Practice post utme mountain top university economics 2025 Past Questions

Question 1

A firm's production function exhibits increa\sing returns to scale. If the firm's current output is 100 units and the price of the input is ₦100 per unit, what is the minimum amount of additional input required to increase output by 20%?

A. 10 units

B. 20 units

C. 30 units

D. 40 units

Question 2

A central bank is considering a monetary policy to reduce inflation. If the current inflation rate is 8% and the target inflation rate is 4%, what is the likely effect of a 2% increase in the reserve requirement on the money supply?

A. The money supply will increase

B. The money supply will decrease

C. The money supply will remain unchanged

D. The money supply will increase by 1%

Question 3

A government in Nigeria decides to implement a policy to reduce poverty. Which of the following is a potential consequence of this policy?

A. The poverty rate increases

B. The poverty rate decreases

C. The poverty rate remains the same

D. The poverty rate becomes zero

Question 4

A firm in Nigeria faces a market structure with a \single buyer and multiple sellers. Which of the following is a characteristic of this market structure?

A. The market structure is perfectly competitive

B. The market structure is monopolistically competitive

C. The market structure is oligopolistic

D. The market structure is monopsonistic

Question 5

A firm's revenue function is given by R = 100Q - 2Q^2, where Q is the quantity sold. If the firm sells 10 units, what is the total revenue?

A. 800

B. 900

C. 1000

D. 1100

Question 6

A firm is producing a good with the following demand and supply functions: D(x) = 100 - 2x and S(x) = 20 + 3x. U\sing the concept of market equilibrium, find the level of production that will result in a market equilibrium.

A. x = 10

B. x = 16

C. x = 20

D. x = 24

Question 7

The concept of diminishing marginal utility is a fundamental principle in consumer behavior. Which of the following best describes the relationship between the quantity of a good consumed and the marginal utility derived from it?

A. MU = Q

B. MU = 1/Q

C. MU = Q^2

D. MU = 1/Q^2

Question 8

A government in Nigeria decides to impose a tax on a particular good. Which of the following is a consequence of this tax?

A. The supply curve shifts to the left

B. The demand curve shifts to the right

C. The equilibrium price increases

D. The equilibrium quantity decreases

Question 9

A government budget is prepared to achieve a fiscal deficit of ₦500 billion. If the government's revenue is ₦1.5 trillion and the interest rate on its debt is 10%, what is the maximum amount of debt the government can issue?

A. ₦1.5 trillion

B. ₦1.8 trillion

C. ₦2.0 trillion

D. ₦2.5 trillion

Question 10

The government of Nigeria has implemented a policy to increase the production of rice in the country. The policy includes providing subsidies to farmers and investing in irrigation infrastructure. However, the policy has also led to an increase in the price of rice in the international market. U\sing the concept of opportunity \cost, explain why the government's policy may not be effective in increa\sing rice production in the country.

A. The government's policy has led to an increase in the price of rice in the international market, making it less competitive for Nigerian farmers.

B. The government's policy has led to an increase in the production of rice in the country, but the increased production has not been matched by an increase in demand.

C. The government's policy has led to an increase in the production of rice in the country, but the increased production has not been matched by an increase in the quality of the rice.

D. The government's policy has led to an increase in the production of rice in the country, but the increased production has not been matched by an increase in the price of rice in the country.

Question 11

A firm in Nigeria produces a good u\sing two inputs: labor and capital. Which of the following is a characteristic of the production function?

A. The production function is homogeneous of degree 1

B. The production function is homogeneous of degree 2

C. The production function is homogeneous of degree 3

D. The production function is not homogeneous

Question 12

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 budget constraint is 2x + 3y = 12, what is the consumer's optimal bundle of goods?

A. x = 2, y = 4

B. x = 4, y = 2

C. x = 3, y = 3

D. x = 1, y = 1

Question 13

The government of Nigeria has implemented a policy to increase the production of rice in the country. The policy includes providing subsidies to farmers and investing in irrigation infrastructure. However, the policy has also led to an increase in the price of rice in the international market. U\sing the concept of opportunity \cost, explain why the government's policy may not be effective in increa\sing rice production in the country.

A. The government's policy has led to an increase in the price of rice in the international market, making it less competitive for Nigerian farmers.

B. The government's policy has led to an increase in the production of rice in the country, but the increased production has not been matched by an increase in demand.

C. The government's policy has led to an increase in the production of rice in the country, but the increased production has not been matched by an increase in the quality of the rice.

D. The government's policy has led to an increase in the production of rice in the country, but the increased production has not been matched by an increase in the price of rice in the country.

Question 14

A consumer has a budget constraint of 100 naira and a preference for two goods, A and B. The prices of A and B are 5 naira and 10 naira, respectively. What is the consumer's optimal consumption bundle?

A. 10 units of A and 10 units of B

B. 20 units of A and 5 units of B

C. 15 units of A and 15 units of B

D. 5 units of A and 20 units of B

Question 15

A consumer in Nigeria faces a budget constraint of ₦1000. Which of the following is a characteristic of the consumer's indifference curve?

A. The indifference curve is downward-sloping

B. The indifference curve is upward-sloping

C. The indifference curve is horizontal

D. The indifference curve is vertical

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