Practice neco economics 2022 Past Questions | Edcrib

Question 1 View Details

The total cost (TC) of a firm is given by $ TC = 0.5Q^{2} + 20Q + 150 $ (in Naira). The market demand for its product is $ P = 200 - 0.5Q $ where $ P $ is price per unit and $ Q $ is quantity sold. Determine the output level that maximizes profit and state the maximum profit.

A. Quantity = 80 units; Maximum profit = 7,850 Naira

B. Quantity = 85 units; Maximum profit = 7,925 Naira

Correct C. Quantity = 90 units; Maximum profit = 7,950 Naira

D. Quantity = 100 units; Maximum profit = 7,850 Naira

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 2 View Details

A farmer produces wheat and corn. The own‑price elasticity of demand for wheat is $ \varepsilon_{w} = -0.5 $. The cross‑price elasticity of demand of wheat with respect to the price of corn is $ \varepsilon_{wc} = 0.3 $. Initially, wheat sells for $ P_{w}=150 $ Naira per kg and the farmer sells $ Q_{w}=20{,}000 $ kg. The price of corn rises by $ 15\% $ while the price of wheat remains unchanged.\n\n(a) Calculate the percentage change in the quantity demanded of wheat.\n(b) Find the new quantity demanded of wheat.\n(c) Determine the new total revenue from wheat.

A. (a) 5.5% increase; (b) 21,100 kg; (c) 3,165,000 Naira

Correct B. (a) 4.5% increase; (b) 20,900 kg; (c) 3,135,000 Naira

C. (a) 3.0% increase; (b) 20,600 kg; (c) 3,090,000 Naira

D. (a) 4.5% decrease; (b) 19,100 kg; (c) 2,865,000 Naira

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 3 View Details

The demand function for a good is $ Q_{d}=500-2P $ and the supply function is $ Q_{s}=3P-150 $, where $ P $ is the price per unit and $ Q $ is quantity. Find the equilibrium price and equilibrium quantity.

A. Equilibrium price = 100 Naira; Equilibrium quantity = 300 units

B. Equilibrium price = 150 Naira; Equilibrium quantity = 200 units

Correct C. Equilibrium price = 130 Naira; Equilibrium quantity = 240 units

D. Equilibrium price = 120 Naira; Equilibrium quantity = 260 units

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 4 View Details

The linear demand curve passes through the points $ (P=200, Q=100) $ and $ (P=150, Q=150) $. Using the midpoint method, calculate the price elasticity of demand at the price $ P=175 $. State whether demand is elastic, inelastic or unit‑elastic at that point.

Correct A. Elasticity = -1.4 (elastic)

B. Elasticity = -1.0 (unit‑elastic)

C. Elasticity = -0.6 (inelastic)

D. Elasticity = -2.0 (elastic)

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 5 View Details

In an economy the labour force is 10 million. The number of employed persons is 8.5 million and the number of unemployed persons is 1.5 million. Of the unemployed, 0.6 million are frictionally unemployed and 0.4 million are structurally unemployed.\n\nCalculate (a) the overall unemployment rate, (b) the frictional unemployment rate, (c) the structural unemployment rate, and (d) the cyclical unemployment rate.

A. (a) 12%; (b) 8%; (c) 2%; (d) 2%

Correct B. (a) 15%; (b) 6%; (c) 4%; (d) 5%

C. (a) 16%; (b) 7%; (c) 5%; (d) 4%

D. (a) 14%; (b) 5%; (c) 3%; (d) 6%

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 6 View Details

An industry firm uses the Cobb‑Douglas production function $ Q = K^{0.4} L^{0.6} $. The capital stock is fixed at $ K = 100 $ units. The cost of capital is ₦200 per unit and the wage rate for labor is ₦50 per unit. The firm sells its output at a uniform price $ P $ per unit and aims to earn a profit of at least ₦500,000. Assuming the firm chooses the amount of labor $ L $ that maximizes profit for a given price, determine the minimum price $ P $ (in ₦) that the firm must charge per unit of output to achieve the target profit.

A. 650

B. 600

Correct C. 630

D. 700

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 7 View Details

Given a reserve requirement ratio of 10\% and a currency‑to‑deposit ratio of 0.25, the central bank wishes to increase the money supply by ₦200\,million through open‑market purchases of government securities. Calculate the amount of securities (in ₦\,million) the central bank must buy.

A. 57

Correct B. 56

C. 40

D. 70

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 8 View Details

Country X imports good A. The world price of A is \$5 per unit. Domestic demand is $ Q_d = 300 - 30P $ and domestic supply is $ Q_s = 20P - 10 $. The government imposes a specific tariff of \$1 per unit on imports. Determine (a) the quantity of imports after the tariff, (b) the tariff revenue, and (c) the change in consumer surplus resulting from the tariff.

