Practice Post UTME ACHIEVERS UNIVERSITY economics 2023 Past Questions

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_L = 10 and w_K = 20, and the firm's current output price is p = 50, what is the firm's maximum profit?

Correct A. ₦1000

B. ₦2000

C. ₦3000

D. ₦4000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 2

A country's GDP can be calculated u\sing the formula: GDP = C + I + G + \( X - M \). If the country's consumption is ₦100 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 GDP?

Correct A. ₦180 billion

B. ₦200 billion

C. ₦220 billion

D. ₦240 billion

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 3

A firm's production function is given by Q = 3L^0.7K^0.3. If the firm's current input prices are w_L = 15 and w_K = 25, and the firm's current output price is p = 60, what is the firm's maximum profit?

A. ₦1200

Correct B. ₦2400

C. ₦3600

D. ₦4800

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 4

A country's balance of payments can be calculated u\sing the formula: BOP = X - M. If the country's exports are ₦50 billion and imports are ₦30 billion, what is the country's balance of payments?

Correct A. ₦20 billion

B. ₦30 billion

C. ₦40 billion

D. ₦50 billion

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 5

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current input prices are w_L = 10 and w_K = 20, and the firm's current output price is p = 50, what is the firm's maximum profit?

Correct A. ₦1000

B. ₦2000

C. ₦3000

D. ₦4000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 6

Consider a firm operating in a perfectly competitive market. The firm's marginal revenue (MR) and marginal \cost (MC) curves are given by MR = 100 - 2q and MC = 20 + 3q, respectively. Determine the firm's profit-maximizing output level.

A. 50 units

Correct B. 75 units

C. 100 units

D. 125 units

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 7

A monopolist faces a demand curve given by p = 100 - 2q. The firm's marginal \cost (MC) is cons\tant at 20. U\sing the concept of marginal revenue (MR), determine the monopolist's profit-maximizing price and quantity.

A. Price = 60, Quantity = 20

Correct B. Price = 80, Quantity = 30

C. Price = 90, Quantity = 40

D. Price = 100, Quantity = 50

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 8

A consumer's utility function is given by U(x, y) = 2x + 3y. The consumer's budget constraint is given by 2x + 3y = 30. Determine the consumer's optimal consumption bundle.

Correct A. (5, 10)

B. (10, 5)

C. (15, 0)

D. (0, 15)

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 9

A firm's production function is given by Q = 2L^0.5K^0.5. The firm's \cost function is given by C = 10L + 20K. Determine the firm's optimal input combination.

Correct A. L = 4, K = 9

B. L = 9, K = 4

C. L = 16, K = 1

D. L = 1, K = 16

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 10

A monopolist faces a demand curve given by p = 100 - 2q. The firm's marginal \cost (MC) is cons\tant at 20. U\sing the concept of elasticity of demand, determine the monopolist's optimal price and quantity.

A. Price = 60, Quantity = 20

Correct B. Price = 80, Quantity = 30

C. Price = 90, Quantity = 40

D. Price = 100, Quantity = 50

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 11

Consider a small open economy with a fixed exchange rate. The government imposes a tariff of 20% on imported goods. U\sing the Marshall-Lerner condition, derive an expression for the tariff revenue as a function of the nominal exchange rate and the price elasticity of demand for imports.

A. \( TR = 0.2 \times P \times Q \)

Correct B. \( TR = 0.2 \times P \times Q \times eta \)

C. \( TR = 0.2 \times \frac{P}{Q} \)

D. \( TR = 0.2 \times \frac{P}{Q} \times eta \)

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 12

A firm is considering investing in a new project with the following cash flows: Year 0: -₦100,000, Year 1: ₦50,000, Year 2: ₦70,000, Year 3: ₦90,000. If the discount rate is 10%, calculate the net present value (NPV) of the project.

Correct A. ₦20,000

B. ₦30,000

C. ₦40,000

D. ₦50,000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 13

U\sing the Cobb-Douglas production function, derive an expression for the marginal product of labor (MPL) as a function of the capital-labor ratio and the output elasticity of labor.

