Post Utme Afe Babalola University 2025 Economics Question 1

Practice objective / multiple choice question 1 from the 2025 Post Utme Afe Babalola University Economics examination.

Post Utme Afe Babalola University 2025 Economics Objective / Multiple Choice
Question 1 POST_UTME_AFE_BABALOLA_UNIVERSITY • 2025 • ECONOMICS • objective

Agricultural mechanization in Nigeria has been hindered by the high \cost of machinery. However, the government has introduced a subsidy program to reduce the \cost. U\sing the concept of opportunity \cost, explain why the subsidy program may not be effective in increa\sing agricultural mechanization.

Answer Options

Correct Answer A. The subsidy program may lead to over-reliance on government support, reducing the incentive for farmers to invest in their own machinery.
B. The subsidy program may not address the underlying issue of high production \costs, which may lead to a decrease in agricultural productivity.
C. The subsidy program may create a market distortion, leading to an increase in the demand for machinery, but not necessarily an increase in agricultural mechanization.
D. The subsidy program may not be effective in increa\sing agricultural mechanization because it does not address the issue of limited access to credit for farmers.
Correct Answer
A
Correct Option:
The subsidy program may lead to over-reliance on government support, reducing the incentive for farmers to invest in their own machinery.

About This Question

This is Post Utme Afe Babalola University 2025 Economics Question 1. It is one of the objective questions from the 2025 Post Utme Afe Babalola University Economics examination.

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