Correct A. 10 units imported; tariff revenue = $10; consumer surplus loss = $135

B. 8 units imported; tariff revenue = $8; consumer surplus loss = $120

C. 15 units imported; tariff revenue = $15; consumer surplus loss = $200

D. 12 units imported; tariff revenue = $12; consumer surplus loss = $150

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 9 View Details

The price of a commodity rises from ₦200 to ₦250, and the quantity demanded falls from 1,200 units to 960 units. Using the midpoint (arc) formula, calculate the price elasticity of demand and state whether demand is elastic, inelastic, or unit elastic.

A. -1.2

B. 1

Correct C. -1

D. -0.8

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 10 View Details

A farmer can use one hectare of land to produce either 40 bags of rice or 30 bags of beans. If the farmer currently produces only rice, what is the opportunity cost of producing one additional bag of rice in terms of beans?

A. 0.8

Correct B. 0.75

C. 0.6

D. 1.25

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 11 View Details

A firm's total cost (in naira) for producing Q units is given by $TC = 500 + 20Q + 0.1Q^{2}$. The firm can sell each unit for ₦150 up to a production level of 200 units. Any unit produced beyond 200 is sold at a 10 % discount on the original price. Determine the output level that maximizes the firm's profit and state the maximum profit (in naira).

A. Quantity = 575 units; Maximum profit = ₦34,000.0

B. Quantity = 600 units; Maximum profit = ₦36,750.0

Correct C. Quantity = 575 units; Maximum profit = ₦35,562.5

D. Quantity = 550 units; Maximum profit = ₦34,250.0

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 12 View Details

The market demand for a good is $P = 500 - 2Q$. A single firm operates in this market with total cost $TC = 100 + 20Q$. (i) Find the competitive equilibrium price and quantity. (ii) Assuming the firm is a monopoly, determine its profit‑maximising quantity, price and profit. (iii) Compute the dead‑weight loss caused by monopoly relative to perfect competition.

Correct A. Dead‑weight loss = ₦14,400

B. Dead‑weight loss = ₦12,000

C. Dead‑weight loss = ₦10,800

D. Dead‑weight loss = ₦15,600

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 13 View Details

The total product (TP) of labour L (with capital fixed) is given by the schedule: $L: 1, 2, 3, 4, 5$; $TP: 10, 22, 33, 42, 48$. The price per unit of output is ₦40, the wage per labour is ₦200 and fixed cost is ₦500. (i) Compute marginal product (MP) and average product (AP) for each labour level. (ii) Identify the labour input at which average product is maximised. (iii) Using the profit formula, determine the labour input that yields the highest profit and state that profit.

A. Labour = 5 units; Maximum profit = ₦400

B. Labour = 6 units; Maximum profit = ₦450

C. Labour = 4 units; Maximum profit = ₦380

Correct D. Labour = 5 units; Maximum profit = ₦420

Correct Answer: D

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 14 View Details

The price of a commodity falls from ₦120 to ₦90 and the quantity demanded rises from 500 units to 650 units. Using the midpoint (arc) method, calculate the price elasticity of demand and indicate whether demand is elastic, inelastic or unit‑elastic.

A. -0.50 (inelastic)

B. -1.20 (elastic)

Correct C. -0.91 (inelastic)

D. -1.00 (unit‑elastic)

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 15 View Details

In an economy the required reserve ratio is 10 % and the public holds currency equal to 20 % of bank deposits. The central bank conducts an open‑market purchase of government securities worth ₦500 million, which adds the same amount to bank reserves. Calculate the resulting change in the total money supply.

A. ₦5,000 million

Correct B. ₦2,000 million

C. ₦1,200 million

D. ₦1,667 million

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 16 View Details

Given a production function ( Q = 10 \sqrt{L}\,\sqrt{K} \) where (L\) is labour (units) and (K\) is capital (units). Capital is fixed. When labour is increased from 16 to 25 units, total product rises by 40 units. Determine the marginal product of labour at (L = 20\) units.

A. 4\sqrt{5}

Correct B. 2\sqrt{5}

C. 3\sqrt{5}

D. 2\sqrt{6}

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 17 View Details

In the income approach to national income, the following data (in billions of Naira) are given: Compensation of employees = 350, Gross operating surplus = 120, Gross mixed income = 80, Indirect taxes = 70, Subsidies = 15, Depreciation = 45, Net factor income from abroad = -10. Calculate the Net National Income at market prices (NNI\_MP).

Correct A. 550

B. 515

C. 605

D. 595

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 18 View Details

A perfectly competitive firm has total cost (in thousand Naira) given by $ TC = 0.02Q^{3}-0.3Q^{2}+15Q+200 $, where $Q$ is output in thousand units. The market price of the product is $\text{₦}50$ per unit. Determine the output level (in thousand units) that maximises profit and compute the maximum profit (in thousand Naira).

