POST UTME ACHIEVERS UNIVERSITY 2017 Economics | Objective

Are you preparing for POST UTME ACHIEVERS UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2017 Economics (Objective) questions designed to simulate the real exam environment.

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Question 1
In a perfectly competitive market, the supply curve is upward-sloping and the demand curve is downward-sloping. What is the equilibrium price and quantity of a product in this market?
A. \( P = 10, Q = 100 \)
B. \( P = 20, Q = 50 \)
Correct C. \( P = 15, Q = 75 \)
D. \( P = 25, Q = 25 \)

Correct Answer: C

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Question 2
A monopolist faces a demand curve \( Q = 100 - 2P \) and a \cost function \( C = 2Q^2 + 100Q \). What is the profit-maximizing price and quantity?
A. \( P = 20, Q = 40 \)
Correct B. \( P = 25, Q = 30 \)
C. \( P = 30, Q = 20 \)
D. \( P = 35, Q = 10 \)

Correct Answer: B

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Question 3
A firm has a production function \( Q = 2L + 3K \) and a \cost function \( C = 10L + 20K \). If the price of labor is ₦50 and the price of capital is ₦100, what is the profit-maximizing level of labor and capital?
A. \( L = 10, K = 5 \)
Correct B. \( L = 5, K = 10 \)
C. \( L = 15, K = 3 \)
D. \( L = 20, K = 2 \)

Correct Answer: B

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Question 4
A government wants to increase the production of wheat in a country. It imposes a subsidy of ₦5 per ki\logram on wheat farmers. What is the effect on the supply curve of wheat?
A. The supply curve shifts to the left.
Correct B. The supply curve shifts to the right.
C. The supply curve remains unchanged.
D. The supply curve shifts downward.

Correct Answer: B

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Question 5
A monopolist faces a demand curve \( Q = 100 - 2P \) and a \cost function \( C = 2Q^2 + 100Q \). What is the profit-maximizing price and quantity?
A. \( P = 20, Q = 40 \)
Correct B. \( P = 25, Q = 30 \)
C. \( P = 30, Q = 20 \)
D. \( P = 35, Q = 10 \)

Correct Answer: B

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Question 6
Consider a country with a fixed money supply and a central bank that uses the money supply as a target for monetary policy. If the central bank increases the money supply, what will happen to the price level in the short run?
A. The price level will decrease
Correct B. The price level will increase
C. The price level will remain unchanged
D. The price level will fluctuate

Correct Answer: B

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Question 7
A firm is producing a good with a production function Q = 2L^0.5K^0.5, where Q is the quantity produced, L is the labor input, and K is the capital input. If the price of the good is $10 and the wage rate is $5 per hour, what is the optimal level of labor input?
A. 10 units
Correct B. 20 units
C. 30 units
D. 40 units

Correct Answer: B

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Question 8
A country is experiencing a trade deficit due to a decrease in exports and an increase in imports. What will happen to the exchange rate in the short run?
A. The exchange rate will appreciate
Correct B. The exchange rate will depreciate
C. The exchange rate will remain unchanged
D. The exchange rate will fluctuate

Correct Answer: B

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Question 9
A firm is considering investing in a new project with a net present value (NPV) of $100,000. If the \cost of capital is 10%, what is the internal rate of return (IRR) of the project?
A. 5%
Correct B. 10%
C. 15%
D. 20%

Correct Answer: B

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Question 10
A country is experiencing a recession due to a decrease in aggregate demand. What will happen to the price level in the short run?
A. The price level will increase
Correct B. The price level will decrease
C. The price level will remain unchanged
D. The price level will fluctuate

Correct Answer: B

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Question 11
The Central Bank of Nigeria (CBN) has implemented a monetary policy aimed at reducing inflation. The policy involves increa\sing the reserve requirement for commercial banks. Which of the following is a likely effect of this policy?
Correct A. Reduced money supply
B. Increased interest rates
C. Increased government sp\ending
D. Increased inflation

Correct Answer: A

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Question 12
A firm is producing a good with a total revenue of ₦100,000 and a total \cost of ₦80,000. The firm's profit-maximizing output is 100 units. If the firm increases its output to 120 units, what is the new profit?
A. ₦20,000
Correct B. ₦30,000
C. ₦40,000
D. ₦50,000

Correct Answer: B

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Question 13
A country is experiencing a recession due to a decline in aggregate demand. Which of the following policies would be most effective in stimulating economic growth?
Correct A. Fiscal policy
B. Monetary policy
C. Supply-side policy
D. Trade policy

Correct Answer: A

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Question 14
A firm is producing a good with a total revenue of ₦150,000 and a total \cost of ₦120,000. The firm's profit-maximizing output is 150 units. If the firm increases its output to 180 units, what is the new profit?
A. ₦30,000
B. ₦40,000
Correct C. ₦50,000
D. ₦60,000

Correct Answer: C

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Question 15
A country is experiencing a trade deficit due to a decline in exports. Which of the following policies would be most effective in reducing the trade deficit?
A. Tariff policy
Correct B. Quota policy
C. Export subsidy policy
D. Import substitution policy

Correct Answer: B

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