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JAMB UTME Economics 2004 past questions and answers

This 2004 JAMB UTME Economics set has 40 practice questions. Try these 5 free sample questions, tap a question to reveal the answer and explanation. Then practise the whole 2004 set with instant marking.

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Sample JAMB UTME Economics 2004 questions

1. A small furniture workshop assigns different workers to cutting, joining and finishing instead of having each worker make a complete chair. The most direct likely benefit is
  1. a reduction in the range of goods the workshop can produce
  2. the elimination of the need for tools and training
  3. higher output per worker through specialization
  4. an increase in the workshop's fixed costs only

Answer: C. higher output per worker through specialization

Specialization lets workers repeat tasks and develop skill, which can raise output per worker.

2. A firm pays rent of ₦40,000 per month for its premises regardless of how many units it produces. This rent is best classified as
  1. a fixed cost
  2. a variable cost
  3. marginal cost
  4. an average revenue

Answer: A. a fixed cost

A fixed cost does not vary with the firm's output over the relevant period.

3. When the price of a good rises from ₦10 to ₦12, quantity demanded falls from 100 units to 80 units. Using the midpoint method, the approximate price elasticity of demand is
  1. 0.50
  2. 0.90
  3. 1.00
  4. 1.22

Answer: D. 1.22

The midpoint percentage changes are 20/90 for quantity and 2/11 for price, so elasticity is about 1.22.

4. Which combination is most characteristic of a perfectly competitive market?
  1. One seller and strong barriers to entry
  2. Many buyers and sellers trading a homogeneous product with free entry
  3. A few firms selling differentiated products with mutual interdependence
  4. One buyer determining the price paid to many sellers

Answer: B. Many buyers and sellers trading a homogeneous product with free entry

Perfect competition is characterized by numerous participants, homogeneous output and freedom of entry and exit.

5. A trader earns total revenue of ₦150,000 and pays explicit costs of ₦100,000; the opportunity cost of the trader's own resources is ₦30,000. The trader's economic profit is
  1. ₦20,000
  2. ₦30,000
  3. ₦50,000
  4. ₦80,000

Answer: A. ₦20,000

Economic profit equals revenue minus explicit and implicit costs, or ₦150,000 − ₦100,000 − ₦30,000 = ₦20,000.

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