Post UTME Economics Past Questions and Answers

Preparing for the Post UTME examination requires consistent practice with real exam-style questions. Economics, as one of the core social science subjects, tests candidates’ understanding of key concepts such as scarcity, demand and supply, market structures, national income, inflation, and international trade. This collection of 100 objective past questions with answers and 10 theory past questions with answers has been carefully compiled to reflect the nature and difficulty of Post UTME economics past questions, helping candidates improve their speed, accuracy, and confidence before the exam.

POST-UTME ECONOMICS PAST QUESTIONS (1–100)

Here Are past year Post UTME Economics Past Questions:

The central problem of economics is concerned with A. Inflation and unemployment B. Scarcity and choice C. Money and banking D. Supply and demand
Answer: B
Which of the following is not a factor of production? A. Land B. Labour C. Money D. Capital
Answer: C
The law of diminishing returns applies only when A. All factors are fixed B. Some factors are fixed C. All factors are variable D. Factors are unlimited
Answer: B
In a perfectly competitive market, the demand curve facing an individual firm is A. Upward sloping B. Perfectly elastic C. Perfectly inelastic D. Downward sloping
Answer: B
Which of the following is a direct tax? A. Value Added Tax B. Import duty C. Company income tax D. Excise duty
Answer: C
The basic tools of economic analysis include A. Graphs, tables, and models B. Spreadsheets and diagrams C. Maps and charts only D. Symbols and words
Answer: A
A sustained increase in the general price level of goods and services is called A. Deflation B. Stagflation C. Inflation D. Reflation
Answer: C
Which of the following measures can reduce inflation? A. Increase in money supply B. Subsidy removal C. Reduction in government spending D. Wage increase
Answer: C
The reward for capital as a factor of production is A. Rent B. Interest C. Profit D. Wages
Answer: B
Opportunity cost is best defined as A. The cost of a good in money terms B. The alternative forgone when a choice is made C. The total cost of production D. The cost of resources used
Answer: B
Which of the following is an example of a public good? A. Bread B. Street lighting C. Furniture D. Clothing
Answer: B
When marginal cost is less than average cost, average cost will A. Rise B. Fall C. Remain constant D. Be undefined
Answer: B
The demand curve generally slopes A. Downwards from left to right B. Upwards from left to right C. Vertically D. Horizontally
Answer: A
The market structure where there is only one seller is called A. Monopoly B. Monopolistic competition C. Perfect competition D. Oligopoly
Answer: A
The extra output obtained by employing one more unit of labour is called A. Marginal utility B. Average product C. Marginal product D. Total product
Answer: C
The difference between total revenue and total cost is A. Average profit B. Marginal profit C. Economic profit D. Accounting profit
Answer: C
Which of the following is a cause of unemployment? A. Technological advancement B. Increase in aggregate demand C. Expansion of industries D. Investment in infrastructure
Answer: A
The term “laissez-faire” means A. Free entry B. Free exit C. Let alone D. Government intervention
Answer: C
A situation where too much money is chasing too few goods describes A. Deflation B. Inflation C. Stagnation D. Recession
Answer: B
Balance of payments surplus means A. Exports exceed imports B. Imports exceed exports C. Imports equal exports D. No trade is done
Answer: A
The proportion of income spent on consumption is called A. Marginal propensity to consume B. Marginal propensity to save C. Average propensity to consume D. Average propensity to save
Answer: C
A perfectly inelastic demand curve is A. Horizontal B. Vertical C. Upward sloping D. Downward sloping
Answer: B
Which of these is a qualitative credit control measure? A. Bank rate B. Open market operation C. Moral suasion D. Special deposits
Answer: C
In the circular flow of income, households supply A. Goods B. Services C. Factors of production D. Finished products
