Practice Post UTME BELLS UNIVERSITY economics 2025 Past Questions

Question 1

A consumer's indifference curve is given by the equation ( u(x,y) = 2x + 3y ). If the consumer's income is ₦1000 and the prices of x and y are ₦5 and ₦3 respectively, find the consumer's optimal bundle of x and y.

Correct A. (200, 100)

B. (150, 150)

C. (100, 200)

D. (50, 250)

Correct Answer: A

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Question 2

A country's balance of payments is given by the following equation: \( BOP = \( X - M \ \) + \( F - I \) ). If the country's exports are ₦500 billion, imports are ₦400 billion, foreign investment is ₦200 billion, and domestic investment is ₦300 billion, what is the country's balance of payments?

Correct A. ₦100 billion

B. ₦200 billion

C. ₦300 billion

D. ₦400 billion

Correct Answer: A

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Question 3

A firm's production function is given by the equation \( Q = 2L + 3K \). If the firm's output is 100 units, labor is 20 units, and capital is 30 units, what is the firm's marginal product of labor?

A. 2

Correct B. 3

C. 4

D. 5

Correct Answer: B

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Question 4

A country's agricultural sector is given by the following equation: \( A = 2P + 3I \). If the country's agricultural output is 100 units, price is ₦5, and investment is ₦10, what is the country's marginal product of investment?

A. 2

Correct B. 3

C. 4

D. 5

Correct Answer: B

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Question 5

A firm's \cost function is given by the equation \( C = 2L + 3K \). If the firm's labor is 20 units and capital is 30 units, what is the firm's total \cost?

A. 100

B. 200

Correct C. 300

D. 400

Correct Answer: C

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Question 6

Consider a closed economy with a GDP of ₦1,500 billion and a GNP of ₦1,600 billion. If the net factor income from abroad is ₦100 billion, what is the value of the country's net foreign investment?

A. ₦100 billion

Correct B. ₦200 billion

C. ₦300 billion

D. ₦400 billion

Correct Answer: B

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Question 7

A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \), where Q is output, L is labor, and K is capital. If the firm's labor and capital are 100 and 400 respectively, what is the value of the firm's output?

A. 100

B. 200

Correct C. 400

D. 800

Correct Answer: C

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Question 8

A country's balance of payments is given by the following equation: BOP = X - M + \( F - I \), where BOP is the balance of payments, X is exports, M is imports, F is foreign investment, and I is interest payments. If the country's exports are ₦1,200 billion, imports are ₦1,000 billion, foreign investment is ₦200 billion, and interest payments are ₦100 billion, what is the value of the country's balance of payments?

A. ₦100 billion

B. ₦200 billion

Correct C. ₦300 billion

D. ₦400 billion

Correct Answer: C

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Question 9

A consumer's utility function is given by U = 2x + 3y, where U is utility, x is the quantity of good x, and y is the quantity of good y. If the consumer's budget is ₦1,000 and the prices of good x and good y are ₦100 and ₦200 respectively, what is the value of the consumer's utility?

A. 100

B. 200

Correct C. 300

D. 400

Correct Answer: C

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Question 10

A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \), where Q is output, L is labor, and K is capital. If the firm's labor and capital are 100 and 400 respectively, what is the value of the firm's output?

A. 100

B. 200

Correct C. 400

D. 800

Correct Answer: C

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Question 11

An agricultural firm in Nigeria produces two crops: maize and soybeans. The production function for maize is given by Qm = 1000L^0.4K^0.3, where Qm is the quantity of maize produced, L is the labor input, and K is the capital input. The production function for soybeans is given by Qs = 800L^0.2K^0.5, where Qs is the quantity of soybeans produced. If the firm has 100 units of labor and 50 units of capital, what is the total revenue from the sale of both crops?

A. ₦250,000

Correct B. ₦300,000

C. ₦350,000

D. ₦400,000

Correct Answer: B

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Question 12

A firm in Nigeria is considering two different production techno\logies for its manufacturing process. The first techno\logy has a fixed \cost of ₦100,000 and a variable \cost of ₦50 per unit produced. The second techno\logy has a fixed \cost of ₦150,000 and a variable \cost of ₦30 per unit produced. If the firm produces 1,000 units, what is the total \cost of each techno\logy?

