New Curriculum Third Term Economics examination for SS 1

Class: SSS 1
Term: Third Term
Subject: Economics
Time: 2 Hours
Total Marks: 70

SECTION A — OBJECTIVES (40 MARKS)
Instruction: Answer all 40 questions. Choose the most appropriate option. Each question carries 1 mark.

1. A workshop combines timber, workers, equipment and a risk-bearing organiser. Identify the final productive factor.
   (a) land alone    (b) enterprise    (c) physical capital alone    (d) labour alone
2. Quantity supplied increases from 30 to 40 when price rises. Identify the relevant law.
   (a) the law of supply    (b) a fall in supply with price    (c) a fixed supply quantity    (d) an inverse supply-price relation
3. A site doubles its visitor count but still receives the same number of orders. Identify the conversion-rate effect.
   (a) double automatically    (b) stay unchanged    (c) rise fourfold    (d) fall to half its former rate
4. A trader requests cash on delivery from an unfamiliar domestic customer. Identify the business risk reduced.
   (a) risk of non-payment    (b) the size of the buyer's order    (c) the physical weight of goods    (d) the need for transport
5. When production expands beyond efficient management, coordination difficulties may lead to _____.
   (a) automatic constant unit costs    (b) guaranteed zero waste    (c) the disappearance of supervision    (d) diseconomies of scale
6. ________ is the shortest distribution channel between a producer and the final customer.
   (a) producer–wholesaler–retailer distribution    (b) direct distribution    (c) three-stage distribution    (d) importer–wholesaler–retailer distribution
7. An assembly line raises daily output from 80 to 120 units with unchanged staffing. Calculate percentage growth.
   (a) 40%    (b) 150%    (c) 33⅓%    (d) 50%
8. Which of these is NOT a typical benefit of trade?
   (a) Greater variety of goods    (b) Complete removal of production costs    (c) Access to wider markets    (d) Opportunities for specialisation
9. The correct step when interpreting a supply-and-demand diagram is to _____.
   (a) read price from the horizontal axis by default    (b) locate the intersection and read both axes    (c) ignore units on quantity axis    (d) assume the highest plotted price is equilibrium
10. The correct step before interpreting online sales data is to _____.
    (a) remove all low-sales days without explanation    (b) assume each visit represents a sale    (c) verify dates, units and missing entries    (d) mix naira amounts with item counts indiscriminately
11. A bakery buys extra ovens but its sales do not increase. Identify the main commercial risk.
    (a) guaranteed doubling of sales    (b) immediate elimination of overhead costs    (c) idle productive capacity and higher fixed-cost burden    (d) certain growth in market share
12. An Aba trader exports fabric to a customer in Accra. Classify the transaction.
    (a) foreign trade    (b) home retail trade only    (c) local wholesale trade only    (d) interhousehold barter within one town
13. At ₦100, demand exceeds supply by 40 units. The market experiences a ________.
    (a) surplus of 40 units    (b) balanced quantity of 80 units    (c) shortage of 40 units    (d) surplus of 120 units
14. The main reason countries specialise in some goods and trade for others is that _____.
    (a) every country possesses identical resources    (b) foreign exchange rates never change    (c) resources and production costs differ    (d) imported goods cannot face tariffs
15. Cassava roots are processed into garri for sale. Classify the production activity.
    (a) pure consumption without output    (b) production through processing    (c) only barter exchange    (d) financial intermediation
16. Fresh vegetables have a nearby urban market. Identify the losses that a shorter distribution channel can reduce.
    (a) handling delays and spoilage    (b) the need for consumer demand    (c) all marketing costs to zero    (d) every quality requirement
17. The ________ is the table relating possible prices to quantities buyers are willing and able to purchase.
    (a) demand schedule    (b) production payroll    (c) warehouse checklist    (d) company cashbook
18. A digital noticeboard reports current commodity prices to traders. Identify the search problem ICT helps solve.
    (a) the need for a physical commodity    (b) every cause of inflation    (c) information delay and search costs    (d) all business competition
19. The main reason specialisation may lower unit costs is that _____.
    (a) every worker performs all tasks simultaneously    (b) businesses stop using capital    (c) transport is no longer required    (d) practice and focused tasks can raise productivity
20. The main reason businesses protect digital customer data is _____.
    (a) to guarantee all customers buy again    (b) to avoid maintaining backups    (c) to reduce privacy and fraud risks    (d) to remove the need for correct entries
21. A Nigerian exporter gains overseas buyers but bears foreign-currency risk. Interpret the opportunity and risk together.
    (a) a guarantee of stable revenue    (b) a foreign-trade opportunity accompanied by exchange risk    (c) the absence of transport needs    (d) a complete elimination of domestic markets
22. Which decision best justifies adding a wholesaler to a distribution chain?
    (a) The producer already delivers cheaply to every buyer.    (b) Retailers are widely dispersed and require small consignments.    (c) Goods are entirely digital and self-delivered.    (d) All consumers purchase directly in bulk.
23. Which case is NOT an appropriate economic use of ICT?
    (a) Comparing online supplier quotations    (b) Monitoring daily sales trends    (c) Using secure electronic payments    (d) Sharing private customer passwords in a public group
24. The ________ method of production chiefly transforms raw materials into new goods.
    (a) primary extraction    (b) tertiary distribution    (c) retail consumption    (d) secondary production
25. Read the supply and demand diagram and identify equilibrium price and output.
    (a) ₦150 and 60 units    (b) ₦100 and 80 units    (c) ₦200 and 80 units    (d) ₦150 and 80 units
26. Average production cost falls from ₦700 to ₦600 as output doubles. Explain what this trend suggests about scale.
    (a) a 100% rise in average cost    (b) an increase of ₦100 per unit    (c) unchanged average cost    (d) falling average cost as output expands
27. All are potential limitations of ICT in trade EXCEPT _____.
    (a) cyber fraud risk    (b) faster verified exchange of market information    (c) connectivity failure    (d) costs of staff training
28. A price schedule shows demand falling from 70 to 40 units as price rises. State the economic law illustrated.
    (a) the law of demand    (b) an upward-sloping demand relationship    (c) a constant quantity demanded    (d) the law of increasing supply only
29. Identify a possible human-resource cost of highly repetitive specialisation.
    (a) automatic elimination of coordination costs    (b) a guarantee against machine breakdown    (c) unlimited adaptability without retraining    (d) worker boredom and loss of task flexibility
30. The main reason trade promotes specialisation is that _____.
    (a) producers can exchange surplus output for other needs    (b) each household must produce all its needs    (c) every imported product is free    (d) goods cease to have prices
31. A firm purchases products made in another Nigerian state. Identify the trading category.
    (a) importing into Nigeria    (b) exporting from Nigeria    (c) domestic trade    (d) international transit trade
32. Which of these is NOT a factor of production?
    (a) Workers' skills and effort    (b) Factory equipment    (c) The retail selling price of the final product    (d) Land used as premises
33. A small enterprise and a large enterprise differ in scale chiefly in _____.
    (a) output capacity and resources employed    (b) whether either uses labour    (c) whether either sells a product    (d) whether either faces customer demand
34. A shop studies electronic sales records from several weeks. Explain the value of these records for decisions.
    (a) automatically proves causation from one sale    (b) guarantees that all future prices are fixed    (c) replaces every stock count permanently    (d) provides timely transaction data for comparison
35. Which situation does NOT represent movement along a fixed demand curve?
    (a) A higher own price reduces quantity demanded.    (b) A lower own price increases quantity demanded.    (c) A rise in household income shifts purchasing plans.    (d) Price changes are considered with other factors unchanged.
36. Which change would best prevent production stoppage when one specialist is absent?
    (a) Cross-train workers for critical stages    (b) Eliminate task documentation    (c) Depend on one employee for every operation    (d) Delay maintenance indefinitely
37. A distribution chain is producer → wholesaler → retailer → consumer. Count the intermediary levels.
    (a) one intermediary stage    (b) two intermediary stages    (c) three intermediary stages    (d) no intermediary stage
38. Online orders increased from 20 in week one to 40 in week four. Calculate percentage growth.
    (a) 50%    (b) 20%    (c) 100%    (d) 75%
39. All of the following can benefit domestic trade EXCEPT _____.
    (a) employment in distribution    (b) movement of goods between regions    (c) market access for local producers    (d) removal of the need for any payment agreement
40. Producers can supply more at any given price after input costs fall. Describe the expected shift in the supply curve.
    (a) a leftward shift of supply    (b) an outward shift of supply    (c) an inward shift of demand caused by input cost    (d) no supply response at any price

