Practice Post UTME RSU economics 2025 Past Questions

Question 1

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 inputs are increased by 10% each, what is the percentage change in output?

A. 5%

B. 10%

Correct C. 15%

D. 20%

Correct Answer: C

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Question 2

A country's government is considering a tax on a particular good. The supply and demand curves for the good are given by Q^s = 100 - 2P and Q^d = 200 + P, respectively. If the government imposes a tax of ₦10 per unit on the good, what is the new equilibrium price?

A. ₦5

Correct B. ₦10

C. ₦15

D. ₦20

Correct Answer: B

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Question 3

A firm is considering investing in a new project. The project's cash flows are given by the following table:\n\n| Year | Cash Flow |\n| --- | --- |\n| 0 | -₦1000 |\n| 1 | ₦200 |\n| 2 | ₦400 |\n| 3 | ₦600 |\n| 4 | ₦800 |\n\nThe firm's \cost of capital is 10%. What is the project's net present value?

A. ₦100

B. ₦200

C. ₦300

Correct D. ₦400

Correct Answer: D

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Question 4

A country's central bank is considering a monetary policy intervention to stabilize the economy. The country's money supply is given by the following equation: M = kPY, where M is the money supply, k is a cons\tant, P is the price level, and Y is real GDP. If the central bank wants to increase the money supply by 10%, what is the required percentage change in real GDP?

A. 5%

Correct B. 10%

C. 15%

D. 20%

Correct Answer: B

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Question 5

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 inputs are increased by 10% each, what is the percentage change in output?

A. 5%

B. 10%

Correct C. 15%

D. 20%

Correct Answer: C

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Question 6

A firm operating in a perfectly competitive market is characterized by which of the following?

A. Monopoly

B. Oligopoly

Correct C. Perfect Competition

D. Monopsony

Correct Answer: C

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Question 7

A consumer's indifference curve is steeper than another consumer's indifference curve, which of the following is true?

A. The first consumer has a higher marginal utility of income

B. The second consumer has a higher marginal utility of income

Correct C. The first consumer has a lower marginal utility of income

D. The second consumer has a lower marginal utility of income

Correct Answer: C

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Question 8

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current inputs are L = 16 and K = 9, what is the firm's current output?

A. 24

Correct B. 32

C. 36

D. 48

Correct Answer: B

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Question 9

A country's agricultural sector is characterized by which of the following?

Correct A. High labor intensity and low capital intensity

B. Low labor intensity and high capital intensity

C. High labor intensity and high capital intensity

D. Low labor intensity and low capital intensity

Correct Answer: A

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Question 10

A firm's demand curve is given by Q = 100 - 2P. If the firm's current price is P = 20, what is the firm's current quantity demanded?

A. 40

Correct B. 60

C. 80

D. 100

Correct Answer: B

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Question 11

A consumer's indifference curve is downward sloping. What does this imply about the consumer's preferences?

A. The consumer prefers more of the good with lower quantity.

Correct B. The consumer prefers more of the good with higher quantity.

C. The consumer is indifferent to the quantity of the good.

D. The consumer prefers less of the good with higher quantity.

Correct Answer: B

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Question 12

A government imposes a tax on a good. What is the effect on the supply curve?

Correct A. The supply curve shifts to the left.

B. The supply curve shifts to the right.

C. The supply curve remains unchanged.

D. The supply curve shifts downward.

Correct Answer: A

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Question 13

A firm's production function is given by Q = 2L^0.5K^0.5. What is the marginal product of labor?

A. 2L^0.5K^0.5

Correct B. L^0.5K^0.5

C. K^0.5

D. L^0.5

Correct Answer: B

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Question 14

A country's GDP is ₦100 billion. The government imposes a tax of 10% on the GDP. What is the tax revenue?

Correct A. ₦10 billion

B. ₦5 billion

C. ₦15 billion

D. ₦20 billion

Correct Answer: A

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Question 15

A firm's \cost function is given by C = 2L + 3K. What is the marginal \cost of labor?

A. 2L + 3K

Correct B. 2

C. 3K

D. L

Correct Answer: B

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Question 16

Consider a firm operating in a perfectly competitive market with a given production function Q = 2L^0.5K^0.5. If the firm's current input prices are w = ₦100 and r = ₦200, calculate the firm's optimal input combination (L, K) u\sing the Hotelling's Lemma.

Correct A. \( L = 100, K = 50 \)

B. \( L = 50, K = 100 \)

C. \( L = 200, K = 100 \)

D. \( L = 100, K = 200 \)

Correct Answer: A

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Question 17

A firm's \cost function is given by C(Q) = 2Q^2 + 100Q. If the firm's revenue function is R(Q) = 3Q^2 - 20Q, calculate the firm's profit-maximizing output level.

Correct A. \( Q = 10 \)

B. \( Q = 20 \)

C. \( Q = 30 \)

D. \( Q = 40 \)

Correct Answer: A

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Question 18

Consider a simple linear programming problem with the following objective function: Maximize Z = 3x + 4y, subject to the constraints: 2x + 3y ≤ 12, x ≥ 0, y ≥ 0. U\sing the graphical method, find the optimal solution.

Correct A. \( x = 4, y = 2 \)

B. \( x = 2, y = 4 \)

C. \( x = 3, y = 3 \)

D. \( x = 1, y = 1 \)

Correct Answer: A

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Question 19

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 ₦10 trillion, and the values of C, I, G, X, and M are ₦4 trillion, ₦1 trillion, ₦2 trillion, ₦2 trillion, and ₦1 trillion respectively, calculate the country's trade balance.

Correct A. ( ₦1 trillion )

B. ( ₦2 trillion )

C. ( ₦3 trillion )

D. ( ₦4 trillion )

Correct Answer: A

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Question 20

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current input prices are w = ₦100 and r = ₦200, calculate the firm's optimal input combination (L, K) u\sing the Hotelling's Lemma.

Correct A. \( L = 100, K = 50 \)

B. \( L = 50, K = 100 \)

C. \( L = 200, K = 100 \)

D. \( L = 100, K = 200 \)

Correct Answer: A

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Question 21

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. ₦1.5 trillion

D. ₦0.5 trillion

Correct Answer: A

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Question 22

A monopolist faces a demand curve given by Q = 100 - 2P. The firm's marginal \cost is MC = 10. What is the profit-maximizing price?

A. ₦50

B. ₦40

Correct C. ₦30

D. ₦20

Correct Answer: C

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Question 23

A government imposes a tax on a good, cau\sing the supply curve to shift to the left. What is the effect on the equilibrium price?

A. Increases

Correct B. Decreases

C. Remains the same

D. No effect

Correct Answer: B

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Question 24

A firm's demand curve is given by Q = 100 - 2P. The firm's marginal \cost is MC = 10. What is the profit-maximizing quantity?

A. 50 units

Correct B. 75 units

C. 100 units

D. 125 units

Correct Answer: B

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Question 25

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. ₦1.5 trillion

D. ₦0.5 trillion

Correct Answer: A

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