A. ₦150,000

Correct B. ₦200,000

C. ₦250,000

D. ₦300,000

Correct Answer: B

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Question 13

A Nigerian bank has a reserve requirement of 10% and a cash reserve ratio of 5%. If the bank has ₦100 million in deposits and ₦5 million in cash, what is the maximum amount of loans it can make?

A. ₦90 million

Correct B. ₦95 million

C. ₦100 million

D. ₦105 million

Correct Answer: B

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Question 14

A Nigerian government is considering a policy to increase the minimum wage for workers in the manufacturing sector. If the policy is implemented, the government expects the demand for labor to increase by 10% and the supply of labor to decrease by 5%. What is the expected effect on the equilibrium wage?

Correct A. Increase

B. Decrease

C. No change

D. Uncertain

Correct Answer: A

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Question 15

A Nigerian firm is considering investing in a new project. The project has a fixed \cost of ₦50 million and a variable \cost of ₦20 per unit produced. The firm expects to sell 10,000 units at a price of ₦50 per unit. What is the minimum rate of return on investment required for the firm to accept the project?

A. 10%

B. 15%

Correct C. 20%

D. 25%

Correct Answer: C

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Question 16

A perfectly competitive market has the following characteristics: (i) many firms producing a homogeneous product, (ii) free entry and exit, (iii) perfect knowledge of market conditions, and (iv) price determined by the intersection of demand and supply curves. Which of the following is NOT a characteristic of a perfectly competitive market?

A. Price determined by the intersection of demand and supply curves

B. Free entry and exit

C. Perfect knowledge of market conditions

Correct D. Firms producing differentiated products

Correct Answer: D

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Question 17

A country's balance of payments (BOP) accounts can be classified into three main categories: current account, capital account, and financial account. Which of the following is NOT a component of the current account?

A. Exports of goods and services

B. Imports of goods and services

C. Net factor income from abroad

Correct D. Net capital outflows

Correct Answer: D

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Question 18

A consumer's utility function is given by U(x, y) = 2x + 3y. The consumer's budget constraint is 2x + 3y = 12. U\sing the method of substitution, find the consumer's optimal bundle of x and y.

Correct A. x = 2, y = 4

B. x = 3, y = 3

C. x = 4, y = 2

D. x = 6, y = 0

Correct Answer: A

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Question 19

A government's budget can be classified into three main categories: revenue, exp\enditure, and net l\ending. Which of the following is NOT a component of the government's revenue?

A. Taxes

B. Grants

Correct C. Fines

D. Interest on loans

Correct Answer: C

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Question 20

A country's GDP can be calculated u\sing the following formula: GDP = C + I + G + \( X - M \). Which of the following is NOT a component of the GDP?

A. Consumption (C)

B. Investment (I)

C. Government sp\ending (G)

Correct D. Imports (M)

Correct Answer: D

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Question 21

Suppose the demand for a product is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the price elasticity of demand is -2, what is the percentage change in quantity demanded when the price increases by 10%?

Correct A. 20%

B. 30%

C. 40%

D. 50%

Correct Answer: A

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Question 22

A firm produces two goods, A and B. The production function for good A is given by Q_A = 10L + 5K, where L is labor and K is capital. The production function for good B is given by Q_B = 8L + 3K. If the firm has 100 units of labor and 50 units of capital, what is the total output of the firm?

A. 500

B. 600

C. 700

Correct D. 800

Correct Answer: D

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Question 23

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 100 billion naira, consumption is 30 billion naira, investment is 20 billion naira, government sp\ending is 15 billion naira, exports are 25 billion naira, and imports are 10 billion naira, what is the value of the country's net exports?

A. 5 billion naira

B. 10 billion naira

C. 15 billion naira

Correct D. 20 billion naira

Correct Answer: D

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Question 24

A firm's \cost function is given by the equation C = 100 + 2Q, where C is the total \cost and Q is the quantity produced. If the firm produces 50 units of the good, what is the total \cost of production?

A. 150

B. 200

C. 250

Correct D. 300

Correct Answer: D

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Question 25

A country's GNP is given by the equation GNP = GDP + (net factor income from abroad). If the country's GDP is 100 billion naira and the net factor income from abroad is 10 billion naira, what is the country's GNP?

A. 90 billion naira

B. 100 billion naira

Correct C. 110 billion naira

D. 120 billion naira

Correct Answer: C

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