Practice Post UTME ABU economics 2022 Past Questions

Question 1

Determine the equilibrium price and quantity of a perfectly competitive market, given the following demand and supply functions: Qd = 100 - 2P, Qs = 2P - 50.

A. ₦200, 75 units

Correct B. ₦150, 50 units

C. ₦250, 100 units

D. ₦300, 125 units

Correct Answer: B

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Question 2

A firm operating in a monopoly market has a demand function Qd = 100 - 2P and a marginal revenue function MR = 50 - 2Q. Determine the firm's profit-maximizing price and quantity.

Correct A. ₦150, 50 units

B. ₦200, 75 units

C. ₦250, 100 units

D. ₦300, 125 units

Correct Answer: A

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Question 3

A consumer has a utility function U(x, y) = 2x + 3y. Determine the consumer's optimal bundle of x and y, given a budget constraint of 100.

Correct A. x = 20, y = 30

B. x = 30, y = 20

C. x = 40, y = 10

D. x = 50, y = 0

Correct Answer: A

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Question 4

Determine the national income of a country, given the following data: GDP = ₦100 billion, net factor income from abroad = ₦20 billion, and depreciation = ₦10 billion.

Correct A. ₦90 billion

B. ₦110 billion

C. ₦120 billion

D. ₦130 billion

Correct Answer: A

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Question 5

Agricultural sector in Nigeria contributes 25% to the country's GDP. If the GDP is ₦100 billion, determine the value of agricultural sector's contribution to GDP.

Correct A. ₦25 billion

B. ₦30 billion

C. ₦35 billion

D. ₦40 billion

Correct Answer: A

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Question 6

Consider a perfectly competitive market with a large number of firms producing a homogeneous product. If the market price falls, what will happen to the marginal revenue of each firm?

A. Marginal revenue will increase

Correct B. Marginal revenue will decrease

C. Marginal revenue will remain unchanged

D. Marginal revenue will become negative

Correct Answer: B

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Question 7

A monopolistically competitive firm faces a downward-sloping demand curve. If the firm increases its price, what will happen to its quantity demanded?

A. Quantity demanded will increase

Correct B. Quantity demanded will decrease

C. Quantity demanded will remain unchanged

D. Quantity demanded will become infinite

Correct Answer: B

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Question 8

A government imposes a tax on a good, cau\sing the supply curve to shift to the left. What will happen to the equilibrium price and quantity?

Correct A. Equilibrium price will increase and quantity will decrease

B. Equilibrium price will decrease and quantity will increase

C. Equilibrium price will remain unchanged and quantity will decrease

D. Equilibrium price will decrease and quantity will remain unchanged

Correct Answer: A

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Question 9

A firm is considering whether to invest in a new project. The project has a positive net present value (NPV) of ₦1,000,000. What does this mean for the firm?

Correct A. The firm should invest in the project

B. The firm should not invest in the project

C. The firm should invest in the project if it has sufficient funds

D. The firm should not invest in the project if it has sufficient funds

Correct Answer: A

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Question 10

A central bank increases the reserve requirement for commercial banks. What will happen to the money supply?

A. Money supply will increase

Correct B. Money supply will decrease

C. Money supply will remain unchanged

D. Money supply will become infinite

Correct Answer: B

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Question 11

The concept of scarcity in economics implies that the production of one good is limited by the availability of resources, which can be allocated to other goods. This is an example of a trade-off between two goods. What is the opportunity \cost of producing more of good X?

A. The opportunity \cost is the value of the next best alternative good that could have been produced with the same resources.

Correct B. The opportunity \cost is the value of the good that is given up when producing more of good X.

C. The opportunity \cost is the value of the good that is produced in excess of the demand.

D. The opportunity \cost is the value of the good that is not produced at all.

Correct Answer: B

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Question 12

Agricultural development in Nigeria has been hindered by the lack of irrigation systems. What is the opportunity \cost of not investing in irrigation systems?

Correct A. The opportunity \cost is the value of the land that could have been used for other crops.

B. The opportunity \cost is the value of the water that could have been used for other purposes.

C. The opportunity \cost is the value of the labor that could have been used for other tasks.

D. The opportunity \cost is the value of the fertilizer that could have been used for other crops.

Correct Answer: A

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Question 13

The Nigerian government has implemented policies to promote industrialization. What is the opportunity \cost of investing in industrialization?

A. The opportunity \cost is the value of the land that could have been used for other purposes.

B. The opportunity \cost is the value of the labor that could have been used for other tasks.

Correct C. The opportunity \cost is the value of the resources that could have been used for other industries.

