POST UTME AFE BABALOLA UNIVERSITY 2025 Economics | Objective

Are you preparing for POST UTME AFE BABALOLA UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2025 Economics (Objective) questions designed to simulate the real exam environment.

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Question 1
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.
Correct 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

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Question 2
A monopolist in Nigeria produces a good with a cons\tant marginal \cost of ₦100 and a price of ₦200. U\sing the concept of profit maximization, calculate the quantity of the good that the monopolist will produce.
A. 100 units
B. 200 units
Correct C. 500 units
D. 1000 units

Correct Answer: C

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Question 3
U\sing the concept of national income accounting, calculate the GDP of Nigeria in 2020, given the following data: Consumer Sp\ending = ₦10 trillion, Investment = ₦2 trillion, Government Sp\ending = ₦3 trillion, and Net Exports = ₦1 trillion.
A. ₦16 trillion
B. ₦18 trillion
Correct C. ₦20 trillion
D. ₦22 trillion

Correct Answer: C

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Question 4
A farmer in Nigeria has 100 hectares of land to cultivate maize. The marginal product of labor is 10 units of maize per hour of labor, and the wage rate is ₦100 per hour. U\sing the concept of scarcity and choice, explain why the farmer may choose to hire labor to cultivate the land.
Correct A. The farmer may choose to hire labor because the marginal product of labor is greater than the wage rate.
B. The farmer may choose to hire labor because the wage rate is greater than the marginal product of labor.
C. The farmer may choose to hire labor because the land is too large to cultivate alone.
D. The farmer may choose to hire labor because the farmer is too old to cultivate the land alone.

Correct Answer: A

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Question 5
U\sing the concept of international trade, explain why Nigeria may import goods from other countries, despite having a comparative advantage in producing those goods.
A. Nigeria may import goods from other countries because of the high transportation \costs of exporting goods.
Correct B. Nigeria may import goods from other countries because of the high tariffs imposed by other countries on Nigerian exports.
C. Nigeria may import goods from other countries because of the low quality of Nigerian goods.
D. Nigeria may import goods from other countries because of the high demand for those goods in Nigeria.

Correct Answer: B

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Question 6
A firm's total revenue (TR) is given by the equation TR = 100x - 2x^2, where x is the number of units sold. If the firm sells 20 units, what is the total revenue?
Correct A. ₦2000
B. ₦1800
C. ₦1600
D. ₦1400

Correct Answer: A

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Question 7
A consumer's utility function is given by U(x,y) = 2x + 3y, where x is the number of units of good X and y is the number of units of good Y. If the consumer has a budget of ₦100 and the prices of good X and good Y are ₦5 and ₦3 respectively, what is the optimal consumption bundle?
A. (10,10)
B. (20,5)
Correct C. (15,15)
D. (5,20)

Correct Answer: C

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Question 8
A country's GDP is given by the equation GDP = C + I + G + \( X - M \), where C is consumption, I is investment, G is government sp\ending, X is exports, and M is imports. If the country's GDP is ₦500 billion, consumption is ₦150 billion, investment is ₦50 billion, government sp\ending is ₦100 billion, exports are ₦200 billion, and imports are ₦50 billion, what is the value of X - M?
A. ₦100 billion
B. ₦150 billion
Correct C. ₦200 billion
D. ₦250 billion

Correct Answer: C

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Question 9
A firm's production function is given by the equation Q = 2L^2 + 3K, where Q is output, L is labor, and K is capital. If the firm uses 10 units of labor and 5 units of capital, what is the output?
A. 50
B. 60
Correct C. 70
D. 80

Correct Answer: C

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Question 10
A consumer's budget constraint is given by the equation 2x + 3y = 12, where x is the number of units of good X and y is the number of units of good Y. If the consumer's utility function is U(x,y) = 2x + 3y, what is the optimal consumption bundle?
Correct A. (3,3)
B. (4,2)
C. (5,1)
D. (6,0)

Correct Answer: A

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Question 11
Determine the equilibrium price and quantity of a commodity when the demand function is given by Qd = 100 - 2P and the supply function is given by Qs = 2P - 10.
A. ₦50
Correct B. ₦75
C. ₦100
D. ₦125

