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POST UTME AAUA 2023 Economics | Objective

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Question 1

The Marshall-Lerner condition states that if the sum of the elasticities of demand for imports and exports is greater than 1, then a devaluation of the currency will lead to a

Correct A. increase in the trade balance

B. decrease in the trade balance

C. increase in the current account deficit

D. decrease in the current account deficit

Correct Answer: A

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Question 2

A firm's revenue function is given by ( R(x) = 100x - 2x^2 ). If the firm's marginal revenue is $20, find the value of ( x )

A. 5

Correct B. 10

C. 15

D. 20

Correct Answer: B

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Question 3

A consumer's utility function is given by ( U(x,y) = 2x + 3y ). If the consumer's income is $100 and the prices of ( x ) and ( y ) are $2 and $3 respectively, find the consumer's optimal bundle

A. (10,20)

Correct B. (15,30)

C. (20,40)

D. (25,50)

Correct Answer: B

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Question 4

A firm's \cost function is given by ( C(x) = 50 + 2x + 0.01x^2 ). If the firm produces 100 units, find the total \cost

A. $550

B. $600

Correct C. $650

D. $700

Correct Answer: C

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Question 5

A firm's supply function is given by $ Q = 50 + 2P $. If the price is $10, find the quantity supplied

A. 50

Correct B. 60

C. 70

D. 80

Correct Answer: B

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Question 6

Suppose the demand for a commodity is given by the equation Qd = 100 - 2P and the supply is given by Qs = 2P - 10. If the equilibrium price is 15, what is the equilibrium quantity?

A. 20

Correct B. 30

C. 40

D. 50

Correct Answer: B

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Question 7

A central bank is considering a monetary policy to reduce inflation. It can either increase the reserve requirement or decrease the money supply. Which policy would be more effective in reducing inflation?

A. Increa\sing the reserve requirement

Correct B. Decrea\sing the money supply

C. Both are equally effective

D. Neither is effective

Correct Answer: B

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Question 8

A government is considering a tax on a particular good to raise revenue. If the tax is 10% of the price, and the demand for the good is given by Qd = 100 - 2P, what is the new equilibrium price?

A. 10

Correct B. 15

C. 20

D. 25

Correct Answer: B

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Question 9

A country is experiencing a trade deficit due to a high demand for imports. If the country's exchange rate is fixed, what is the likely effect on the domestic price level?

Correct A. Increase

B. Decrease

C. No effect

D. Uncertain

Correct Answer: A

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Question 10

A firm is considering a price increase due to a rise in production \costs. If the demand for the good is given by Qd = 100 - 2P, and the supply is given by Qs = 2P - 10, what is the new equilibrium price?

A. 10

B. 15

Correct C. 20

D. 25

Correct Answer: C

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Question 11

Consider a firm operating in a perfectly competitive market. If the firm's marginal revenue (MR) curve intersects its marginal \cost (MC) curve at point E, where MR = MC, and the firm is producing at its optimal level of output, what is the implication of this intersection point on the firm's profit-maximizing output level?

A. The firm is producing at its minimum point on the average total \cost (ATC) curve.

B. The firm is producing at its maximum point on the average total \cost (ATC) curve.

Correct C. The firm is producing at its optimal level of output, where MR = MC.

D. The firm is producing at its minimum point on the average variable \cost (AVC) curve.

Correct Answer: C

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Question 12

A country's GDP is calculated as the sum of its consumption, investment, government sp\ending, and net exports. If the country's GDP is ₦1,500 billion, and its government sp\ending is ₦300 billion, what is the sum of its consumption and investment?

Correct A. ₦1,200 billion

B. ₦1,500 billion

C. ₦1,200 billion

D. ₦1,200 billion

Correct Answer: A

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Question 13

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

A. 10% increase in labor and 10% increase in capital

B. 20% increase in labor and 20% increase in capital

Correct C. 10% increase in labor and 20% increase in capital

D. 20% increase in labor and 10% increase in capital

Correct Answer: C

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Question 14

A country's government imposes a tax on its citizens, which is a lump-sum tax of ₦100 per person. If the country has a population of 50 million people, what is the total tax revenue collected by the government?

Correct A. ₦5,000 billion

B. ₦5,000 billion

C. ₦5,000 billion

D. ₦5,000 billion

Correct Answer: A

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Question 15

A firm's revenue function is given by R = 2Q^2, where R is the revenue and Q is the output. If the firm wants to increase its revenue by 50%, what is the required percentage increase in output?

A. 25% increase in output

Correct B. 50% increase in output

C. 25% increase in output

D. 50% increase in output

Correct Answer: B

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Question 16

A firm's total revenue (TR) is given by the equation TR = 100x - 2x^2, where x is the number of units sold. If the firm's marginal revenue (MR) is 80, find the value of x.

A. 20

B. 30

Correct C. 40

D. 50

Correct Answer: C

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Question 17

A country's balance of payments (BOP) is given by the equation BOP = X - M, where X is the value of exports and M is the value of imports. If the country's exports are ₦100 billion and imports are ₦120 billion, find the value of BOP.

A. -20

B. -10

C. 0

Correct D. 10

Correct Answer: D

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Question 18

A firm's demand curve is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the firm's supply curve is Qs = 50 + 3P, find the equilibrium price and quantity.

A. ₦20, 60

B. ₦30, 70

Correct C. ₦40, 80

D. ₦50, 90

Correct Answer: C

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Question 19

A country's tax revenue (TR) is given by the equation TR = 0.1X, where X is the value of taxable income. If the country's taxable income is ₦100 billion, find the value of TR.

Correct A. ₦10 billion

B. ₦20 billion

C. ₦30 billion

D. ₦40 billion

Correct Answer: A

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Question 20

A firm's \cost function is given by the equation C(x) = 100 + 2x^2, where x is the number of units produced. If the firm produces 10 units, find the value of C(x).

A. ₦200

B. ₦300

Correct C. ₦400

D. ₦500

Correct Answer: C

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Question 21

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 22

A firm produces two goods, A and B, u\sing two inputs, labor and capital. The production function for good A is given by Q_A = 2L^0.5 K^0.5, where Q_A is the quantity of good A produced, L is the amount of labor used, and K is the amount of capital used. If the firm uses 4 units of labor and 9 units of capital, what is the marginal product of labor?

Correct A. 0.5

B. 1

C. 1.5

D. 2

Correct Answer: A

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Question 23

The government of a country is considering a new tax on a particular good. The demand for the good is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. The supply of the good is given by the equation Qs = 2P, where Qs is the quantity supplied and P is the price. If the government imposes a tax of 10 on the good, what is the new equilibrium price?

A. 20

Correct B. 25

C. 30

D. 35

Correct Answer: B

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Question 24

A country's GDP is given by the equation Y = C + I + G, where Y is the GDP, C is the consumption, I is the investment, and G is the government sp\ending. If the country's consumption is 500, investment is 200, and government sp\ending is 300, what is the country's GDP?

A. 1000

Correct B. 1200

C. 1500

D. 2000

Correct Answer: B

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Question 25

A central bank is considering a monetary policy to reduce inflation. The money supply is given by the equation M = kPY, where M is the money supply, k is a cons\tant, P is the price level, and Y is the real GDP. If the central bank wants to reduce the money supply by 10%, what is the percentage change in the price level?

A. -5%

Correct B. -10%

C. -15%

D. -20%

Correct Answer: B

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