POST UTME ABU 2021 Economics | Objective

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Question 1
A firm's total revenue is given by the equation TR = 100x - 2x^2, where x is the number of units sold. If the firm's marginal revenue is 50, find the number of units sold.
A. 20
Correct B. 30
C. 40
D. 50

Correct Answer: B

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Question 2
Agricultural production in Nigeria is characterized by a high degree of seasonality. Which of the following is a consequence of this seasonality?
A. Increased production \costs
B. Decreased food security
Correct C. Increased food prices
D. Increased agricultural employment

Correct Answer: C

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Question 3
A firm's production function is given by Q = 10L^0.5K^0.5, where Q is output, L is labor, and K is capital. If the firm wants to increase output by 20%, how much should it increase labor and capital?
Correct A. Increase labor by 10% and capital by 10%
B. Increase labor by 20% and capital by 20%
C. Increase labor by 30% and capital by 30%
D. Increase labor by 40% and capital by 40%

Correct Answer: A

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Question 4
The demand for a product is given by the equation Qd = 100 - 2P, where Qd is demand and P is price. The supply of the product is given by the equation Qs = 2P - 10, where Qs is supply. Find the equilibrium price and quantity.
A. Price = 20, Quantity = 40
Correct B. Price = 30, Quantity = 50
C. Price = 40, Quantity = 60
D. Price = 50, Quantity = 70

Correct Answer: B

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Question 5
A firm's \cost function is given by the equation TC = 100 + 2Q + 0.5Q^2, where TC is total \cost and Q is output. Find the marginal \cost function.
Correct A. MC = 2 + Q
B. MC = 2 + 0.5Q
C. MC = 2 + 0.25Q
D. MC = 2 + 0.1Q

Correct Answer: A

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Question 6
A firm's revenue function is given by R(x) = 2x^2 + 5x + 1, where x is the number of units produced. If the firm's marginal revenue function is MR(x) = 4x + 5, find the value of x that maximizes revenue.
A. 1
Correct B. 2
C. 3
D. 4

Correct Answer: B

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Question 7
A monopolist faces a demand curve given by P = 100 - 2Q, where Q is the quantity demanded. If the monopolist's marginal \cost function is MC(Q) = 10 + 2Q, find the quantity that maximizes profit.
A. 10
Correct B. 20
C. 30
D. 40

Correct Answer: B

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Question 8
A country's GDP is given by the equation Y = C + I + G, where Y is the total output, C is the consumption, I is the investment, and G is the government sp\ending. If the country's consumption function is C = 100 + 0.8Y, the investment function is I = 50 + 0.2Y, and the government sp\ending is G = 200, find the value of Y.
A. 500
B. 600
Correct C. 700
D. 800

Correct Answer: C

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Question 9
A farmer produces wheat and maize. The production functions are given by W = 100 + 2M - 0.1M^2 and M = 50 + 3W - 0.2W^2, where W is the wheat production and M is the maize production. Find the values of W and M that maximize the total production.
A. 100, 50
B. 120, 60
Correct C. 140, 70
D. 160, 80

Correct Answer: C

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Question 10
A firm's production function is given by Q = 100 + 2L - 0.1L^2, where Q is the output and L is the labor. If the firm's \cost function is C = 50 + 2L + 0.1L^2, find the value of L that minimizes the \cost.
A. 10
B. 20
Correct C. 30
D. 40

Correct Answer: C

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Question 11
The government of Nigeria has introduced a new policy to increase agricultural production. The policy includes providing subsidies to farmers, improving irrigation systems, and increa\sing access to credit. However, the policy also includes a provision to increase the price of fertilizers by 20%. What is the likely effect of this policy on the demand for fertilizers?
A. The demand for fertilizers will increase
Correct B. The demand for fertilizers will decrease
C. The demand for fertilizers will remain unchanged
D. The demand for fertilizers will increase in the short run but decrease in the long run

Correct Answer: B

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Question 12
A monopolistically competitive firm is faced with a downward-sloping demand curve. If the firm increases its price, what will happen to its revenue?
A. Revenue will increase
Correct B. Revenue will decrease
C. Revenue will remain unchanged
D. Revenue will increase in the short run but decrease in the long run

