SS2 Economics 3rd Term Questions and Answers

ECONOMICS Questions and Answers – SS2 – 3rd Term

Duration: 45mins
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Table of Contents – Weekly Scheme of Work

• Week 1: Revision of Second Term Unified Examination
• Week 2: Distributive Trade – Meaning, Chain and Process of Distribution
• Week 3: Wholesalers and Retailers – Functions to Producers, Retailers, and Customers
• Week 4: Middlemen – Arguments, Problems, and Government Roles in Distribution
• Week 5: Money – Definition, Origin, Types, Characteristics, and Functions
• Week 6: Financial Institutions – Types, Commercial and Central Banks
• Week 7: Demand – Meaning, Law, Types, Factors, Curve and Schedule
• Week 8: Supply – Meaning, Law, Types, Factors, Curve and Schedule
• Week 9: Price Determination – Equilibrium Price, Price System, Demand-Supply Equations
• Week 10: Nature of the Nigerian Economy – Structure, Sectors, and Geo-Political Zones
• Week 11: Agriculture – Meaning, Systems, Contributions, Problems, Policies
• Week 12: Mining – Meaning, Components, Types and Locations of Minerals

Objective Questions

1. What is the process by which goods move from producers to consumers?
A. Importation B. Distribution C. Production D. Transportation

2. Which of the following is a function of the wholesaler to the retailer?
A. Advertising goods B. Breaking bulk C. Producing goods D. Selling directly to consumers

3. A retailer performs all the following functions except:
A. Displaying goods B. Selling in large quantities C. Offering after-sales service D. Providing credit

4. Middlemen are often blamed for:
A. Agricultural failure B. Increase in product prices C. Scarcity of raw materials D. Currency devaluation

5. A major argument **for** middlemen is that they:
A. Reduce national income B. Delay distribution C. Facilitate distribution D. Increase unemployment

6. A major **problem** of distribution in Nigeria is:
A. Overproduction B. Poor road networks C. Excess demand D. Surplus foreign reserves

7. One way to improve distribution of goods in West Africa is:
A. High taxation B. Frequent strikes C. Improved infrastructure D. Border closure

8. What is the origin of money?
A. Coins B. Paper notes C. Trade by barter D. ATM

9. A major disadvantage of barter is:
A. Scarcity of goods B. Double coincidence of wants C. High inflation D. Price control

10. Which of the following is **not** a characteristic of money?
A. Durability B. Portability C. Volatility D. Divisibility

11. Money serves as a:
A. Means of production B. Medium of exchange C. Tool of culture D. Form of inheritance

12. Financial institutions include the following except:
A. Commercial banks B. Insurance companies C. Petrol stations D. Mortgage banks

13. One key function of commercial banks is:
A. Making laws B. Controlling inflation C. Accepting deposits D. Issuing passports

14. The central bank is different from commercial banks because it:
A. Grants loans to individuals B. Manufactures goods C. Issues currency D. Buys retail goods

15. A major function of the central bank is:
A. Price fixing B. Tax collection C. Monetary policy control D. Road construction

16. Demand is defined as:
A. Willingness to save B. Ability to produce C. Willingness and ability to buy D. Scarcity of goods

17. The Law of Demand states that:
A. The higher the price, the higher the demand
B. The lower the price, the lower the demand
C. Price has no effect on demand
D. Price and demand are inversely related

18. A demand curve usually slopes:
A. Upward from left to right B. Downward from left to right
C. Vertically D. Upward from right to left

19. All these are types of demand **except**:
A. Joint demand B. Composite demand C. Market demand D. Fixed supply

20. Which factor does **not** affect demand?
A. Taste and preference B. Price of related goods C. Government budget D. Income level

21. The Law of Supply states that:
A. Price and supply are directly related
B. Price has no impact on supply
C. Higher price reduces supply
D. Lower price increases supply

22. Which of the following is **not** a type of supply?
A. Joint supply B. Market supply C. Individual supply D. Taxed supply

23. When quantity demanded equals quantity supplied, we have:
A. Excess supply B. Shortage C. Disequilibrium D. Equilibrium

24. If Qd = Qs, this implies:
A. No transaction B. Equilibrium price C. Profit loss D. Monopoly

25. A graphical representation of demand and supply is called:
A. Pie chart B. Bar chart C. Schedule D. Demand-Supply graph

26. One major function of the price system is:
A. Setting exchange rates B. Allocating resources C. Reducing interest rates D. Creating currency

