NECO Economics Past Questions and Answers

Introduction

Economics is a social science subject in the NECO Senior School Certificate Examination (SSCE). It deals with the production, distribution, and consumption of goods and services. Key topics include demand and supply, market structures, inflation, national income, money, banking, and international trade. Success in Economics requires understanding key concepts, graphs, and real-life applications. This set contains 100 NECO-standard objective questions with well-shuffled options A–D.

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OBJECTIVE QUESTIONS

Instruction: Choose the correct option A–D.

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1–25: Basic Economic Concepts

1. Economics is the study of
   A. crops and animals B. human behavior in relation to scarce resources C. rocks and minerals D. weather conditions
   Answer: B

2. Scarcity means
   A. abundance of goods B. limited resources C. free goods D. unlimited supply
   Answer: B

3. Choice arises because of
   A. scarcity B. abundance C. demand D. supply
   Answer: A

4. Opportunity cost is
   A. total cost of production B. cost of transport C. next best alternative forgone D. tax paid
   Answer: C

5. A free good is
   A. scarce B. not scarce C. expensive D. produced
   Answer: B

6. Economic problem arises due to
   A. abundance B. scarcity C. production D. inflation
   Answer: B

7. Factors of production include land, labour, capital and
   A. money B. entrepreneur C. demand D. tax
   Answer: B

8. Labour refers to
   A. machines B. human effort C. land D. money
   Answer: B

9. Capital refers to
   A. human effort B. tools and equipment C. land D. demand
   Answer: B

10. Land in economics includes
    A. only soil B. all natural resources C. buildings only D. labour only
    Answer: B

11. Entrepreneur is
    A. worker B. risk taker and organizer C. consumer D. seller only
    Answer: B

12. Goods are
    A. services only B. tangible products C. ideas only D. labour only
    Answer: B

13. Services are
    A. physical goods B. intangible activities C. machines D. land
    Answer: B

14. A consumer is someone who
    A. produces goods B. uses goods and services C. sells only D. transports goods
    Answer: B

15. Production is
    A. destruction of goods B. creation of goods and services C. consumption only D. exchange only
    Answer: B

16. Consumption is
    A. use of goods and services B. production only C. taxation D. saving
    Answer: A

17. Utility means
    A. profit B. satisfaction from consumption C. cost D. tax
    Answer: B

18. Demand refers to
    A. desire only B. willingness and ability to buy C. supply only D. production
    Answer: B

19. Supply refers to
    A. demand for goods B. willingness to sell C. consumption D. tax
    Answer: B

20. Law of demand states that as price increases, demand
    A. increases B. decreases C. remains constant D. doubles
    Answer: B

21. Law of supply states that as price increases, supply
    A. decreases B. increases C. remains constant D. stops
    Answer: B

22. Equilibrium price is where
    A. demand > supply B. demand = supply C. supply > demand D. no demand
    Answer: B

23. Market is
    A. place only B. arrangement for buying and selling C. factory D. bank
    Answer: B

24. Inflation means
    A. decrease in price level B. increase in general price level C. stable prices D. no money
    Answer: B

25. Deflation is
    A. increase in prices B. decrease in prices C. no production D. high demand
    Answer: B

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26–50: Market Structure and Production

26. Perfect competition is a market with
    A. one seller B. many buyers and sellers C. government control only D. monopoly
    Answer: B

27. Monopoly is a market with
    A. many sellers B. one seller C. many buyers only D. no buyers
    Answer: B

28. Oligopoly is a market with
    A. few large firms B. one firm C. many small firms D. no firms
    Answer: A

29. Monopolistic competition has
    A. identical goods B. differentiated products C. one seller D. no competition
    Answer: B

30. Price is determined in
    A. production only B. market forces C. government only D. banks only
    Answer: B

31. Demand curve slopes
    A. upward B. downward C. vertical only D. horizontal only
    Answer: B

32. Supply curve slopes
    A. downward B. upward C. vertical only D. random
    Answer: B

33. A shift in demand is caused by
    A. price only B. income change C. constant price D. supply only
    Answer: B

34. Elasticity of demand measures
    A. price only B. responsiveness of demand to price change C. supply only D. cost
    Answer: B

35. If demand is elastic, it means
    A. demand does not change B. demand changes greatly C. no demand D. fixed demand
    Answer: B

36. Inelastic demand means
    A. demand changes a lot B. demand changes slightly C. no supply D. no price
    Answer: B

37. Total revenue =
    A. price × quantity B. cost × profit C. demand × supply D. wage × labour
    Answer: A

38. Cost of production includes
    A. profit only B. fixed and variable costs C. tax only D. demand only
    Answer: B

39. Fixed cost does not change with
    A. time B. output C. price D. demand
    Answer: B

40. Variable cost changes with
    A. output B. time only C. demand only D. weather
    Answer: A

41. Average cost is
    A. total cost × output B. total cost ÷ output C. output ÷ cost D. profit ÷ cost
    Answer: B

42. Profit is
    A. revenue − cost B. cost − revenue C. demand − supply D. price − tax
    Answer: A

43. Loss occurs when
    A. revenue > cost B. cost > revenue C. demand > supply D. supply > demand
    Answer: B

44. National income is
    A. personal income only B. total income of a country C. tax only D. profit only
    Answer: B

45. GDP stands for
    A. Gross Domestic Product B. General Demand Product C. Gross Development Plan D. Global Domestic Profit
    Answer: A

46. GNP includes
    A. only local income B. income of citizens abroad C. tax only D. imports only
    Answer: B

47. Inflation reduces
    A. prices B. purchasing power C. supply D. production
    Answer: B

48. Money supply means
    A. goods only B. total money in circulation C. tax only D. loans only
    Answer: B

49. Bank is an institution that
    A. produces goods B. accepts deposits and gives loans C. farms D. builds roads
    Answer: B

