second Term Exam Past Questions made available to assist students in their revision for 2nd term examinations and also teachers in structuring standard examinations.

PART A: Objectives (60 MARKS — 1 mark each)

Instruction: Answer all questions in this section by choosing from the options lettered A—D. Each question carries equal marks.

1. The long run is a period when
A. all factors become variable
B. only the variable factors can be altered
C. the firm will cease to exist
D. only the fixed factors can be altered

2. The necessary condition for a firm to be in equilibrium is that marginal revenue is
A. greater than marginal cost
B. equal to marginal cost
C. less than average revenue
D. equal to average cost

3. Charging different prices for the same commodity is a feature of a
A. perfect competition
B. commodity market
C. monopoly market
D. monopolistic competition

4. Price elasticity of demand measures how responsive
A. buyers are to a change in income
B. sellers are to a change in price
C. sellers are to a change in income
D. consumers are to a change in price

5. The tendency for workers to value their leisure hours more than hours of work as wage rate increases gives rise to
A. backward bending supply curve
B. perfectly elastic supply curve
C. positively sloping supply curve
D. perfectly inelastic

6. The supply of rice in tons is given by the equation: Qs = 80 + 0.7P, where Qs = Quantity supplied, P = price in naira. Find Qs when P = N40
A. 108ton          B. 55tons
C. 52tons           D. 102tons

7. A price floor results in
A. excess supply
B. excess demand
C. queueing
D. rationing of goods

8. The demand curve for necessity is usually
A. vertical
B. backward bending
C. horizontal
D. negatively sloped

9. What effect will an increase in price have on the total revenue of a firm whose product has inelastic demand? total revenue will
A. increase
B. fall
C. fluctuate
D. remain unchanged

10. The demand for torch and batteries is an example of
A. complementary demand
B. composite demand
C. competitive demand
D. derived demand

11. A demand curve parallel to the Y-axis indicates
A. fairly elastic demand
B. perfectly inelastic demand
C. perfectly elastic
D. fairly inelastic demand

12. which of the following is an example of derived demand
A. textbook
B. labour
C. staple food
D. mobile phone

13. Black markets are usually the results of
A. price mechanism
B. price legislation
C. the activities of rich individuals
D. inadequate information

14. Another term for equilibrium price is?
A. price floor
B. market clearing price
C. demand price
D. satisfactory price

15. The amount of money that a firm receives from the sales of its output is called
A. total profit
B. total cost
C. total revenue
D. average revenue

16. which of the following is true of the monopolist
A. his average revenue curve is horizontal
B. He determines both price and output
C. he determines either price or output
D. his demand and marginal revenue curve are the same

17. The total number of people of working age who are willing and prepared to work at a given wage rate is the
A. demand of labour
B. supply of labour
C. labour force
D. occupational demand for labour

18. A downward sloping demand curve means that?
A. price must be lowered to sell more
B. demand falls as output rises
C. demand falls as output falls
D. total revenue declines as price is lowered

19. if the price of commodity X rises and consumers shift to commodity Y, then commodity X and Y are?
A. complements
B. substitutes
C. inferior goods
D. bought goods

20. An exceptional demand curve can result from?
A. increase in prices of raw materials
B. increase in the size of the population
C. expectation of future price increase
D. change in taste of the consumer

21. The intentional hiding, withholding, or stockpiling of a commodity to create artificial scarcity and drive up prices is called?
A. distribution       B. rationing
C. inventory           D. hoarding

22. A price floor is usually fixed
A. at the equilibrium and causes shortage
B. above the equilibrium and causes shortage
C. below the equilibrium and causes shortage
D. above the equilibrium and causes surplus

23. A market is in equilibrium when?
A. there is no government intervention
B. there is no free entry and exit
C. buyers and sellers are free to sell more goods
D. the demand and supply are equal

24. If the coefficient of price elasticity of demand of a product is zero, then its demand curve will be?
A. positively sloped
B. horizontal
C. negatively sloped
D. vertical

25. If less of a good is bought as one’s income increases, such a good is
A. a normal good
B. a luxury
C. a necessity
D. an inferior good

26. The additional cost incurred by a firm as a result of producing one more unit of output is called?
A. marginal cost
B. variable cost
C. total cost
D. average cost

27. Which of the following is not associated with minimum price legislation?
A. excess demand
B. wastage of resources
C. excess supply
D. unemployment

28. The short-run in production is the time period when
A. at least a factor is fixed while others are variable
B. all factors of production are variable
C. techniques of production can easily be changed
D. variable factors cannot be changed

29. In perfect competition, the average revenue curve of a firm is
A. below the marginal revenue curve
B. the same as marginal revenue curve
C. download sloping
D. convex to the origin

30. If the coefficient of income elasticity of demand for rice is positive, then rice is a/an
A. inferior good
B. normal good
C. giffen good
D. abnormal good

31. In the long run, as individuals receive higher wages, it causes
A. demand for food to decrease
B. demand for leisure to decrease
C. supply of labour to decrease
D. supply of normal goods to decrease

32. The price of soap rose from ₦10 to ₦20 causing a trader to increase her supply from 50 to 120 boxes per week. This makes supply ___________
A. unitary elastic
B. perfectly inelastic
C. inelastic
D. fairly elastic

33. The upward shift in the supply curve for a commodity indicates___________
A. a decrease in supply
B. an increase in quantity supplied
C. a reduction in quantity supplied
D. an increase in supply

34. The effect of increase in demand on the equilibrium price and quantity is that
A. both equilibrium price and quantity will fall
B. both equilibrium price and quantity will increase
C. both equilibrium price and quantity will remain the same
D. equilibrium price will rise but equilibrium quantity will fall.

35. Government can stabilize farmers’ incomes by___________
A. fixing maximum prices
B. encouraging them to produce surplus output
C. fixing minimum prices
D. Increasing taxes on inputs

36. When market supply increases, the equilibrium price___________
A. rises and quantity falls
B. and quantity fall
C. and quantity increase
D. falls and quantity rises

37. The relationship between the marginal revenue (MR) and the average revenue (AR) of a monopolist is that the marginal revenue curve _____
A. is above the average revenue curve
B. is vertical while the average revenue curve is horizontal curve
C. and the AR curve are downward sloping and are identical
D. slopes down to the right and is below the AR

Use the table below to answer questions 38, 39 and 40

The age distribution of a country’s population is shown below. Use the information is answer the question below.

38. What is the percentage of the working population?
A. 75%             B. 15%
C. 45%             D. 60%

39. What is the percentage of the dependent population?
A. 75%            B. 60%
C. 15%            D. 40%

40. What is the dependency ratio?
A. 2:3             B. 3:2
C. 1:2             D. 6:1

41. A diagram showing the possible combination of two commodities that can be produced given a particular amount of resources and level of technology in an economy within a given period of time is called?
A. demand curve
B. production possibility curve
C. indifference curve
D. isoquant

42. If commodity X and Y are substitute, their coefficient of cross elasticity of demand (XED) will be?
A. one            B. positive
C. zero           D. negative

43. Which of the following factors is not a cause of change in demand? Changes in
A. the size of the population
B. price of the commodity
C. income distribution
D. taste and fashion

44. If the quantity demanded of a commodity increases from 20 units to 30 units when there is an increase in price from $4.00 to $5.00, the elasticity of demand is
A. 0.50             B. 2.00
C. 0.65             D. 2.50

45. In perfectly elastic supply, the supply curve
A. is vertical
B. slopes downward
C. horizontal
D. slopes upward

46. If the government imposes a minimum price on a commodity
A. government regulation is no longer needed
B. the market will be cleared in the short-run
C. excess demand occurs
D. market surplus occurs

47. A monopolist may enjoy abnormal profit only if its
A. price exceeds average total cost
B. demand curve is perfectly elastic
C. expenditure on advertisement increases
D. marginal cost exceeds marginal revenue

48. A rightward shift in the supply curve of a commodity is brought about by an increase in?
A. the price of the commodity
B. the level of technology
C. cost of production
D. taxation

49. The degree of responsiveness of demand to changes in the price of the commodity is called?
A. price elasticity of demand
B. cross elasticity of demand
C. income elasticity of demand
D. cost elasticity of demand

50. The total number of hours which workers are willing and able to offer for work at a particular wage rate and a particular time is called
A. supply of labour
B. labour force
C. demand for labour
D. wage rate

51. In order to protect consumers from being exploited by producers the Government set the _______________
A. price floors
B. minimum price
C. maximum price
D. market clearing price

52. Price ceilings are set
A. above the equilibrium price
B. at the equilibrium price
C. below the equilibrium price
D. through the forces of demand and supply

53. In a competitive market, the wage is determined
A. through the activities of the trade union
B. through government policy
C. through the market forces of demand and supply
D. by employers

Use the diagram below to answer questions 54, 55 and 56

54. What is the Total Revenue (TR)?
A. OSRM            B. SPQR
C. OPQM           D. OSQM

55. What is the Total Cost?
A. OSRM           B. OPQM
C. SPQR             D. OSQM

56. The shaded region (SPQR) represents?
A. normal profit
B. supernormal profit
C. loss
D. zero economic profit

Use the information below to answer questions 57 and 58

If the demand function is Qd = 30 – P and the supply function is Qs = 15 + 2P.

57. What is the equilibrium price?
A. 10             B. 5
C. 12             D. 15

58. What is the equilibrium quantity?
A. 15            B. 20
C. 25            D. 18

59. The quantity of goods and services which a given wage can buy is called?
A. Money wage
B. nominal wage
C. real wage
D. minimum wage

60. A persistent increase in the general price of goods and services is called?
A. economic growth
B. deflation
C. unemployment
D. inflation

PART TWO: THEORY

SECTION A

Instruction: Answer only one question from this section

1. The table below shows the quantity demanded of beef as income of the consumer increased from ₦20,000 to ₦36,000. Use the table to answer the questions that follows:

(a) calculate the coefficient of income elasticity of demand (YED)
(b) what kind of good is beef to the consumer?
(i) give reason for your answer in (b) above
(c) differentiate between inferior goods and Giffen goods

2. Use the diagram below to answer the questions that follows:

2 (a) (i) What is the total revenue (TR) of the firm
(ii) What is the total cost (TC) of the firm
(iii) What is the profit of the firm
(b) (i) state the type of profit represented by the shaded region
(ii) in which market structure is the firm operating in?
(iii) give reason for your answer in b(ii) above (2 marks)

SECTION B

Instruction: answer only three (3) questions from this section

3. The market for apples is represented by the following demand and supply functions respectively: Qd = 100 – 3p and Qs = 20 + 2p.
(a) calculate the quantity supplied when price is (i) 10 (ii) 15 (iii) 20
(b) (i) Determine the equilibrium price and equilibrium quantity of apples in the market
(ii) If the price of apple is fixed at $3.00, what will be the excess demand or excess supply

4. (a) Define minimum price legislation.
(b) with the aid of a diagram explain how setting minimum wage by government creates unemployment
(c) Outline any three effects of price ceiling.

5. (a) Stale three characteristics of perfect competition,
(b) With the aid of diagrams, explain equilibrium positions of a perfectly competitive firm in the: (i) short-run; (ii) long-run

6. (a) Define labour market
(b) state five (5) factors that affect the supply of labour
(c) with the aid of a diagram, explain how wage is determined
(i) in competitive market
(ii) through government policy

7. (a) Define elasticity of demand?
(b) What factors determine elasticity of demand for a commodity?
(c) Due to an increase in the price of OMO from ₦20 to ₦30, a seller increases the quantity offered for sale from 400 units to 450 units
(d) Calculate elasticity of supply ii. Is supply elastic or inelastic? Iii. State reasons for your answer.

Remember to use the comments sections if you have questions, and don’t forget to join our Free Online Tutorial Classes on YouTube. (Subscribe to the Channel)

Answers to Economics Exam Questions for SS2 Second Term

Answers to PART 1 (Objective Test)

The following table gives the correct answers to the objective part of Economics exam questions for SS2 Second term. If you are using a mobile device, hold the table and scroll to the right or left for a complete view.

