UI Post-UTME Economics 2025 (Model questions) past questions and answers

Which of the following are characteristics of a free market economy?
I. Private ownership of factors of production
II. Government sets prices for all goods
III. Resource allocation is through the price mechanism
IV. Competition among producers

1. A.I, II and IV only
2. B.I, III and IV only
3. C.II and III only
4. D.All of the above

The demand for a good is said to be price inelastic when:
I. A 10% price rise causes less than 10% fall in quantity demanded
II. The PED value is between 0 and 1
III. Total revenue increases when the price is raised
IV. The good has many close substitutes

1. A.I, II and III only
2. B.II and IV only
3. C.III and IV only
4. D.All of the above

An increase in the money supply, all else equal, will most likely lead to:
I. Higher inflation in the long run
II. Depreciation of the currency
III. Higher interest rates immediately
IV. Increased purchasing power of money

1. A.I and II only
2. B.III and IV only
3. C.I, II and III only
4. D.II and IV only

The concept of comparative advantage implies that:
I. A country should export goods it produces at a lower opportunity cost
II. Specialisation and trade can benefit all trading nations
III. Absolute advantage is necessary for mutually beneficial trade
IV. A country with no absolute advantage can still gain from trade

1. A.I, II and IV only
2. B.I and III only
3. C.II, III and IV only
4. D.All of the above

Which of the following are examples of automatic stabilisers in fiscal policy?
I. Unemployment benefits
II. Progressive income tax
III. Government capital expenditure on roads
IV. Corporate income tax

1. A.I, II and IV only
2. B.I and III only
3. C.II, III and IV only
4. D.All of the above

A rightward shift of the supply curve can be caused by:
I. A fall in the cost of raw materials
II. Technological improvements in production
III. An increase in the price of the good itself
IV. A government subsidy to producers

1. A.I, II and IV only
2. B.I and III only
3. C.II, III and IV only
4. D.All of the above

Which of the following are NOT included in the computation of Gross Domestic Product (GDP) using the expenditure approach?
I. Government transfer payments
II. Export of goods and services
III. Intermediate goods
IV. Gross fixed capital formation

1. A.I and III only
2. B.II and IV only
3. C.I, III and IV only
4. D.II and III only

In a monopoly market, compared with perfect competition, the equilibrium outcome typically results in:
I. Higher prices
II. Lower output
III. Deadweight welfare loss
IV. Productive efficiency

1. A.I, II and III only
2. B.I and IV only
3. C.II, III and IV only
4. D.All of the above

The multiplier effect in Keynesian economics states that:
I. An initial injection of spending generates a larger final change in national income
II. The size of the multiplier is inversely related to the marginal propensity to save
III. Higher marginal propensity to consume means a larger multiplier
IV. The multiplier only works with government spending

1. A.I, II and III only
2. B.I and IV only
3. C.II and III only
4. D.All of the above

Which of the following policies are used to control inflation?
I. Raising the minimum rediscount rate
II. Open market operations — selling securities
III. Reduction in cash reserve ratio
IV. Decrease in government expenditure

1. A.I, II and IV only
2. B.I and III only
3. C.II, III and IV only
4. D.All of the above

The table below shows the total utility (TU) of a consumer from consuming units of a good: Units: 1, 2, 3, 4, 5 TU: 20, 36, 48, 56, 60. Which of the following statements are CORRECT?
I. Marginal utility at the 3rd unit is 12
II. Marginal utility is declining throughout
III. The consumer reaches saturation at 5 units
IV. The law of diminishing marginal utility is illustrated

1. A.I, II and IV only
2. B.I and III only
3. C.II, III and IV only
4. D.All of the above

A country has the following national income data: GDP at market prices: ₦800bn, Indirect taxes: ₦60bn, Subsidies: ₦20bn, Net property income from abroad: ₦30bn, Depreciation: ₦50bn. Which of the following are CORRECT?
I. GDP at factor cost = ₦760bn
II. GNP at market prices = ₦830bn
III. NNP at market prices = ₦780bn
IV. GDP at factor cost = ₦840bn