A. Q \approx 32.5 thousand units; maximum profit \approx 610,000 Naira

B. Q \approx 25.0 thousand units; maximum profit \approx 450,000 Naira

Correct C. Q \approx 29.7 thousand units; maximum profit \approx 580,000 Naira

D. Q \approx 20.0 thousand units; maximum profit \approx 300,000 Naira

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 19 View Details

The central bank sets the required reserve ratio at 10% and the public holds currency equal to 30% of bank deposits. Initially, total bank deposits are $\text{₦}500$ million. The central bank then purchases government securities worth $\text{₦}50$ million, paying the sellers by crediting their bank accounts. What is the new total money supply (in million Naira) after this open‑market operation?

A. 775

B. 1150

Correct C. 812.5

D. 700

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 20 View Details

A farmer produces output $Q$ (tons) using labour $L$ (hours) and fertilizer $F$ (kg) according to the Cobb‑Douglas function $ Q = 0.5 L^{0.4} F^{0.6} $. The price of labour is $\text{₦}200$ per hour and the price of fertilizer is $\text{₦}150$ per kg. The farmer wishes to produce exactly 100 tons at minimum cost. Find the cost‑minimising quantities of labour and fertilizer and compute the minimum total cost (in Naira).

A. Labour \approx 140 hours, Fertiliser \approx 240 kg, Minimum cost \approx \text{₦}68,200

Correct B. Labour \approx 132 hours, Fertiliser \approx 264 kg, Minimum cost \approx \text{₦}65,983

C. Labour \approx 120 hours, Fertiliser \approx 300 kg, Minimum cost \approx \text{₦}66,500

D. Labour \approx 150 hours, Fertiliser \approx 210 kg, Minimum cost \approx \text{₦}70,000

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 21 View Details

The following data are for a closed economy in a given year (all values in billions of Naira): Consumption $C = 3,200$, Investment $I = 800$, Government expenditure $G = 1,200$, Exports $X = 500$, Imports $M = 700$, Depreciation $D = 300$, and Net factor income from abroad $NFIA = 150$. Calculate the Net National Income (NNI) for that year.

Correct A. 4850

B. 4700

C. 4550

D. 5150

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 22 View Details

An industrial firm produces two products, A and B. Fixed cost = $\text{₦}500,000$. Variable cost per unit: $VC_A = 200$ Naira, $VC_B = 150$ Naira. Selling price per unit: $P_A = 400$ Naira, $P_B = 300$ Naira. An environmental tax of $\text{₦}20$ per unit is imposed on product A only. The firm has a total production capacity of 4,000 units and must allocate at least 20 % of its output to product B. Determine the number of units of A and B that the firm should produce to maximise profit, and state the maximum profit.

A. A = 2800 units, B = 1200 units; Profit = 184000

B. A = 3200 units, B = 800 units; Profit = 200000

C. A = 3000 units, B = 1000 units; Profit = 190000

Correct D. A = 3200 units, B = 800 units; Profit = 196000

Correct Answer: D

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 23 View Details

The total output $Q$ (in units) of a workshop depends on the number of labour units $L$ according to the function $Q = 5L^{2} - 0.1L^{3}$. Find the labour input at which average product equals marginal product, and compute the corresponding output level.

A. L = 30 units, Q = 1800

B. L = 25 units, Q = 1500

C. L = 20 units, Q = 1200

Correct D. L = 25 units, Q = 1562.5

Correct Answer: D

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 24 View Details

A farmer needs to transport 10,000 tonnes of wheat to market. Two transport modes are available:\n\n- Rail: fixed cost $\text{₦}200,000$, variable cost $\text{₦}30$ per tonne, maximum capacity 6,000 tonnes, and a government subsidy of $\text{₦}5$ per tonne for the first 4,000 tonnes shipped by rail.\n- Road: fixed cost $\text{₦}80,000$, variable cost $\text{₦}45$ per tonne, unlimited capacity.\n\nDetermine how many tonnes should be shipped by rail and by road to minimise total transport cost, and state the minimum total cost.

A. Rail = 6000 tonnes, Road = 4000 tonnes; Minimum total cost = 630000

B. Rail = 5000 tonnes, Road = 5000 tonnes; Minimum total cost = 635000

Correct C. Rail = 6000 tonnes, Road = 4000 tonnes; Minimum total cost = 620000

D. Rail = 4000 tonnes, Road = 6000 tonnes; Minimum total cost = 650000

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 25 View Details

A farmer can use his land to produce either 100 kg of rice or 50 kg of beans. If he decides to produce 60 kg of rice, what is the maximum quantity of beans he can produce with the remaining resources?

A. 30

Correct B. 20

C. 15

D. 25

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

neco 2022 economics | Objective

Master the Exam!

Help others prepare! Share this practice hub: