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POST UTME WELLSPRING UNIVERSITY 2025 Economics | Objective

Are you preparing for POST UTME WELLSPRING UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2025 Economics (Objective) questions designed to simulate the real exam environment.

Practice these randomly selected questions to test your readiness.

Question 1

Consider a firm operating in a perfectly competitive market with a downward-sloping demand curve. If the firm's marginal revenue (MR) curve intersects its average variable \cost (AVC) curve at a point where MR = AVC, what is the likely outcome for the firm's profit-maximizing output level?

A. The firm will produce at the point where MR = MC.

Correct B. The firm will produce at the point where MR = AVC.

C. The firm will produce at the point where MR = ATC.

D. The firm will produce at the point where MR = AFC.

Correct Answer: B

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Question 2

A consumer's indifference curve for two goods, X and Y, is given by the equation $ U = 2x + 3y $. If the consumer's initial \endowment is $ x_0, y_0 \ $ = (2, 3) ), and the prices of X and Y are $ p_x = 4 $ and $ p_y = 5 $, respectively, what is the consumer's optimal bundle of X and Y?

Correct A. ( (x, y) = (6, 2) )

B. ( (x, y) = (4, 3) )

C. ( (x, y) = (2, 4) )

D. ( (x, y) = (1, 5) )

Correct Answer: A

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Question 3

A firm's production function is given by $ Q = 2L^{1/2}K^{1/2} $, where ( L ) is labor and ( K ) is capital. If the firm's current input levels are $ L = 4 $ and $ K = 9 $, what is the firm's current output level?

A. $ Q = 24 $

Correct B. $ Q = 36 $

C. $ Q = 48 $

D. $ Q = 60 $

Correct Answer: B

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Question 4

A government imposes a tax on a firm's output, cau\sing the firm's supply curve to shift to the left. If the firm's initial supply curve is given by $ Q = 2P - 10 $, and the tax is $ T = 5 $, what is the firm's new supply curve?

Correct A. $ Q = 2P - 15 $

B. $ Q = 2P - 20 $

C. $ Q = 2P - 25 $

D. $ Q = 2P - 30 $

Correct Answer: A

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Question 5

A consumer's budget constraint is given by the equation $ 2x + 3y = 12 $, where ( x ) and ( y ) are the quantities of two goods. If the consumer's indifference curve is given by the equation $ U = x + 2y $, and the prices of the two goods are $ p_x = 2 $ and $ p_y = 3 $, respectively, what is the consumer's optimal bundle of the two goods?

Correct A. ( (x, y) = (4, 2) )

B. ( (x, y) = (3, 3) )

C. ( (x, y) = (2, 4) )

D. ( (x, y) = (1, 5) )

Correct Answer: A

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Question 6

Determine the value of elasticity of demand for a firm that experiences a 10% increase in price, resulting in a 5% decrease in quantity demanded, given that the initial price is ₦100 and the initial quantity demanded is 100 units.

Correct A. 0.5

B. 1.0

C. 1.5

D. 2.0

Correct Answer: A

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Question 7

A firm's production function is given by Q = 2L^0.5K^0.5, where Q is the quantity produced, L is the labor input, and K is the capital input. If the firm increases labor input from 4 units to 6 units and capital input from 9 units to 12 units, what is the percentage change in output?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 8

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

Correct A. x = 5, y = 10

B. x = 10, y = 5

C. x = 15, y = 0

D. x = 0, y = 15

Correct Answer: A

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Question 9

A country's balance of payments is given by the following equation: BOP = $ X - M $ + $ F - I $, where BOP is the balance of payments, X is exports, M is imports, F is foreign investment, and I is domestic investment. If the country's exports are ₦100, imports are ₦80, foreign investment is ₦20, and domestic investment is ₦30, what is the balance of payments?

A. ₦10

Correct B. ₦20

C. ₦30

D. ₦40

Correct Answer: B

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Question 10

A central bank uses the following monetary policy tool: r = 2 + 0.1$ Y - Y^* $ + 0.01i, where r is the interest rate, Y is the current output, Y^* is the potential output, and i is the inflation rate. If the current output is 100, potential output is 90, and inflation rate is 2%, what is the interest rate?

A. 2%

B. 3%

Correct C. 4%

D. 5%

Correct Answer: C

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Question 11

The Central Bank of Nigeria (CBN) uses the monetary policy instrument of Open Market Operations (OMO) to increase the money supply in the economy. Which of the following is a consequence of this action?

A. A decrease in the interest rate

B. An increase in the reserve requirement

C. A decrease in the money supply

Correct D. An increase in the inflation rate

Correct Answer: D

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Question 12

A country's balance of payments (BOP) is in equilibrium when the current account and capital account are equal. Which of the following is a characteristic of a country with a BOP surplus?

A. A decrease in the value of the domestic currency

B. An increase in the value of the domestic currency

C. A decrease in the trade deficit

Correct D. An increase in the trade surplus

Correct Answer: D

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Question 13

A firm's production function is given by Q = 2L^0.5K^0.5, where Q is the output, L is the labor, and K is the capital. What is the marginal product of labor (MPL) when L = 4 and K = 9?

A. 1

Correct B. 2

C. 3

D. 4

Correct Answer: B

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Question 14

A country's national income (NI) is given by NI = C + I + G + $ X - M $, where C is the consumption, I is the investment, G is the government sp\ending, X is the exports, and M is the imports. If the country's NI is $100 billion, and the government sp\ending is $20 billion, what is the value of the exports minus imports?

A. $10 billion

B. $20 billion

Correct C. $30 billion

D. $40 billion

Correct Answer: C

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Question 15

A firm's production function is given by Q = 2L^0.5K^0.5, where Q is the output, L is the labor, and K is the capital. What is the value of the marginal product of capital (MPC) when L = 4 and K = 9?

A. 1

B. 2

Correct C. 3

D. 4

Correct Answer: C

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Question 16

Consider a firm operating in a perfectly competitive market. The firm's demand curve is given by Q = 100 - 2P, where Q is the quantity demanded and P is the price. The firm's supply curve is given by Q = 2P - 10. Find the equilibrium price and quantity.

A. P = 20, Q = 30

Correct B. P = 15, Q = 25

C. P = 25, Q = 35

D. P = 30, Q = 40

Correct Answer: B

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Question 17

A country's balance of payments (BOP) is given by the following equation: BOP = X - M, where X is the value of exports and M is the value of imports. If the country's exports are valued at ₦100 billion and imports are valued at ₦120 billion, what is the balance of payments?

A. ₦20 billion surplus

Correct B. ₦20 billion deficit

C. ₦10 billion surplus

D. ₦10 billion deficit

Correct Answer: B

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Question 18

A firm's total revenue (TR) is given by the equation TR = 2Q^2 - 10Q + 20, where Q is the quantity sold. If the firm sells 10 units, what is the total revenue?

A. ₦200

B. ₦300

Correct C. ₦400

D. ₦500

Correct Answer: C

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Question 19

A country's GDP is given by the equation GDP = C + I + G + $ X - M $, where C is consumption, I is investment, G is government sp\ending, X is exports, and M is imports. If the country's consumption is ₦100 billion, investment is ₦20 billion, government sp\ending is ₦30 billion, exports are ₦50 billion, and imports are ₦40 billion, what is the GDP?

A. ₦200 billion

B. ₦250 billion

Correct C. ₦300 billion

D. ₦350 billion

Correct Answer: C

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Question 20

A central bank uses the money multiplier formula to determine the money supply in an economy. The formula is given by M = (MB x R)/r, where MB is the monetary base, R is the reserve requirement, and r is the currency ratio. If the monetary base is ₦100 billion, the reserve requirement is 0.2, and the currency ratio is 0.5, what is the money supply?

A. ₦50 billion

B. ₦100 billion

Correct C. ₦150 billion

D. ₦200 billion

Correct Answer: C

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Question 21

A firm's demand function is given by Q = 100 - 2P + 3Y. If the price elasticity of demand is defined as the percentage change in quantity demanded in response to a 1% change in price, calculate the price elasticity of demand.

A. 2

Correct B. -2

C. 3

D. -3

Correct Answer: B

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Question 22

A consumer's utility function is given by U = 2x + 3y. If the consumer's income is ₦1000 and the prices of x and y are ₦5 and ₦3 respectively, calculate the consumer's optimal bundle of x and y.

A. x = 100, y = 200

B. x = 200, y = 100

Correct C. x = 150, y = 150

D. x = 50, y = 250

Correct Answer: C

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Question 23

A firm's \cost function is given by C = 100 + 2Q + 3Q^2. If the firm produces 10 units of output, calculate the firm's total \cost.

A. ₦300

B. ₦400

Correct C. ₦500

D. ₦600

Correct Answer: C

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Question 24

A central bank uses the following monetary policy instrument: Open Market Operations (OMO). If the central bank buys ₦100 million worth of government securities, what is the effect on the money supply?

Correct A. Increase money supply

B. Decrease money supply

C. No effect on money supply

D. Increase interest rates

Correct Answer: A

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Question 25

A country's GDP is given by the equation: GDP = C + I + G + $ X - M $. If the country's consumption is ₦500 billion, investment is ₦200 billion, government sp\ending is ₦300 billion, exports are ₦400 billion, and imports are ₦200 billion, calculate the country's GDP.

A. ₦1.5 trillion

B. ₦1.8 trillion

Correct C. ₦2.0 trillion

D. ₦2.2 trillion

Correct Answer: C

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