Practice neco economics 2025 Past Questions | Edcrib

Question 1 View Details

A farmer faces the market demand equation \( P = 150 - 0.1Q \) where \(P\) is the price per tonne (₦) and \(Q\) is the quantity in tonnes. The farmer's total cost function is \( C(Q) = 2000 + 5Q + 0.02Q^{2} \). The government imposes a per‑unit tax of ₦10 on each tonne sold. Determine the quantity that maximizes the farmer's profit after tax, the maximum profit, and the net price received per tonne at that quantity.

Correct A. Quantity = 562.5 tonnes; Maximum profit = ₦35,968.75; Net price = ₦83.75 per tonne

B. Quantity = 500 tonnes; Maximum profit = ₦30,000.00; Net price = ₦85.00 per tonne

C. Quantity = 600 tonnes; Maximum profit = ₦40,500.00; Net price = ₦80.00 per tonne

D. Quantity = 562.5 tonnes; Maximum profit = ₦36,500.00; Net price = ₦84.00 per tonne

Correct Answer: A

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

Question 2 View Details

The market demand for a good is given by \( Q_d = 500 - 5P \) and the market supply is \( Q_s = 20P - 100 \), where \(P\) is the price in naira and \(Q\) is quantity. Find the equilibrium price and quantity.

A. Equilibrium price = ₦30; Equilibrium quantity = 450 units

B. Equilibrium price = ₦20; Equilibrium quantity = 300 units

C. Equilibrium price = ₦22; Equilibrium quantity = 340 units

Correct D. Equilibrium price = ₦24; Equilibrium quantity = 380 units

Correct Answer: D

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

Question 3 View Details

The Human Development Index (HDI) for a country is calculated as the geometric mean of three normalized indices: health (H), education (E) and income (I), i.e. \( HDI = (H \times E \times I)^{1/3} \). Suppose the country's HDI is 0.720, its health index is 0.800 and its income index is 0.650. Determine the education index, rounded to three decimal places.

A. Education index = 0.650 (approximately)

Correct B. Education index = 0.717 (approximately)

C. Education index = 0.735 (approximately)

D. Education index = 0.997 (approximately)

Correct Answer: B

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

Question 4 View Details

A firm produces output according to the Cobb‑Douglas production function \( Q = 20 L^{0.5} K^{0.5} \), where \(L\) is labour units and \(K\) is capital units. The wage rate is ₦150 per unit of labour and the rental rate of capital is ₦200 per unit. The firm wishes to produce \(Q = 800\) units. Find the cost‑minimising quantities of labour and capital and the minimum total cost, rounding quantities to two decimal places and cost to the nearest naira.

A. Labour = 50.00 units; Capital = 30.00 units; Minimum total cost = ₦13,500

B. Labour = 40.00 units; Capital = 40.00 units; Minimum total cost = ₦14,000

Correct C. Labour = 46.22 units; Capital = 34.62 units; Minimum total cost = ₦13,857

D. Labour = 45.00 units; Capital = 35.00 units; Minimum total cost = ₦13,900

Correct Answer: C

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

Question 5 View Details

In a country the labour force is 10 million. The current unemployment rate is 12 %. The natural rate of unemployment is 6 %, consisting of frictional unemployment of 2 % and structural unemployment of 4 %. (a) Calculate the number of people unemployed due to cyclical factors. (b) What percentage of the total unemployed are frictionally unemployed? Give your answer to one decimal place.

A. Cyclical unemployment = 0.8 million people; Frictional unemployment = 15.0 % of total unemployed

B. Cyclical unemployment = 0.7 million people; Frictional unemployment = 18.3 % of total unemployed

C. Cyclical unemployment = 0.5 million people; Frictional unemployment = 20.0 % of total unemployed

Correct D. Cyclical unemployment = 0.6 million people; Frictional unemployment = 16.7 % of total unemployed

Correct Answer: D

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

Question 6 View Details

Country X's real GDP grew at a constant compounded annual rate of \(5\%\) over a three‑year period, while its population grew at a constant compounded annual rate of \(2\%\) over the same period. At the end of the third year the real per‑capita income was \(150{,}000\) naira. Assuming the rates remained unchanged throughout, what was the real per‑capita income at the beginning of the first year? Give your answer in naira, rounded to the nearest thousand.

