POST UTME ABU 2019 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A country's GDP is given by the equation: GDP = C + I + G + \( X - M \), where C is consumption, I is investment, G is government sp\ending, X is exports, and M is imports. If the country's GDP is $100 billion, consumption is $50 billion, investment is $20 billion, government sp\ending is $30 billion, exports are $40 billion, and imports are $20 billion, what is the country's trade balance?
A. $10 billion
B. $20 billion
C. $30 billion
D. $40 billion
Question 2
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 price elasticity of demand is unit elastic, what is the optimal quantity of the good that the firm should produce?
A. \( Q^* = \frac{P}{pi} \)
B. \( Q^* = \frac{P}{MC} \)
C. \( Q^* = \frac{MR}{MC} \)
D. \( Q^* = \frac{MC}{MR} \)
Question 3
A country is experiencing a trade deficit due to a large imbalance between its imports and exports. Which of the following policies would help to reduce the trade deficit?
A. Increase government sp\ending
B. Decrease taxes
C. Implement protectionist trade policies
D. Increase exports
Question 4
A firm is producing two goods, x and y, with the following production function: \( x + 2y = 100 \). If the price of x is ₦5 and the price of y is ₦3, find the firm's optimal production levels of x and y.
A. x = 50, y = 25
B. x = 40, y = 30
C. x = 30, y = 35
D. x = 20, y = 40
Question 5
A firm is considering investing in a new project. The project has a net present value (NPV) of ₦100,000 and a payback period of 5 years. What is the internal rate of return (IRR) of the project?
A. 15%
B. 20%
C. 25%
D. 30%
Question 6
A firm's production function is given by Q = 3L^0.5K^0.5. If the firm's current output is 9 units and the number of workers is 1, what is the minimum number of machines required to produce this output?
A. 1
B. 2
C. 3
D. 4
Question 7
A firm's production function is given by Q = 2L + 3K, where L is labor and K is capital. If the firm has 10 units of labor and 5 units of capital, find the total output u\sing the diagram below.
A. Q = 25
B. Q = 30
C. Q = 35
D. Q = 40
Question 8
The government of Nigeria has imposed a tariff on imported goods to protect the domestic industry. What is the effect of this policy on the balance of payments?
A. The balance of payments will improve.
B. The balance of payments will worsen.
C. The balance of payments will remain the same.
D. The balance of payments will fluctuate.
Question 9
A firm has the following \cost function: C = 2L + 3K, where L and K are the amounts of labor and capital used, respectively. The firm's revenue function is given by R = 4L + 5K. What is the firm's profit-maximizing input bundle?
A. L = 2, K = 1
B. L = 1, K = 2
C. L = 3, K = 3
D. L = 4, K = 4
Question 10
A consumer in Nigeria has a budget of ₦10,000 to sp\end on two goods, X and Y. The price of good X is ₦5,000 and the price of good Y is ₦3,000. If the consumer sp\ends all of their budget on the two goods, what is the opportunity \cost of buying one more unit of good X?
A. ₦1,000
B. ₦2,000
C. ₦3,000
D. ₦5,000
Question 11
A government imposes a tax of ₦10 on a firm's output. If the firm's supply curve is given by Qs = 10 + 3P, find the new supply curve u\sing the diagram below.
A. Qs = 10 + 3P
B. Qs = 20 + 3P
C. Qs = 30 + 3P
D. Qs = 40 + 3P
Question 12
The agricultural sector is a significant contributor to the GDP of many developing countries. Which of the following is a benefit of agricultural development in a developing country?
A. It leads to a reduction in poverty and income inequality
B. It leads to an increase in the country's foreign exchange earnings
C. It leads to an increase in the country's industrialization
D. It leads to a reduction in the country's population growth rate
Question 13
A firm produces two goods, X and Y, u\sing two inputs, labor and capital. The production function for good X is given by Q_X = 2L^0.5K^0.5, where Q_X is the quantity of good X produced, L is the amount of labor used, and K is the amount of capital used. The production function for good Y is given by Q_Y = 3L^0.2K^0.8. If the firm uses 100 units of labor and 200 units of capital, what is the total output of the firm?
A. 1000
B. 1200
C. 1500
D. 1800
Question 14
The demand for a product is said to be elastic if a small change in price leads to a large change in quantity demanded. Which of the following products is likely to have an elastic demand?
A. A luxury item.
B. A necessity.
C. A product with a high price elasticity of demand.
D. A product with a low price elasticity of demand.
Question 15
The concept of opportunity \cost is closely related to the concept of scarcity. Which of the following best describes the relationship between opportunity \cost and scarcity?
A. Opportunity \cost is the \cost of choo\sing one option over another.
B. Opportunity \cost is the \cost of not choo\sing an option.
C. Opportunity \cost is the \cost of scarcity.
D. Opportunity \cost is the benefit of scarcity.

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