Correct Answer: B

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Question 12
A consumer has a budget of ₦1000 and faces the following prices for two goods: Good X is priced at ₦200 and Good Y is priced at ₦300. If the consumer's utility function is given by U = 2X + 3Y, determine the optimal bundle of goods that maximizes utility.
Correct A. X = 2, Y = 1
B. X = 3, Y = 2
C. X = 4, Y = 3
D. X = 5, Y = 4

Correct Answer: A

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Question 13
A country's GDP is given by the equation GDP = C + I + G + \( X - M \). If the country's consumption is ₦500 billion, investment is ₦200 billion, government sp\ending is ₦300 billion, exports are ₦400 billion, and imports are ₦200 billion, determine the country's GDP.
A. ₦1.5 trillion
B. ₦1.8 trillion
Correct C. ₦2.0 trillion
D. ₦2.2 trillion

Correct Answer: C

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Question 14
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm has 100 units of labor and 200 units of capital, determine the firm's output.
A. 200 units
B. 300 units
Correct C. 400 units
D. 500 units

Correct Answer: C

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Question 15
A consumer's indifference curve is given by the equation U = 2X + 3Y. If the consumer's budget constraint is given by the equation 2X + 3Y = 12, determine the consumer's optimal bundle of goods.
Correct A. X = 2, Y = 2
B. X = 3, Y = 1
C. X = 4, Y = 0
D. X = 0, Y = 4

Correct Answer: A

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Question 16
A monopolist's marginal revenue (MR) is given by the equation MR = 100 - 2x, where x is the quantity sold. If the monopolist's marginal \cost (MC) is 20, at what quantity will the monopolist stop producing?
A. 10
B. 20
Correct C. 30
D. 40

Correct Answer: C

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Question 17
A consumer's utility function is given by U(x, y) = 2x + 3y. If the consumer's income is ₦1000 and the prices of x and y are ₦5 and ₦10 respectively, find the consumer's optimal bundle of x and y.
Correct A. x = 100, y = 50
B. x = 50, y = 100
C. x = 200, y = 0
D. x = 0, y = 100

Correct Answer: A

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Question 18
A firm's \cost function is given by C(x) = 100 + 2x + 0.01x^2. If the firm produces 100 units, what is the total \cost of production?
A. ₦1200
B. ₦1500
Correct C. ₦1800
D. ₦2000

Correct Answer: C

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Question 19
A bank's reserve requirement is 20%. If the bank has ₦1000 in reserves and wants to increase its l\ending by ₦500, how much will it need to borrow from the central bank?
A. ₦200
Correct B. ₦250
C. ₦300
D. ₦350

Correct Answer: B

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Question 20
A firm's revenue function is given by R(x) = 100x - 0.01x^2. If the firm produces 100 units, what is the total revenue?
A. ₦9000
Correct B. ₦10000
C. ₦11000
D. ₦12000

Correct Answer: B

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Question 21
A firm's revenue function is given by R(x) = 100x - 2x^2. If the firm's marginal revenue is 120 when x = 8, what is the value of the firm's total revenue?
A. ₦800
B. ₦1000
Correct C. ₦1200
D. ₦1600

Correct Answer: C

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Question 22
A consumer's utility function is given by U(x, y) = 2x + 3y. If the consumer's income is ₦1000 and the prices of x and y are ₦5 and ₦3 respectively, what is the consumer's optimal bundle?
A. x = 10, y = 20
B. x = 20, y = 10
Correct C. x = 15, y = 15
D. x = 5, y = 5

Correct Answer: C

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Question 23
A firm is operating in a perfectly competitive market with a demand curve given by P = 100 - 2x. If the firm's marginal \cost is ₦20, what is the firm's optimal quantity?
A. x = 20
Correct B. x = 30
C. x = 40
D. x = 50

Correct Answer: B

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Question 24
A consumer's indifference curve is given by U(x, y) = 2x + 3y. If the consumer's income is ₦1000 and the prices of x and y are ₦5 and ₦3 respectively, what is the consumer's optimal bundle?
A. x = 10, y = 20
B. x = 20, y = 10
Correct C. x = 15, y = 15
D. x = 5, y = 5

Correct Answer: C

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Question 25
A firm is operating in a monopoly market with a demand curve given by P = 100 - 2x. If the firm's marginal \cost is ₦20, what is the firm's optimal quantity?
A. x = 20
Correct B. x = 30
C. x = 40
D. x = 50

Correct Answer: B

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