Practice Post UTME UNILORIN economics 2023 Past Questions

Question 1

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 -2, what is the percentage change in quantity demanded when the price increases by 10%?

Correct A. 20%

B. 30%

C. 40%

D. 50%

Correct Answer: A

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Question 2

A central bank increases the reserve requirement for commercial banks. What is the likely effect on the money supply?

A. Increase

Correct B. Decrease

C. No change

D. Uncertain

Correct Answer: B

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Question 3

A country's balance of payments is in surplus. What is the likely effect on the exchange rate?

Correct A. Appreciate

B. Depreciate

C. No change

D. Uncertain

Correct Answer: A

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Question 4

A firm's \cost function is given by C = 100 + 2Q + 0.5Q^2, where C is the total \cost and Q is the quantity produced. What is the marginal \cost when Q = 10?

A. 110

B. 120

Correct C. 130

D. 140

Correct Answer: C

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Question 5

A consumer's utility function is given by U = 2x + 3y, where U is the utility and x and y are the quantities of two goods. If the consumer's budget constraint is 100 = 2x + 3y, what is the optimal combination of x and y?

Correct A. x = 20, y = 30

B. x = 30, y = 20

C. x = 40, y = 10

D. x = 10, y = 40

Correct Answer: A

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Question 6

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

A. The long-run average \cost curve will shift to the left.

Correct B. The long-run average \cost curve will shift to the right.

C. The long-run average \cost curve will remain unchanged.

D. The long-run average \cost curve will shift upwards.

Correct Answer: B

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Question 7

A monopolist faces a demand curve given by Q = 100 - 2P. If the firm's marginal revenue function is MR = 200 - 2Q, what is the firm's optimal price?

A. ₦50

Correct B. ₦75

C. ₦100

D. ₦125

Correct Answer: B

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Question 8

A consumer's indifference curve is given by U = 2x + 3y. If the consumer's budget constraint is given by 2x + 4y = ₦100, what is the consumer's optimal bundle?

A. (x, y) = (20, 10)

Correct B. (x, y) = (15, 12.5)

C. (x, y) = (10, 20)

D. (x, y) = (5, 25)

Correct Answer: B

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Question 9

A government is considering a tax on a particular good. If the tax is expected to increase the price of the good by 20%, what will happen to the quantity demanded of the good?

A. The quantity demanded will increase by 20%.

Correct B. The quantity demanded will decrease by 20%.

C. The quantity demanded will remain unchanged.

D. The quantity demanded will increase by 10%.

Correct Answer: B

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Question 10

A firm is considering investing in a new project. If the project has a net present value of ₦100,000 and a required rate of return of 10%, what is the firm's expected return on investment?

Correct A. 10%

B. 15%

C. 20%

D. 25%

Correct Answer: A

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Question 11

The government of Nigeria has introduced a new policy to increase the production of rice in the country. The policy includes providing subsidies to farmers and increa\sing the import duty on rice. U\sing the concept of elasticity of demand, explain why the government's policy may not be effective in increa\sing rice production.

Correct A. The policy may not be effective because the demand for rice is inelastic, meaning that a small change in price will not lead to a significant change in quantity demanded.

B. The policy may not be effective because the supply of rice is inelastic, meaning that a small change in price will not lead to a significant change in quantity supplied.

C. The policy may not be effective because the government's policy may lead to a decrease in the quality of rice produced, which may not be acceptable to consumers.

D. The policy may not be effective because the government's policy may lead to a decrease in the quantity of rice produced, due to the high \cost of production.

Correct Answer: A

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Question 12

The Nigerian government has introduced a new policy to increase the production of maize in the country. The policy includes providing subsidies to farmers and increa\sing the import duty on maize. U\sing the concept of elasticity of supply, explain why the government's policy may be effective in increa\sing maize production.

Correct A. The policy may be effective because the supply of maize is elastic, meaning that a small change in price will lead to a significant change in quantity supplied.

B. The policy may be effective because the demand for maize is elastic, meaning that a small change in price will lead to a significant change in quantity demanded.

C. The policy may be effective because the government's policy may lead to a decrease in the \cost of production, which may lead to an increase in quantity supplied.

D. The policy may be effective because the government's policy may lead to an increase in the quality of maize produced, which may lead to an increase in quantity demanded.

Correct Answer: A

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Question 13

The Nigerian government has introduced a new policy to increase the production of wheat in the country. The policy includes providing subsidies to farmers and increa\sing the import duty on wheat. U\sing the concept of \cost and revenue analysis, explain why the government's policy may not be effective in increa\sing wheat production.

Correct A. The policy may not be effective because the \cost of production of wheat is high, and the government's policy may not be able to cover the \costs.

B. The policy may not be effective because the revenue generated from the sale of wheat is low, and the government's policy may not be able to generate enough revenue to cover the \costs.