Answer: C
Price floor is usually set A. Above equilibrium price B. Below equilibrium price C. At equilibrium price D. Independent of equilibrium price
Answer: A
Which of the following is an example of derived demand? A. Demand for rice B. Demand for textbooks C. Demand for labour D. Demand for shoes
Answer: C
An increase in supply causes the equilibrium price to A. Fall B. Rise C. Remain constant D. Double
Answer: A
Which of the following is a characteristic of money? A. Perishability B. Durability C. Bulkiness D. Instability
Answer: B
A country’s terms of trade improve when A. Import prices rise relative to export prices B. Export prices rise relative to import prices C. Both export and import prices rise equally D. Import prices fall more than export prices
Answer: B
An upward movement along the demand curve is caused by A. Increase in price B. Decrease in price C. Increase in demand D. Decrease in demand
Answer: A
The concept of “utility” in economics refers to A. The usefulness of a commodity B. The power of a commodity to satisfy wants C. The cost of producing a commodity D. The market price of a commodity
Answer: B
Which of the following is not an instrument of monetary policy? A. Open market operations B. Taxation C. Reserve requirements D. Bank rate
Answer: B
Cross elasticity of demand measures the degree of responsiveness of the demand for a good to changes in A. Its own price B. Consumers’ income C. Price of another good D. Cost of production
Answer: C
In international trade, “invisible exports” refer to A. Services sold abroad B. Goods sold abroad C. Goods bought from abroad D. Services bought from abroad
Answer: A
When total utility is at maximum, marginal utility is A. Zero B. Rising C. Negative D. Positive
Answer: A
Which of the following is an advantage of division of labour? A. It increases cost of production B. It reduces efficiency C. It saves time D. It reduces output
Answer: C
If the quantity demanded of a good falls when income rises, the good is A. Normal B. Inferior C. Luxury D. Essential
Answer: B
Which of the following is a function of money? A. Storage of goods B. Measure of value C. Exchange of services D. Source of income
Answer: B
The difference between gross domestic product and gross national product is A. Depreciation B. Net factor income from abroad C. Indirect taxes D. Subsidies
Answer: B
In economics, land refers to A. Only soil B. All free gifts of nature C. Buildings and roads D. Agricultural produce
Answer: B
A persistent fall in the general price level is A. Deflation B. Inflation C. Stagflation D. Disinflation
Answer: A
Which of these is a limitation of the barter system? A. Store of value B. Double coincidence of wants C. Divisibility of money D. Durability
Answer: B
The extra satisfaction derived from consuming an additional unit of a good is called A. Average utility B. Total utility C. Marginal utility D. Derived utility
Answer: C
Which of these is a merit of indirect taxes? A. They are easy to evade B. They discourage consumption of harmful goods C. They are difficult to collect D. They are equitable
Answer: B
Which of the following is a capital expenditure of government? A. Payment of salaries B. Construction of roads C. Payment of pensions D. Purchase of stationery
Answer: B
The market structure in which a few firms dominate the industry is A. Monopoly B. Oligopoly C. Perfect competition D. Monopolistic competition
Answer: B
When price elasticity of demand is greater than one, demand is said to be A. Perfectly elastic B. Inelastic C. Elastic D. Perfectly inelastic
Answer: C
A budget deficit occurs when A. Government revenue equals expenditure B. Government revenue exceeds expenditure C. Government expenditure exceeds revenue D. Government borrows to finance projects
Answer: C
The curve showing all combinations of two goods that yield the same satisfaction is A. Demand curve B. Indifference curve C. Supply curve D. Production possibility curve
Answer: B
The unemployment that occurs as a result of changes in technology is A. Seasonal unemployment B. Structural unemployment C. Frictional unemployment D. Cyclical unemployment
Answer: B