1. A.I, II and III only
2. B.II and IV only
3. C.I and III only
4. D.III and IV only

The balance of payments of Country X shows the following: Merchandise exports: $500m Merchandise imports: $620m Net services: $40m Net transfers: −$20m. Which of the following is TRUE?
I. The trade balance shows a deficit of $120m
II. The current account balance is −$100m
III. Invisible trade balance is $20m
IV. The current account is in surplus

1. A.I, II and III only
2. B.I and IV only
3. C.II and III only
4. D.I, III and IV only

Which of the following are correct regarding the relationship between Average Cost (AC) and Marginal Cost (MC)?
I. When MC < AC, the AC curve is falling
II. When MC > AC, the AC curve is rising
III. MC intersects AC at AC's minimum point
IV. MC is always below AC throughout production

1. A.I, II and III only
2. B.I and III only
3. C.III and IV only
4. D.All of the above

Unemployment can be classified as:
I. Frictional — occurring between jobs during search
II. Structural — caused by declining industries or skills mismatch
III. Cyclical — resulting from insufficient aggregate demand
IV. Seasonal — permanent loss of jobs due to automation

1. A.I, II and III only
2. B.I and II only
3. C.II, III and IV only
4. D.All of the above

Economic development differs from economic growth in that development:
I. Involves improvements in living standards and quality of life
II. Requires structural transformation of the economy
III. Is measured solely by increases in GDP
IV. Includes reduction of poverty and inequality

1. A.I, II and IV only
2. B.I and III only
3. C.III and IV only
4. D.All of the above

When the Central Bank of Nigeria raises the Monetary Policy Rate (MPR), the expected outcomes include:
I. Commercial banks raise their lending rates
II. Investment spending by firms tends to fall.
III. Aggregate demand in the economy falls
IV. The exchange rate of the naira immediately depreciates

1. A.I, II and III only
2. B.I and IV only
3. C.II, III and IV only
4. D.All of the above

A public good is characterised by:
I. Non-rivalry in consumption
II. Non-excludability
III. The free rider problem
IV. Being produced only by the private sector

1. A.I, II and III only
2. B.II and IV only
3. C.I and III only
4. D.All of the above

A firm's total fixed cost is ₦60,000, and the variable cost per unit is ₦40. If the firm sells output at ₦70 per unit, which of the following are CORRECT?
I. Break-even output is 2,000 units
II. Contribution per unit is ₦30
III. Profit at 3,000 units of output is ₦30,000
IV. At 1,500 units, the firm makes a loss

1. A.I, II and III only
2. B.II and IV only
3. C.I and IV only
4. D.All of the above

A firm operates under perfect competition. In the short run, which of the following are TRUE?
I. The firm is a price taker
II. Economic profit may be positive, zero, or negative.
III. Price equals marginal revenue
IV. The firm sets its own price above marginal cost

1. A.I, II and III only
2. B.I and IV only
3. C.II and IV only
4. D.All of the above

The following are associated with market failure:
I. Negative externalities such as pollution from factories
II. Public goods being under-provided by the private sector
III. Perfect information available to all buyers and sellers
IV. Monopoly power leading to allocative inefficiency

1. A.I, II and IV only
2. B.I and III only
3. C.III and IV only
4. D.All of the above

The following data is available for an economy: Consumption: ₦600bn Investment: ₦150bn Government expenditure: ₦200bn Exports: ₦180bn Imports: ₦130bn. Which of the following are CORRECT?
I. GDP = ₦1,000bn
II. Net exports = ₦50bn
III. The economy has a trade surplus
IV. GDP = ₦950bn

1. A.I, II and III only
2. B.II, III and IV only
3. C.I and IV only
4. D.II and IV only

Which of the following are supply-side policies used to promote long-run economic growth?
I. Investment in education and training
II. Reducing income tax rates to increase work incentives
III. Increasing government transfer payments to households
IV. Deregulation of product and labour markets

1. A.I, II and IV only
2. B.I and III only
3. C.II, III and IV only
4. D.All of the above

The following statements relate to the concept of elasticity:
I. Cross price elasticity of demand is positive for substitute goods
II. The income elasticity of demand for inferior goods is negative.
III. Price elasticity of supply is higher in the long run than in the short run.
IV. Unit elastic demand means a price change causes no change in total revenue

1. A.I, II and III only
2. B.I and IV only
3. C.II, III and IV only
4. D.All of the above