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POST UTME AAUA 2020 Economics | Objective

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Question 1 View Details

Consider a production function given by $ Q = 100K^{\frac{1}{2}}L^{\frac{1}{2}} $, where ( Q ) is output, ( K ) is capital, and ( L ) is labor. If the marginal product of labor is 10, and the marginal product of capital is 5, what is the value of $ \frac{dQ}{dL} $ when $ K = 100 $ and $ L = 100 $?

Correct A. 20

B. 30

C. 40

D. 50

Correct Answer: A

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Question 2 View Details

A monopolist faces a demand curve given by $ P = 100 - 2Q $ and a \cost function given by $ C = 50 + 10Q $. If the firm's profit-maximizing output is 20 units, what is the value of the price elasticity of demand at this output level?

Correct A. -2

B. -1

C. 0

D. 1

Correct Answer: A

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Question 3 View Details

Consider the following diagram:

A. The demand curve is downward-sloping.

B. The supply curve is upward-sloping.

Correct C. The equilibrium price is $10.

D. The equilibrium quantity is 10 units.

Correct Answer: C

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Question 4 View Details

A country's GDP is given by $ Y = C + I + G $, where ( C ) is consumption, ( I ) is investment, and ( G ) is government sp\ending. If the country's GDP is $100 billion, and the government sp\ending is $20 billion, what is the value of the marginal propensity to consume?

Correct A. 0.2

B. 0.3

C. 0.4

D. 0.5

Correct Answer: A

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Question 5 View Details

Consider a firm that produces a good u\sing a production function given by $ Q = 100K^{\frac{1}{2}}L^{\frac{1}{2}} $, where ( Q ) is output, ( K ) is capital, and ( L ) is labor. If the firm's marginal product of labor is 10, and the marginal product of capital is 5, what is the value of the elasticity of substitution between labor and capital?

A. 0.5

Correct B. 1

C. 2

D. 3

Correct Answer: B

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Question 6 View Details

The opportunity \cost of producing one more unit of a good is measured by the

Correct A. marginal \cost

B. marginal revenue

C. marginal benefit

D. marginal utility

Correct Answer: A

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Question 7 View Details

The law of diminishing returns states that as the quantity of a variable input is increased, while the quantity of a fixed input is held cons\tant, the marginal product of the variable input will eventually

A. increase

Correct B. decrease

C. remain cons\tant

D. become negative

Correct Answer: B

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Question 8 View Details

The concept of comparative advantage suggests that a country should specialize in producing goods for which it has a

A. absolute advantage

Correct B. comparative advantage

C. opportunity \cost

D. marginal benefit

Correct Answer: B

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Question 9 View Details

The production function is given by Q = 2L^0.5K^0.5, where Q is the output, L is the labor, and K is the capital. If the labor and capital are increased by 10% and 20% respectively, the new output will be

A. 1.2Q

B. 1.4Q

Correct C. 1.6Q

D. 2Q

Correct Answer: C

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Question 10 View Details

The diagram below shows the production isoquant and the budget constraint. If the price of labor is 10 and the price of capital is 20, the optimal combination of labor and capital is

Correct A. (10,20)

B. (20,10)

C. (15,15)

D. (20,20)

Correct Answer: A

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Question 11 View Details

A monopolist faces a demand curve given by Q = 100 - 2P and a \cost function C(Q) = 2Q^2 + 10Q. Find the profit-maximizing price and quantity.

A. ₦250

Correct B. ₦300

C. ₦350

D. ₦400

Correct Answer: B

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Question 12 View Details

A firm's production function is given by Q = 2L^2 + 5L. If the wage rate is ₦50 per hour, find the profit-maximizing level of labor.

A. 10

Correct B. 15

C. 20

D. 25

Correct Answer: B

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Question 13 View Details

A firm faces a demand curve given by Q = 100 - 2P and a \cost function C(Q) = 2Q^2 + 10Q. Find the profit-maximizing price and quantity u\sing the Lagrange method.

A. ₦250

Correct B. ₦300

C. ₦350

D. ₦400

Correct Answer: B

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Question 14 View Details

A firm's production function is given by Q = 2L^2 + 5L. If the wage rate is ₦50 per hour, find the profit-maximizing level of labor u\sing the Kuhn-Tucker method.

A. 10

Correct B. 15

C. 20

D. 25

Correct Answer: B

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Question 15 View Details

A monopolist faces a demand curve given by Q = 100 - 2P and a \cost function C(Q) = 2Q^2 + 10Q. Find the profit-maximizing price and quantity u\sing the Hotelling's rule.

A. ₦250

Correct B. ₦300

C. ₦350

D. ₦400

Correct Answer: B

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Question 16 View Details

The demand for a product is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the price elasticity of demand is -2, what is the percentage change in quantity demanded when the price increases by 10%?

Correct A. 20%

B. 30%

C. 40%

D. 50%

Correct Answer: A

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Question 17 View Details

A firm produces two goods, X and Y, u\sing two inputs, labor (L) and capital (K). The production functions are given by Qx = 2L + 3K and Qy = 4L + 2K. If the firm has 10 units of labor and 5 units of capital, what is the total output of the firm?

A. 30

B. 40

Correct C. 50

D. 60

Correct Answer: C

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Question 18 View Details

The following diagram shows the supply and demand curves for a product. If the price elasticity of supply is 2 and the price elasticity of demand is -3, what is the equilibrium price and quantity?

A. P = 10, Q = 20

B. P = 15, Q = 30

Correct C. P = 20, Q = 40

D. P = 25, Q = 50

Correct Answer: C

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Question 19 View Details

A country's balance of payments is given by the following equation: BOP = X - M, where X is the value of exports and M is the value of imports. If the value of exports is 100 and the value of imports is 80, what is the balance of payments?

Correct A. 10

B. 20

C. 30

D. 40

Correct Answer: A

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Question 20 View Details

The following table shows the demand for a product at different prices. If the price elasticity of demand is -2, what is the percentage change in quantity demanded when the price increases by 10%?

Correct A. 20%

B. 30%

C. 40%

D. 50%

Correct Answer: A

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Question 21 View Details

A consumer's indifference curve is represented by the equation u(x,y) = 2x + 3y. If the consumer's income is ₦1000 and the prices of x and y are ₦5 and ₦3 respectively, what is the consumer's optimal bundle?

Correct A. x = 40, y = 20

B. x = 30, y = 30

C. x = 20, y = 40

D. x = 10, y = 50

Correct Answer: A

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Question 22 View Details

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's output is 100 units and the price of labor is ₦10 per unit, what is the minimum \cost of production?

A. ₦1000

Correct B. ₦2000

C. ₦3000

D. ₦4000

Correct Answer: B

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Question 23 View Details

A country's GDP is ₦100 billion and its population is 20 million. If the country's GDP per capita is ₦5000, what is the country's economic growth rate?

A. 5%

Correct B. 10%

C. 15%

D. 20%

Correct Answer: B

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Question 24 View Details

A firm's demand function is given by Q = 100 - 2P. If the firm's output is 50 units, what is the firm's revenue?

A. ₦1000

Correct B. ₦2000

C. ₦3000

D. ₦4000

Correct Answer: B

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Question 25 View Details

A consumer's indifference curve is represented by the equation u(x,y) = 3x + 2y. If the consumer's income is ₦2000 and the prices of x and y are ₦10 and ₦5 respectively, what is the consumer's optimal bundle?

A. x = 40, y = 20

B. x = 30, y = 30

Correct C. x = 20, y = 40

D. x = 10, y = 50

Correct Answer: C

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