D. The opportunity \cost is the value of the goods that could have been produced with the same resources.

Correct Answer: C

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Question 14

The concept of returns to scale in economics implies that as the scale of production increases, the marginal product of labor also increases. What is the opportunity \cost of increa\sing the scale of production?

A. The opportunity \cost is the value of the resources that could have been used for other purposes.

B. The opportunity \cost is the value of the labor that could have been used for other tasks.

Correct C. The opportunity \cost is the value of the goods that could have been produced with the same resources.

D. The opportunity \cost is the value of the land that could have been used for other crops.

Correct Answer: C

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Question 15

The Nigerian government has implemented policies to promote economic planning and development. What is the opportunity \cost of investing in economic planning and development?

Correct A. The opportunity \cost is the value of the resources that could have been used for other purposes.

B. The opportunity \cost is the value of the labor that could have been used for other tasks.

C. The opportunity \cost is the value of the goods that could have been produced with the same resources.

D. The opportunity \cost is the value of the land that could have been used for other crops.

Correct Answer: A

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Question 16

The concept of national income accounting in economics implies that the value of goods and services produced within a country is measured by the Gross Domestic Product (GDP). What is the opportunity \cost of increa\sing the GDP?

A. The opportunity \cost is the value of the resources that could have been used for other purposes.

B. The opportunity \cost is the value of the labor that could have been used for other tasks.

Correct C. The opportunity \cost is the value of the goods that could have been produced with the same resources.

D. The opportunity \cost is the value of the land that could have been used for other crops.

Correct Answer: C

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Question 17

The concept of scarcity in economics implies that the production of one good is limited by the availability of resources, which can be allocated to other goods. What is the opportunity \cost of producing more of good X?

A. The opportunity \cost is the value of the next best alternative good that could have been produced with the same resources.

Correct B. The opportunity \cost is the value of the good that is given up when producing more of good X.

C. The opportunity \cost is the value of the good that is produced in excess of the demand.

D. The opportunity \cost is the value of the good that is not produced at all.

Correct Answer: B

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Question 18

The concept of returns to scale in economics implies that as the scale of production increases, the marginal product of labor also increases. What is the opportunity \cost of increa\sing the scale of production?

A. The opportunity \cost is the value of the resources that could have been used for other purposes.

B. The opportunity \cost is the value of the labor that could have been used for other tasks.

C. The opportunity \cost is the value of the goods that could have been produced with the same resources.

D. The opportunity \cost is the value of the land that could have been used for other crops.

Correct Answer: VIEW ANSWER

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Question 19

An increase in the price of a good from P0 to P1 leads to a decrease in the quantity demanded from Q0 to Q1. Which of the following is a possible explanation for this phenomenon?

A. Increase in consumer income

B. Decrease in consumer income

Correct C. Increase in price of a complementary good

D. Decrease in price of a substitute good

Correct Answer: C

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Question 20

A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \). If the price of labor increases from ₦100 to ₦120 and the price of capital increases from ₦200 to ₦240, what is the new \cost-minimizing combination of labor and capital?

Correct A. L = 16, K = 9

B. L = 9, K = 16

C. L = 4, K = 4

D. L = 2, K = 2

Correct Answer: A

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Question 21

A country's GDP is ₦100 billion, its imports are ₦20 billion, and its exports are ₦15 billion. What is its balance of trade?

A. ₦5 billion surplus

Correct B. ₦5 billion deficit

C. ₦10 billion surplus

D. ₦10 billion deficit

Correct Answer: B

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Question 22

A firm faces a demand curve given by P = 100 - 2Q. What is the price elasticity of demand at a quantity of 20?

A. 0.5

B. 1

C. 2

Correct D. -2

Correct Answer: D

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Question 23

A country's GNP is ₦120 billion, its GDP is ₦110 billion, and its net factor income from abroad is ₦5 billion. What is its national income?

A. ₦125 billion

Correct B. ₦130 billion

C. ₦135 billion

D. ₦140 billion

Correct Answer: B

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Question 24

Suppose a country's demand for a good is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the supply of the good is given by the equation Qs = 2P - 100, where Qs is the quantity supplied, find the equilibrium price and quantity.

A. ₦50

B. ₦75

Correct C. ₦100

D. ₦125

Correct Answer: C

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Question 25

A country's balance of payments is given by the equation BOP = X - M, where X is the value of exports and M is the value of imports. If the value of exports is ₦100 billion and the value of imports is ₦120 billion, find the balance of payments.

Correct A. ₦20 billion

B. ₦30 billion

C. ₦40 billion

D. ₦50 billion

Correct Answer: A

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