Practice Post UTME ABU economics 2024 Past Questions

Question 1

The demand for a product is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. The supply of the product is given by the equation Qs = 2P - 100, where Qs is the quantity supplied. Find the equilibrium price and quantity.

A. ₦50, 150 units

Correct B. ₦75, 100 units

C. ₦25, 200 units

D. ₦100, 50 units

Correct Answer: B

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Question 2

A firm has a production function given by Q = 2L^2 + 5K, where Q is the output, L is the labor and K is the capital. If the firm uses 4 units of labor and 3 units of capital, what is the output?

A. 29

B. 31

Correct C. 33

D. 35

Correct Answer: C

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Question 3

A government wants to reduce inflation by reducing the money supply. If the initial money supply is ₦100 billion and the government reduces it by 10%, what is the new money supply?

A. ₦90 billion

Correct B. ₦80 billion

C. ₦70 billion

D. ₦60 billion

Correct Answer: B

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Question 4

A firm has a \cost function given by C = 2L + 5K, where C is the \cost, L is the labor and K is the capital. If the firm uses 4 units of labor and 3 units of capital, what is the \cost?

A. ₦29

B. ₦31

Correct C. ₦33

D. ₦35

Correct Answer: C

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Question 5

A government wants to increase revenue by increa\sing taxes. If the initial tax rate is 10% and the government increases it by 5%, what is the new tax rate?

A. 15%

Correct B. 12.5%

C. 10%

D. 7.5%

Correct Answer: B

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Question 6

Consider a perfectly competitive market with a downward-sloping demand curve and an upward-sloping supply curve. If the market price is initially at P1 and the quantity demanded is Q1, and then a shift in the demand curve causes the new market price to be P2, which of the following statements is true?

A. The quantity demanded increases from Q1 to Q2

B. The quantity supplied increases from Q1 to Q2

Correct C. The quantity demanded decreases from Q1 to Q2

D. The quantity supplied decreases from Q1 to Q2

Correct Answer: C

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Question 7

A firm's production function is given by Q = 2L^0.5K^0.5, where Q is the output, L is the labor, and K is the capital. If the firm wants to produce 16 units of output, and the price of labor is ₦100 per unit, and the price of capital is ₦200 per unit, which of the following is the minimum \cost of production?

A. ₦400

Correct B. ₦800

C. ₦1200

D. ₦1600

Correct Answer: B

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Question 8

A country's government imposes a tax of ₦10 per unit on a good that is produced by a firm. If the firm's supply curve is given by Q = 2P - 10, where Q is the quantity supplied and P is the price, which of the following is the new supply curve after the tax is imposed?

A. Q = 2P - 20

Correct B. Q = 2P - 15

C. Q = 2P - 25

D. Q = 2P - 30

Correct Answer: B

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Question 9

A firm's production function is given by Q = 3L^0.5K^0.5, where Q is the output, L is the labor, and K is the capital. If the firm wants to produce 9 units of output, and the price of labor is ₦50 per unit, and the price of capital is ₦100 per unit, which of the following is the minimum \cost of production?

A. ₦150

Correct B. ₦300

C. ₦450

D. ₦600

Correct Answer: B

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Question 10

A country's government imposes a tax of ₦20 per unit on a good that is produced by a firm. If the firm's supply curve is given by Q = 2P - 20, where Q is the quantity supplied and P is the price, which of the following is the new supply curve after the tax is imposed?

A. Q = 2P - 40

Correct B. Q = 2P - 30

C. Q = 2P - 25

D. Q = 2P - 20

Correct Answer: B

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Question 11

A firm's \cost function is given by C(x) = 2x^2 + 10x + 5. If the firm's fixed \cost is ₦500 and its variable \cost is ₦5 per unit, what is the firm's total \cost when it produces 10 units?

A. ₦150

B. ₦250

Correct C. ₦350

D. ₦450

Correct Answer: C

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Question 12

A country's GDP is ₦100 billion. If the country's population is 20 million, what is the per capita GDP?

A. ₦5,000

Correct B. ₦10,000

C. ₦15,000

D. ₦20,000

Correct Answer: B

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Question 13

A firm's revenue function is given by R(x) = 3x^2 - 2x + 1. If the firm's marginal revenue is ₦10 per unit, what is the firm's total revenue when it produces 5 units?

A. ₦150

B. ₦250

Correct C. ₦350

D. ₦450

Correct Answer: C

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Question 14

A country's government budget is given by B = T + I. If the country's tax revenue is ₦50 billion and its interest payment is ₦20 billion, what is the country's budget deficit?

A. ₦30 billion

B. ₦40 billion

Correct C. ₦50 billion

D. ₦60 billion

Correct Answer: C

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Question 15

A firm's demand function is given by Q = 100 - 2P. If the firm's price is ₦50, what is the firm's quantity demanded?

