Practice post utme abu economics 2025 Past Questions

Question 1

Consider a country with a balance of payments deficit. Which of the following policies would most likely help to reduce the deficit?

A. Increase government sp\ending

B. Reduce taxes

C. Implement a trade embargo against other countries

D. Devalue the currency

Question 2

A consumer has a budget of ₦1000 and faces the following prices for two goods: Good X \costs ₦200 and Good Y \costs ₦300. If the consumer's utility function is given by U = 2X + 3Y, what is the optimal bundle of goods that the consumer will purchase?

A. X = 2, Y = 1

B. X = 3, Y = 0

C. X = 1, Y = 2

D. X = 0, Y = 3

Question 3

A firm's demand for labor is given by the equation Q = 100L^0.5, where Q is the quantity of labor demanded and L is the wage rate. If the wage rate increases by 10%, what is the percentage change in the quantity of labor demanded?

A. -5%

B. -10%

C. -15%

D. -20%

Question 4

A country's GDP is given by the equation Y = C + I + G + $ X - M $, where Y is the GDP, C is the consumption, I is the investment, G is the government sp\ending, X is the exports, and M is the imports. If the consumption increases by 10%, the investment increases by 15%, the government sp\ending increases by 20%, the exports increase by 5%, and the imports increase by 10%, what is the percentage change in the GDP?

A. 10%

B. 12%

C. 15%

D. 18%

Question 5

A firm's supply curve is given by Q = 2P + 100, where Q is the quantity supplied and P is the price. If the price is ₦50, what is the quantity supplied?

A. 150

B. 200

C. 250

D. 300

Question 6

A firm is considering a new investment project. The project has a high initial \cost but is expected to generate high returns in the long run. The firm's financial manager has estimated the project's net present value (NPV) to be positive. What is the likely effect of this project on the firm's overall financial performance?

A. The project will lead to an increase in the firm's overall profitability.

B. The project will lead to a decrease in the firm's overall profitability.

C. The project will have no effect on the firm's overall profitability.

D. The project will lead to an increase in the firm's overall debt-to-equity ratio.

Question 7

A firm's demand curve is given by Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the price elasticity of demand is calculated at a price of ₦50, what is the value of the elasticity?

A. 0.5

B. 1.0

C. 2.0

D. 3.0

Question 8

A consumer's utility function is given by U = 2x + 3y, where x and y are the quantities of two goods consumed. If the prices of the two goods are $2 and $3 respectively, and the consumer's income is $10, what is the optimal bundle of goods?

A. (2, 2)

B. (3, 1)

C. (4, 0)

D. (0, 4)

Question 9

A country is experiencing a trade deficit. The government has introduced a trade policy to reduce the deficit. The policy includes increa\sing tariffs on imported goods and reducing subsidies on exports. What is the likely effect of this policy on the overall trade balance?

A. The policy will lead to an increase in the overall trade deficit.

B. The policy will lead to a decrease in the overall trade deficit.

C. The policy will have no effect on the overall trade deficit.

D. The policy will lead to an increase in the overall GDP.

Question 10

A firm is considering two different investment projects. Project A has a higher initial \cost but is expected to generate higher returns in the long run. Project B has a lower initial \cost but is expected to generate lower returns in the long run. What is the likely effect of the firm's decision on the overall economy?

A. The firm's decision will lead to an increase in the overall GDP.

B. The firm's decision will lead to a decrease in the overall GDP.

C. The firm's decision will have no effect on the overall GDP.

D. The firm's decision will lead to an increase in the overall inflation rate.

Question 11

A country's import demand function is given by M = 100 - 2Y, where M is the quantity of imports and Y is the country's GDP. If the country's GDP is ₦500 billion, what is the quantity of imports?

A. 50

B. 100

C. 150

D. 200

Question 12

The government of Nigeria has introduced a new policy to increase agricultural production. The policy includes providing subsidies to farmers, improving irrigation systems, and increa\sing access to credit. However, the policy also includes a provision to increase the price of fertilizers by 20%. What is the likely effect of this policy on the overall agricultural production in Nigeria?

A. The policy will lead to a significant increase in agricultural production.

B. The policy will lead to a moderate increase in agricultural production.

C. The policy will lead to a decrease in agricultural production.

D. The policy will have no effect on agricultural production.

Question 13

A consumer has a budget of ₦1000 and faces the following prices for two goods: Good X \costs ₦200 and Good Y \costs ₦300. If the consumer's indifference curve is given by U = 2X + 3Y, what is the optimal bundle of goods that the consumer will purchase?

A. X = 2, Y = 1

B. X = 3, Y = 0

C. X = 1, Y = 2

D. X = 0, Y = 3

Question 14

A firm's supply function is given by Q = 100 + 2P, where Q is the quantity supplied and P is the price. If the price increases by 10%, what is the percentage change in the quantity supplied?

A. 5%

B. 10%

C. 15%

D. 20%

Question 15

A country is experiencing a recession. The government has introduced a fiscal policy to stimulate the economy. The policy includes increa\sing government sp\ending and cutting taxes. What is the likely effect of this policy on the overall inflation rate?

A. The policy will lead to an increase in the overall inflation rate.

B. The policy will lead to a decrease in the overall inflation rate.

C. The policy will have no effect on the overall inflation rate.

D. The policy will lead to a decrease in the overall unemployment rate.

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