C. The policy may not be effective because the government's policy may lead to a decrease in the quality of wheat produced, which may not be acceptable to consumers.

D. The policy may not be effective because the government's policy may lead to a decrease in the quantity of wheat produced, due to the high \cost of production.

Correct Answer: A

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Question 14

The Nigerian government has introduced a new policy to increase the production of rice in the country. The policy includes providing subsidies to farmers and increa\sing the import duty on rice. U\sing the concept of agricultural development, explain why the government's policy may be effective in increa\sing rice production.

Correct A. The policy may be effective because the government's policy may lead to an increase in the quality of rice produced, which may lead to an increase in quantity demanded.

B. The policy may be effective because the government's policy may lead to a decrease in the \cost of production, which may lead to an increase in quantity supplied.

C. The policy may be effective because the government's policy may lead to an increase in the quantity of rice produced, due to the high demand for rice.

D. The policy may be effective because the government's policy may lead to a decrease in the quantity of rice produced, due to the high \cost of production.

Correct Answer: A

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Question 15

The Nigerian government has introduced a new policy to increase the production of maize in the country. The policy includes providing subsidies to farmers and increa\sing the import duty on maize. U\sing the concept of industrialization, explain why the government's policy may not be effective in increa\sing maize production.

Correct A. The policy may not be effective because the government's policy may lead to a decrease in the quality of maize produced, which may not be acceptable to consumers.

B. The policy may not be effective because the government's policy may lead to a decrease in the quantity of maize produced, due to the high \cost of production.

C. The policy may not be effective because the government's policy may lead to a decrease in the revenue generated from the sale of maize, due to the high \cost of production.

D. The policy may not be effective because the government's policy may lead to a decrease in the quantity of maize produced, due to the high demand for maize.

Correct Answer: A

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Question 16

The elasticity of demand for a product is -2. If the price of the product increases by 10%, what is the percentage change in the quantity demanded?

Correct A. 20%

B. 15%

C. 10%

D. 5%

Correct Answer: A

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Question 17

Agricultural mechanization in Nigeria has led to an increase in crop yields. However, this has also resulted in soil degradation. What is the opportunity \cost of agricultural mechanization?

A. Increased crop yields

Correct B. Soil degradation

C. Loss of biodiversity

D. Decreased water quality

Correct Answer: B

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Question 18

The Nigerian government has implemented a tax on imported goods to reduce the trade deficit. What is the effect of this tax on the supply curve?

Correct A. Shifts the supply curve to the left

B. Shifts the supply curve to the right

C. Does not affect the supply curve

D. Increases the supply curve

Correct Answer: A

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Question 19

A consumer has a utility function U(x, y) = 2x + 3y. If the consumer's income is ₦1000 and the prices of x and y are ₦5 and ₦10 respectively, what is the consumer's optimal bundle?

Correct A. x = 100, y = 50

B. x = 50, y = 100

C. x = 200, y = 0

D. x = 0, y = 200

Correct Answer: A

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Question 20

The Nigerian government has implemented a budget of ₦10 trillion for the next fiscal year. If the government's revenue is ₦5 trillion, what is the fiscal deficit?

Correct A. ₦5 trillion

B. ₦10 trillion

C. ₦15 trillion

D. ₦20 trillion

Correct Answer: A

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Question 21

A firm's production function is given by Q = 2L^0.5K^0.5. If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, and the firm's budget constraint is 100L + 200K = 10000, what is the optimal level of labor and capital?

A. L = 100, K = 50

Correct B. L = 50, K = 100

C. L = 100, K = 100

D. L = 50, K = 50

Correct Answer: B

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Question 22

A country's GDP is ₦100 billion, its imports are ₦20 billion, and its exports are ₦15 billion. What is its balance of trade?

A. ₦5 billion surplus

Correct B. ₦5 billion deficit

C. ₦10 billion surplus

D. ₦10 billion deficit

Correct Answer: B

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Question 23

A monopolist faces a demand curve given by Q = 100 - 2P. The firm's marginal \cost is ₦50. What is the optimal price and quantity?

A. P = ₦50, Q = 50

Correct B. P = ₦75, Q = 25

C. P = ₦100, Q = 0

D. P = ₦25, Q = 75

Correct Answer: B

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Question 24

A firm's production function is given by Q = 2L^0.5K^0.5. If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, and the firm's budget constraint is 100L + 200K = 10000, what is the optimal level of labor and capital?

A. L = 100, K = 50

Correct B. L = 50, K = 100

C. L = 100, K = 100

D. L = 50, K = 50

Correct Answer: B

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Question 25

A country's GDP is ₦100 billion, its imports are ₦20 billion, and its exports are ₦15 billion. What is its balance of trade?

A. ₦5 billion surplus

Correct B. ₦5 billion deficit

C. ₦10 billion surplus

D. ₦10 billion deficit

Correct Answer: B

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