Correct Answer: B

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Question 13
A consumer has a utility function given by U(x, y) = 2x + 3y. If the prices of x and y are $2 and $3 respectively, and the consumer has an income of $10, what is the consumer's optimal bundle?
Correct A. x = 2, y = 1
B. x = 1, y = 2
C. x = 3, y = 0
D. x = 0, y = 3

Correct Answer: A

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Question 14
A firm is faced with a perfectly elastic demand curve. If the firm increases its price, what will happen to its revenue?
A. Revenue will increase
Correct B. Revenue will decrease
C. Revenue will remain unchanged
D. Revenue will increase in the short run but decrease in the long run

Correct Answer: B

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Question 15
A consumer has a budget constraint given by 2x + 3y = 10. If the consumer's utility function is given by U(x, y) = 2x + 3y, what is the consumer's optimal bundle?
Correct A. x = 2, y = 1
B. x = 1, y = 2
C. x = 3, y = 0
D. x = 0, y = 3

Correct Answer: A

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Question 16
Consider a firm operating in a perfectly competitive market with a downward-sloping demand curve. If the firm's marginal revenue (MR) curve intersects its average variable \cost (AVC) curve at a point where MR = AVC, what is the likely outcome for the firm's profit?
A. The firm will experience a loss.
B. The firm will break even.
Correct C. The firm will experience a profit.
D. The firm's profit will be maximized.

Correct Answer: C

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Question 17
A government imposes a tax on a firm's output. If the firm's supply curve shifts to the left due to the tax, what is the likely effect on the firm's price?
Correct A. The price will increase.
B. The price will decrease.
C. The price will remain unchanged.
D. The price will fluctuate.

Correct Answer: A

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Question 18
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's output is 16 units, and the price of labor is $10 per unit, while the price of capital is $20 per unit, what is the likely effect on the firm's profit?
Correct A. The firm's profit will increase.
B. The firm's profit will decrease.
C. The firm's profit will remain unchanged.
D. The firm's profit will fluctuate.

Correct Answer: A

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Question 19
A government imposes a subsidy on a firm's output. If the firm's supply curve shifts to the right due to the subsidy, what is the likely effect on the firm's price?
A. The price will increase.
Correct B. The price will decrease.
C. The price will remain unchanged.
D. The price will fluctuate.

Correct Answer: B

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Question 20
A firm's demand curve is given by Q = 100 - 2P. If the firm's output is 60 units, what is the likely effect on the firm's price?
A. The price will increase.
Correct B. The price will decrease.
C. The price will remain unchanged.
D. The price will fluctuate.

Correct Answer: B

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Question 21
Consider a firm operating in a perfectly competitive market with a downward-sloping demand curve. If the firm's marginal revenue (MR) is greater than its marginal \cost (MC), what will be the effect on the firm's output?
Correct A. The firm will increase its output.
B. The firm will decrease its output.
C. The firm's output will remain unchanged.
D. The firm will exit the market.

Correct Answer: A

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Question 22
A monopolist faces a demand curve with the following equation: Qd = 100 - 2P. If the firm's marginal \cost (MC) is cons\tant at ₦10, what is the optimal price and quantity that the firm will produce?
Correct A. P = ₦40, Q = 30
B. P = ₦50, Q = 25
C. P = ₦60, Q = 20
D. P = ₦70, Q = 15

Correct Answer: A

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Question 23
A country's GDP is ₦1.2 trillion, and its GNP is ₦1.5 trillion. What is the country's net factor income from abroad?
A. ₦300 billion
Correct B. ₦400 billion
C. ₦500 billion
D. ₦600 billion

Correct Answer: B

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Question 24
A firm's total revenue (TR) is given by the equation TR = 100P + 2000. If the firm's total \cost (TC) is ₦50,000, what is the firm's profit?
A. ₦25,000
Correct B. ₦30,000
C. ₦35,000
D. ₦40,000

Correct Answer: B

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Question 25
A firm's demand curve is given by the equation Qd = 100 - 2P. If the firm's marginal revenue (MR) is greater than its marginal \cost (MC), what is the price elasticity of demand?
Correct A. Unit elastic
B. Inelastic
C. Perfectly elastic
D. Perfectly inelastic

Correct Answer: A

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