A. 144000

B. 135000

C. 140000

Correct D. 138000

Correct Answer: D

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

Question 7 View Details

A firm's total product (TP) of labour \(L\) is given by \(TP = 5L^{2} - L^{3}\). Determine the level of labour at which average product (AP) is maximised and state the maximum AP value. Give the labour quantity to one decimal place and the AP to two decimal places.

Correct A. 2.5, 6.25

B. 2.0, 6.00

C. 2.5, 12.50

D. 3.3, 5.56

Correct Answer: A

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

Question 8 View Details

In an economy the currency‑to‑deposit ratio is \(c = 0.25\) and the required reserve ratio is \(r = 0.10\). The central bank conducts an open‑market purchase that injects ₦200 million of reserves into the banking system. Assuming banks lend out all excess reserves, calculate the total increase in the money supply. Express your answer in millions of naira, rounded to one decimal place.

A. 800.0

Correct B. 714.3

C. 625.0

D. 571.4

Correct Answer: B

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

Question 9 View Details

An economy has autonomous investment of ₦30 million. The marginal propensity to consume is \(0.75\). Indirect taxes net of subsidies are zero. The accelerator coefficient is defined as \(k = 1 / (1 - MPC)\). If equilibrium national income rises by ₦80 million, compute the new total level of investment. Give your answer in millions of naira.

Correct A. 350

B. 400

C. 280

D. 300

Correct Answer: A

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

Question 10 View Details

In a given year a country recorded a GDP at market prices of ₦1,200 billion. Net factor income from abroad was a net outflow of ₦50 billion. Depreciation (capital consumption allowance) amounted to ₦180 billion and indirect taxes net of subsidies were ₦70 billion. Calculate the Net National Income at factor cost for that year. Give your answer in billions of naira.

A. 950

B. 1130

C. 1080

Correct D. 900

Correct Answer: D

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

Question 11 View Details

Government collects income tax using the following progressive schedule: \(10\%\) on the first \(\text{₦}200{,}000\) of income, \(20\%\) on the next \(\text{₦}300{,}000\) and \(30\%\) on any income above \(\text{₦}500{,}000\). From a particular sector the total tax revenue is \(\text{₦}48\) million and the sector employs 12,000 workers. The government now plans to raise an additional uniform tax of \(5\%\) on all incomes to fund a \(15\%\) increase in public spending. Assuming the average income of workers in the sector remains unchanged, what will be the average after‑tax income per worker after the new tax is applied?

A. ₦30,000

Correct B. ₦34,000

C. ₦36,500

D. ₦31,200

Correct Answer: B

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

Question 12 View Details

A country has existing public debt of \(\text{₦}2.5\) trillion carrying an average interest rate of \(8\%\) per annum. The government intends to issue new bonds worth \(\text{₦}300\) billion, with a coupon rate of \(6\%\) and equal principal repayments over 10 years. It also expects a primary surplus of \(\text{₦}150\) billion each year for the next ten years. Assuming GDP is currently \(\text{₦}12\) trillion and will grow at \(5\%\) per annum, will the debt‑to‑GDP ratio be higher after five years compared with the initial ratio? Show your calculations.

A. No; after five years the debt‑to‑GDP ratio falls to about 22 % (≈21.7 %).

Correct B. No; after five years the debt‑to‑GDP ratio falls to about 20 % (≈19.9 %).

C. Yes; after five years the debt‑to‑GDP ratio rises to about 25 % (≈24.8 %).

D. Yes; after five years the debt‑to‑GDP ratio stays near 20 % (≈20.3 %).

Correct Answer: B

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

Question 13 View Details

In year 0 the Consumer Price Index (CPI) is \(120\). The government's monetary policy reduces the annual inflation rate by \(1.5\) percentage points each year, starting from \(6\%\) in year 1. However, a one‑off supply shock in year 3 adds an extra \(2\%\) to that year's inflation. Calculate the CPI at the end of year 5 and the average annual inflation rate over the whole five‑year period.

