Practice Post UTME NILE UNIVERSITY economics 2023 Past Questions

Question 1

A consumer's indifference curve is downward sloping and convex to the origin. What is the implication of this shape on the consumer's utility function?

A. The consumer's utility function is linear.

Correct B. The consumer's utility function is concave.

C. The consumer's utility function is convex.

D. The consumer's utility function is cons\tant.

Correct Answer: B

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Question 2

A firm is producing a good with a cons\tant marginal \cost (MC) of ₦100. The market price (P) is ₦120. What is the profit-maximizing quantity $ Q* $?

A. Q* = 1000

B. Q* = 1200

Correct C. Q* = 1500

D. Q* = 1800

Correct Answer: C

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Question 3

A country's balance of payments (BOP) is in equilibrium when the current account (CA) is equal to the capital account (KA). What is the implication of this equilibrium on the country's exchange rate?

A. The exchange rate will appreciate.

B. The exchange rate will depreciate.

Correct C. The exchange rate will remain cons\tant.

D. The exchange rate will fluctuate.

Correct Answer: C

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Question 4

A consumer is faced with a budget constraint of ₦1000 and two goods, A and B. The prices of the goods are ₦200 and ₦300, respectively. What is the consumer's optimal bundle (x, y)?

A. x = 2, y = 1

Correct B. x = 3, y = 2

C. x = 4, y = 3

D. x = 5, y = 4

Correct Answer: B

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Question 5

A firm is a pure monopolist with a demand curve given by Q = 100 - 2P. The firm's marginal \cost (MC) is cons\tant at ₦50. What is the firm's profit-maximizing price $ P* $?

A. P* = 25

B. P* = 30

Correct C. P* = 35

D. P* = 40

Correct Answer: C

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Question 6

A firm's production function is given by Q = 2L^0.5K^0.5. If the price of labor (L) is ₦100 per unit and the price of capital (K) is ₦200 per unit, calculate the total \cost of producing 16 units of output.

A. ₦1600

B. ₦3200

Correct C. ₦6400

D. ₦12800

Correct Answer: C

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Question 7

A country's balance of payments is given by the following equation: BOP = $ X - M $ + $ F - I $. If the country's exports (X) are ₦100 billion, imports (M) are ₦80 billion, foreign investment (F) is ₦20 billion, and domestic investment (I) is ₦15 billion, calculate the balance of payments.

A. ₦5 billion

B. ₦10 billion

Correct C. ₦15 billion

D. ₦20 billion

Correct Answer: C

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Question 8

A firm's \cost function is given by C = 2L + 3K. If the price of labor (L) is ₦100 per unit and the price of capital (K) is ₦200 per unit, calculate the marginal \cost of producing 10 units of output.

A. ₦150

Correct B. ₦200

C. ₦250

D. ₦300

Correct Answer: B

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Question 9

A country's GDP is given by the following equation: GDP = C + I + G + $ X - M $. If the country's consumption (C) is ₦100 billion, investment (I) is ₦20 billion, government sp\ending (G) is ₦30 billion, exports (X) are ₦50 billion, and imports (M) are ₦40 billion, calculate the GDP.

A. ₦150 billion

B. ₦160 billion

Correct C. ₦170 billion

D. ₦180 billion

Correct Answer: C

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Question 10

A firm's production function is given by Q = 2L^0.5K^0.5. If the price of labor (L) is ₦100 per unit and the price of capital (K) is ₦200 per unit, calculate the total revenue of producing 16 units of output.

A. ₦3200

B. ₦6400

Correct C. ₦12800

D. ₦25600

Correct Answer: C

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Question 11

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

A. ₦150

Correct B. ₦200

C. ₦250

D. ₦300

Correct Answer: B

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Question 12

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

Correct A. ₦20 billion

B. ₦30 billion

C. ₦40 billion

D. ₦50 billion

Correct Answer: A

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Question 13

A consumer's utility function is given by ( U(x,y) = 2x + 3y ). If the consumer has a budget constraint of $100 and the prices of x and y are $5 and $10 respectively, what is the consumer's optimal bundle?

A. (10, 0)

Correct B. (5, 5)

C. (0, 10)

D. (15, 5)

Correct Answer: B

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Question 14

A firm's demand function is given by $ Q = 100 - 2P $. If the firm's supply function is given by $ Q = 2P - 10 $, what is the equilibrium price?

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 15

A country's economic growth rate is 5% per annum. If the country's population is 100 million, what is the total increase in population after 10 years?

