All practice questions

The market demand for soya beans in a regional market is given by $Q_d = 350 - 5P$, and the initial market supply function is $Q_s = -70 + 9P$, where $P$ is the price per bag in Naira ($\text{N}$). If an increase in fuel costs shifts the supply function to $Q_s = -140 + 9P$, by how much will the equilibrium price change?

In an economy where productive assets are privately owned, a shift in consumer demand towards renewable energy devices prompts manufacturers to automatically reallocate capital and labor from fossil-fuel product lines to clean-energy goods. Which mechanism is primarily responsible for solving the basic economic question of 'what to produce' in this scenario?

When the price of Good X increases, the substitution effect causes a consumer to decrease their consumption of Good X by $7$ units. If the net total price effect results in an overall increase of $3$ units in the quantity demanded of Good X, which of the following correctly classifies Good X and describes the direction and magnitude of the income effect?

In a monopolistically competitive market, which feature ensures that firms earn only normal profit in the long run?

A pharmaceutical firm operating in Onitsha, Anambra State, experiences a reduction in its average unit cost of production because the concentration of related chemical and packaging enterprises in the region has attracted specialized maintenance engineers and lowered shared material transport expenses for all producers in the area. Which type of economic advantage does this situation illustrate?

A commercial bakery doubles all of its production inputs (capital and labor), causing its daily output to expand from $500$ loaves to $1,200$ loaves. Which of the following best describes the effect of this expansion on the bakery's long-run unit cost and the economic principle illustrated?

Which type of budget is implemented by a government when its proposed total expenditure exceeds its expected total revenue for a given fiscal year?

The market demand and supply equations for cassava in a regional economy are given as $Q_d = 800 - 10P$ and $Q_s = 200 + 15P$, where $P$ is the price per kilogram in Naira ($\text{N}$) and $Q$ is the quantity in metric tonnes. If the government imposes a price floor of $\text{N}32$ per kilogram to support cassava farmers and guarantees to purchase all unsold produce, what is the total monetary outlay required by the government to buy the surplus cassava?

Which of the following characteristics distinguishes a pure monopoly from a firm operating under perfect competition?

A cooperative farm produced a total grain harvest of $1,200\text{ bags}$ in a farming season, consisting of $450\text{ bags}$ of maize, $350\text{ bags}$ of sorghum, and $400\text{ bags}$ of rice. What is the sectorial angle representing sorghum when this data is represented on a pie chart?

Several independent footwear manufacturing businesses establish their factories within the same town in Abia State to share a common pool of skilled artisans and raw material suppliers. Which economic concept best describes this concentration of firms in a particular area?

In an economy experiencing rapid credit expansion and high liquidity in the commercial banking sector, the Central Bank mandates all commercial banks to lodge an additional, non-interest-bearing percentage of their total deposit liabilities directly with the apex bank beyond the statutory reserve threshold. Which monetary policy instrument has the Central Bank deployed to curb bank liquidity?

A consumer allocates household income between cassava flour and yam. Cassava flour is classified as an inferior good, but not a Giffen good. If the market price of cassava flour increases, which of the following correctly describes the directional impacts of the substitution effect and the income effect on the quantity of cassava flour demanded?

A palm oil processing mill operates in the short run with fixed processing machinery and variable labor ($L$). When $3$ workers are employed, the average product ($AP$) of labor is $16$ barrels per day. When a $4\text{th}$ worker is added, the total product ($TP$) increases to $64$ barrels per day. What is the marginal product ($MP$) of the $4\text{th}$ worker in barrels per day?

A major challenge confronting national economic planning in Nigeria is the severe shortage of accurate, timely, and comprehensive statistical data.

An increase in government subsidies granted to palm oil processors in Nigeria causes an outward shift of the supply curve for palm oil, whereas a rise in the market price of palm oil results in an upward movement along the existing supply curve.

In a four-sector open economy, circular flow equilibrium requires that total leakages ($S + T + M$) equal total injections ($I + G + X$). If domestic investment ($I$) increases by $\$40\text{ billion}$, government spending ($G$) decreases by $\$15\text{ billion}$, exports ($X$) rise by $\$25\text{ billion}$, tax revenues ($T$) increase by $\$20\text{ billion}$, and imports ($M$) remain constant, what change in household savings ($S$) is required to maintain equilibrium?

The national income data for an economy over two consecutive years is shown in the table below:

Based on these national income estimates and the standard limitations of national income accounting, which of the following accurately assesses the change in the average citizen's economic welfare from Year 1 to Year 2?

If the price of an inferior commodity (which is not a Giffen good) decreases, how do the substitution effect and the income effect interact to influence the quantity demanded of the commodity?

In 2025, Country Alpha recorded a Nominal Gross Domestic Product (GDP) of $\$600\text{ billion}$. The country's GDP deflator was $150$ (with base year index = $100$) and its total population was $80\text{ million}$. To assess living standards accurately, economists adjust national income figures for inflation and population size. What is the Real Per Capita GDP of Country Alpha in dollars?