Practice Post UTME UNILORIN economics 2025 Past Questions

Question 1

Consider a perfectly competitive market with a large number of firms producing a homogeneous product. If the market price falls by 10%, what will be the percentage change in the quantity supplied?

A. 0%

B. 5%

C. 10%

Correct D. 15%

Correct Answer: D

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Question 2

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

A. 20

B. 30

Correct C. 40

D. 50

Correct Answer: C

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Question 3

A firm is producing a good with a production function given by Q = 2L^0.5K^0.5. The firm's \cost function is C = 10L + 20K. If the firm wants to minimize its \cost, what is the optimal value of L?

A. 10

Correct B. 20

C. 30

D. 40

Correct Answer: B

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Question 4

Consider a country that imports 100 units of a good and exports 50 units of another good. If the country's trade balance is in deficit by 20 units, what is the value of the trade deficit?

A. ₦1000

Correct B. ₦2000

C. ₦3000

D. ₦4000

Correct Answer: B

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Question 5

A firm is producing a good with a production function given by Q = 2L^0.5K^0.5. The firm's \cost function is C = 10L + 20K. If the firm wants to maximize its profit, what is the optimal value of K?

A. 10

Correct B. 20

C. 30

D. 40

Correct Answer: B

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Question 6

U\sing the concept of returns to scale, explain why a firm's average \cost per unit of output decreases as it increases its production level.

A. Due to the law of diminishing marginal returns.

Correct B. Because the firm is able to take advantage of economies of scale.

C. As a result of the firm's ability to negotiate better prices with suppliers.

D. Due to the firm's increased bargaining power with customers.

Correct Answer: B

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Question 7

A country's balance of payments is in equilibrium when the current account is equal to the capital account. True or False?

A. True

Correct B. False

C. It dep\ends on the country's economic policies.

D. It dep\ends on the country's trade agreements.

Correct Answer: B

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Question 8

U\sing the IS-LM model, explain how an increase in the money supply affects the interest rate and output in the short run.

Correct A. The interest rate decreases and output increases.

B. The interest rate increases and output decreases.

C. The interest rate remains unchanged and output increases.

D. The interest rate remains unchanged and output decreases.

Correct Answer: A

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Question 9

A firm's production function is given by Q = 2L^0.5K^0.5. U\sing the concept of returns to scale, explain why the firm's average product of labor increases as it increases its labor input.

A. Due to the law of diminishing marginal returns.

Correct B. Because the firm is able to take advantage of economies of scale.

C. As a result of the firm's ability to negotiate better prices with suppliers.

D. Due to the firm's increased bargaining power with customers.

Correct Answer: B

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Question 10

U\sing the concept of comparative advantage, explain why a country should specialize in producing goods for which it has a lower opportunity \cost.

Correct A. Because it will be able to produce more goods at a lower \cost.

B. Because it will be able to export more goods and earn a higher income.

C. Because it will be able to import more goods and reduce its trade deficit.

D. Because it will be able to reduce its unemployment rate.

Correct Answer: A

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Question 11

The government of a country imposes a tax on imports to reduce the trade deficit. However, the tax also increases the \cost of production for domestic firms. U\sing the concept of opportunity \cost, explain how the tax affects the production possibilities frontier (PPF) of the country.

Correct A. The tax shifts the PPF inward, reducing the production possibilities of the country.

B. The tax shifts the PPF outward, increa\sing the production possibilities of the country.

C. The tax has no effect on the PPF of the country.

D. The tax shifts the PPF outward, but also increases the opportunity \cost of producing one good over the other.

Correct Answer: A

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Question 12

A consumer has a budget of ₦1,000 and faces the following prices: good A = ₦200, good B = ₦300, and good C = ₦400. U\sing the budget constraint, find the consumer's optimal bundle of goods A and B.

A. The consumer will choose 2 units of good A and 1 unit of good B.

Correct B. The consumer will choose 1 unit of good A and 2 units of good B.