A. 20 units

B. 30 units

Correct C. 40 units

D. 50 units

Correct Answer: C

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Question 16

A firm's production function is given by Q = 100L^0.5K^0.5, where Q is output, L is labor, and K is capital. If the firm's labor and capital inputs are 100 units each, what is the marginal product of labor?

Correct A. 50

B. 100

C. 200

D. 250

Correct Answer: A

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Question 17

A country's GDP is ₦10 trillion, and its GNP is ₦11 trillion. What is the net factor income from abroad?

Correct A. ₦1 trillion

B. ₦500 billion

C. ₦1.5 trillion

D. ₦2 trillion

Correct Answer: A

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Question 18

A monopolist faces a demand curve given by P = 100 - 2Q. If the firm's marginal \cost is ₦20, what is the optimal quantity to produce?

A. 20 units

B. 30 units

Correct C. 40 units

D. 50 units

Correct Answer: C

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Question 19

A firm's \cost function is given by C = 100 + 20L + 10K, where C is \cost, L is labor, and K is capital. If the firm's labor and capital inputs are 50 units each, what is the total \cost?

A. ₦2,500

B. ₦3,000

Correct C. ₦3,500

D. ₦4,000

Correct Answer: C

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Question 20

A country's budget is given by the equation B = T + I, where B is budget, T is taxation, and I is interest. If the country's taxation is ₦5 trillion and interest is ₦2 trillion, what is the budget?

Correct A. ₦7 trillion

B. ₦8 trillion

C. ₦9 trillion

D. ₦10 trillion

Correct Answer: A

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Question 21

A government plans to implement a new tax policy to reduce income inequality. The policy involves a progressive tax system where higher-income individuals pay a higher tax rate. However, the policy also includes a tax exemption for low-income individuals. What is the opportunity \cost of implementing this policy?

Correct A. The opportunity \cost is the reduction in economic growth due to the increased tax burden on high-income individuals.

B. The opportunity \cost is the increase in tax revenue from high-income individuals.

C. The opportunity \cost is the reduction in tax revenue from low-income individuals.

D. The opportunity \cost is the increase in economic inequality due to the tax exemption for low-income individuals.

Correct Answer: A

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Question 22

A firm is considering two different production processes to manufacture a product. Process A requires an initial investment of ₦1,000,000 and generates a profit of ₦200,000 per year. Process B requires an initial investment of ₦500,000 and generates a profit of ₦300,000 per year. What is the opportunity \cost of choo\sing Process A over Process B?

A. The opportunity \cost is the difference in initial investment between the two processes.

Correct B. The opportunity \cost is the difference in profit between the two processes.

C. The opportunity \cost is the difference in the number of years it takes to break even between the two processes.

D. The opportunity \cost is the difference in the total profit generated by the two processes over a 5-year period.

Correct Answer: B

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Question 23

A government is considering a policy to increase the minimum wage for all workers. The policy is expected to increase the \cost of production for firms, which may lead to job losses. However, the policy is also expected to increase the purcha\sing power of workers, which may lead to increased demand for goods and services. What is the opportunity \cost of implementing this policy?

Correct A. The opportunity \cost is the reduction in economic growth due to the increased \cost of production for firms.

B. The opportunity \cost is the increase in unemployment due to job losses.

C. The opportunity \cost is the reduction in the s\tandard of living for low-income workers.

D. The opportunity \cost is the increase in the s\tandard of living for high-income workers.

Correct Answer: A

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Question 24

A firm is considering two different pricing strategies for a product. Strategy A involves setting a high price for the product to maximize profit, while Strategy B involves setting a low price for the product to maximize market share. What is the opportunity \cost of choo\sing Strategy A over Strategy B?

Correct A. The opportunity \cost is the reduction in market share due to the high price.

B. The opportunity \cost is the reduction in profit due to the low price.

C. The opportunity \cost is the increase in the number of customers who are unable to afford the product.

D. The opportunity \cost is the increase in the number of customers who are willing to pay the high price.

Correct Answer: A

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Question 25

A government is considering a policy to increase the tax rate on luxury goods. The policy is expected to increase tax revenue, but it may also lead to a decrease in demand for these goods. What is the opportunity \cost of implementing this policy?

Correct A. The opportunity \cost is the reduction in tax revenue due to the decrease in demand.

B. The opportunity \cost is the increase in the number of jobs lost in the luxury goods industry.

C. The opportunity \cost is the reduction in the s\tandard of living for high-income individuals.

D. The opportunity \cost is the increase in the s\tandard of living for low-income individuals.

Correct Answer: A

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