POST UTME AFE BABALOLA UNIVERSITY 2020 Economics | Objective

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Question 1
Consider a country with a GDP of ₦10 trillion and a GNP of ₦12 trillion. If the country's population is 200 million, calculate the per capita GNP.
A. ₦60,000
Correct B. ₦80,000
C. ₦100,000
D. ₦120,000

Correct Answer: B

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Question 2
A firm's demand function is given by Q = 100 - 2P. If the price elasticity of demand is -2, calculate the price at which the firm will sell 50 units.
A. ₦20
B. ₦30
Correct C. ₦40
D. ₦50

Correct Answer: C

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Question 3
A consumer's utility function is given by U = 2x + 3y. If the consumer's budget constraint is 10x + 5y = 100, find the optimal values of x and y.
Correct A. x = 5, y = 10
B. x = 10, y = 5
C. x = 15, y = 3
D. x = 20, y = 2

Correct Answer: A

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Question 4
A country's balance of payments account is given by Current Account = 100, Capital Account = 50, and Financial Account = -20. Calculate the country's overall balance of payments.
A. ₦30
B. ₦50
Correct C. ₦70
D. ₦90

Correct Answer: C

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Question 5
A government's budget is given by Revenue = 100, Exp\enditure = 80, and Surplus = 20. Calculate the government's fiscal policy.
Correct A. Expansionary
B. Contractionary
C. Neutral
D. Fiscal Policy Ineffective

Correct Answer: A

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Question 6
A government imposes a tax on a firm's profits. The tax rate is 20% of the firm's profits. If the firm's profits are ₦1,000,000, what is the amount of tax the firm must pay?
Correct A. ₦200,000
B. ₦250,000
C. ₦300,000
D. ₦400,000

Correct Answer: A

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Question 7
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 sells 20 units, what is its total revenue?
A. ₦1,600
B. ₦1,800
Correct C. ₦2,000
D. ₦2,200

Correct Answer: C

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Question 8
A firm's demand curve is given by the equation \( Q = 100 - 2P \), where ( Q ) is the quantity demanded and ( P ) is the price. If the price is ₦50, what is the quantity demanded?
A. 20 units
B. 30 units
Correct C. 40 units
D. 50 units

Correct Answer: C

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Question 9
A firm's supply curve is given by the equation \( Q = 2P + 10 \), where ( Q ) is the quantity supplied and ( P ) is the price. If the price is ₦30, what is the quantity supplied?
A. 20 units
Correct B. 30 units
C. 40 units
D. 50 units

Correct Answer: B

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Question 10
A central bank increases the money supply in an economy. What is the likely effect on the price level?
Correct A. Increase
B. Decrease
C. No effect
D. Uncertain

Correct Answer: A

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Question 11
The concept of diminishing marginal utility is a fundamental principle in consumer theory. Explain how it influences a consumer's decision-making process when purcha\sing a bundle of goods.
Correct A. The consumer becomes indifferent to the additional units of the good as the marginal utility decreases.
B. The consumer's willingness to pay for the good increases as the marginal utility decreases.
C. The consumer's demand for the good decreases as the marginal utility decreases.
D. The consumer's income effect increases as the marginal utility decreases.

Correct Answer: A

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Question 12
A firm's supply curve is given by the equation Q = 2 + 3P, where Q is the quantity supplied and P is the price. What is the firm's marginal \cost (MC) when the price is ₦100?
A. ₦300
B. ₦200
Correct C. ₦150
D. ₦250

Correct Answer: C

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Question 13
A country's GDP is ₦10 trillion, and its GNP is ₦12 trillion. What is the country's net factor income from abroad?
Correct A. ₦2 trillion
B. ₦1 trillion
C. ₦3 trillion
D. ₦4 trillion

Correct Answer: A

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Question 14
A consumer's indifference curve is given by the equation U = 2x + 3y, where U is the utility and x and y are the quantities of two goods. What is the consumer's marginal rate of substitution (MRS) when x = 2 and y = 3?
Correct A. -2/3
B. 2/3
C. 1/3
D. -1/3

Correct Answer: A

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Question 15
A firm's production function is given by the equation Q = 2L^2 + 3K^2, where Q is the output and L and K are the labor and capital inputs, respectively. What is the firm's marginal product of labor (MPL) when L = 2 and K = 3?
A. 8
Correct B. 4
C. 2
D. 6

Correct Answer: B

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Question 16
The money multiplier is the ratio of the change in the money supply to a change in the reserve requirement. If the reserve requirement is increased from 10% to 15%, and the money supply is currently ₦100 billion, what is the new money supply if the central bank injects ₦5 billion into the economy?
A. ₦90 billion
B. ₦95 billion
C. ₦100 billion
Correct D. ₦105 billion

Correct Answer: D

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Question 17
A country's GDP is the sum of the value of all final goods and services produced within its borders. If a country's GDP is ₦100 billion, and its GNP is ₦120 billion, what is the value of the net factor income from abroad?
A. ₦20 billion
B. ₦30 billion
Correct C. ₦40 billion
D. ₦50 billion

Correct Answer: C

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Question 18
A firm's production function is given by Q = 2L^0.5K^0.5, where Q is output, L is labor, and K is capital. If the firm hires 100 workers and uses ₦100 million in capital, what is the output?
A. 200 units
B. 400 units
Correct C. 600 units
D. 800 units

Correct Answer: C

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Question 19
A country's balance of payments is in equilibrium when its current account is equal to its capital account. If a country's current account is a deficit of ₦10 billion, and its capital account is a surplus of ₦20 billion, what is the value of the net capital inflow?
A. ₦10 billion
Correct B. ₦20 billion
C. ₦30 billion
D. ₦40 billion

Correct Answer: B

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Question 20
A firm's demand for labor is given by L = 100 - 2P, where L is labor and P is the wage rate. If the wage rate is ₦50 per hour, what is the demand for labor?
A. 50 workers
Correct B. 75 workers
C. 100 workers
D. 125 workers

Correct Answer: B

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Question 21
A perfectly competitive market has a downward-sloping demand curve for the product. If the market price falls from ₦100 to ₦80, and the quantity demanded increases from 100 units to 150 units, what is the price elasticity of demand?
A. 0.5
B. 1
Correct C. 2
D. 3

Correct Answer: C

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Question 22
A country's GDP is ₦10 trillion, and its GNP is ₦12 trillion. What is the country's net factor income from abroad?
Correct A. ₦2 trillion
B. ₦1 trillion
C. ₦0.5 trillion
D. ₦0.2 trillion

Correct Answer: A

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Question 23
A central bank increases the reserve requirement for commercial banks from 10% to 15%. What is the effect on the money supply?
A. Increase
Correct B. Decrease
C. No change
D. Uncertain

Correct Answer: B

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Question 24
A monopolist faces a demand curve given by Q = 100 - 2P. The marginal revenue function is given by MR = 50 - 2Q. What is the price at which the monopolist maximizes profit?
A. ₦20
Correct B. ₦30
C. ₦40
D. ₦50

Correct Answer: B

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Question 25
A country's balance of payments is given by the following table:\n| Item | Value |\n| --- | --- |\n| Exports | ₦100 billion |\n| Imports | ₦120 billion |\n| Net Factor Income | ₦5 billion |\n| Net Transfer | ₦10 billion |\nWhat is the country's balance of payments deficit?
A. ₦20 billion
B. ₦25 billion
Correct C. ₦30 billion
D. ₦35 billion

Correct Answer: C

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