This is the real Level 1 question set — 20 questions, free, no account needed.
Tap a question to check your answer and read the explanation.
1. Business activities contribute to national development mainly by
A. increasing government revenue through taxes and creating jobs
B. reducing the number of markets in the country
C. discouraging the use of local goods
D. preventing people from working
Explanation: Businesses contribute to national development by generating revenue for government through taxes and by creating employment opportunities for citizens.
2. Mr. Adeyemi owns a provision shop in Lagos where he sells goods to earn money for his family. What is the main objective of his business?
A. To create employment for government workers
B. To make a profit
C. To pay school fees for other people's children
D. To build roads in his community
Explanation: The primary objective of most businesses, including Mr. Adeyemi's shop, is to make a profit by selling goods or services at a price higher than their cost.
3. Business contributes to national development by:
A. Paying taxes that the government uses to provide services
B. Refusing to obey government laws
C. Preventing the circulation of money in the economy
D. Discouraging people from buying goods
Explanation: Businesses contribute to national development by paying taxes to the government, which uses the revenue to provide infrastructure and public services.
4. Business helps to create employment mainly by:
A. Giving out free food to the unemployed
B. Providing jobs for people who work in it
C. Closing down factories to save cost
D. Reducing the number of workers needed
Explanation: Businesses create employment by providing job opportunities for workers such as traders, factory workers, managers, and office staff.
5. Which of the following best describes the meaning of business?
A. Any activity carried out to help the poor without expecting profit
B. The buying and selling of goods and services with the aim of making profit
C. The act of storing goods in a warehouse for future use
D. The process of teaching people how to read and write
Explanation: Business refers to activities involving the production, buying and selling of goods and services with the main aim of making profit to satisfy human wants.
6. Which of the following persons is NOT engaged in business?
A. A tailor sewing clothes for customers
B. A farmer selling yams at the market
C. A trader buying and selling clothes
D. A man watching television in his sitting room
Explanation: Watching television at home is a leisure activity, not a business activity, because it does not involve the production or exchange of goods and services for profit.
7. Business is important to the society mainly because it
A. creates employment and generates income for people
B. reduces the number of schools in a community
C. prevents people from farming
D. increases the level of poverty
Explanation: Business provides employment opportunities and generates income, which improves the standard of living of individuals and the nation.
8. Apart from making profit, another common objective of business is to:
A. Provide satisfactory goods and services to customers
B. Cheat customers to gain more money
C. Avoid paying workers their salaries
D. Stop production completely
Explanation: Besides profit-making, businesses also aim to satisfy customers by providing quality goods and services that meet their needs.
9. Mrs Adaeze sells rice and beans at Mile 12 market in Lagos in order to earn income. This shows that a major objective of business is to
A. make profit
B. punish competitors
C. avoid customers
D. waste raw materials
Explanation: One of the primary objectives of business is to make profit, which serves as a reward and motivation for the business owner.
10. A business activity that involves changing raw materials into finished products is called:
A. Distribution
B. Production
C. Consumption
D. Advertising
Explanation: Production is the business activity that involves converting raw materials into finished goods that can be used or sold to consumers.
11. One of the functions of business is to bridge the gap between producers and consumers through
A. distribution of goods and services
B. collection of import duties
C. printing of textbooks
D. regulation of traffic
Explanation: Distribution ensures that goods produced reach the final consumers, thereby bridging the gap between producers and consumers.
12. Which of the following is an example of a business activity?
A. A father giving pocket money to his child
B. A trader selling provisions in Onitsha main market
C. A student writing an examination
D. A community celebrating a festival
Explanation: Selling provisions for profit is a business activity because it involves exchange of goods for money with the aim of gain.
13. One of the main functions of business is to satisfy human wants by:
A. Collecting taxes from citizens
B. Producing and distributing goods and services
C. Enforcing traffic laws
D. Conducting religious activities
Explanation: A key function of business is to produce and distribute goods and services in order to meet the needs and wants of people in society.
14. One of the major functions of business is to
A. collect taxes from the government
B. produce and distribute goods and services to satisfy human needs
C. make laws for the country
D. print currency notes for circulation
Explanation: A key function of business is producing and distributing goods and services to meet the needs and wants of consumers in society.
15. Business organisations help to bridge the gap between producers and consumers through the function of:
A. Distribution of goods and services
B. Collection of school fees
C. Preaching in churches and mosques
D. Voting during elections
Explanation: One important function of business is the distribution of goods and services, which involves moving products from producers to the final consumers.
16. Which statement correctly describes a business transaction?
A. A person donating clothes to an orphanage
B. A trader exchanging goods for money with a customer
C. A teacher marking students' exercise books
D. A worshipper praying in church
Explanation: A business transaction involves an exchange of goods or services for money or value, usually with the intention of making profit.
17. The main reason why Chike opened a barbing salon in his area is to
A. satisfy customers' needs and earn profit
B. spend his savings quickly
C. avoid paying rent
D. discourage other barbers
Explanation: Businesses are established to satisfy the needs of customers while earning profit as a reward for the risk taken by the entrepreneur.
18. Which of the following is an example of a business activity?
A. A woman selling akara by the roadside
B. A child playing football with friends
C. A man sleeping in his house
D. A student reading a novel for pleasure
Explanation: Selling akara by the roadside is a business activity because it involves the exchange of goods (akara) for money with the aim of making a profit.
19. Which of the following best describes the meaning of business?
A. An activity where goods and services are produced, bought, and sold for profit
B. An activity where people relax and play games for fun
C. An activity where students attend school to learn
D. An activity where government makes laws for the people
Explanation: Business refers to any activity that involves the production, buying, and selling of goods and services with the aim of making a profit.
20. The function of business that involves moving goods from the place of production to the place where they are needed is called
A. advertising
B. insurance
C. transportation
D. banking
Explanation: Transportation is a business function that involves the movement of goods and people from one place to another, ensuring goods reach consumers.
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