Practice Post UTME AAUA economics 2021 Past Questions

Question 1

A consumer's indifference curve is given 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 ₦10 respectively, find the consumer's optimal bundle of x and y.

Correct A. (200, 100)

B. (150, 50)

C. (100, 200)

D. (50, 150)

Correct Answer: A

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Question 2

The government of Nigeria has implemented a policy to increase the production of rice. The policy involves providing subsidies to farmers and increa\sing the import duty on rice. The supply and demand curves for rice are given by the equations ( S(p) = 100 - 2p ) and ( D(p) = 50 + 3p ) respectively. If the government wants to increase the production of rice, what should be the optimal price of rice?

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 3

A company produces two products, x and y, u\sing two inputs, labor and capital. The production functions for x and y are given by the equations $ x = 2L + 3K $ and $ y = 4L + 2K $ respectively. If the company has 100 units of labor and 50 units of capital, find the optimal production levels of x and y.

Correct A. (200, 100)

B. (150, 50)

C. (100, 200)

D. (50, 150)

Correct Answer: A

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Question 4

The government of Nigeria has implemented a policy to increase the production of agriculture. The policy involves providing subsidies to farmers and increa\sing the import duty on agricultural products. The supply and demand curves for agricultural products are given by the equations ( S(p) = 100 - 2p ) and ( D(p) = 50 + 3p ) respectively. If the government wants to increase the production of agriculture, what should be the optimal price of agricultural products?

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 5

A consumer's indifference curve is given 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 ₦10 respectively, find the consumer's optimal bundle of x and y.

Correct A. (200, 100)

B. (150, 50)

C. (100, 200)

D. (50, 150)

Correct Answer: A

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Question 6

A firm's demand curve is given by Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. The supply curve is given by Qs = 2P - 50. Find the equilibrium price and quantity.

A. ₦50

Correct B. ₦75

C. ₦100

D. ₦125

Correct Answer: B

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Question 7

A consumer's utility function is given by U = 2x + 3y, where x and y are the quantities of two goods consumed. The budget constraint is given by 2x + 3y = 100. Find the consumer's optimal bundle of goods.

Correct A. x = 20, y = 10

B. x = 15, y = 20

C. x = 10, y = 30

D. x = 25, y = 15

Correct Answer: A

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Question 8

A country's import demand function is given by M = 100 - 2Y, where M is the quantity imported and Y is the country's income. The export supply function is given by X = 2Y - 50. Find the balance of payments equilibrium.

Correct A. M = 50, X = 50

B. M = 75, X = 75

C. M = 100, X = 100

D. M = 125, X = 125

Correct Answer: A

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Question 9

A firm's \cost function is given by C = 100 + 2Q + 3Q^2, where C is the total \cost and Q is the quantity produced. The revenue function is given by R = 200 - 2Q. Find the profit-maximizing quantity.

A. Q = 10

Correct B. Q = 15

C. Q = 20

D. Q = 25

Correct Answer: B

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Question 10

A consumer's indifference curve is given by U = 2x + 3y, where x and y are the quantities of two goods consumed. The budget constraint is given by 2x + 3y = 100. Find the consumer's optimal bundle of goods.

Correct A. x = 20, y = 10

B. x = 15, y = 20

C. x = 10, y = 30

D. x = 25, y = 15

Correct Answer: A

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Question 11

Suppose a firm is producing a good with a cons\tant elasticity of demand of 2. If the price of the good increases by 10%, what is the percentage change in the quantity demanded?

A. 5%

Correct B. 10%

C. 15%

D. 20%

Correct Answer: B

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Question 12

A country's balance of payments account is in equilibrium when the current account is equal to the capital account. If the current account is $100 billion and the capital account is $50 billion, what is the value of the trade balance?

Correct A. $50 billion

B. $100 billion

C. $150 billion

D. $200 billion

Correct Answer: A

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Question 13

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm wants to increase its output by 20% and the labor input is fixed at 100 units, what is the required increase in the capital input?

A. 10% increase

Correct B. 20% increase

C. 30% increase

D. 40% increase

Correct Answer: B

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Question 14

A country's GDP is $100 billion and its GNP is $120 billion. What is the value of the net factor income from abroad?

A. $10 billion

Correct B. $20 billion

C. $30 billion

D. $40 billion

Correct Answer: B

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Question 15

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm wants to increase its output by 20% and the labor input is fixed at 100 units, what is the required increase in the capital input?

A. 10% increase

Correct B. 20% increase

C. 30% increase

D. 40% increase

Correct Answer: B

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Question 16

Determine the returns to scale for a firm that experiences a 20% increase in all inputs and a 25% increase in output.

A. Decrea\sing Returns to Scale

B. Increa\sing Returns to Scale

Correct C. Cons\tant Returns to Scale

D. No Returns to Scale

Correct Answer: C

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Question 17

Calculate the GDP at market price for a country with a nominal GDP of ₦1,500,000,000 and a GDP deflator of 120.

A. ₦1,200,000,000

Correct B. ₦1,500,000,000

C. ₦1,800,000,000

D. ₦2,100,000,000

Correct Answer: B

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Question 18

A central bank increases the reserve requirement for commercial banks. What is the likely effect on the money supply?

A. Increase

Correct B. Decrease

C. No change

D. Uncertain

Correct Answer: B

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Question 19

A firm has a total revenue of ₦1,000,000 and a total \cost of ₦800,000. What is the profit?

A. ₦100,000

Correct B. ₦200,000

C. ₦300,000

D. ₦400,000

Correct Answer: B

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Question 20

A consumer has a utility function U(x,y) = 2x + 3y. If the prices of x and y are ₦5 and ₦3 respectively, and the consumer has a budget of ₦20, what is the optimal bundle of x and y?

A. (2,4)

Correct B. (4,2)

C. (3,3)

D. (1,5)

Correct Answer: B

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Question 21

Consider a perfectly competitive market with a downward-sloping demand curve and an upward-sloping supply curve. If the market equilibrium price is $10 and the quantity demanded is 100 units, and the firm's marginal revenue is $5, what is the firm's marginal \cost?

A. $2

Correct B. $5

C. $8

D. $12

Correct Answer: B

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Question 22

A country's balance of payments account shows a trade deficit of $100 million and a capital account surplus of $150 million. What is the overall balance of payments position?

Correct A. $50 million surplus

B. $100 million deficit

C. $150 million surplus

D. $200 million deficit

Correct Answer: A

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Question 23

A firm's production function is given by Q = 2L^0.5K^0.5, where Q is output, L is labor, and K is capital. If the firm wants to produce 100 units of output, and the wage rate is $10 per unit of labor, and the rental rate of capital is $5 per unit of capital, what is the optimal level of labor?

A. 10 units

Correct B. 20 units

C. 30 units

D. 40 units

Correct Answer: B

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Question 24

A central bank implements a monetary policy of increa\sing the money supply by 10%. What is the expected effect on the price level?

A. Decrease

B. No change

Correct C. Increase

D. Uncertain

Correct Answer: C

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Question 25

A firm's demand curve is given by Q = 100 - 2P, where Q is quantity demanded and P is price. If the firm's marginal revenue is $5, what is the optimal price?

A. $5

Correct B. $10

C. $15

D. $20

Correct Answer: B

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