C. The consumer will choose 3 units of good A and 0 units of good B.

D. The consumer will choose 0 units of good A and 3 units of good B.

Correct Answer: B

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Question 13

The government of a country is considering a policy to reduce inflation. One option is to increase the reserve requirement for commercial banks. U\sing the money market equilibrium model, explain how this policy affects the money supply and inflation.

A. The policy increases the money supply, which leads to higher inflation.

Correct B. The policy decreases the money supply, which leads to lower inflation.

C. The policy has no effect on the money supply or inflation.

D. The policy increases the money supply, but also increases the interest rate, which reduces inflation.

Correct Answer: B

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Question 14

A country has a trade deficit of $100 million and a current account deficit of $200 million. U\sing the balance of payments identity, explain how these deficits affect the country's exchange rate.

A. The trade deficit and current account deficit lead to an appreciation of the exchange rate.

Correct B. The trade deficit and current account deficit lead to a depreciation of the exchange rate.

C. The trade deficit and current account deficit have no effect on the exchange rate.

D. The trade deficit and current account deficit lead to a stable exchange rate.

Correct Answer: B

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Question 15

A firm is considering investing in a new project with a net present value (NPV) of ₦1,000. The firm's \cost of capital is 10%. U\sing the NPV rule, explain whether the firm should invest in the project.

Correct A. The firm should invest in the project because the NPV is positive.

B. The firm should not invest in the project because the NPV is negative.

C. The firm should invest in the project because the NPV is equal to the \cost of capital.

D. The firm should not invest in the project because the NPV is less than the \cost of capital.

Correct Answer: A

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Question 16

The Nigerian government has implemented policies to promote agricultural development and industrialization. However, the country still faces significant challenges in achieving sustainable economic growth. Which of the following is a major constraint to Nigeria's economic development?

A. Inadequate infrastructure

Correct B. Corruption and poor governance

C. Lack of access to finance

D. Inadequate human capital

Correct Answer: B

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Question 17

A firm produces 100 units of a commodity at a \cost of ₦100 per unit. If the price of the commodity increases by 20%, what will be the new \cost per unit?

Correct A. ₦120

B. ₦120

C. ₦120

D. ₦120

Correct Answer: A

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Question 18

The demand for a commodity is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the price is ₦50, what is the quantity demanded?

Correct A. 50

B. 50

C. 50

D. 50

Correct Answer: A

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Question 19

A firm has a production function given by Q = 2L + 3K, where Q is the output, L is the labor input, and K is the capital input. If the firm uses 10 units of labor and 5 units of capital, what is the output?

Correct A. 25

B. 25

C. 25

D. 25

Correct Answer: A

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Question 20

The government of Nigeria has implemented a policy to increase the production of rice. However, the policy has led to a decrease in the production of other crops. Which of the following is a consequence of this policy?

A. Increased food security

Correct B. Decreased food security

C. Increased income for farmers

D. Decreased income for farmers

Correct Answer: B

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Question 21

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 and the income elasticity of demand is 3, what is the percentage change in quantity demanded when the price increases by 10% and income increases by 20%?

A. 10%

B. 20%

Correct C. 30%

D. 40%

Correct Answer: C

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Question 22

A firm's \cost function is given by C = 100 + 2Q + 3Q^2, where C is the total \cost and Q is the quantity produced. If the firm produces 10 units, what is the total \cost?

A. 1000

B. 1200

Correct C. 1500

D. 2000

Correct Answer: C

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Question 23

A firm's revenue function is given by R = 100Q - 2Q^2, where R is the total revenue and Q is the quantity sold. If the firm sells 20 units, what is the total revenue?

A. 1000

B. 1200

Correct C. 1500

D. 2000

Correct Answer: C

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Question 24

Agricultural production in Nigeria is characterized by a high degree of seasonality. What is the main reason for this seasonality?

A. Climate change

B. Soil degradation

Correct C. Seasonal rainfall

D. Lack of irrigation

Correct Answer: C

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Question 25

The Central Bank of Nigeria (CBN) has implemented a monetary policy aimed at reducing inflation. What is the main tool used by the CBN to achieve this goal?

A. Open market operations

B. Reserve requirements

Correct C. Interest rate targeting

D. Quantitative ea\sing

Correct Answer: C

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