Practice Post UTME ELIZADE UNIVERSITY economics 2025 Past Questions

Question 1

Consider a perfectly competitive market with n firms, each producing a homogeneous product. If the market demand curve is given by Qd = 100 - 2P and the supply curve is given by Qs = 2P, find the equilibrium price and quantity u\sing the supply and demand framework.

A. \( P = 50, Q = 50 \)

Correct B. \( P = 25, Q = 75 \)

C. \( P = 75, Q = 25 \)

D. \( P = 100, Q = 0 \)

Correct Answer: B

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Question 2

A monopolist faces a demand curve given by Qd = 100 - 2P and a marginal revenue curve given by MR = 200 - 2P. Find the profit-maximizing price and quantity u\sing the marginal revenue and marginal \cost framework.

Correct A. \( P = 75, Q = 25 \)

B. \( P = 50, Q = 50 \)

C. \( P = 25, Q = 75 \)

D. \( P = 100, Q = 0 \)

Correct Answer: A

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Question 3

A firm is considering investing in a new project with an initial investment of ₦100,000 and expected returns of ₦120,000 per year for 5 years. If the discount rate is 10%, calculate the net present value of the project u\sing the present value formula.

A. ₦20,000

Correct B. ₦30,000

C. ₦40,000

D. ₦50,000

Correct Answer: B

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Question 4

A country's balance of payments account shows a trade deficit of ₦100 billion and a current account deficit of ₦50 billion. If the capital account surplus is ₦20 billion, calculate the overall balance of payments deficit u\sing the balance of payments identity.

A. ₦30 billion

B. ₦40 billion

Correct C. ₦50 billion

D. ₦60 billion

Correct Answer: C

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Question 5

A firm is considering investing in a new project with an initial investment of ₦100,000 and expected returns of ₦120,000 per year for 5 years. If the discount rate is 10%, calculate the internal rate of return of the project u\sing the internal rate of return formula.

A. 15%

Correct B. 20%

C. 25%

D. 30%

Correct Answer: B

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Question 6

Assume that 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 cons\tant and equal to 0.5, find the price at which the quantity demanded is 60 units.

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 7

A country's balance of payments is given by the equation BOP = X - M, where X is the value of exports and M is the value of imports. If the value of exports is ₦100 billion and the value of imports is ₦120 billion, what is the balance of payments?

Correct A. ₦20 billion

B. ₦30 billion

C. ₦40 billion

D. ₦50 billion

Correct Answer: A

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Question 8

A firm's production function is given by the equation Q = 100K^0.5L^0.5, where Q is the quantity produced, K is the capital and L is the labor. If the firm wants to produce 100 units of output, how much labor should it hire if the capital is 100 units?

A. 10 units

Correct B. 20 units

C. 30 units

D. 40 units

Correct Answer: B

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Question 9

A country's national income is given by the equation Y = C + I + G, where Y is the national income, C is the consumption, I is the investment and G is the government sp\ending. If the consumption is ₦100 billion, the investment is ₦50 billion and the government sp\ending is ₦20 billion, what is the national income?

A. ₦170 billion

B. ₦180 billion

Correct C. ₦190 billion

D. ₦200 billion

Correct Answer: C

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Question 10

A firm's demand function 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 cons\tant and equal to 0.5, find the price at which the quantity demanded is 60 units.

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 11

A monopolistically competitive firm faces a demand curve with a cons\tant elasticity of -2. If the firm's marginal revenue (MR) is given by MR = 100 - 2Q, where Q is the quantity sold, find the firm's optimal quantity and price.

A. Q = 25, P = 75

B. Q = 50, P = 50

Correct C. Q = 75, P = 33.33

D. Q = 100, P = 25

Correct Answer: C

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Question 12

A firm's \cost function is given by C(Q) = 100 + 2Q + 0.1Q^2. If the firm's revenue function is R(Q) = 200Q - 0.5Q^2, find the firm's profit-maximizing quantity and price.

A. Q = 20, P = 90

B. Q = 30, P = 80

Correct C. Q = 40, P = 70

D. Q = 50, P = 60

Correct Answer: C

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Question 13

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, consumption is 60 billion, investment is 10 billion, government sp\ending is 20 billion, exports are 30 billion, and imports are 20 billion, find the country's GDP.

Correct A. 100 billion

B. 120 billion

C. 140 billion

D. 160 billion

Correct Answer: A

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Question 14

A monopolist faces a demand curve with a cons\tant elasticity of -3. If the firm's marginal revenue (MR) is given by MR = 150 - 3Q, where Q is the quantity sold, find the firm's optimal quantity and price.

A. Q = 25, P = 75

B. Q = 50, P = 50

Correct C. Q = 75, P = 33.33

D. Q = 100, P = 25

Correct Answer: C

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Question 15

A firm's \cost function is given by C(Q) = 150 + 3Q + 0.2Q^2. If the firm's revenue function is R(Q) = 300Q - 1Q^2, find the firm's profit-maximizing quantity and price.

A. Q = 20, P = 90

B. Q = 30, P = 80

Correct C. Q = 40, P = 70

D. Q = 50, P = 60

Correct Answer: C

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Question 16

Consider a production function ( f(x) = 2x^2 + 3x + 1 ) where ( x ) represents the number of units produced. If the marginal product of labor is 5 units when \( x = 4 \), what is the value of the marginal product of labor when \( x = 5 \)?

A. 10

Correct B. 12

C. 15

D. 20

Correct Answer: B

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Question 17

A country's balance of payments can be affected by the following factors: (A) exchange rates, (B) interest rates, (C) inflation rates, (D) all of the above. Which of the following is NOT a factor that affects a country's balance of payments?

A. Exchange rates

B. Interest rates

C. Inflation rates

Correct D. Government policies

Correct Answer: D

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Question 18

A firm's production function is given by ( f(x) = 2x^2 + 3x + 1 ). If the firm's marginal product of labor is 5 units when \( x = 4 \), what is the value of the marginal product of labor when \( x = 5 \)?

A. 10

Correct B. 12

C. 15

D. 20

Correct Answer: B

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Question 19

Consider the following diagram:

Correct A. Supply and demand curves

B. Production possibilities frontier

C. Cost-benefit analysis

D. Opportunity \cost

Correct Answer: A

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Question 20

A country's balance of payments can be affected by the following factors: (A) exchange rates, (B) interest rates, (C) inflation rates, (D) all of the above. Which of the following is NOT a factor that affects a country's balance of payments?

A. Exchange rates

B. Interest rates

C. Inflation rates

Correct D. Government policies

Correct Answer: D

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Question 21

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 two goods, where the production of one good is sacrificed for the production of another. What is the opportunity \cost of producing one unit of wheat in a country where the production of wheat is limited by the availability of water?

Correct A. The opportunity \cost is the amount of water that could have been used to produce one unit of wheat.

B. The opportunity \cost is the amount of land that could have been used to produce one unit of wheat.

C. The opportunity \cost is the amount of labor that could have been used to produce one unit of wheat.

D. The opportunity \cost is the amount of capital that could have been used to produce one unit of wheat.

Correct Answer: A

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Question 22

A country's balance of payments (BOP) is a statistical statement that summarizes all economic transactions between residents and non-residents over a specific period of time. The BOP can be broken down into three main components: the current account, the capital account, and the financial account. What is the primary purpose of the current account in the BOP?

Correct A. To record all transactions that involve the exchange of goods and services between residents and non-residents.

B. To record all transactions that involve the exchange of capital between residents and non-residents.

C. To record all transactions that involve the exchange of financial assets between residents and non-residents.

D. To record all transactions that involve the exchange of goods and services between residents and non-residents, as well as the exchange of capital and financial assets.

Correct Answer: A

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Question 23

The concept of opportunity \cost is closely related to the concept of scarcity. In a situation where a country has to choose between producing wheat and producing rice, what is the opportunity \cost of producing one unit of wheat?

Correct A. The opportunity \cost is the amount of rice that could have been produced instead of wheat.

B. The opportunity \cost is the amount of land that could have been used to produce rice instead of wheat.

C. The opportunity \cost is the amount of labor that could have been used to produce rice instead of wheat.

D. The opportunity \cost is the amount of capital that could have been used to produce rice instead of wheat.

Correct Answer: A

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Question 24

A country's budget is a plan for how it will sp\end its revenue over a specific period of time. What is the primary purpose of a budget in a country?

A. To record all transactions that involve the exchange of goods and services between residents and non-residents.

B. To record all transactions that involve the exchange of capital between residents and non-residents.

C. To record all transactions that involve the exchange of financial assets between residents and non-residents.

Correct D. To plan how the country will sp\end its revenue over a specific period of time.

Correct Answer: D

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Question 25

The concept of demand and supply is a fundamental concept in economics. What is the equilibrium price and quantity in a market where the demand curve is downward sloping and the supply curve is upward sloping?

Correct A. The equilibrium price is the price at which the quantity demanded equals the quantity supplied.

B. The equilibrium quantity is the quantity at which the demand curve intersects the supply curve.

C. The equilibrium price is the price at which the demand curve intersects the supply curve.

D. The equilibrium quantity is the quantity at which the demand curve equals the supply curve.

Correct Answer: A

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