POST UTME AFE BABALOLA UNIVERSITY 2020 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A firm's total revenue is given by the equation TR = 100P + 200, where TR is the total revenue and P is the price. If the price elasticity of demand is -2, what is the percentage change in total revenue when the price increases by 10%?
A. 20%
B. 40%
C. 60%
D. 80%
Question 2
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?
A. -2/3
B. 2/3
C. 1/3
D. -1/3
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.
A. x = 5, y = 10
B. x = 10, y = 5
C. x = 15, y = 3
D. x = 20, y = 2
Question 4
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
C. ₦40 billion
D. ₦50 billion
Question 5
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
C. ₦150
D. ₦250
Question 6
A central bank increases the reserve requirement for commercial banks from 10% to 15%. What is the effect on the money supply?
A. Increase
B. Decrease
C. No change
D. Uncertain
Question 7
At the point of equilibrium, the price elasticity of demand is equal to the price elasticity of supply. Which of the following statements is true?
A. The equilibrium price is the same as the price elasticity of demand.
B. The equilibrium quantity is the same as the price elasticity of supply.
C. The price elasticity of demand is greater than the price elasticity of supply.
D. The price elasticity of demand is less than the price elasticity of supply.
Question 8
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
C. 600 units
D. 800 units
Question 9
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?
A. ₦200,000
B. ₦250,000
C. ₦300,000
D. ₦400,000
Question 10
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
C. ₦2,000
D. ₦2,200
Question 11
A firm's revenue function is given by R(q) = 20q - 0.5q^2. What is the price elasticity of demand when q = 10?
A. 0.5
B. 1
C. 2
D. 5
Question 12
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
B. ₦20 billion
C. ₦30 billion
D. ₦40 billion
Question 13
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
C. ₦30 billion
D. ₦35 billion
Question 14
A country's balance of payments is in equilibrium when its current account is balanced by its capital account. True or False?
A. True
B. False
C. Dep\ends on the country's economic policies
D. Not enough information to determine
Question 15
A central bank increases the money supply in an economy. What is the likely effect on the price level?
A. Increase
B. Decrease
C. No effect
D. Uncertain

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