SECTION B — THEORY (30 MARKS)
Instruction: Answer Question 1 and any other TWO questions. Each question carries 10 marks. Show all workings where calculations are required.

Question 1 (10 marks)
(a) Explain the factors of production using a small bakery. Identify who bears entrepreneurial risk. (4 marks)
(b) Describe two advantages and one disadvantage of division of labour. Propose one realistic measure to reduce the disadvantage. (6 marks)

Question 2 (10 marks)
(a) At prices ₦100, ₦150 and ₦200, demand is respectively 80, 60 and 40 units while supply is 40, 60 and 80 units. Identify equilibrium and the shortage at ₦100. (4 marks)
(b) Explain how a rise in household income and a fall in producers’ input costs could change market equilibrium. Use correctly labelled demand and supply curves. (6 marks)

Question 3 (10 marks)
(a) Compare domestic and foreign trade using one Nigerian example each; state one foreign-trade risk. (4 marks)
(b) A trader must choose between selling directly online or using wholesalers and retailers. Explain three criteria for choosing a distribution channel. (6 marks)

Question 4 (10 marks)
(a) Online orders in four successive weeks are 20, 25, 35 and 40. Calculate percentage growth from week 1 to week 4, showing workings. (4 marks)
(b) Discuss three ways ICT can help markets function more efficiently, while explaining an associated risk for each. (6 marks)

Objective Marking Scheme
Question 1 – ✅ (b) enterprise
Question 2 – ✅ (a) the law of supply
Question 3 – ✅ (d) fall to half its former rate
Question 4 – ✅ (a) risk of non-payment
Question 5 – ✅ (d) diseconomies of scale
Question 6 – ✅ (b) direct distribution
Question 7 – ✅ (d) 50%
Question 8 – ✅ (b) Complete removal of production costs
Question 9 – ✅ (b) locate the intersection and read both axes
Question 10 – ✅ (c) verify dates, units and missing entries
Question 11 – ✅ (c) idle productive capacity and higher fixed-cost burden
Question 12 – ✅ (a) foreign trade
Question 13 – ✅ (c) shortage of 40 units
Question 14 – ✅ (c) resources and production costs differ
Question 15 – ✅ (b) production through processing
Question 16 – ✅ (a) handling delays and spoilage
Question 17 – ✅ (a) demand schedule
Question 18 – ✅ (c) information delay and search costs
Question 19 – ✅ (d) practice and focused tasks can raise productivity
Question 20 – ✅ (c) to reduce privacy and fraud risks
Question 21 – ✅ (b) a foreign-trade opportunity accompanied by exchange risk
Question 22 – ✅ (b) Retailers are widely dispersed and require small consignments.
Question 23 – ✅ (d) Sharing private customer passwords in a public group
Question 24 – ✅ (d) secondary production
Question 25 – ✅ (a) ₦150 and 60 units
Question 26 – ✅ (d) falling average cost as output expands
Question 27 – ✅ (b) faster verified exchange of market information
Question 28 – ✅ (a) the law of demand
Question 29 – ✅ (d) worker boredom and loss of task flexibility
Question 30 – ✅ (a) producers can exchange surplus output for other needs
Question 31 – ✅ (c) domestic trade
Question 32 – ✅ (c) The retail selling price of the final product
Question 33 – ✅ (a) output capacity and resources employed
Question 34 – ✅ (d) provides timely transaction data for comparison
Question 35 – ✅ (c) A rise in household income shifts purchasing plans.
Question 36 – ✅ (a) Cross-train workers for critical stages
Question 37 – ✅ (b) two intermediary stages
Question 38 – ✅ (c) 100%
Question 39 – ✅ (d) removal of the need for any payment agreement
Question 40 – ✅ (b) an outward shift of supply

Theory Marking Scheme

Question 1:
(a) Land/premises (1); labour/bakers (1); capital/ovens (1); enterprise/organiser bears risk (1). (4 marks)
(b) Two benefits with explanation (2 each); valid drawback such as boredom or production interruption (1); reasonable cross-training or rotation (1). (6 marks)

Question 2:
(a) Equilibrium ₦150, 60 units (2); at ₦100, shortage 80−40=40 units (2). (4 marks)
(b) Demand likely shifts right for a normal good (2); supply shifts right when costs fall (2); correctly labelled curves/intersection, sound explanation of possible price ambiguity and higher quantity (2). (6 marks)

Question 3:
(a) Domestic Nigerian example with distinction (1); international example and distinction (2); relevant foreign-trade risk such as currency or customs delay (1). (4 marks)
(b) Three justified factors: product perishability, cost, customer coverage, transaction scale, delivery time, credit risk (2 each). (6 marks)

Question 4:
(a) Increase 20 orders (2); 20/20 ×100=100% (2). (4 marks)
(b) Three benefit–risk pairs such as price information/misinformation, faster payment/fraud, stock records/data breach or outages (2 each). (6 marks)
Accept logically valid equivalents within the taught curriculum. Credit correct workings and justifications; do not award the same point twice.