African Economics Quiz

An oil company in Nigeria had been losing money for years. It used to locate and extract crude oil and then transport the crude oil to its own refineries. There, the oil was refined into products that could be sold for profit. The company’s equipment was old, and there were other companies that produced crude oil more efficiently. The company sold off its drilling equipment and pipelines. It then invested in new technology for its refinery. Now it buys crude oil, refines it, and earns a profit selling the refined product.

What occurred in the passage?

• Economic specialization

• Investment in human capital

• Economic globalization

• Investment in entrepreneurship

An oil company in Nigeria had been losing money for years. It used to locate and extract crude oil and then transport the crude oil to its own refineries. There, the oil was refined into products that could be sold for profit. The company’s equipment was old, and there were other companies that produced crude oil more efficiently. The company sold off its drilling equipment and pipelines. It then invested in new technology for its refinery. Now it buys crude oil, refines it, and earns a profit selling the refined product.

What is this passage is an example of?

• Investment in human capital

• Investment in capital goods

• Investment in entrepreneurship

• Investment in economic diversity

What is one way a government can invest in human capital?

• by creating tax breaks for industrial equipment

• by creating a low corporate tax rate

• by providing no-interest loans for higher education

• by providing unemployment insurance

Country 1 and Country 2 are both located in Africa.

The level of investment in capital goods is much higher in Country 1 than it is in Country 2.

Based solely on this information, how do the economies of these nations MOST LIKELY compare to one another?

• Country 1 is likely has a more skilled labor force than Country 2.

• Country 1 is likely more technologically advanced than Country 2.

• Country 1 is likely more reliant (or depends more) on trade with other countries than Country 2.

• Country 1 likely has more government controlled businesses than Country 2.

Which is a major obstacle toward entrepreneurship in Nigeria?

• Government corruption

• Economic specialization

• Lack of natural resources

• Reliance on foreign trade

Which of the following would encourage investment in capital goods?

• Tax breaks for corporations that pay for their employees’ education

• Tax breaks for corporations that purchase new industrial equipment

• Unemployment insurance for temporarily unemployed workers

• Crop insurance for farmers who experience bad harvests

How does Investments in human capital typically lead to economic growth?

• Enabling governments to collect higher taxes from citizens.

• Enabling workers to be more productive and earn more money

• Enabling consumers to have greater access to foreign-made goods.

• Enabling businesses to charge higher prices for goods they produce.

What is a capital investment that would MOST benefit South Africa’s economy?

• Industrial gold-mining equipment

• Industrial oil-drilling equipment

• Adult literacy programs

• Universal higher education

What is a capital investment that would MOST benefit Nigeria’s economy?

• Industrial gold-mining equipment

• Industrial oil-drilling equipment

• Adult literacy programs

• Universal higher education

Which of these countries is likely to have the HIGHEST level of entrepreneurship?

• A country that heavily restricts trade

• A country that has few natural resources

• A country with a pure market economy

• A country with a pure command economy