27. Which sector includes farming and fishing?
A. Primary B. Secondary C. Tertiary D. Quaternary

28. The secondary sector includes:
A. Fishing B. Manufacturing C. Trading D. Banking

29. Tertiary sector activities include:
A. Production of maize B. Building of roads C. Provision of services D. Manufacturing of goods

30. The Nigerian economy is classified as:
A. Socialist B. Capitalist C. Mixed D. Traditional

31. Agriculture contributes to the economy in all ways **except**:
A. Employment B. Foreign exchange C. Population growth D. Raw materials

32. One major problem facing agriculture in Nigeria is:
A. High interest rates B. Use of crude implements C. Inflation D. Oil exploration

33. OFN stands for:
A. Operation Farm Now B. Operation Feed Nigeria
C. Official Farmers Network D. Organization of Farming Nations

34. Which mineral is commonly found in Jos?
A. Crude oil B. Coal C. Tin D. Limestone

35. A major use of limestone is in:
A. Textile production B. Cement making C. Medicine D. Banking

36. The barter system failed because:
A. There was excess supply B. People lacked education
C. It lacked a standard measure of value D. There was too much money

37. The major tool used by the central bank to control inflation is:
A. Taxation B. Printing money C. Monetary policy D. Import duties

38. What does Qd = Qs stand for?
A. Price discrimination B. Balance of trade
C. Equilibrium D. Demand monopoly

39. The demand for petrol and cars is an example of:
A. Composite demand B. Derived demand C. Joint demand D. Competitive demand

40. A policy like Green Revolution was designed to:
A. Stop oil mining B. Promote agricultural development
C. Expand electricity D. Reduce inflation

Theory Questions

1. Define distributive trade.
   Explain the chain of distribution from producer to final consumer, and describe the roles of wholesalers and retailers in this process.
2. Who are middlemen?
   Present two arguments for and two arguments against the elimination of middlemen in the distribution of goods in Nigeria.
3. State and explain four major problems of product distribution in Nigeria.
   Then, suggest four practical solutions that could improve the system of distribution in West Africa.
4. Define money and describe its origin.
   Highlight four characteristics and three functions of money in modern economies.
5. Differentiate between commercial banks and central banks.
   List and explain three functions of each and give one reason why the central bank is important in a developing country like Nigeria.
6. What is demand?
   Using a well-labeled diagram, draw and explain a typical demand curve, and identify four factors that affect demand.
7. Explain the law of supply.
   With the aid of a properly labeled graph, illustrate how supply changes with price. List and explain three factors that affect supply.
8. Define equilibrium price.
   Using a hypothetical demand and supply schedule, calculate and determine the equilibrium price and quantity. Show workings clearly.
9. Describe the structure of the Nigerian economy.
   Explain the contributions of the primary, secondary, and tertiary sectors, and give one example of an economic activity in each of the six geo-political zones in Nigeria.
10. Define agriculture.
    List and explain three major systems of agriculture practiced in Nigeria. Also mention three government agricultural policies and briefly describe their objectives.

 

Objective Answers

1. B — Distribution is the movement of goods from producer to consumer.
2. B — Wholesalers break bulk for retailers.
3. B — Retailers sell in small, not large, quantities.
4. B — Middlemen are often blamed for price hikes.
5. C — Middlemen help facilitate distribution.
6. B — Poor road networks hinder product distribution.
7. C — Improved infrastructure boosts distribution.
8. C — Money originated from trade by barter.
9. B — Barter requires a double coincidence of wants.
10. C — Volatility is not a desirable quality of money.
11. B — Money serves as a medium of exchange.
12. C — Petrol stations are not financial institutions.
13. C — A major function of commercial banks is accepting deposits.
14. C — The central bank issues currency.
15. C — Controlling money supply is a function of the central bank.
16. C — Demand means willingness and ability to buy goods.
17. D — Law of demand: higher price leads to lower demand.
18. B — A demand curve slopes downward from left to right.
19. D — Fixed supply is not a type of demand.
20. C — Government budget doesn’t directly affect demand.
21. A — Higher prices encourage producers to supply more.
22. D — Taxed supply is not a recognized type of supply.
23. D — Demand equals supply at equilibrium.
24. B — Qd = Qs defines equilibrium price.
25. D — Demand-Supply graph shows their relationship.
26. B — Price system allocates scarce resources.
27. A — Primary sector includes farming and fishing.
28. B — Manufacturing belongs to the secondary sector.
29. C — Services like teaching are part of the tertiary sector.
30. C — Nigeria operates a mixed economy.
31. C — Agriculture does not directly cause population growth.
32. B — Use of crude tools is a major issue in agriculture.
33. B — OFN stands for Operation Feed the Nation.
34. C — Tin is found in Jos.
35. B — Limestone is used to produce cement.
36. C — Barter lacked a standard measure of value.
37. C — The central bank uses monetary policy to control inflation.
38. C — Qd = Qs indicates market equilibrium.
39. C — Petrol and cars are jointly demanded.
40. B — Green Revolution aimed to boost agriculture.

