Practice post utme unilag economics 2025 Past Questions

Question 1

A country's balance of payments is in equilibrium when the value of its imports equals the value of its exports. Which of the following is a correct statement about the balance of payments equilibrium?

A. The balance of payments equilibrium implies that the country has a trade deficit.

B. The balance of payments equilibrium implies that the country has a trade surplus.

Correct C. The balance of payments equilibrium implies that the country's imports and exports are equal in value.

D. The balance of payments equilibrium implies that the country has a trade deficit and a capital surplus.

Correct Answer: C

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Question 2

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's labor and capital inputs are increased by 10% and 20% respectively, what is the percentage change in output?

A. 5%

B. 10%

Correct C. 15%

D. 20%

Correct Answer: C

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Question 3

A government imposes a tax on a good, cau\sing the supply curve to shift to the left. What is the effect on the equilibrium price and quantity of the good?

Correct A. The equilibrium price increases and the equilibrium quantity decreases.

B. The equilibrium price decreases and the equilibrium quantity increases.

C. The equilibrium price increases and the equilibrium quantity increases.

D. The equilibrium price decreases and the equilibrium quantity decreases.

Correct Answer: A

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Question 4

A country's GDP is given by the equation GDP = C + I + G + \( X - M \). If the country's consumption, investment, government sp\ending, exports, and imports are 100, 50, 20, 80, and 60 respectively, what is the country's GDP?

A. ₦250

Correct B. ₦300

C. ₦350

D. ₦400

Correct Answer: B

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Question 5

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's labor and capital inputs are increased by 10% and 20% respectively, what is the percentage change in output?

A. 5%

B. 10%

Correct C. 15%

D. 20%

Correct Answer: C

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Question 6

The concept of scarcity in economics implies that the production of one good is limited by the availability of resources that could be used to produce another good. Which of the following is a correct example of scarcity in Nigeria?

Correct A. The scarcity of skilled labor in the manufacturing sector

B. The abundance of fertile land in the agricultural sector

C. The high demand for imported goods in the consumer market

D. The low \cost of raw materials in the mining sector

Correct Answer: A

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Question 7

Agricultural industrialization in Nigeria has been hindered by the lack of infrastructure. Which of the following is a correct example of infrastructure that is essential for agricultural industrialization?

A. Roads

Correct B. Railways

C. Seaports

D. Airports

Correct Answer: B

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Question 8

The concept of opportunity \cost in economics implies that the value of the next best alternative that is given up when a choice is made. Which of the following is a correct example of opportunity \cost in Nigeria?

A. The \cost of producing a good in a factory

Correct B. The value of the next best alternative that is given up when a choice is made

C. The \cost of importing a good from another country

D. The \cost of maintaining a good in storage

Correct Answer: B

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Question 9

The concept of national income accounting in economics implies that the measurement of the total value of goods and services produced within a country. Which of the following is a correct example of national income accounting in Nigeria?

Correct A. Gross Domestic Product (GDP)

B. Gross National Product (GNP)

C. Net Domestic Product (NDP)

D. Net National Product (NNP)

Correct Answer: A

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Question 10

The concept of international trade in economics implies that the exchange of goods and services between countries. Which of the following is a correct example of international trade in Nigeria?

Correct A. Export of crude oil to other countries

B. Import of goods from other countries

C. Tourism in Nigeria

D. Remit\tances from Nigerians abroad

Correct Answer: A

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Question 11

A firm operating in a perfectly competitive market is faced with a downward-sloping demand curve. If the firm increases its output from 100 units to 120 units, its total revenue increases by ₦120,000. What is the price elasticity of demand for the firm's product?

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 market demand curve given by Q = 100 - 2P. The monopolist's marginal \cost curve is given by MC = 10 + 2Q. What is the monopolist's profit-maximizing price?

A. ₦50

B. ₦60

Correct C. ₦70

D. ₦80

Correct Answer: C

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Question 13

A government imposes a tax of ₦10 per unit on a firm that produces a good with a price elasticity of demand of 0.5. What is the effect of the tax on the firm's supply curve?

A. The supply curve shifts to the left.

Correct B. The supply curve shifts to the right.

C. The supply curve remains unchanged.

D. The supply curve becomes perfectly elastic.

Correct Answer: B

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Question 14

A firm's production function is given by Q = 100 + 2L + 3K, where L is labor and K is capital. If the firm increases its labor input from 50 units to 60 units, and its capital input from 20 units to 30 units, what is the resulting change in output?

A. 10 units

B. 20 units

Correct C. 30 units

D. 40 units

Correct Answer: C

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Question 15

A government budget constraint is given by G = T + I, where G is government sp\ending, T is taxation, and I is interest payments on debt. If the government increases its taxation by ₦10 billion, and its interest payments on debt by ₦5 billion, what is the resulting change in government sp\ending?

A. ₦5 billion

B. ₦10 billion

Correct C. ₦15 billion

D. ₦20 billion

Correct Answer: C

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Question 16

U\sing the Marshall-Lerner condition, determine whether a country will experience an improvement in its balance of payments position if the price elasticity of demand for its exports is 0.5 and the price elasticity of demand for its imports is 2.0.

Correct A. The country will experience an improvement in its balance of payments position.

B. The country will experience a deterioration in its balance of payments position.

C. The country's balance of payments position will remain unchanged.

D. Insufficient information to determine the outcome.

Correct Answer: A

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Question 17

A government imposes a tax on a particular good, resulting in a decrease in the quantity demanded. U\sing the concept of deadweight loss, determine the effect on the government's revenue.

A. The government's revenue will increase.

Correct B. The government's revenue will decrease.

C. The government's revenue will remain unchanged.

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

Correct Answer: B

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Question 18

A central bank implements a monetary policy aimed at reducing inflation. U\sing the Phillips curve, determine the effect on the unemployment rate.

A. The unemployment rate will increase.

Correct B. The unemployment rate will decrease.

C. The unemployment rate will remain unchanged.

D. The effect on the unemployment rate is ambiguous.

Correct Answer: B

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Question 19

A firm is considering two different production processes. U\sing the concept of opportunity \cost, determine which process is more efficient.

Correct A. Process A is more efficient.

B. Process B is more efficient.

C. Both processes are equally efficient.

D. Insufficient information to determine the outcome.

Correct Answer: A

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Question 20

A government is considering a fiscal policy aimed at reducing the budget deficit. U\sing the concept of crowding out, determine the effect on private investment.

A. Private investment will increase.

Correct B. Private investment will decrease.

C. Private investment will remain unchanged.

D. The effect on private investment is ambiguous.

Correct Answer: B

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Question 21

Consider a perfectly competitive market with n firms, each producing a homogeneous product. If the market demand curve is downward sloping and the firms are price takers, what is the relationship between the marginal revenue (MR) and the price (P)?

A. MR = P

B. MR > P

Correct C. MR < P

D. MR = 0

Correct Answer: C

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Question 22

A country's GDP is ₦1,500 billion, and its GNP is ₦1,600 billion. What is the net factor income from abroad?

Correct A. ₦100 billion

B. ₦50 billion

C. ₦0 billion

D. ₦-50 billion

Correct Answer: A

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Question 23

A firm is operating in the long run, and its average \cost (AC) curve is U-shaped. What is the relationship between the firm's output and its average \cost?

A. AC decreases as output increases

Correct B. AC increases as output increases

C. AC remains cons\tant as output increases

D. AC decreases as output decreases

Correct Answer: B

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Question 24

A country is experiencing a trade deficit of ₦200 billion. What is the effect on its balance of payments?

A. The balance of payments will improve

Correct B. The balance of payments will worsen

C. The balance of payments will remain unchanged

D. The balance of payments will be affected by other factors

Correct Answer: B

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Question 25

A country's economic growth rate is 5% per annum, and its population growth rate is 2% per annum. What is the effect on its per capita income?

Correct A. Per capita income will increase

B. Per capita income will decrease

C. Per capita income will remain unchanged

D. Per capita income will be affected by other factors

Correct Answer: A

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