Correct A. \( MPL = \frac{partial Y}{partial L} = \alpha K^{eta} L^{\alpha - 1} \)

B. \( MPL = \frac{partial Y}{partial L} = \alpha K^{\alpha - 1} L^{eta} \)

C. \( MPL = \frac{partial Y}{partial L} = \alpha K^{eta - 1} L^{\alpha} \)

D. \( MPL = \frac{partial Y}{partial L} = \alpha K^{\alpha} L^{eta - 1} \)

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 14

A country's balance of payments (BOP) accounts show the following transactions: Exports: ₦100,000, Imports: ₦150,000, Foreign Direct Investment (FDI): ₦20,000. Calculate the current account balance (CAB) and the capital account balance (KAB).

Correct A. CAB = ₦-50,000, KAB = ₦20,000

B. CAB = ₦50,000, KAB = ₦20,000

C. CAB = ₦-50,000, KAB = ₦-20,000

D. CAB = ₦50,000, KAB = ₦-20,000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 15

A firm is considering investing in a new project with the following cash flows: Year 0: -₦100,000, Year 1: ₦50,000, Year 2: ₦70,000, Year 3: ₦90,000. If the discount rate is 10%, calculate the internal rate of return (IRR) of the project.

A. 15%

Correct B. 20%

C. 25%

D. 30%

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 16

A monopolistically competitive firm faces a demand curve with a cons\tant elasticity of -2. If the firm's marginal revenue (MR) curve intersects its average revenue (AR) curve at a point where the elasticity of demand is 4, what is the firm's price elasticity of demand at the point of MR = AR?

A. 2

Correct B. 4

C. 6

D. 8

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 17

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 ₦100 per unit, while the price of capital is ₦200 per unit, what is the firm's total \cost of production?

A. ₦4000

B. ₦6000

Correct C. ₦8000

D. ₦10000

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 18

A country's GDP is ₦100 billion, while its GNP is ₦120 billion. If the country's net factor income from abroad is ₦10 billion, what is the country's net domestic product?

A. ₦90 billion

B. ₦100 billion

Correct C. ₦110 billion

D. ₦120 billion

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 19

A firm's demand curve is given by Q = 100 - 2P. If the firm's marginal revenue (MR) curve is given by MR = 200 - 4P, what is the firm's equilibrium price?

A. ₦20

B. ₦30

Correct C. ₦40

D. ₦50

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 20

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 ₦100 per unit, while the price of capital is ₦200 per unit, what is the firm's total revenue?

A. ₦3200

B. ₦4000

Correct C. ₦4800

D. ₦5600

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 21

The concept of scarcity in economics implies that the production of one good is at the expense of another. Which of the following is a correct example of scarcity?

Correct A. A farmer must choose between planting wheat or corn due to limited land.

B. A consumer must choose between buying a new car or a new smartphone.

C. A country must choose between investing in education or healthcare.

D. A bu\siness must choose between hiring more employees or increa\sing production.

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 22

A firm's production function is given by Q = 2L + 3K, where Q is output, L is labor, and K is capital. If the firm's labor and capital inputs are 10 and 5 respectively, what is the total output?

A. 20

Correct B. 25

C. 30

D. 35

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 23

The demand for a commodity is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the price is 20, what is the quantity demanded?

A. 60

Correct B. 70

C. 80

D. 90

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 24

A consumer's budget constraint is given by the equation I = 100 + 2Y, where I is income and Y is years of experience. If the consumer's income is 120 and years of experience is 5, what is the income?

A. 120

Correct B. 140

C. 160

D. 180

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 25

A firm's \cost function is given by C = 100 + 2Q, where C is \cost and Q is quantity produced. If the firm produces 20 units, what is the total \cost?

A. 200

Correct B. 220

C. 240

D. 260

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

POST UTME ACHIEVERS UNIVERSITY 2023 Economics | Objective

Master the Exam!

Help others prepare! Share this practice hub: