Practice post utme ims u economics 2025 Past Questions

Question 1

A government imposes a tax on a commodity to reduce its consumption. If the demand for the commodity is inelastic, what will be the effect on the government's revenue?

A. The government's revenue will increase.

B. The government's revenue will decrease.

C. The government's revenue will remain the same.

D. The effect on the government's revenue is uncertain.

Question 2

The concept of scarcity is a fundamental principle in economics, which states that the needs and wants of individuals are unlimited, but the resources available to satisfy those needs and wants are limited. This leads to the necessity of making choices and trade-offs. Which of the following is a correct example of a trade-off?

A. Choo\sing between a higher salary and a shorter working week

B. Choo\sing between a new car and a vacation

C. Choo\sing between a higher education and a career in the arts

D. Choo\sing between a new smartphone and a laptop

Question 3

A monopolist faces a market demand curve given by Q = 100 - 2P. The firm's marginal revenue (MR) is given by MR = 50 - 2Q. If the firm's marginal \cost (MC) is cons\tant at ₦20, what is the profit-maximizing quantity of output?

A. ₦40

B. ₦60

C. ₦80

D. ₦100

Question 4

A country's elasticity of demand for a particular good is given by the equation E = -2P/Q. If the price (P) of the good is ₦20 and the quantity (Q) demanded is 100 units, what is the country's elasticity of demand?

A. 0.04

B. 0.08

C. 0.12

D. 0.16

Question 5

A consumer has an income of ₦1000 and faces the following prices: p_A = ₦200, p_B = ₦300, and p_C = ₦400. The consumer's indifference curves are given by the equation u = 2x_A + 3x_B + 4x_C, where x_A, x_B, and x_C are the quantities consumed of goods A, B, and C, respectively. Find the consumer's optimal consumption bundle.

A. x_A = 2, x_B = 1, x_C = 0

B. x_A = 1, x_B = 2, x_C = 0

C. x_A = 0, x_B = 1, x_C = 2

D. x_A = 1, x_B = 1, x_C = 1

Question 6

A perfectly competitive market is characterized by a large number of firms producing a homogeneous product, and each firm has complete knowledge of market conditions. In such a market, firms are price-takers and produce at the point where marginal revenue equals marginal \cost. Which of the following is a correct characteristic of a perfectly competitive market?

A. Firms produce at the point where marginal revenue equals marginal \cost

B. Firms have complete knowledge of market conditions

C. Firms produce a homogeneous product

D. All of the above

Question 7

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 = 20L^0.25K^0.75. If the firm has 100 units of labor and 200 units of capital, find the optimal production levels of A and B.

A. q_A = 50, q_B = 100

B. q_A = 75, q_B = 150

C. q_A = 100, q_B = 200

D. q_A = 125, q_B = 250

Question 8

A consumer's utility function is given by u(x, y) = 2x + y, where x is the quantity of good x and y is the quantity of good y. If the consumer's budget constraint is given by 2x + 3y = 18, what is the optimal bundle of goods?

A. x = 3, y = 6

B. x = 4, y = 4

C. x = 5, y = 3

D. x = 6, y = 2

Question 9

A country's balance of payments (BOP) is a statistical statement that summarizes all economic transactions between residents and non-residents over a specific period. The BOP accounts for all international transactions, including trade in goods and services, income, and capital flows. Which of the following is a correct component of a country's BOP?

A. Current account

B. Capital account

C. Financial account

D. All of the above

Question 10

A firm's total revenue (TR) is given by the equation TR = 100P - 0.5P^2. If the firm's marginal revenue (MR) is cons\tant at ₦20, what is the firm's optimal price \( P* \)?

A. ₦20

B. ₦30

C. ₦40

D. ₦50

Question 11

A consumer's utility function is given by U = 2x + 3y. The consumer's budget constraint is given by 2x + 3y = ₦100. If the consumer's income is ₦100, what is the optimal bundle of x and y?

A. x = 20, y = 20

B. x = 30, y = 10

C. x = 40, y = 0

D. x = 0, y = 33.33

Question 12

The demand function for a product is given by \( Q_d = 100 - 2P \). If the supply function is given by \( Q_s = 2P - 20 \), find the equilibrium price and quantity.

A. P = 30, Q = 40

B. P = 40, Q = 30

C. P = 50, Q = 20

D. P = 60, Q = 10

Question 13

The concept of diminishing marginal utility is a fundamental principle in economics, which states that as the consumption of a good increases, the marginal utility derived from each additional unit decreases. Which of the following is a correct example of diminishing marginal utility?

A. The consumption of a good increases, but the marginal utility derived from each additional unit remains cons\tant

B. The consumption of a good increases, but the marginal utility derived from each additional unit increases

C. The consumption of a good increases, but the marginal utility derived from each additional unit decreases

D. The consumption of a good decreases, but the marginal utility derived from each additional unit increases

Question 14

A firm faces a demand curve given by Q = 100 - 2P. If the firm's marginal \cost (MC) is cons\tant at ₦10, what is the optimal price \( P* \) at which the firm should produce?

A. ₦20

B. ₦30

C. ₦40

D. ₦50

Question 15

The opportunity \cost of producing one more unit of a good is the value of the next best alternative that could have been produced with the same resources. This concept is closely related to the law of increa\sing opportunity \costs, which states that as the production of a good increases, the opportunity \cost of producing one more unit also increases. Which of the following statements is a correct interpretation of the law of increa\sing opportunity \costs?

A. The law of increa\sing opportunity \costs implies that as the production of a good increases, the opportunity \cost of producing one more unit decreases.

B. The law of increa\sing opportunity \costs implies that as the production of a good increases, the opportunity \cost of producing one more unit remains cons\tant.

C. The law of increa\sing opportunity \costs implies that as the production of a good increases, the opportunity \cost of producing one more unit also increases.

D. The law of increa\sing opportunity \costs implies that as the production of a good increases, the opportunity \cost of producing one more unit decreases and then increases.

POST UTME IMS U 2025 Economics | Objective

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