POST UTME ACHIEVERS UNIVERSITY 2017 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
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
B. 20 units
C. 30 units
D. 40 units
Question 2
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
C. ₦50,000
D. ₦60,000
Question 3
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. \( P = 20, Q = 50 \)
C. \( P = 15, Q = 75 \)
D. \( P = 25, Q = 25 \)
Question 4
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%
B. 10%
C. 15%
D. 20%
Question 5
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
B. The exchange rate will depreciate
C. The exchange rate will remain unchanged
D. The exchange rate will fluctuate
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
B. The price level will increase
C. The price level will remain unchanged
D. The price level will fluctuate
Question 7
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. \( P = 20, Q = 40 \)
B. \( P = 25, Q = 30 \)
C. \( P = 30, Q = 20 \)
D. \( P = 35, Q = 10 \)
Question 8
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.
B. The supply curve shifts to the right.
C. The supply curve remains unchanged.
D. The supply curve shifts downward.
Question 9
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
B. ₦30,000
C. ₦40,000
D. ₦50,000
Question 10
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. \( L = 10, K = 5 \)
B. \( L = 5, K = 10 \)
C. \( L = 15, K = 3 \)
D. \( L = 20, K = 2 \)
Question 11
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?
A. Fiscal policy
B. Monetary policy
C. Supply-side policy
D. Trade policy
Question 12
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. \( P = 20, Q = 40 \)
B. \( P = 25, Q = 30 \)
C. \( P = 30, Q = 20 \)
D. \( P = 35, Q = 10 \)
Question 13
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
B. Quota policy
C. Export subsidy policy
D. Import substitution policy
Question 14
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
B. The price level will decrease
C. The price level will remain unchanged
D. The price level will fluctuate
Question 15
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?
A. Reduced money supply
B. Increased interest rates
C. Increased government sp\ending
D. Increased inflation

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