So here you have the answers to the objective part of Economics Exam Questions for SS2 Second term. Use the comments section to let me know if you have any questions you would want me to clarify or discuss further.

Answers to Part 2 (Theory)

1.

Income and Quantity Demanded Table

(a) Calculation of Coefficient of Income Elasticity of Demand (YED)

YED = Percentage change in quantity demanded ÷ Percentage change in income

Change in quantity demanded = 96 − 120 = -24

Average quantity demanded = (120 + 96) ÷ 2 = 108

Percentage change in quantity demanded = -24 ÷ 108 × 100 = -22.22%

Change in income = 36,000 − 20,000 = 16,000

Average income = (20,000 + 36,000) ÷ 2 = 28,000

Percentage change in income = 16,000 ÷ 28,000 × 100 = 57.14%

YED = -22.22 ÷ 57.14

YED = -0.39

(b) Type of Good

Beef is an inferior good.

(i) Reason

As the income of the consumer increased from ₦20,000 to ₦36,000, the quantity demanded of beef reduced from 120kg to 96kg. This shows an inverse relationship between income and demand.

(c) Difference Between Inferior Goods and Giffen Goods

2.

(a)(i) Total Revenue (TR)

TR = OPaQc

(ii) Total Cost (TC)

TC = OCbQc

(iii) Profit of the Firm

Profit = Total Revenue − Total Cost

Profit = CPab

(b)(i) Type of Profit Represented by the Shaded Region

The shaded region represents supernormal (abnormal) profit.

(ii) Market Structure

The firm is operating under perfect competition.

(iii) Reasons

• The demand curve is horizontal and equal to AR and MR.
• The firm is a price taker.
• Equilibrium occurs where MC = MR.

3.

Demand Function: Qd = 100 − 3P

Supply Function: Qs = 20 + 2P

(a) Quantity Supplied

(i) When Price = 10

Qs = 20 + 2(10)

Qs = 20 + 20 = 40

(ii) When Price = 15

Qs = 20 + 2(15)

Qs = 20 + 30 = 50

(iii) When Price = 20

Qs = 20 + 2(20)

Qs = 20 + 40 = 60

(b)(i) Equilibrium Price and Quantity

At equilibrium:

Qd = Qs

100 − 3P = 20 + 2P

100 − 20 = 2P + 3P

80 = 5P

P = 16

Substitute P = 16 into Qs:

Qs = 20 + 2(16)

Qs = 20 + 32 = 52

Equilibrium Price = 16

Equilibrium Quantity = 52

(ii) When Price is fixed at $3.00

Qd = 100 − 3(3) = 91

Qs = 20 + 2(3) = 26

Excess Demand = 91 − 26 = 65

Therefore, there is an excess demand of 65 units.

4.

(a) Definition of Minimum Price Legislation

Minimum price legislation is a government policy that fixes the minimum price below which goods and services cannot be sold.

(b) How Minimum Wage Creates Unemployment

When government fixes minimum wage above the equilibrium wage rate, the supply of labour becomes greater than the demand for labour. More workers are willing to work while employers demand fewer workers. This creates unemployment.

(c) Three Effects of Price Ceiling

• It leads to excess demand or shortage.
• It encourages black market activities.
• It may lead to rationing of goods.

5.

(a) Three Characteristics of Perfect Competition

• There are many buyers and sellers.
• Products are homogeneous.
• There is free entry and exit of firms.

(b)(i) Short-run Equilibrium of a Perfectly Competitive Firm

In the short-run, a perfectly competitive firm reaches equilibrium where MC = MR. The firm may earn supernormal profit, normal profit, or loss depending on the position of the AC curve.

(ii) Long-run Equilibrium of a Perfectly Competitive Firm

In the long-run, firms earn only normal profit because free entry and exit of firms eliminate supernormal profit and losses. Equilibrium occurs where MC = MR = AR = AC.

6.

(a) Definition of Labour Market

Labour market is a market where labour services are bought and sold.

