Practice Post UTME UNIPORT economics 2025 Past Questions

Question 1

The opportunity \cost of producing an additional unit of a good is the value of the next best alternative that must be given up in order to produce that unit. Which of the following represents the opportunity \cost of producing an additional unit of a good?

Correct A. The value of the next best alternative that must be given up

B. The value of the additional unit of the good

C. The value of the good that is being produced

D. The value of the resources used to produce the good

Correct Answer: A

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Question 2

A country's balance of payments is in equilibrium when the current account is equal to the capital account. Which of the following is a characteristic of a country with a balance of payments in equilibrium?

A. The country has a trade deficit

B. The country has a trade surplus

C. The country has a balance of payments deficit

Correct D. The country has a balance of payments surplus

Correct Answer: D

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Question 3

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

Correct A. (10,20)

B. (20,10)

C. (15,15)

D. (5,5)

Correct Answer: A

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Question 4

A central bank uses open market operations to increase the money supply. Which of the following is a consequence of this action?

A. The interest rate increases

B. The interest rate decreases

Correct C. The money supply increases

D. The money supply decreases

Correct Answer: C

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Question 5

A country's economic growth is measured by its GDP per capita. Which of the following is a characteristic of a country with high GDP per capita?

A. The country has a high population

B. The country has a high GDP

Correct C. The country has a high s\tandard of living

D. The country has a low s\tandard of living

Correct Answer: C

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Question 6

Suppose the government of Nigeria decides to impose a 10% tax on all imports. If the current balance of trade deficit is ₦100 billion, what will be the effect on the balance of trade deficit if the tax is implemented?

A. The balance of trade deficit will decrease by 10%.

Correct B. The balance of trade deficit will increase by 10%.

C. The balance of trade deficit will remain unchanged.

D. The balance of trade deficit will increase by 20%.

Correct Answer: B

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Question 7

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

A. (x,y) = (100,0)

Correct B. (x,y) = (80,20)

C. (x,y) = (60,40)

D. (x,y) = (40,60)

Correct Answer: B

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Question 8

A firm is considering two different production processes for producing a certain good. Process A has a fixed \cost of ₦1000 and a variable \cost of ₦5 per unit, while process B has a fixed \cost of ₦500 and a variable \cost of ₦10 per unit. If the firm produces 100 units of the good, what will be the total \cost of production for each process?

A. Process A: ₦1500, Process B: ₦1500

Correct B. Process A: ₦1500, Process B: ₦2000

C. Process A: ₦2000, Process B: ₦1500

D. Process A: ₦2000, Process B: ₦2000

Correct Answer: B

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Question 9

A central bank is considering a monetary policy to reduce inflation. If the current inflation rate is 10% and the central bank wants to reduce it to 5% within the next 2 years, what will be the required annual rate of interest?

A. 10%

B. 15%

Correct C. 20%

D. 25%

Correct Answer: C

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Question 10

A government is considering a fiscal policy to stimulate economic growth. If the current GDP is ₦10 trillion and the government wants to increase it by 10% within the next year, what will be the required increase in government exp\enditure?

A. ₦100 billion

Correct B. ₦500 billion

C. ₦1 trillion

D. ₦1.5 trillion

Correct Answer: B

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Question 11

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's output is 16 units when labor (L) is 4 units and capital (K) is 4 units, what is the marginal product of labor (MPL) when labor is 9 units and capital is 9 units?

A. 1

B. 2

Correct C. 3

D. 4

Correct Answer: C

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Question 12

A consumer's utility function is given by U = 2x + 3y. If the consumer's income is ₦100 and the prices of x and y are ₦5 and ₦10 respectively, what is the consumer's optimal bundle of x and y?

A. x = 10, y = 5

Correct B. x = 15, y = 3

C. x = 20, y = 2

D. x = 25, y = 1

Correct Answer: B

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Question 13

A government imposes a tax of ₦10 on a firm's output. The firm's supply function is given by Q = 2P - 10. What is the firm's new supply function after the tax is imposed?

Correct A. Q = 2P - 20

B. Q = 2P - 15

C. Q = 2P - 10

D. Q = 2P + 10

Correct Answer: A

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Question 14

A monopoly firm has a demand function given by Q = 100 - 2P. The firm's marginal \cost is given by MC = 5. What is the firm's optimal price and quantity?

