Practice post utme christopher university economics 2025 Past Questions

Question 1

Consider a small open economy with a trade balance of -$100 million. If the exchange rate is 1 USD = 120 NGN, and the price of a barrel of crude oil is $50, what is the value of the trade balance in NGN?

Correct A. -12,000,000 NGN

B. -10,000,000 NGN

C. -15,000,000 NGN

D. -8,000,000 NGN

Correct Answer: A

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Question 2

A monopolistically competitive firm faces a demand curve given by Q = 100 - 2P. If the firm's marginal revenue (MR) is given by MR = 200 - 2Q, what is the firm's optimal price?

A. $50

Correct B. $55

C. $60

D. $65

Correct Answer: B

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Question 3

A firm is considering investing in a new project with the following cash flows: Year 1: -$100,000, Year 2: $50,000, Year 3: $75,000. If the firm's \cost of capital is 10%, what is the net present value (NPV) of the project?

A. -$10,000

Correct B. $10,000

C. -$20,000

D. $20,000

Correct Answer: B

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Question 4

Consider a market with the following supply and demand functions: Qs = 100 + 2P, Qd = 200 - 3P. If the market is in equilibrium, what is the equilibrium price?

A. $20

Correct B. $30

C. $40

D. $50

Correct Answer: B

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Question 5

A firm is considering investing in a new project with the following cash flows: Year 1: -$100,000, Year 2: $50,000, Year 3: $75,000. If the firm's \cost of capital is 10%, what is the internal rate of return (IRR) of the project?

A. 10%

Correct B. 12%

C. 15%

D. 18%

Correct Answer: B

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Question 6

A firm operating in a perfectly competitive market has a demand curve given by Q = 100 - 2P. If the firm's marginal revenue (MR) is given by MR = 200 - 4P, what is the price at which the firm's marginal revenue equals its marginal \cost (MC)?

A. ₦50

Correct B. ₦75

C. ₦100

D. ₦125

Correct Answer: B

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Question 7

A country's GDP is ₦1,000,000,000. If the country's population is 20 million, what is the per capita income?

A. ₦50

B. ₦100

C. ₦200

Correct D. ₦500

Correct Answer: D

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Question 8

A monopolist faces a demand curve given by Q = 100 - 2P. If the firm's marginal revenue (MR) is given by MR = 200 - 4P, what is the price at which the firm's marginal revenue equals its marginal \cost (MC)?

A. ₦50

Correct B. ₦75

C. ₦100

D. ₦125

Correct Answer: B

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Question 9

A country's GNP is ₦1,500,000,000. If the country's population is 20 million, what is the per capita income?

A. ₦75

B. ₦150

C. ₦300

Correct D. ₦750

Correct Answer: D

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Question 10

A firm's demand curve is given by Q = 100 - 2P. If the firm's marginal revenue (MR) is given by MR = 200 - 4P, what is the price at which the firm's marginal revenue equals its marginal \cost (MC)?

A. ₦50

Correct B. ₦75

C. ₦100

D. ₦125

Correct Answer: B

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Question 11

The demand for a commodity is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the price elasticity of demand is 0.5, find the price at which the quantity demanded is 60 units.

A. ₦50

B. ₦75

Correct C. ₦100

D. ₦125

Correct Answer: C

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Question 12

A firm produces two goods, A and B, u\sing two inputs, labor and capital. The production functions are given by Q_A = 10L^0.5K^0.5 and Q_B = 5L^0.5K^0.5, where Q_A and Q_B are the quantities of goods A and B, respectively, and L and K are the quantities of labor and capital, respectively. If the firm has 100 units of labor and 50 units of capital, find the quantities of goods A and B produced.

Correct A. Q_A = 50, Q_B = 25

B. Q_A = 25, Q_B = 50

C. Q_A = 100, Q_B = 50

D. Q_A = 50, Q_B = 100

Correct Answer: A

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Question 13

The demand for a commodity is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the price elasticity of demand is 0.5, find the price at which the quantity demanded is 60 units.

A. ₦50

B. ₦75

Correct C. ₦100

D. ₦125

Correct Answer: C

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Question 14

A firm produces two goods, A and B, u\sing two inputs, labor and capital. The production functions are given by Q_A = 10L^0.5K^0.5 and Q_B = 5L^0.5K^0.5, where Q_A and Q_B are the quantities of goods A and B, respectively, and L and K are the quantities of labor and capital, respectively. If the firm has 100 units of labor and 50 units of capital, find the quantities of goods A and B produced.

Correct A. Q_A = 50, Q_B = 25

B. Q_A = 25, Q_B = 50

C. Q_A = 100, Q_B = 50

D. Q_A = 50, Q_B = 100

Correct Answer: A

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Question 15

The demand for a commodity is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the price elasticity of demand is 0.5, find the price at which the quantity demanded is 60 units.

A. ₦50

B. ₦75

Correct C. ₦100

D. ₦125

Correct Answer: C

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Question 16

A perfectly competitive market is characterized by a large number of firms producing a homogeneous product, each firm having complete knowledge of market conditions, and the ability to enter or exit the market freely. What is the primary implication of this market structure on the behavior of firms?

A. Firms will produce at the minimum point of their average total \cost curve.

Correct B. Firms will produce at the point where their marginal revenue equals their marginal \cost.

C. Firms will produce at the point where their average revenue equals their average \cost.

D. Firms will produce at the point where their total revenue equals their total \cost.

Correct Answer: B

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Question 17

A country's balance of payments (BOP) is in equilibrium when the current account and capital account are balanced. What is the primary factor that determines the equilibrium exchange rate in the BOP?

Correct A. The interest rate differential between countries.

B. The difference in inflation rates between countries.

C. The difference in income levels between countries.

D. The difference in trade balances between countries.

Correct Answer: A

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Question 18

A country's national income is measured by its gross domestic product (GDP). What is the primary difference between GDP and gross national product (GNP)?

A. GDP includes income earned by foreign residents, while GNP excludes income earned by domestic residents.

Correct B. GDP excludes income earned by foreign residents, while GNP includes income earned by domestic residents.

C. GDP includes income earned by domestic residents, while GNP excludes income earned by foreign residents.

D. GDP excludes income earned by domestic residents, while GNP includes income earned by foreign residents.

Correct Answer: B

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Question 19

A firm's production possibilities curve (PPC) is a graphical representation of the maximum output of two goods that a firm can produce given the available resources. What is the primary implication of a firm's PPC on its production decisions?

A. The firm will produce at the point where the PPC is \tangent to the budget line.

B. The firm will produce at the point where the PPC is \tangent to the indifference curve.

Correct C. The firm will produce at the point where the PPC is \tangent to the production frontier.

D. The firm will produce at the point where the PPC is \tangent to the \cost curve.

Correct Answer: C

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Question 20

A country's economic growth is measured by its GDP per capita. What is the primary factor that determines a country's GDP per capita?

A. The country's population growth rate.

B. The country's GDP growth rate.

C. The country's income inequality.

Correct D. The country's human capital investment.

Correct Answer: D

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Question 21

A firm's opportunity \cost is the value of the next best alternative that is given up when a choice is made. What is the primary implication of a firm's opportunity \cost on its production decisions?

A. The firm will produce at the point where the opportunity \cost is minimized.

B. The firm will produce at the point where the opportunity \cost is maximized.

C. The firm will produce at the point where the opportunity \cost is equal to the marginal revenue.

Correct D. The firm will produce at the point where the opportunity \cost is equal to the marginal \cost.

Correct Answer: D

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Question 22

A country's balance of payments (BOP) is in equilibrium when the current account and capital account are balanced. What is the primary factor that determines the equilibrium exchange rate in the BOP?

Correct A. The interest rate differential between countries.

B. The difference in inflation rates between countries.

C. The difference in income levels between countries.

D. The difference in trade balances between countries.

Correct Answer: A

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Question 23

A country's national income is measured by its gross domestic product (GDP). What is the primary difference between GDP and gross national product (GNP)?

A. GDP includes income earned by foreign residents, while GNP excludes income earned by domestic residents.

Correct B. GDP excludes income earned by foreign residents, while GNP includes income earned by domestic residents.

C. GDP includes income earned by domestic residents, while GNP excludes income earned by foreign residents.

D. GDP excludes income earned by domestic residents, while GNP includes income earned by foreign residents.

Correct Answer: B

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Question 24

The agricultural sector in Nigeria contributes significantly to the country's GDP. However, the sector is plagued by low productivity, inadequate infrastructure, and lack of access to credit. Which of the following policies would be most effective in addres\sing these challenges?

A. Implementing a cash transfer program to support smallholder farmers

B. Providing subsidies to large-scale commercial farmers

C. Investing in irrigation infrastructure to increase crop yields

Correct D. Establishing a national agricultural bank to provide credit to farmers

Correct Answer: D

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Question 25

The money market in Nigeria is characterized by a high level of liquidity. However, this has led to a situation where commercial banks are reluc\tant to l\end to the private sector. What is the likely cause of this phenomenon?

A. High interest rates

Correct B. Low interest rates

C. High inflation

D. Low inflation

Correct Answer: B

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