(b) Five Factors Affecting Supply of Labour

• Wage rate
• Population size
• Level of education and training
• Government policy
• Mobility of labour

(c)(i) Wage Determination in Competitive Market

In a competitive labour market, wage rate is determined by the interaction of demand and supply of labour. Equilibrium wage is reached where demand equals supply.

(ii) Wage Determination Through Government Policy

Government may fix minimum wage above the equilibrium wage rate. This can increase workers’ income but may also create unemployment if employers cannot employ more workers.

7.

(a) Definition of Elasticity of Demand

Elasticity of demand is the degree of responsiveness of quantity demanded to changes in price, income, or other factors.

(b) Factors Determining Elasticity of Demand

• Availability of substitutes
• Nature of the commodity
• Level of consumer income
• Proportion of income spent on the commodity
• Time period

(c) Calculation of Elasticity of Supply

Initial Price = ₦20

New Price = ₦30

Initial Quantity = 400

New Quantity = 450

Change in Quantity = 450 − 400 = 50

Average Quantity = (450 + 400) ÷ 2 = 425

Percentage Change in Quantity = 50 ÷ 425 × 100 = 11.76%

Change in Price = 30 − 20 = 10

Average Price = (30 + 20) ÷ 2 = 25

Percentage Change in Price = 10 ÷ 25 × 100 = 40%

Elasticity of Supply = 11.76 ÷ 40

Elasticity of Supply = 0.29

(d)(ii) Type of Supply

Supply is inelastic.

(iii) Reason

Supply is inelastic because the elasticity coefficient is less than 1. The percentage change in quantity supplied is less than the percentage change in price.

How to Pass Economics Exam Questions for SS2 Second Term

Economics can be very easy and interesting when you understand the basic concepts and practice regularly. Many students fail Economics not because the subject is too difficult, but because they do not study the right way. If you want to score high in your SS2 Second Term Economics examination, you must prepare seriously and study smartly.

1. Know the Topics in the Scheme of Work

Start by identifying all the topics for the second term. Topics like demand and supply, elasticity, market structures, labour market, price control, revenue concepts, and production are very important. Make sure you read and understand each topic before moving to another one.

2. Understand Definitions and Key Terms

Economics contains many definitions and technical terms. Learn the meanings of terms such as inflation, equilibrium price, elasticity of demand, monopoly, labour force, and marginal cost. In essay questions, definitions usually carry marks, so write them clearly and correctly.

3. Practice Calculations Regularly

SS2 Economics involves calculations. Learn how to solve questions on elasticity, equilibrium price, total revenue, marginal cost, and demand and supply equations. Practice many examples until you can solve them confidently without assistance.

4. Study Graphs and Diagrams

Graphs are very important in Economics. Practice how to draw and explain demand and supply curves, monopoly graphs, perfect competition graphs, and labour market diagrams. Always label your diagrams properly because neat diagrams can earn extra marks.

5. Read Past Questions

Past questions help you understand the pattern of examination questions. Solve objective and essay questions from previous years. This will improve your speed, confidence, and understanding of important topics.

6. Learn How to Answer Essay Questions

In essay questions, answer directly and explain your points clearly. Number your answers correctly and use simple English. Where necessary, use headings, bullet points, calculations, and diagrams to make your work neat and easy to read.

7. Attend Classes and Ask Questions

Pay attention during lessons and do not be afraid to ask questions when you are confused. Some Economics topics may look difficult at first, but a simple explanation from your teacher can make them easier to understand.

8. Create a Reading Timetable

Avoid reading only during examination period. Create a timetable and study Economics regularly. Reading for one or two hours daily is better than trying to read everything in one night.

9. Revise Frequently

Revision helps you remember what you have learned. Go through your notes, textbooks, class exercises, and assignments often. Focus more on areas where you are weak.

10. Be Calm During the Examination

Read every question carefully before answering. Start with questions you understand very well. Avoid rushing, and manage your time properly. In objective questions, think well before shading your answers.

It’s a wrap!

If you need more clarification on SS2 Second Term Questions on Economics, you can use the comments box below. We’ll be there to answer you asap. Don’t forget to join our Free Online Tutorial Classes on YouTube. (Subscribe to the Channel)

Best wishes…