50. Central bank controls
    A. farmers B. money supply C. schools D. hospitals
    Answer: B

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51–75: Money, Banking and Trade

51. Money serves as a
    A. crop B. medium of exchange C. land D. labour
    Answer: B

52. One function of money is
    A. spoil goods B. store of value C. destroy value D. reduce trade
    Answer: B

53. Bank deposit is
    A. money stored in bank B. goods sold C. tax paid D. loan taken
    Answer: A

54. Interest is
    A. tax B. cost of borrowing money C. profit only D. wage
    Answer: B

55. Inflation rate measures
    A. population B. price increase C. production D. trade
    Answer: B

56. Foreign trade is
    A. local buying B. exchange between countries C. farming D. banking
    Answer: B

57. Export means
    A. buying from abroad B. selling to other countries C. storing goods D. producing only
    Answer: B

58. Import means
    A. selling abroad B. buying from other countries C. production D. consumption
    Answer: B

59. Balance of trade is
    A. exports only B. difference between exports and imports C. tax system D. inflation rate
    Answer: B

60. A favorable balance of trade means
    A. imports > exports B. exports > imports C. equal trade D. no trade
    Answer: B

61. Unfavorable balance means
    A. exports > imports B. imports > exports C. equal trade D. no money
    Answer: B

62. Currency is
    A. goods B. money used in a country C. tax D. land
    Answer: B

63. Exchange rate is
    A. price of goods B. value of one currency against another C. tax rate D. interest rate
    Answer: B

64. Devaluation means
    A. increase in currency value B. decrease in currency value C. no change D. increase in goods
    Answer: B

65. Appreciation means
    A. fall in value B. rise in value of currency C. no trade D. inflation
    Answer: B

66. Tariff is
    A. tax on imports B. subsidy C. wage D. profit
    Answer: A

67. Subsidy is
    A. tax B. government support C. fine D. debt
    Answer: B

68. Budget is
    A. spending plan B. crop plan C. trade deal D. loan
    Answer: A

69. Deficit budget occurs when
    A. revenue > expenditure B. expenditure > revenue C. equal D. no money
    Answer: B

70. Surplus budget occurs when
    A. expenditure > revenue B. revenue > expenditure C. equal D. no tax
    Answer: B

71. Public debt is
    A. personal loan B. government borrowing C. bank profit D. tax income
    Answer: B

72. Tax is
    A. gift B. compulsory payment to government C. loan D. subsidy
    Answer: B

73. Direct tax is paid by
    A. companies only B. individuals directly C. banks D. traders only
    Answer: B

74. Indirect tax is included in
    A. salary B. price of goods C. loan D. profit
    Answer: B

75. VAT stands for
    A. Value Added Tax B. Variable Asset Tax C. Value Annual Tax D. Voluntary Added Tax
    Answer: A

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76–100: Development and Mixed Concepts

76. Economic development means
    A. increase in population B. improvement in living standard C. inflation D. unemployment
    Answer: B

77. Economic growth is
    A. decrease in output B. increase in output C. inflation only D. tax only
    Answer: B

78. Unemployment means
    A. job creation B. lack of jobs C. production D. trade
    Answer: B

79. Inflation reduces
    A. cost B. purchasing power C. demand D. supply
    Answer: B

80. Poverty is
    A. wealth B. lack of basic needs C. production D. trade
    Answer: B

81. Development planning is done by
    A. farmers B. government C. traders D. banks only
    Answer: B

82. Infrastructure includes
    A. roads and electricity B. crops C. money only D. demand
    Answer: A

83. Population affects
    A. only food B. economy C. only land D. only trade
    Answer: B

84. High population may lead to
    A. surplus food B. unemployment C. low demand D. no trade
    Answer: B

85. Labour force refers to
    A. children only B. working population C. retired people D. animals
    Answer: B

86. Productivity is
    A. output per input B. input per output C. cost only D. tax only
    Answer: A

87. Efficiency means
    A. waste B. maximum output with minimum input C. inflation D. tax increase
    Answer: B

88. Economic system includes
    A. education system B. way economy is organized C. transport system D. weather system
    Answer: B

89. Capitalist economy is based on
    A. government control B. private ownership C. farming only D. trade only
    Answer: B

90. Socialist economy is based on
    A. private ownership B. government ownership C. free market only D. no production
    Answer: B

91. Mixed economy combines
    A. socialism only B. capitalism and socialism C. trade only D. farming only
    Answer: B

92. Economic policy is made by
    A. students B. government C. traders D. farmers
    Answer: B

93. Savings is
    A. spending money B. income not spent C. borrowing D. taxation
    Answer: B

94. Investment is
    A. saving only B. use of money to produce more wealth C. spending only D. tax payment
    Answer: B

95. Interest rate affects
    A. weather B. borrowing and saving C. crops D. land
    Answer: B

96. Bank loan is
    A. gift B. borrowed money C. tax D. salary
    Answer: B

97. Credit means
    A. cash payment B. buying now and paying later C. saving only D. selling
    Answer: B

98. Debit means
    A. money owed B. money received C. profit D. tax
    Answer: B

99. Economic problem is solved through
    A. choice B. waste C. inflation D. unemployment
    Answer: A

100. Economics helps individuals to
     A. waste resources B. make rational decisions C. avoid money D. stop trade
     Answer: B

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EXAM SUCCESS TIPS

• Understand basic economic terms clearly
• Learn graphs of demand and supply
• Memorize key formulas (GDP, cost, revenue)
• Practice calculations regularly
• Study real-life economic situations
• Revise market structures and features
• Understand inflation and banking system
• Practice past NECO questions
• Focus on definitions and examples
• Stay consistent with revision and practice