Correct A. CPI after 5 years ≈ 147.34; average annual inflation ≈ 4.2 %

B. CPI after 5 years ≈ 148.50; average annual inflation ≈ 3.9 %

C. CPI after 5 years ≈ 145.00; average annual inflation ≈ 4.0 %

D. CPI after 5 years ≈ 150.12; average annual inflation ≈ 4.5 %

Correct Answer: A

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

Question 14 View Details

The market for rice is described by the demand equation \(Q_d = 500 - 2P\) and the supply equation \(Q_s = 3P - 30\), where \(Q\) is quantity in tonnes and \(P\) is price in naira per kilogram. Find the equilibrium price and quantity.

A. Equilibrium price = 100 naira\/kg, equilibrium quantity = 300 tonnes

Correct B. Equilibrium price = 106 naira/kg, equilibrium quantity = 288 tonnes

C. Equilibrium price = 110 naira\/kg, equilibrium quantity = 280 tonnes

D. Equilibrium price = 95 naira\/kg, equilibrium quantity = 310 tonnes

Correct Answer: B

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

Question 15 View Details

A developing country has current per‑capita GDP of \(\text{₦}150{,}000\) and a poverty line set at \(\text{₦}80{,}000\). The government will raise public investment in infrastructure by \(20\%\) of current GDP, financed by a temporary tax that raises total tax revenue by \(5\%\) of GDP. The marginal propensity to consume (MPC) is \(0.75\) and the marginal propensity to import (MPM) is \(0.10\). The fiscal multiplier for autonomous investment is \(k = \frac{1}{1 - MPC + MPM}\). The country's Gini coefficient is currently \(0.45\) and is expected to fall by \(0.02\) for every \(0.5\%\) increase in per‑capita GDP (linear approximation). Determine:\n(a) the expected increase in per‑capita GDP after the investment boost (ignore price‑level changes);\n(b) the new per‑capita GDP;\n(c) whether the poverty line will be above the new per‑capita GDP (i.e., will poverty be eliminated?);\n(d) the projected Gini coefficient after the growth.

Correct A. a) Increase ≈ ₦85,714; b) New per‑capita GDP ≈ ₦235,714; c) No - poverty line remains below the new average; d) Projected Gini ≈ 0 (capped at zero).

B. a) Increase ≈ ₦85,714; b) New per‑capita GDP ≈ ₦235,714; c) Yes - poverty line remains above the new average; d) Projected Gini ≈ 0.45 (capped at zero).

C. a) Increase ≈ ₦71,714; b) New per‑capita GDP ≈ ₦221,714; c) Yes - poverty line remains above the new average; d) Projected Gini ≈ 0.43 (capped at zero).

D. a) Increase ≈ ₦100,000; b) New per‑capita GDP ≈ ₦250,000; c) No - poverty line remains below the new average; d) Projected Gini ≈ 0.44 (capped at zero).

Correct Answer: A

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

Question 16 View Details

A farmer plans to cultivate maize on 10 hectares. Fixed costs amount to ₦150,000. For each hectare, the farmer can apply F kilograms of fertilizer (0 ≤ F ≤ 30). The yield per hectare (in tonnes) is given by \(Y_f = 2 + 0.1F\). The cost of fertilizer is ₦500 per kilogram and other variable costs amount to ₦20,000 per hectare. The farmer wishes to earn a profit of exactly ₦200,000. Determine the minimum price per tonne of maize, \(P\) (in Naira), that the farmer must obtain to meet the profit target, assuming the farmer will use the fertilizer amount that minimises the required price.

Correct A. 14000

B. 15000

C. 17857

D. 27500

Correct Answer: A

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

Question 17 View Details

A firm's total output is described by the production function \(Q = 6L - 0.3L^{2} + 0.01L^{3}\), where \(L\) is the number of labour units employed and \(Q\) is the output in units. Find the level of labour \(L\) at which the average product of labour equals the marginal product of labour.

A. 12

B. 18

Correct C. 15

D. 20

Correct Answer: C

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

Question 18 View Details

An industry faces a total cost function \(TC = 0.04Q^{3} - 0.6Q^{2} + 30Q + 500\), where \(Q\) is the quantity of output.\n\n(a) Determine the output level that minimizes average total cost (ATC).\n(b) If the market price is ₦120 per unit and the firm is a price‑taker, calculate the firm's profit (or loss) at the output found in part (a).

A. 1355.2

Correct B. 1302.5

C. 1250.0

D. 1199.9

Correct Answer: B

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

Question 19 View Details

In a closed economy, consumption is given by \(C = 200 + 0.75(Y - T)\), investment \(I = 150\), government spending \(G = 100\), and taxes are proportional to income: \(T = 0.2Y\).\n\n(a) Compute the equilibrium national income \(Y\).\n(b) If government spending rises by ₦50, what is the new equilibrium income?

A. Y = 1050; new Y = 1200

B. Y = 1000; new Y = 1125

Correct C. Y = 1125; new Y = 1250

D. Y = 1200; new Y = 1350

Correct Answer: C

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

Question 20 View Details

A monopolist faces the inverse demand curve \(P = 200 - 2Q\) and has a constant marginal cost of ₦20. Fixed costs are ₦500.\n\n(a) Determine the profit‑maximising output and price.\n(b) Compute the monopoly's profit at that output.

A. Q = 45, P = 100, profit = 3100

B. Q = 40, P = 120, profit = 3500

C. Q = 50, P = 100, profit = 3500

Correct D. Q = 45, P = 110, profit = 3550

Correct Answer: D

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

Question 21 View Details

The economy has a total unemployment rate of 12% and a natural rate of unemployment of 6%. According to Okun's law, each 1% point of cyclical unemployment above the natural rate reduces real GDP by 2% relative to potential output. If the actual real GDP is \(15\) trillion naira, calculate the economy's potential GDP (in trillion naira) rounded to two decimal places.

A. 17.50

B. 16.95

Correct C. 17.05

D. 16.80

Correct Answer: C

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

Question 22 View Details

In a small open economy, the export price index rises from 100 to 108 while the import price index rises from 100 to 105. Export and import quantities remain unchanged. Initially, export earnings are \(200\) billion naira and import expenditures are \(250\) billion naira. Calculate the new terms of trade index (export price index divided by import price index, multiplied by 100) rounded to two decimal places.

A. 100.00

Correct B. 102.86

C. 103.00

D. 108.00

Correct Answer: B

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

Question 23 View Details

A firm faces the total cost function \(TC = 10{,}000 + 5Q + 0.1Q^{2}\) where \(Q\) is output in units. The market demand for its product is given by \(P = 200 - 0.5Q\). Determine the output level \(Q\) that maximizes profit and compute the maximum profit (in naira), rounding the profit to the nearest naira.

A. Q = 162.5 units; Profit = ₦5,845

Correct B. Q = 162.5 units; Profit = ₦5,844

C. Q = 160 units; Profit = ₦5,840

D. Q = 150 units; Profit = ₦5,750

Correct Answer: B

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

Question 24 View Details

A firm produces two products, A and B. Fixed costs are \(500{,}000\) naira. Variable cost per unit is \(30\) naira for A and \(20\) naira for B. Selling prices are \(80\) naira for A and \(50\) naira for B. The firm intends to produce the products in the ratio A:B = 3:2 and wants to achieve a total profit of \(200{,}000\) naira. What is the minimum total number of units (A plus B) that must be produced to meet this target?

A. 17000

B. 16000

Correct C. 16670

D. 16600

Correct Answer: C

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

Question 25 View Details

A farmer has 100 hectares of land to allocate between wheat and maize. For wheat, the first 60 hectares yield 2.5 tonnes per hectare; any hectare beyond 60 yields only 1.5 tonnes per hectare. For maize, the first 40 hectares yield 3 tonnes per hectare; any hectare beyond 40 yields 2 tonnes per hectare. Market prices are ₦120,000 per tonne of wheat and ₦90,000 per tonne of maize. Production costs are ₦30,000 per hectare for wheat and ₦25,000 per hectare for maize. Determine the allocation of hectares to wheat and maize that maximizes total profit and state the maximum profit (in naira).

A. Wheat 70 ha, Maize 30 ha; Profit = ₦25,050,000

B. Wheat 55 ha, Maize 45 ha; Profit = ₦25,425,000

C. Wheat 50 ha, Maize 50 ha; Profit = ₦24,850,000

Correct D. Wheat 60 ha, Maize 40 ha; Profit = ₦26,000,000

Correct Answer: D

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

neco 2025 economics | Objective

Master the Exam!

Help others prepare! Share this practice hub: