Practice Post UTME AFE BABALOLA UNIVERSITY economics 2024 Past Questions

Question 1

A farmer in Nigeria decides to cultivate a new crop, cassava, on a 10-hectare farm. The initial investment is ₦150,000, and the expected revenue is ₦250,000. However, the farmer also expects to incur additional \costs of ₦20,000 per hectare for irrigation and fertilizers. What is the minimum price per ki\logram of cassava that the farmer must sell to break even?

Correct A. ₦12.50

B. ₦15.00

C. ₦17.50

D. ₦20.00

Correct Answer: A

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Question 2

A consumer's utility function is given by ( U(x,y) = 2x + 3y ), where x and y are the quantities of two goods consumed. If the consumer's income is ₦100,000 and the prices of the two goods are ₦20,000 and ₦30,000 respectively, what is the consumer's optimal bundle of goods?

Correct A. x = 2, y = 3

B. x = 3, y = 2

C. x = 4, y = 1

D. x = 1, y = 4

Correct Answer: A

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Question 3

A firm's production function is given by $ Q = 2L + 3K $, where L and K are the quantities of labor and capital respectively. If the firm's output is 100 units and the price of labor is ₦20,000 per unit and the price of capital is ₦30,000 per unit, what is the firm's optimal input mix?

Correct A. L = 20, K = 30

B. L = 30, K = 20

C. L = 40, K = 10

D. L = 10, K = 40

Correct Answer: A

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Question 4

A diagram of a firm's demand and supply curves is shown below. If the price of the good is ₦50,000, what is the quantity demanded?

A. 10 units

Correct B. 20 units

C. 30 units

D. 40 units

Correct Answer: B

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Question 5

A firm's \cost function is given by ( C(L,K) = 2L + 3K ), where L and K are the quantities of labor and capital respectively. If the firm's output is 100 units and the price of labor is ₦20,000 per unit and the price of capital is ₦30,000 per unit, what is the firm's minimum \cost?

Correct A. ₦200,000

B. ₦250,000

C. ₦300,000

D. ₦350,000

Correct Answer: A

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Question 6

A government may use a combination of fiscal and monetary policies to achieve its economic objectives. Which of the following is an example of a fiscal policy tool?

Correct A. Taxation

B. Government sp\ending

C. Monetary policy

D. Trade policy

Correct Answer: A

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Question 7

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current labor and capital inputs are L = 16 and K = 9, what is the marginal product of labor?

A. 2

Correct B. 4

C. 6

D. 8

Correct Answer: B

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Question 8

A country's GDP is given by the equation GDP = C + I + G + $ X - M $. If the country's current consumption, investment, government sp\ending, exports, and imports are C = 100, I = 50, G = 75, X = 150, and M = 120, what is the country's GDP?

A. 275

B. 300

Correct C. 325

D. 350

Correct Answer: C

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Question 9

A firm's revenue function is given by R = 2Q^2 - 10Q + 15. If the firm's current output is Q = 5, what is the firm's marginal revenue?

A. 10

Correct B. 20

C. 30

D. 40

Correct Answer: B

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Question 10

A government's budget is given by the equation B = T + I + G. If the government's current tax revenue, interest income, and government sp\ending are T = 100, I = 50, and G = 75, what is the government's budget?

A. 225

B. 250

Correct C. 275

D. 300

Correct Answer: C

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Question 11

A monopolistically competitive firm faces a downward-sloping demand curve. If the firm's marginal revenue (MR) curve intersects its marginal \cost (MC) curve at point A, and the firm's average revenue (AR) curve intersects its average \cost (AC) curve at point B, which of the following statements is true?

A. The firm is operating in the short run and is maximizing profits.

B. The firm is operating in the long run and is minimizing losses.

C. The firm is operating in the short run and is minimizing losses.

Correct D. The firm is operating in the long run and is maximizing profits.