Theory Answers

1. Definition and Chain of Distribution

Distributive trade is the process of moving goods and services from producers to final consumers through various channels like wholesalers and retailers.

Chain of distribution:

• Producer → Wholesaler → Retailer → Consumer

Wholesaler functions:

• Buys in bulk from producers.
• Stores goods, reducing producers’ storage cost.
• Provides feedback from retailers to manufacturers.

Retailer functions:

• Breaks bulk into consumer-sized units.
• Provides after-sales services.
• Offers customer feedback to wholesalers.

2. Middlemen: Pros and Cons

Middlemen are agents who facilitate the movement of goods between producers and final buyers.

Arguments for elimination:

• Increases product prices.
• Sometimes hoard goods to create artificial scarcity.

Arguments against elimination:

• Help reduce distribution burden on producers.
• Provide storage and transport services.

3. Problems and Solutions of Product Distribution

Problems:

• Poor road infrastructure.
• Inadequate storage facilities.
• Lack of credit for traders.
• Unstable prices due to hoarding.

Solutions:

• Government investment in transport systems.
• Provision of credit facilities to distributors.
• Stabilization of prices through regulatory agencies.
• Support cooperatives for collective distribution.

4. Money: Definition, Origin, Characteristics & Functions

Money is a legal medium of exchange for goods and services.

Origin:

• Evolved from barter, which lacked a standard value and double coincidence of wants.

Characteristics:

1. Durability
2. Divisibility
3. Portability
4. Acceptability

Functions:

1. Medium of exchange
2. Store of value
3. Measure of value

5. Commercial vs Central Banks

Commercial Banks:

• Accept deposits
• Grant loans
• Offer chequing services

Central Bank:

• Issues legal tender
• Controls money supply
• Regulates commercial banks

Importance in Nigeria:

• Controls inflation
• Ensures financial system stability

6. Demand and Demand Curve

Demand is the quantity of goods a consumer is willing and able to buy at a given price.

Law of Demand:

• As price increases, quantity demanded decreases.

Factors affecting demand:

1. Price of the good
2. Income level
3. Taste and preference
4. Population size

Demand Curve:

• A downward-sloping line showing inverse relationship between price and quantity.

7. Supply: Law, Curve & Factors

Law of Supply:

• As price increases, quantity supplied increases.

Factors affecting supply:

1. Cost of production
2. Government policies (tax/subsidy)
3. Technological advancements

Supply Curve:

• Upward-sloping line indicating direct relationship between price and supply.

8. Equilibrium Price Calculation

Equilibrium price is where quantity demanded equals quantity supplied.

Example:

Price (₦)	Qd	Qs
100	60	30
120	50	40
140	40	40 ← Equilibrium
160	30	50

Thus, equilibrium price = ₦140
Equilibrium quantity = 40 units

9. Structure of Nigerian Economy

Primary Sector: Agriculture, mining (e.g., fishing in South-South)

Secondary Sector: Manufacturing, construction (e.g., textile industry in Kano)

Tertiary Sector: Services like banking (e.g., financial services in Lagos)

Geo-political zones & activities:

• North Central – Farming
• North East – Cattle rearing
• North West – Commerce
• South East – Oil and gas
• South South – Fishing
• South West – Industrial production

10. Agriculture: Systems and Policies

Agriculture is the practice of cultivating soil and raising livestock for food and economic purposes.

Systems:

1. Subsistence farming
2. Commercial farming
3. Mixed farming

Policies:

• Operation Feed the Nation (OFN): Boost food production
• National Accelerated Food Production Programme (NAFPP): Address food shortage
• Green Revolution: Modernize farming methods

Studying Economics is more than just passing exams it’s about understanding how money, goods, and government policies affect your daily life. This post has covered all 12 weeks of your third-term scheme, offering practice questions and full theory answers to help you prepare for school exams, WAEC, and NECO.

To succeed, revise every topic carefully, especially complex ones like price determination and the Nigerian economy. Don’t just cram understand. And remember, consistent reading and solving past questions will put you ahead of your peers.

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