Practice post utme esut economics 2025 Past Questions

Question 1

A firm's total revenue is given by the equation \( TR = 100x - 2x^2 \), where ( x ) is the number of units sold. If the firm's marginal revenue is \( MR = 100 - 4x \), find the value of ( x ) at which the firm's revenue is maximized.

A. 5

Correct B. 10

C. 15

D. 20

Correct Answer: B

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Question 2

The government of Nigeria has implemented a policy to increase the production of rice in the country. The policy involves providing subsidies to farmers and increa\sing the import duty on rice. If the demand for rice is given by the equation \( Q_d = 100 - 2P \) and the supply of rice is given by the equation \( Q_s = 2P - 20 \), find the equilibrium price and quantity of rice in the market.

A. ₦50, ₦100

Correct B. ₦75, ₦150

C. ₦100, ₦200

D. ₦125, ₦250

Correct Answer: B

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Question 3

A firm is considering investing in a new project that requires an initial investment of ₦1,000,000. The project is expected to generate a cash inflow of ₦200,000 in the first year, ₦250,000 in the second year, and ₦300,000 in the third year. If the firm's \cost of capital is 10%, find the net present value of the project.

A. ₦500,000

Correct B. ₦750,000

C. ₦1,000,000

D. ₦1,250,000

Correct Answer: B

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Question 4

The government of Nigeria has implemented a policy to increase the production of cement in the country. The policy involves providing subsidies to cement manufacturers and increa\sing the import duty on cement. If the demand for cement is given by the equation \( Q_d = 100 - 2P \) and the supply of cement is given by the equation \( Q_s = 2P - 20 \), find the equilibrium price and quantity of cement in the market.

A. ₦50, ₦100

Correct B. ₦75, ₦150

C. ₦100, ₦200

D. ₦125, ₦250

Correct Answer: B

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Question 5

A firm is considering investing in a new project that requires an initial investment of ₦1,500,000. The project is expected to generate a cash inflow of ₦300,000 in the first year, ₦350,000 in the second year, and ₦400,000 in the third year. If the firm's \cost of capital is 12%, find the net present value of the project.

A. ₦750,000

B. ₦1,000,000

Correct C. ₦1,250,000

D. ₦1,500,000

Correct Answer: C

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Question 6

Consider a firm operating in a perfectly competitive market with a production function Q = 2L^0.5K^0.5. If the firm's current input prices are w = 10 and r = 20, and it is currently producing 100 units of output, what is the firm's current average \cost of production?

Correct A. ₦1000

B. ₦1200

C. ₦1500

D. ₦1800

Correct Answer: A

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Question 7

A country's GDP is ₦1 trillion, its imports are ₦200 billion, and its government exp\enditure is ₦300 billion. What is the country's national income?

A. ₦1.2 trillion

B. ₦1.3 trillion

Correct C. ₦1.4 trillion

D. ₦1.5 trillion

Correct Answer: C

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Question 8

A firm's demand function is given by Q = 100 - 2P, and its supply function is given by Q = 2P - 50. What is the equilibrium price and quantity?

A. P = ₦20, Q = 50

Correct B. P = ₦30, Q = 70

C. P = ₦40, Q = 90

D. P = ₦50, Q = 110

Correct Answer: B

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Question 9

A central bank increases the money supply by 10%. What is the expected effect on the price level?

A. Price level decreases by 10%

Correct B. Price level increases by 10%

C. Price level remains unchanged

D. Price level decreases by 20%

Correct Answer: B

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Question 10

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current input prices are w = 10 and r = 20, and it is currently producing 100 units of output, what is the firm's current average \cost of production?

Correct A. ₦1000

B. ₦1200

C. ₦1500

D. ₦1800

Correct Answer: A

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Question 11

A firm's production function is given by Q = 2L^0.5H^0.5, where Q is output, L is labor and H is capital. If the firm wants to increase output by 20% while keeping labor cons\tant, what percentage increase in capital is required?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 12

A country's balance of payments account is given by the following equation: BOP = \( X - M \) + \( F - I \) + \( S - T \), where BOP is the balance of payments, X is exports, M is imports, F is foreign investment, I is domestic investment, S is savings and T is taxes. If the country's exports increase by 15%, imports decrease by 10%, foreign investment increases by 20%, domestic investment decreases by 15%, savings increase by 12% and taxes decrease by 8%, what is the new balance of payments?

A. ₦1500

B. ₦1800

Correct C. ₦2000

D. ₦2200

Correct Answer: C

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Question 13

A consumer's utility function is given by U = 2x + 3y, where x and y are the quantities of two goods. If the consumer's income is ₦100 and the prices of the two goods are ₦5 and ₦10 respectively, what is the consumer's optimal bundle of goods?

Correct A. x = 10, y = 5

B. x = 15, y = 3

C. x = 20, y = 2

D. x = 25, y = 1

Correct Answer: A

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Question 14

A firm's production function is given by Q = 2L^0.5H^0.5, where Q is output, L is labor and H is capital. If the firm wants to increase output by 20% while keeping labor cons\tant, what percentage increase in capital is required?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 15

A country's balance of payments account is given by the following equation: BOP = \( X - M \) + \( F - I \) + \( S - T \), where BOP is the balance of payments, X is exports, M is imports, F is foreign investment, I is domestic investment, S is savings and T is taxes. If the country's exports increase by 15%, imports decrease by 10%, foreign investment increases by 20%, domestic investment decreases by 15%, savings increase by 12% and taxes decrease by 8%, what is the new balance of payments?

A. ₦1500

B. ₦1800

Correct C. ₦2000

D. ₦2200

Correct Answer: C

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Question 16

A firm's production function is given by Q = 2L^0.5K^0.5, where Q is output, L is labor and K is capital. If the firm's current labor and capital inputs are 4 and 9 units respectively, what is the marginal product of labor?

Correct A. 1.5

B. 2.5

C. 3.5

D. 4.5

Correct Answer: A

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Question 17

A consumer's utility function is given by U = 2x + 3y, where x and y are the quantities of two goods consumed. If the consumer's budget constraint is 10x + 5y = 50, what is the consumer's optimal bundle of goods?

Correct A. (5, 5)

B. (10, 0)

C. (0, 10)

D. (7.5, 2.5)

Correct Answer: A

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Question 18

A firm's demand function is given by Q = 100 - 2P, where Q is quantity demanded and P is price. If the firm's total revenue is given by TR = PQ, what is the firm's marginal revenue?

Correct A. -2

B. -1

C. 1

D. 2

Correct Answer: A

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Question 19

A central bank's monetary policy tool is given by the money supply equation MS = kY, where MS is money supply, k is a cons\tant and Y is real GDP. If the central bank wants to increase the money supply by 10%, what is the percentage change in real GDP?

A. 5%

Correct B. 10%

C. 15%

D. 20%

Correct Answer: B

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Question 20

A firm's \cost function is given by C = 2L + 3K, where C is total \cost, L is labor and K is capital. If the firm's current labor and capital inputs are 4 and 9 units respectively, what is the firm's total \cost?

A. 25

Correct B. 30

C. 35

D. 40

Correct Answer: B

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Question 21

Consider a production function given by \( Q = 100K^{\frac{1}{3}}L^{\frac{2}{3}} \), where Q is output, K is capital, and L is labor. If the marginal product of labor is 20, and the price of labor is ₦100 per unit, what is the optimal level of labor to maximize profits?

A. 50 units

Correct B. 100 units

C. 200 units

D. 300 units

Correct Answer: B

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Question 22

A firm's production function is given by \( Q = 2L^2 + 5K \), where Q is output, L is labor, and K is capital. If the price of labor is ₦50 per unit and the price of capital is ₦100 per unit, what is the optimal combination of labor and capital to maximize profits?

A. L = 10, K = 5

Correct B. L = 5, K = 10

C. L = 15, K = 3

D. L = 20, K = 2

Correct Answer: B

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Question 23

Consider a country with a GDP of ₦10 trillion and a GNP of ₦12 trillion. What is the net factor income from abroad?

Correct A. ₦2 trillion

B. ₦1 trillion

C. ₦0.5 trillion

D. ₦0.2 trillion

Correct Answer: A

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Question 24

A firm's production function is given by \( Q = 3L^{\frac{2}{3}}K^{\frac{1}{3}} \), where Q is output, L is labor, and K is capital. If the marginal product of labor is 10, and the price of labor is ₦75 per unit, what is the optimal level of labor to maximize profits?

A. 20 units

Correct B. 30 units

C. 40 units

D. 50 units

Correct Answer: B

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Question 25

Consider a country with a GDP of ₦15 trillion and a GNP of ₦18 trillion. What is the net factor income from abroad?

Correct A. ₦3 trillion

B. ₦2 trillion

C. ₦1.5 trillion

D. ₦1 trillion

Correct Answer: A

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