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JAMB UTME Economics 2010 past questions and answers

This 2010 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 2010 set with instant marking.

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Sample JAMB UTME Economics 2010 questions

1. Country K can produce either 8 units of rice or 4 units of cloth with the same resources, while Country L can produce either 6 units of rice or 2 units of cloth; which country has comparative advantage in producing rice?
  1. Country K, because it produces more rice
  2. Country L, because its opportunity cost of rice is lower
  3. Country K, because it produces more cloth
  4. Neither country, because both produce rice

Answer: B. Country L, because its opportunity cost of rice is lower

The opportunity cost of one unit of rice is 0.5 unit of cloth in K and one-third unit in L, so L has the lower cost.

2. If a government imposes a tariff on imported footwear, what is the most likely immediate effect, other things being equal?
  1. Imported footwear becomes cheaper for domestic buyers
  2. Government revenue from imports must fall to zero
  3. Domestic producers are forced to stop producing footwear
  4. Imported footwear becomes more expensive in the domestic market

Answer: D. Imported footwear becomes more expensive in the domestic market

A tariff is a tax on imports and normally raises their domestic market price.

3. A country's export price index is 120 while its import price index is 100; what is its net barter terms-of-trade index?
  1. 120
  2. 83.3
  3. 20
  4. 220

Answer: A. 120

The index is (export price index ÷ import price index) × 100, which equals 120.

4. Which group of transactions is normally recorded in a country's current account?
  1. Purchases of foreign shares and long-term loans
  2. Changes in official foreign-exchange reserves only
  3. Exports and imports of goods and services, investment income, and current transfers
  4. The issue of domestic currency and government bonds

Answer: C. Exports and imports of goods and services, investment income, and current transfers

The current account records trade in goods and services together with primary income and current transfers.

5. If a country devalues its currency, what is the likely effect on the domestic-currency prices of imports, assuming foreign prices do not change?
  1. They fall because foreign goods become cheaper
  2. They rise because more domestic currency is needed to buy foreign currency
  3. They remain fixed by definition
  4. They become equal to domestic export prices

Answer: B. They rise because more domestic currency is needed to buy foreign currency

Devaluation reduces the currency's value, so a given foreign-currency price costs more in domestic currency.

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