POST UTME ABU 2023 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
Consider a firm operating in a perfectly competitive market with a production function Q = 2L^0.5K^0.5. If the firm's current input prices are w = 10 and r = 20, and it currently employs 4 units of labor and 2 units of capital, calculate the firm's current total revenue, total \cost, and profit. Assume that the market price of the firm's output is p = 50.
A. ₦200
B. ₦300
C. ₦400
D. ₦500
Question 2
The government of Nigeria has implemented a policy to increase the production of rice through the use of irrigation. However, the policy has been criticized for its potential impact on the environment. Which of the following is a potential environmental impact of the policy?
A. Increased water pollution
B. Decreased water table
C. Increased soil salinization
D. Decreased biodiversity
Question 3
The government can use the following fiscal policy tools to stabilize the economy
A. Fiscal policy tools include taxation, government sp\ending, and monetary policy
B. Fiscal policy tools include taxation, government sp\ending, and automatic stabilizers
C. Fiscal policy tools include monetary policy, automatic stabilizers, and government sp\ending
D. Fiscal policy tools include taxation, monetary policy, and automatic stabilizers
Question 4
The law of diminishing marginal utility states that as the quantity of a good consumed increases, the marginal utility derived from each additional unit of the good decreases. Which of the following is a consequence of this law?
A. The total utility of the good increases at a decrea\sing rate.
B. The marginal utility of the good remains cons\tant.
C. The law of diminishing marginal utility is only applicable to normal goods.
D. The law of diminishing marginal utility is only applicable to inferior goods.
Question 5
A monopolist produces a product with a cons\tant marginal \cost of ₦50 and a cons\tant marginal revenue of ₦75. If the demand for the product is given by the equation Q = 100 - 2P, where Q is the quantity demanded and P is the price, what is the profit-maximizing quantity and price?
A. Q = 25, P = ₦50
B. Q = 50, P = ₦75
C. Q = 75, P = ₦100
D. Q = 100, P = ₦150
Question 6
A monopolist's marginal revenue (MR) curve lies below the average revenue (AR) curve because
A. The monopolist is willing to supply more at higher prices
B. The monopolist is willing to supply less at lower prices
C. The monopolist is willing to supply more at lower prices
D. The monopolist is willing to supply less at higher prices
Question 7
A firm is producing a product with a cons\tant marginal \cost of ₦50 and a cons\tant marginal revenue of ₦75. If the demand for the product is given by the equation Q = 100 - 2P, where Q is the quantity demanded and P is the price, what is the profit-maximizing quantity and price?
A. Q = 25, P = ₦50
B. Q = 50, P = ₦75
C. Q = 75, P = ₦100
D. Q = 100, P = ₦125
Question 8
The central bank of Nigeria has increased the reserve requirement for commercial banks from 10% to 12%. If a commercial bank has a deposit of ₦100 million, what will be the new reserve requirement?
A. ₦12 million
B. ₦12.5 million
C. ₦13 million
D. ₦13.5 million
Question 9
The government can use the following monetary policy tools to stabilize the economy
A. Monetary policy tools include open market operations, reserve requirements, and the discount rate
B. Monetary policy tools include taxation, government sp\ending, and automatic stabilizers
C. Monetary policy tools include fiscal policy, automatic stabilizers, and government sp\ending
D. Monetary policy tools include monetary policy, taxation, and automatic stabilizers
Question 10
A firm has a production function Q = 2L^\( 1/2 \)K^\( 1/2 \). If the price of labor is ₦100 and the price of capital is ₦200, what is the \cost-minimizing level of capital?
A. 10 units
B. 20 units
C. 30 units
D. 40 units
Question 11
The demand for a good is given by Qd = 100 - 2P and the supply is given by Qs = 2P - 50. What is the equilibrium price?
A. ₦25
B. ₦30
C. ₦35
D. ₦40
Question 12
A monopolist's demand curve is given by Q = 100 - 2P. If the firm's marginal revenue is given by MR = 200 - 4Q, what is the firm's optimal price?
A. ₦20
B. ₦30
C. ₦40
D. ₦50
Question 13
The demand function for a product is given by Q = 100 - 2p. If the supply function is given by Q = 2p - 10, find the equilibrium price and quantity.
A. (20,60)
B. (30,50)
C. (40,40)
D. (50,30)
Question 14
The government of Nigeria is implementing a policy to increase agricultural production. Which of the following is a potential benefit of this policy?
A. Increased employment opportunities
B. Increased food security
C. Increased foreign exchange earnings
D. Increased inflation
Question 15
A firm is producing a good u\sing a production function Q = 2L^0.5K^0.5, where Q is output, L is labor, and K is capital. If the firm increases labor from 100 to 121 units, and capital from 100 to 121 units, what is the percentage change in output?
A. 10%
B. 20%
C. 30%
D. 40%

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