POST UTME BSU 2025 Economics | Objective

Are you preparing for POST UTME BSU exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2025 Economics (Objective) questions designed to simulate the real exam environment.

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Question 1
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's output increases by 20% due to a 10% increase in labor and a 15% increase in capital, what is the return to scale of the firm?
A. Increa\sing
B. Decrea\sing
Correct C. Cons\tant
D. Indeterminate

Correct Answer: C

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Question 2
A government imposes a tax on a firm's output. The firm's supply curve shifts to the left. What is the effect of this tax on the firm's equilibrium price and quantity?
Correct A. Price increases and quantity decreases
B. Price decreases and quantity increases
C. Price increases and quantity increases
D. Price decreases and quantity decreases

Correct Answer: A

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Question 3
A firm's \cost function is given by C = 100 + 2L + 3K. If the firm's output is 100 units, and the price of labor is ₦50 per unit and the price of capital is ₦100 per unit, what is the firm's total \cost?
A. ₦10,500
Correct B. ₦11,000
C. ₦11,500
D. ₦12,000

Correct Answer: B

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Question 4
A country's balance of payments is given by the following equation: BOP = X - M. If the country's exports are ₦100 billion and imports are ₦80 billion, what is the country's balance of payments?
Correct A. ₦20 billion surplus
B. ₦20 billion deficit
C. ₦10 billion surplus
D. ₦10 billion deficit

Correct Answer: A

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Question 5
A firm's revenue function is given by R = 200Q - 2Q^2. If the firm's output is 50 units, what is the firm's revenue?
A. ₦7,500
Correct B. ₦8,000
C. ₦8,500
D. ₦9,000

Correct Answer: B

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Question 6
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 0.5, what is the percentage change in quantity demanded when the price increases by 10%?
Correct A. -5%
B. -10%
C. -15%
D. -20%

Correct Answer: A

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Question 7
A country's GDP is $100 billion, its imports are $20 billion, and its exports are $30 billion. What is its net foreign income?
Correct A. $10 billion
B. $20 billion
C. $30 billion
D. $40 billion

Correct Answer: A

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Question 8
A firm's total revenue is given by TR = 100P - 0.5P^2, where P is the price. If the price is $10, what is the firm's marginal revenue?
Correct A. $90
B. $95
C. $100
D. $105

Correct Answer: A

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Question 9
A government imposes a tax of $5 on a firm's output. If the firm's supply curve is given by Q = 100 + 2P, what is the new supply curve after the tax?
Correct A. Q = 100 + 2P - 5
B. Q = 100 + 2P + 5
C. Q = 100 - 2P + 5
D. Q = 100 - 2P - 5

Correct Answer: A

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Question 10
A consumer has a budget of $100 and faces the following prices: Q1 = $10, Q2 = $20, Q3 = $30. If the consumer's indifference curves are given by U = 2Q1 + Q2, what is the optimal consumption bundle?
Correct A. Q1 = 10, Q2 = 20, Q3 = 0
B. Q1 = 20, Q2 = 10, Q3 = 0
C. Q1 = 10, Q2 = 0, Q3 = 20
D. Q1 = 0, Q2 = 10, Q3 = 20

Correct Answer: A

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Question 11
A perfectly competitive market has a downward-sloping demand curve for its product. If the market price falls from ₦100 to ₦80, and the quantity demanded increases from 100 units to 150 units, what is the price elasticity of demand?
A. 0.5
Correct B. 1.0
C. 1.5
D. 2.0

Correct Answer: B

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Question 12
A monopolist faces a demand curve given by Q = 100 - 2P. The monopolist's marginal \cost (MC) is ₦20. What is the profit-maximizing price and quantity?
Correct A. P = ₦40, Q = 60
B. P = ₦30, Q = 70
C. P = ₦20, Q = 80
D. P = ₦10, Q = 90