A. 5 million

Correct B. 10 million

C. 15 million

D. 20 million

Correct Answer: B

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Question 16

The Nigerian government has implemented a policy to increase agricultural production by providing subsidies to farmers. However, the policy has been criticized for being ineffective due to the high \cost of production. U\sing the concept of opportunity \cost, explain why the policy may not be effective in increa\sing agricultural production.

A. The policy may not be effective because the subsidies are not sufficient to cover the high \cost of production.

Correct B. The policy may not be effective because the subsidies are not targeted at the most productive farmers.

C. The policy may not be effective because the subsidies are not aligned with the market demand for agricultural products.

D. The policy may not be effective because the subsidies are not sustainable in the long run.

Correct Answer: B

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Question 17

A company is considering two different production processes to manufacture a product. Process A requires an initial investment of ₦10 million and has a variable \cost of ₦5 per unit. Process B requires an initial investment of ₦15 million and has a variable \cost of ₦3 per unit. U\sing the concept of \cost-benefit analysis, determine which process is more profitable if the company sells 10,000 units per year.

Correct A. Process A is more profitable because it has a lower variable \cost.

B. Process B is more profitable because it has a lower initial investment.

C. Process A is more profitable because it has a higher selling price.

D. Process B is more profitable because it has a higher selling price.

Correct Answer: A

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Question 18

The Nigerian government has implemented a tax on imported goods to raise revenue. However, the tax has been criticized for being regressive because it disproportionately affects low-income households. U\sing the concept of elasticity of demand, explain why the tax may be regressive.

Correct A. The tax may be regressive because low-income households have a higher propensity to consume imported goods.

B. The tax may be regressive because low-income households have a lower elasticity of demand for imported goods.

C. The tax may be regressive because low-income households have a higher income elasticity of demand for imported goods.

D. The tax may be regressive because low-income households have a lower income elasticity of demand for imported goods.

Correct Answer: A

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Question 19

A country has a trade deficit of ₦100 billion and a current account deficit of ₦50 billion. U\sing the concept of balance of payments, explain why the trade deficit may not be the same as the current account deficit.

Correct A. The trade deficit may not be the same as the current account deficit because the current account deficit includes net factor income.

B. The trade deficit may not be the same as the current account deficit because the current account deficit includes net transfers.

C. The trade deficit may not be the same as the current account deficit because the current account deficit includes net investment income.

D. The trade deficit may not be the same as the current account deficit because the current account deficit includes net income from abroad.

Correct Answer: A

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Question 20

A country has a GDP of ₦10 trillion and a GNP of ₦11 trillion. U\sing the concept of national income accounting, explain why the GNP may be higher than the GDP.

Correct A. The GNP may be higher than the GDP because the GNP includes net factor income from abroad.

B. The GNP may be higher than the GDP because the GNP includes net transfers from abroad.

C. The GNP may be higher than the GDP because the GNP includes net investment income from abroad.

D. The GNP may be higher than the GDP because the GNP includes net income from abroad.

Correct Answer: A

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Question 21

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 0.5, what is the percentage change in quantity demanded when the price increases by 10%?

Correct A. 5%

B. 10%

C. 15%

D. 20%

Correct Answer: A

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Question 22

A firm produces two goods, X and Y. The production function for good X is given by Qx = 2L + 3K, where L is labor and K is capital. The production function for good Y is given by Qy = 4L + 2K. If the firm has 10 units of labor and 5 units of capital, what is the total output of the firm?

A. 50

B. 60

Correct C. 70

D. 80

Correct Answer: C

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Question 23

The government of a country imposes a tax on a particular good. The supply curve of the good is given by Qs = 100 + 2P, where Qs is the quantity supplied and P is the price. If the tax increases the supply price by 10, what is the new supply curve?

A. Qs = 110 + 2P

Correct B. Qs = 120 + 2P

C. Qs = 130 + 2P

D. Qs = 140 + 2P

Correct Answer: B

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Question 24

A firm has a \cost function given by C = 100 + 2Q, where C is the total \cost and Q is the quantity produced. If the firm produces 20 units of the good, what is the total \cost?

A. 200

B. 220

Correct C. 240

D. 260

Correct Answer: C

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Question 25

A country has a budget constraint given by B = 1000 + 0.5Y, where B is the government exp\enditure and Y is the income. If the government exp\enditure is 1200, what is the income?

A. 2000

B. 2200

Correct C. 2400

D. 2600

Correct Answer: C

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