Practice Post UTME BOWEN UNIVERSITY economics 2025 Past Questions

Question 1

A firm operating in a perfectly competitive market will always maximize profits by producing at the point where its marginal revenue (MR) equals its marginal \cost (MC). True or False?

Correct A. True

B. False

C. It dep\ends on the firm's production function

D. It dep\ends on the market demand

Correct Answer: A

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Question 2

A diagram showing the supply and demand curves for a commodity is provided below. If the price of the commodity increases, what will happen to the quantity supplied?

Correct A. Increase

B. Decrease

C. Remain the same

D. Be unaffected

Correct Answer: A

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Question 3

A firm's \cost function is given by C(x) = 2x^2 + 10x + 5. If the firm produces 10 units of output, what is its total \cost?

A. ₦1250

Correct B. ₦1500

C. ₦1750

D. ₦2000

Correct Answer: B

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Question 4

A diagram showing the production possibilities frontier (PPF) for two countries is provided below. If Country A experiences a techno\logical improvement, what will happen to its PPF?

Correct A. Shift outward

B. Shift inward

C. Remain the same

D. Be unaffected

Correct Answer: A

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Question 5

A firm's revenue function is given by R(x) = 3x^2 - 5x + 2. If the firm produces 5 units of output, what is its marginal revenue?

A. ₦20

B. ₦25

Correct C. ₦30

D. ₦35

Correct Answer: C

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Question 6

The concept of scarcity in economics implies that the production of one good is limited by the availability of resources, which can be used to produce other goods. This is an example of a trade-off between:

Correct A. Present consumption and future consumption

B. Present consumption and leisure

C. Future consumption and leisure

D. Present consumption and investment

Correct Answer: A

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Question 7

A firm's demand for labor is said to be elastic if a small change in the wage rate leads to a large change in the quantity of labor demanded. Which of the following is a characteristic of an elastic demand for labor?

A. A small change in the wage rate leads to a small change in the quantity of labor demanded

Correct B. A small change in the wage rate leads to a large change in the quantity of labor demanded

C. A large change in the wage rate leads to a small change in the quantity of labor demanded

D. A large change in the wage rate leads to a large change in the quantity of labor demanded

Correct Answer: B

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Question 8

The supply curve of a firm is said to be upward-sloping if the firm is a price-taker. However, if the firm is a price-maker, the supply curve is said to be downward-sloping. Which of the following is a characteristic of a price-maker firm?

A. The firm is a price-taker

Correct B. The firm is a price-maker

C. The firm produces a homogeneous product

D. The firm produces a heterogeneous product

Correct Answer: B

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Question 9

Agricultural development in Nigeria has been hindered by the lack of access to credit facilities by farmers. Which of the following is a possible solution to this problem?

Correct A. Establishing a national agricultural bank

B. Providing subsidies to farmers

C. Increa\sing the interest rate on loans

D. Reducing the amount of credit available to farmers

Correct Answer: A

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Question 10

The balance of payments (BOP) of a country is said to be in equilibrium when the current account and the capital account are balanced. Which of the following is a characteristic of a country with a balanced BOP?

A. The country has a trade deficit

Correct B. The country has a trade surplus

C. The country has a capital account surplus

D. The country has a capital account deficit

Correct Answer: B

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Question 11

A government imposes a tax on a firm's profits. The tax rate is 20% of the profits. If the firm's profits before tax are ₦1,000,000, what is the amount of tax paid?

Correct A. ₦200,000

B. ₦250,000

C. ₦300,000

D. ₦400,000

Correct Answer: A

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Question 12

A firm's 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 is ₦50, what is the quantity demanded?

Correct A. 50

B. 75

C. 100

D. 125

Correct Answer: A

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Question 13

A consumer has a budget of ₦1,000 and a preference for two goods, A and B. The prices of the goods are ₦200 and ₦300 respectively. If the consumer sp\ends all their budget, what is the quantity of good A consumed?

A. 2

Correct B. 3

C. 4

D. 5

Correct Answer: B

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Question 14

A firm's production function is given by Q = 2L + 3K, where Q is the output, L is the labor and K is the capital. If the firm uses 10 units of labor and 5 units of capital, what is the output?

A. 25

B. 30

Correct C. 35

D. 40

Correct Answer: C

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Question 15

A country's GDP is ₦1,500,000 and its GNP is ₦1,600,000. What is the net factor income from abroad?

A. ₦50,000

B. ₦75,000

Correct C. ₦100,000

D. ₦125,000

Correct Answer: C

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Question 16

Consider a firm operating in a perfectly competitive market with a given supply curve. If the firm's marginal revenue (MR) is greater than its marginal \cost (MC), what will be the effect on the firm's output and profit?

Correct A. The firm will increase output and profit.

B. The firm will decrease output and profit.

C. The firm's output will remain the same, but profit will increase.

D. The firm's output will remain the same, but profit will decrease.

Correct Answer: A

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Question 17

A country's GDP is ₦10 trillion, and its GNP is ₦12 trillion. What is the net factor income from abroad?

Correct A. ₦2 trillion

B. ₦1 trillion

C. ₦0.5 trillion

D. ₦0.1 trillion

Correct Answer: A

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Question 18

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

A. Equilibrium price will decrease, and quantity will increase.

Correct B. Equilibrium price will increase, and quantity will decrease.

C. Equilibrium price will remain the same, but quantity will decrease.

D. Equilibrium price will remain the same, but quantity will increase.

Correct Answer: B

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Question 19

A firm is operating at the point of diminishing returns. What will be the effect on the firm's output and \cost?

A. Output will increase, and \cost will decrease.

Correct B. Output will decrease, and \cost will increase.

C. Output will remain the same, but \cost will increase.

D. Output will remain the same, but \cost will decrease.

Correct Answer: B

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Question 20

A country's agricultural sector is experiencing a surplus, while its industrial sector is experiencing a shortage. What will be the effect on the country's overall economic activity?

A. Overall economic activity will increase.

Correct B. Overall economic activity will decrease.

C. Overall economic activity will remain the same.

D. Overall economic activity will fluctuate.

Correct Answer: B

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Question 21

Suppose a country's import demand function is given by $ Q^d = 100 - 2P $ and the export supply function is given by $ Q^s = 50 + P $, where ( P ) is the price in dollars. If the country's trade balance is initially in surplus, what is the price level at which the trade balance will be zero?

A. $25

Correct B. $50

C. $75

D. $100

Correct Answer: B

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Question 22

A firm's \cost function is given by $ C = 100 + 2Q + 0.01Q^2 $. If the firm produces 100 units of output, what is the total \cost of production?

A. ₦1200

B. ₦1500

Correct C. ₦1800

D. ₦2000

Correct Answer: C

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Question 23

Suppose a country's GDP is $100 billion and its imports are $20 billion. If the country's trade balance is initially in surplus, what is the value of its exports?

A. $80 billion

B. $90 billion

C. $100 billion

Correct D. $120 billion

Correct Answer: D

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Question 24

A firm's revenue function is given by $ R = 200Q - 0.05Q^2 $. If the firm produces 50 units of output, what is the total revenue?

A. ₦9000

B. ₦10,000

Correct C. ₦11,250

D. ₦12,500

Correct Answer: C

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Question 25

Suppose a country's import demand function is given by $ Q^d = 100 - 2P $ and the export supply function is given by $ Q^s = 50 + P $, where ( P ) is the price in dollars. If the country's trade balance is initially in surplus, what is the price level at which the trade balance will be zero?

A. $25

Correct B. $50

C. $75

D. $100

Correct Answer: B

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