Practice Post UTME MOUNTAIN TOP UNIVERSITY economics 2025 Past Questions

Question 1

The government of Nigeria has implemented a policy to increase the production of rice in the country. The policy includes providing subsidies to farmers and investing in irrigation infrastructure. However, the policy has also led to an increase in the price of rice in the international market. U\sing the concept of opportunity \cost, explain why the government's policy may not be effective in increa\sing rice production in the country.

Correct A. The government's policy has led to an increase in the price of rice in the international market, making it less competitive for Nigerian farmers.

B. The government's policy has led to an increase in the production of rice in the country, but the increased production has not been matched by an increase in demand.

C. The government's policy has led to an increase in the production of rice in the country, but the increased production has not been matched by an increase in the quality of the rice.

D. The government's policy has led to an increase in the production of rice in the country, but the increased production has not been matched by an increase in the price of rice in the country.

Correct Answer: A

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Question 2

A firm is producing a good with the following \cost and revenue functions: C(x) = 2x^2 + 10x + 5 and R(x) = 3x^2 - 2x + 1. U\sing the concept of profit maximization, find the level of production that will maximize the firm's profit.

Correct A. x = 6

B. x = 12

C. x = 18

D. x = 24

Correct Answer: A

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Question 3

The government of Nigeria has implemented a policy to increase the production of electricity in the country. The policy includes investing in new power plants and increa\sing the efficiency of existing power plants. However, the policy has also led to an increase in the price of electricity in the country. U\sing the concept of elasticity of demand, explain why the government's policy may not be effective in increa\sing electricity production in the country.

Correct A. The government's policy has led to an increase in the price of electricity in the country, making it less competitive for consumers.

B. The government's policy has led to an increase in the production of electricity in the country, but the increased production has not been matched by an increase in demand.

C. The government's policy has led to an increase in the production of electricity in the country, but the increased production has not been matched by an increase in the quality of the electricity.

D. The government's policy has led to an increase in the production of electricity in the country, but the increased production has not been matched by an increase in the price of electricity in the country.

Correct Answer: A

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Question 4

A firm is producing a good with the following demand and supply functions: D(x) = 100 - 2x and S(x) = 20 + 3x. U\sing the concept of market equilibrium, find the level of production that will result in a market equilibrium.

A. x = 10

Correct B. x = 16

C. x = 20

D. x = 24

Correct Answer: B

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Question 5

The government of Nigeria has implemented a policy to increase the production of rice in the country. The policy includes providing subsidies to farmers and investing in irrigation infrastructure. However, the policy has also led to an increase in the price of rice in the international market. U\sing the concept of opportunity \cost, explain why the government's policy may not be effective in increa\sing rice production in the country.

Correct A. The government's policy has led to an increase in the price of rice in the international market, making it less competitive for Nigerian farmers.

B. The government's policy has led to an increase in the production of rice in the country, but the increased production has not been matched by an increase in demand.

C. The government's policy has led to an increase in the production of rice in the country, but the increased production has not been matched by an increase in the quality of the rice.

D. The government's policy has led to an increase in the production of rice in the country, but the increased production has not been matched by an increase in the price of rice in the country.

Correct Answer: A

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Question 6

A country's GDP is 100 billion naira, and its GNP is 120 billion naira. What is the net factor income from abroad?

A. 20 billion naira

Correct B. 30 billion naira

C. 40 billion naira

D. 50 billion naira

Correct Answer: B

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Question 7

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm wants to increase its output by 20%, what is the required percentage increase in labor and capital?

A. 10% increase in labor and 10% increase in capital

B. 15% increase in labor and 15% increase in capital

Correct C. 20% increase in labor and 20% increase in capital

D. 25% increase in labor and 25% increase in capital

Correct Answer: C

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Question 8

A government imposes a tax on a firm's output. The firm's supply curve shifts to the left. What is the effect on the firm's profit-maximizing output and price?

Correct A. Output decreases and price increases

B. Output increases and price decreases

C. Output remains the same and price increases

D. Output decreases and price decreases

Correct Answer: A

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Question 9

A consumer has a budget constraint of 100 naira and a preference for two goods, A and B. The prices of A and B are 5 naira and 10 naira, respectively. What is the consumer's optimal consumption bundle?

A. 10 units of A and 10 units of B

Correct B. 20 units of A and 5 units of B

C. 15 units of A and 15 units of B

D. 5 units of A and 20 units of B

Correct Answer: B

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Question 10

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm wants to increase its output by 20%, what is the required percentage increase in labor and capital?

A. 10% increase in labor and 10% increase in capital

B. 15% increase in labor and 15% increase in capital

Correct C. 20% increase in labor and 20% increase in capital

D. 25% increase in labor and 25% increase in capital

Correct Answer: C

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Question 11

A firm's demand function is given by Q = 100 - 2P + 3Y, where Q is the quantity demanded, P is the price, and Y is the income. If the price elasticity of demand is -2, what is the price elasticity of demand with respect to income?

A. 6

Correct B. -1

C. 4

D. 3

Correct Answer: B

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Question 12

A consumer's utility function is given by U = 2x + 3y, where x and y are the quantities of two goods. If the consumer's budget constraint is 2x + 3y = 12, what is the consumer's optimal bundle of goods?

Correct A. x = 2, y = 4

B. x = 4, y = 2

C. x = 3, y = 3

D. x = 1, y = 1

Correct Answer: A

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Question 13

A firm's \cost function is given by C = 100 + 2Q + 0.5Q^2, where Q is the quantity produced. If the firm produces 10 units, what is the total \cost?

A. 150

B. 200

Correct C. 250

D. 300

Correct Answer: C

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Question 14

A country's balance of payments is given by BOP = X - M, where X is the value of exports and M is the value of imports. If the value of exports is 100 and the value of imports is 80, what is the balance of payments?

Correct A. 20

B. 30

C. 40

D. 50

Correct Answer: A

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Question 15

A firm's revenue function is given by R = 100Q - 2Q^2, where Q is the quantity sold. If the firm sells 10 units, what is the total revenue?

A. 800

Correct B. 900

C. 1000

D. 1100

Correct Answer: B

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Question 16

A firm is operating on its long-run average \cost curve. If the firm experiences a decrease in the price of one of its inputs, what will happen to its long-run average \cost curve?

A. It will shift to the left

B. It will shift to the right

C. It will remain unchanged

Correct D. It will shift downwards

Correct Answer: D

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Question 17

A country is experiencing a trade deficit. What is the likely effect on its balance of payments?

A. The trade deficit will increase the current account balance

Correct B. The trade deficit will decrease the current account balance

C. The trade deficit will have no effect on the current account balance

D. The trade deficit will increase the capital account balance

Correct Answer: B

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Question 18

A consumer is faced with a budget constraint of ₦1000. If the price of good X is ₦200 and the price of good Y is ₦300, what is the opportunity \cost of consuming one more unit of good X?

A. ₦100

Correct B. ₦200

C. ₦300

D. ₦400

Correct Answer: B

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Question 19

A central bank is considering a monetary policy to reduce inflation. If the current inflation rate is 8% and the target inflation rate is 4%, what is the likely effect of a 2% increase in the reserve requirement on the money supply?

A. The money supply will increase

Correct B. The money supply will decrease

C. The money supply will remain unchanged

D. The money supply will increase by 1%

Correct Answer: B

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Question 20

A farmer is considering whether to adopt a new techno\logy that will increase crop yields by 10%. If the \cost of the techno\logy is ₦5000 and the price of the crop is ₦2000 per unit, what is the break-even point for the farmer?

A. ₦2500

Correct B. ₦5000

C. ₦7500

D. ₦10000

Correct Answer: B

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Question 21

The government of Nigeria has introduced a new policy to increase agricultural production. The policy includes providing subsidies to farmers, investing in irrigation systems, and promoting the use of techno\logy in farming. Which of the following is a likely outcome of this policy?

Correct A. An increase in the production of crops such as maize, sorghum, and millet

B. A decrease in the production of crops such as rice, wheat, and sugarcane

C. An increase in the production of livestock such as cattle, sheep, and goats

D. A decrease in the production of livestock such as poultry and fish

Correct Answer: A

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Question 22

A monopolist firm produces a product with a demand curve given by Q = 100 - 2P and a \cost function C = 2Q^2 + 10Q. What is the profit-maximizing price of the product?

A. ₦50

B. ₦75

Correct C. ₦100

D. ₦125

Correct Answer: C

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Question 23

A consumer has a utility function given by U = 2x + 3y, where x and y are the quantities of two goods consumed. The prices of the goods are ₦10 and ₦20, respectively. What is the consumer's budget constraint?

Correct A. 10x + 20y = 100

B. 10x + 20y = 200

C. 10x + 20y = 300

D. 10x + 20y = 400

Correct Answer: A

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Question 24

The government of Nigeria has introduced a new tax policy to increase revenue. The policy includes a 10% tax on all goods and services. What is the effect of this policy on the supply curve of a firm?

A. The supply curve shifts to the left

Correct B. The supply curve shifts to the right

C. The supply curve remains the same

D. The supply curve shifts downward

Correct Answer: B

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Question 25

A consumer has a budget of ₦100 and a utility function given by U = 2x + 3y, where x and y are the quantities of two goods consumed. The prices of the goods are ₦10 and ₦20, respectively. What is the consumer's optimal consumption bundle?

Correct A. x = 5, y = 2

B. x = 3, y = 4

C. x = 2, y = 5

D. x = 4, y = 3

Correct Answer: A

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