A. P = 40, Q = 30

Correct B. P = 50, Q = 25

C. P = 60, Q = 20

D. P = 70, Q = 15

Correct Answer: B

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Question 15

A firm has a total revenue function given by TR = 2Q^2 - 10Q + 20. What is the firm's marginal revenue function?

Correct A. MR = 4Q - 10

B. MR = 2Q - 5

C. MR = Q - 2

D. MR = 2Q + 5

Correct Answer: A

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Question 16

The government of a country decides to implement a policy of reducing the budget deficit by increa\sing taxes. However, this policy may have an unint\ended consequence of reducing aggregate demand and leading to a recession. U\sing the IS-LM model, explain how this policy would affect the economy.

A. The policy would lead to a decrease in interest rates and an increase in investment, resulting in an increase in aggregate demand.

B. The policy would lead to a decrease in interest rates and a decrease in investment, resulting in a decrease in aggregate demand.

Correct C. The policy would lead to an increase in interest rates and a decrease in investment, resulting in a decrease in aggregate demand.

D. The policy would lead to an increase in interest rates and an increase in investment, resulting in an increase in aggregate demand.

Correct Answer: C

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Question 17

A firm is considering investing in a new project that has a net present value (NPV) of ₦100,000. However, the firm's \cost of capital is 10% per annum. U\sing the NPV rule, determine 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 greater than 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 18

A country's GDP is ₦1,000,000,000,000, and its GNP is ₦1,100,000,000,000. What is the country's net factor income from abroad?

A. ₦100,000,000,000

Correct B. ₦200,000,000,000

C. ₦300,000,000,000

D. ₦400,000,000,000

Correct Answer: B

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Question 19

A firm is producing a good u\sing two inputs, labor and capital. The production function is given by Q = 10L^0.5K^0.5, where Q is the quantity of output, L is the amount of labor, and K is the amount of capital. If the firm is currently producing 100 units of output u\sing 10 units of labor and 10 units of capital, what is the marginal product of labor?

A. 5

Correct B. 10

C. 15

D. 20

Correct Answer: B

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Question 20

A central bank is considering implementing a monetary policy to reduce inflation. The current inflation rate is 5%, and the central bank's target inflation rate is 2%. U\sing the Phillips curve, determine the expected effect of the monetary policy on unemployment.

A. The monetary policy would lead to an increase in unemployment.

Correct B. The monetary policy would lead to a decrease in unemployment.

C. The monetary policy would have no effect on unemployment.

D. The monetary policy would lead to an increase in inflation.

Correct Answer: B

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Question 21

A firm is considering investing in a new project that has a net present value (NPV) of ₦100,000. However, the firm's \cost of capital is 10% per annum. U\sing the NPV rule, determine 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 greater than 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 22

A country's GDP is ₦1,000,000,000,000, and its GNP is ₦1,100,000,000,000. What is the country's net factor income from abroad?

A. ₦100,000,000,000

Correct B. ₦200,000,000,000

C. ₦300,000,000,000

D. ₦400,000,000,000

Correct Answer: B

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Question 23

In a perfectly competitive market, the equilibrium price and quantity are determined by the intersection of the market demand and supply curves. However, if the market demand curve shifts to the left, the equilibrium price will increase, but the equilibrium quantity will decrease. U\sing the following data, calculate the new equilibrium price and quantity.

A. ₦1200, 100 units

Correct B. ₦1500, 80 units

C. ₦1800, 60 units

D. ₦2000, 40 units

Correct Answer: B

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Question 24

A firm's \cost function is given by C(q) = 2q^2 + 10q + 100. If the firm's revenue function is given by R(q) = 20q, calculate the firm's profit function.

Correct A. P(q) = 18q^2 + 10q + 100

B. P(q) = 18q^2 - 10q + 100

C. P(q) = 18q^2 + 10q - 100

D. P(q) = 18q^2 - 10q - 100

Correct Answer: A

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Question 25

A monopoly firm faces a demand curve given by Qd = 100 - 2P. The firm's marginal \cost curve is given by MC = 5. Calculate the firm's optimal price and quantity.

Correct A. P = ₦50, Q = 75 units

B. P = ₦75, Q = 50 units

C. P = ₦100, Q = 25 units

D. P = ₦125, Q = 0 units

Correct Answer: A

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