Correct Answer: A

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Question 13
Agricultural development in Nigeria has been hindered by the lack of access to credit. Which of the following is a possible solution to this problem?
A. Establishing a national bank to provide credit to farmers
B. Implementing a cash crop program to increase farmers' income
C. Providing subsidies to farmers to reduce their \costs
Correct D. Establishing a cooperative society to pool resources and reduce risk

Correct Answer: D

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Question 14
A firm's total revenue (TR) is given by TR = 100P - P^2, where P is the price of the product. If the firm's marginal revenue (MR) is ₦50, what is the price at which MR = TR?
A. P = ₦20
Correct B. P = ₦30
C. P = ₦40
D. P = ₦50

Correct Answer: B

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Question 15
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 curves are given by U = 2x + 3y, what is the optimal combination of the two goods?
Correct A. x = 2, y = 1
B. x = 3, y = 2
C. x = 4, y = 3
D. x = 5, y = 4

Correct Answer: A

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Question 16
A perfectly competitive market is characterized by a large number of firms producing a homogeneous product. If the market demand curve is downward sloping, what is the likely effect on the equilibrium price and quantity of the product?
A. An increase in price and a decrease in quantity
Correct B. A decrease in price and an increase in quantity
C. No change in price and quantity
D. A decrease in price and a decrease in quantity

Correct Answer: B

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Question 17
A government has implemented a policy to increase the production of agricultural products. If the policy is successful, what is the likely effect on the overall economic growth of the country?
Correct A. An increase in economic growth
B. A decrease in economic growth
C. No change in economic growth
D. A decrease in economic growth

Correct Answer: A

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Question 18
A monopolistically competitive firm faces a downward-sloping demand curve. If the firm increases its price, what is the likely effect on its revenue?
A. An increase in revenue
Correct B. A decrease in revenue
C. No change in revenue
D. A decrease in revenue

Correct Answer: B

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Question 19
A government has implemented a policy to increase the production of industrial products. If the policy is successful, what is the likely effect on the overall economic growth of the country?
Correct A. An increase in economic growth
B. A decrease in economic growth
C. No change in economic growth
D. A decrease in economic growth

Correct Answer: A

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Question 20
A firm is considering investing in a new project. If the project has a high expected return but also a high level of risk, what is the likely effect on the firm's decision to invest?
A. The firm is likely to invest in the project
Correct B. The firm is unlikely to invest in the project
C. The firm may invest in the project
D. The firm will definitely invest in the project

Correct Answer: B

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Question 21
A government has implemented a policy to increase the production of agricultural products. If the policy is successful, what is the likely effect on the overall economic growth of the country?
Correct A. An increase in economic growth
B. A decrease in economic growth
C. No change in economic growth
D. A decrease in economic growth

Correct Answer: A

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Question 22
A monopolistically competitive firm faces a downward-sloping demand curve. If the firm increases its price, what is the likely effect on its revenue?
A. An increase in revenue
Correct B. A decrease in revenue
C. No change in revenue
D. A decrease in revenue

Correct Answer: B

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Question 23
A government has implemented a policy to increase the production of industrial products. If the policy is successful, what is the likely effect on the overall economic growth of the country?
Correct A. An increase in economic growth
B. A decrease in economic growth
C. No change in economic growth
D. A decrease in economic growth

Correct Answer: A

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Question 24
A firm is considering investing in a new project. If the project has a high expected return but also a high level of risk, what is the likely effect on the firm's decision to invest?
A. The firm is likely to invest in the project
Correct B. The firm is unlikely to invest in the project
C. The firm may invest in the project
D. The firm will definitely invest in the project

Correct Answer: B

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Question 25
A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \), where L is labor and K is capital. If the firm's current labor and capital inputs are L = 16 and K = 9, respectively, what is the firm's marginal product of labor?
Correct A. \( \frac{1}{2} \sqrt{\frac{K}{L}} \)
B. \( \frac{1}{2} \sqrt{\frac{L}{K}} \)
C. \( \sqrt{\frac{K}{L}} \)
D. \( \sqrt{\frac{L}{K}} \)

Correct Answer: A

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