POST-UTME ECONOMICS PAST QUESTIONS (51–100)

Below Are past year Post UTME Economics Past Questions and answers:

The central bank can reduce the supply of money in the economy by A. Buying securities in the open market B. Reducing bank rate C. Selling securities in the open market D. Reducing reserve requirements
Answer: C
The slope of the production possibility curve shows A. Marginal rate of substitution B. Marginal rate of transformation C. Law of diminishing returns D. Law of variable proportion
Answer: B
The most liquid form of money is A. Time deposits B. Savings deposits C. Demand deposits D. Foreign exchange
Answer: C
Which of the following is a feature of a developing economy? A. High literacy rate B. Low unemployment rate C. High dependency ratio D. Advanced technology
Answer: C
Which of the following items is not included in national income? A. Rent B. Wages C. Transfer payments D. Interest
Answer: C
The money paid to the owners of land for its use is called A. Wage B. Rent C. Interest D. Profit
Answer: B
A monopolist maximizes profit at the point where A. MC = MR B. AC = AR C. MC = AC D. MR = AR
Answer: A
Which of the following is a cause of demand-pull inflation? A. Fall in production cost B. Increase in money supply C. Technological advancement D. Fall in wages
Answer: B
Which of the following is an example of a regressive tax? A. VAT B. Excise duty C. Poll tax D. Import duty
Answer: C
National income at constant prices measures A. Real national income B. Nominal national income C. Disposable income D. Per capita income
Answer: A
The concept of comparative advantage was developed by A. Adam Smith B. Alfred Marshall C. David Ricardo D. John Keynes
Answer: C
A tax imposed to protect home industries is called A. Revenue tariff B. Protective tariff C. Import duty D. Export duty
Answer: B
Which of the following is a factor determining the supply of a commodity? A. Income of consumers B. Taste and fashion C. Price of the commodity D. Population size
Answer: C
The demand for a commodity that is used to produce another commodity is called A. Joint demand B. Composite demand C. Derived demand D. Competitive demand
Answer: C
When the price of a good falls and total revenue also falls, the demand for the good is A. Elastic B. Inelastic C. Unitary elastic D. Perfectly elastic
Answer: B
The deliberate effort to restrict imports is known as A. Import substitution B. Trade liberalization C. Protectionism D. Export promotion
Answer: C
The cost that changes with the level of output is A. Fixed cost B. Variable cost C. Average cost D. Sunk cost
Answer: B
The market for foreign currencies is called A. Stock market B. Capital market C. Money market D. Foreign exchange market
Answer: D
If two goods are substitutes, the cross elasticity of demand will be A. Negative B. Positive C. Zero D. Infinite
Answer: B
The term “dumping” in international trade means A. Selling goods at a loss abroad B. Selling inferior goods abroad C. Selling without profit abroad D. Selling at high prices abroad
Answer: A
Which of the following is a function of the stock exchange? A. Issuing currency B. Mobilizing savings C. Lending to government D. Printing money
Answer: B
The policy of selling government-owned enterprises to private individuals is A. Commercialization B. Nationalization C. Privatization D. Liberalization
Answer: C
Which of the following is not a function of money? A. Store of value B. Medium of exchange C. Measure of value D. Source of income
Answer: D
Which of the following is an instrument of fiscal policy? A. Bank rate B. Government expenditure C. Open market operation D. Reserve requirement
Answer: B
Which of the following is a merit of free trade? A. Encourages dumping B. Reduces competition C. Increases efficiency D. Reduces variety of goods
Answer: C
Per capita income is obtained by dividing national income by A. Number of workers B. Number of industries C. Total population D. Adult population
Answer: C
The situation in which resources are fully utilized is called A. Full employment B. Underemployment C. Overemployment D. Optimum population
Answer: A
Which of these is an example of a capital good? A. Bread B. Machinery C. Clothing D. Furniture
Answer: B
The difference between gross profit and net profit is A. Overhead cost B. Direct cost C. Depreciation D. Operating expenses
Answer: D
In a closed economy, the major components of aggregate demand are A. C + I + G B. C + I + X C. C + I + G + X D. C + I – X
Answer: A
Which of the following is an effect of inflation? A. Increase in value of money B. Fall in cost of living C. Loss of purchasing power D. Increased real wages
Answer: C
In which market structure is product differentiation a key feature? A. Monopoly B. Oligopoly C. Perfect competition D. Monopolistic competition
Answer: D
Which of the following is a disadvantage of division of labour? A. Increased speed B. Loss of skill variety C. Reduced cost D. Specialization
Answer: B
An example of a transfer payment is A. Pension B. Rent C. Interest D. Profit
Answer: A
Which of the following is an example of a normal good? A. Gari B. Luxury cars C. Inferior rice D. Low-quality clothes
Answer: B
When a country’s imports exceed its exports, the balance of trade is A. Surplus B. Deficit C. Balanced D. Favourable
Answer: B
The use of income to acquire capital goods is called A. Savings B. Investment C. Consumption D. Expenditure
Answer: B
Which of the following is an advantage of sole proprietorship? A. Unlimited liability B. Quick decision-making C. Limited source of capital D. Limited life span
Answer: B
A loan granted by the IMF to correct a country’s balance of payments deficit is called A. Structural loan B. Stand-by loan C. Development loan D. Special drawing rights
Answer: B
The excess of a country’s visible and invisible exports over imports is A. Balance of payments surplus B. Balance of payments deficit C. Balance of trade surplus D. Balance of trade deficit
Answer: A
Which of the following is an example of an economic good? A. Air B. Sunshine C. Water in a desert D. Sea water
Answer: C
The period when total production is zero is called A. Shutdown point B. Break-even point C. Short run D. Long run
Answer: A
In the short run, a firm will continue to operate if A. Price covers average fixed cost B. Price covers average variable cost C. Price is below average variable cost D. Total revenue is zero
Answer: B
When government spends more than it earns, it is said to have A. Budget surplus B. Budget deficit C. Balanced budget D. Fiscal balance
Answer: B
The measure of dispersion that is least affected by extreme values is A. Mean deviation B. Standard deviation C. Range D. Mode
Answer: D
A proportional tax is one in which A. Tax rate increases with income B. Tax rate decreases with income C. Tax rate remains constant D. Tax rate varies
Answer: C
The point where no consumer can be made better off without making another worse off is A. Market equilibrium B. Pareto optimum C. Nash equilibrium D. Break-even point
Answer: B
An import quota is A. A tax on imports B. A limit on quantity of imports C. A ban on imports D. A subsidy to exporters
Answer: B
Which of the following is the main aim of production? A. Creation of goods only B. Creation of services only C. Satisfaction of human wants D. Increase in output
Answer: C
The study of the behaviour of individual economic units is called A. Macroeconomics B. Microeconomics C. Economic theory D. Economic analysis
Answer: B

POST-UTME ECONOMICS THEORY QUESTIONS AND ANSWERS

Below Are past year Post UTME Economics Past Questions

Question: Define opportunity cost and explain its importance in decision-making.
Answer: Opportunity cost is the value of the next best alternative forgone when a choice is made. It is important in decision-making because resources are scarce, and individuals, firms, and governments must choose between competing uses. Understanding opportunity cost ensures resources are allocated to the most beneficial use.
Question: Distinguish between a direct tax and an indirect tax, giving one example of each.
Answer: A direct tax is levied directly on the income or wealth of individuals or organizations, e.g., personal income tax. An indirect tax is levied on goods and services and is paid through an intermediary, e.g., Value Added Tax (VAT).
Question: Explain three causes of inflation in an economy.
Answer:

Demand-pull inflation: Caused by excessive aggregate demand relative to supply.
Cost-push inflation: Caused by rising production costs such as wages or raw materials.
Monetary inflation: Caused by an excessive increase in money supply.

Question: Differentiate between perfect competition and monopoly.
Answer:

Perfect competition: Many buyers and sellers, identical products, free entry and exit, and no single seller controls price.
Monopoly: One seller dominates the market, no close substitutes for the product, high barriers to entry, and the seller has significant price-setting power.

Question: Define gross domestic product (GDP) and gross national product (GNP).
Answer:

GDP: The total monetary value of all goods and services produced within a country’s borders in a given period.
GNP: The total monetary value of all goods and services produced by a country’s citizens, whether within or outside its borders, in a given period.

Question: Mention four functions of money.
Answer:

Medium of exchange
Measure of value
Store of value
Standard for deferred payments

Question: Explain the term “balance of payments” and state its two major components.
Answer: Balance of payments is a record of all economic transactions between residents of a country and the rest of the world within a specific period. Its two major components are:

Current account: Records trade in goods and services, income, and current transfers.
Capital/financial account: Records capital transfers and financial investments.

Question: State and explain the law of demand.
Answer: The law of demand states that, ceteris paribus, the quantity demanded of a good increases as its price falls and decreases as its price rises. This inverse relationship is due to factors such as the substitution effect and the income effect.
Question: List and explain three instruments of monetary policy.
Answer:

Open Market Operations: Buying and selling government securities to control money supply.
Bank Rate: Changing the interest rate at which commercial banks borrow from the central bank.
Reserve Requirements: Changing the proportion of deposits banks must hold as reserves.

Question: Identify and explain three causes of unemployment.
Answer:

Structural unemployment: Due to changes in technology or industry structure.
Frictional unemployment: Short-term unemployment during job transitions.
Seasonal unemployment: Caused by changes in demand for labour during different seasons.

POST-UTME ECONOMICS PAST QUESTIONS (1–100)

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