Correct Answer: D

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Question 12

A consumer has a utility function given by u(x, y) = 2x + 3y. If the prices of x and y are $2 and $3, respectively, and the consumer has an income of $10, what is the optimal bundle of x and y?

A. x = 2, y = 2

Correct B. x = 3, y = 1

C. x = 1, y = 3

D. x = 4, y = 0

Correct Answer: B

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Question 13

A country's balance of payments is given by the following equation: BOP = X - M - $ I - S $. If the country's exports (X) are $100, imports (M) are $80, and the difference between investment (I) and saving (S) is $20, what is the balance of payments?

Correct A. $20

B. $30

C. $40

D. $50

Correct Answer: A

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Question 14

A firm is operating in a perfectly competitive market. If the firm's marginal revenue (MR) curve is given by MR = 100 - 2x, and the firm's marginal \cost (MC) curve is given by MC = 20 + x, what is the firm's optimal output level?

A. 10

Correct B. 20

C. 30

D. 40

Correct Answer: B

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Question 15

A country's inflation rate is given by the following equation: π = $ P - P* $ / P*, where P is the current price level and P* is the price level in the previous period. If the current price level is $100 and the price level in the previous period is $80, what is the inflation rate?

A. 0.25

Correct B. 0.50

C. 0.75

D. 1.00

Correct Answer: B

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Question 16

The government of a country decides to implement a policy to reduce the consumption of fossil fuels. The policy involves a tax on gasoline and diesel fuel. If the demand for gasoline is given by the equation Q = 100 - 2P, where Q is the quantity demanded and P is the price, and the tax is 10% of the price, what will be the new demand equation after the tax is implemented?

A. Q = 100 - 2$ P + 0.1P $

Correct B. Q = 100 - 2P - 0.1P

C. Q = 100 - 2$ P - 0.1P $

D. Q = 100 - 2P + 0.1P

Correct Answer: B

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Question 17

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 labor is 10 and the price of capital is 20, and the firm wants to maximize its profit, what will be the optimal values of L and K?

Correct A. L = 100, K = 50

B. L = 50, K = 100

C. L = 200, K = 25

D. L = 25, K = 200

Correct Answer: A

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Question 18

The government of a country is considering a policy to reduce the level of unemployment. The policy involves the creation of new jobs in the public sector. If the government wants to create 1000 new jobs, and the average wage of a public sector employee is 50,000, what will be the total \cost of the policy?

Correct A. ₦50,000,000

B. ₦50,000,000,000

C. ₦5,000,000

D. ₦500,000

Correct Answer: A

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Question 19

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 labor is 10 and the price of capital is 20, and the firm wants to maximize its profit, what will be the marginal product of labor?

Correct A. L^$ -0.5 $K^0.5

B. L^0.5K^$ -0.5 $

C. L^0.5K^0.5

D. L^$ -0.5 $K^$ -0.5 $

Correct Answer: A

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Question 20

The government of a country is considering a policy to reduce the level of inflation. The policy involves the reduction of the money supply. If the current money supply is 100 billion, and the government wants to reduce it by 10%, what will be the new money supply?

Correct A. ₦90,000,000,000

B. ₦100,000,000,000

C. ₦110,000,000,000

D. ₦120,000,000,000

Correct Answer: A

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Question 21

The concept of scarcity in economics implies that the production of one good is limited by the availability of resources, which can be allocated to other goods. This is an example of a fundamental principle in economics. Which of the following is a correct statement regarding the concept of scarcity?

A. Scarcity is a problem that can be solved by increa\sing the supply of goods.

Correct B. Scarcity is a fundamental principle in economics that implies that the production of one good is limited by the availability of resources.

C. Scarcity is a problem that can be solved by decrea\sing the demand for goods.

D. Scarcity is not a problem in economics.

Correct Answer: B

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Question 22

A consumer's budget constraint is given by the equation: $ Y = 120 - 2x $, where ( Y ) is the consumer's income and ( x ) is the amount spent on a particular good. If the consumer's income is $120, what is the maximum amount that can be spent on the good?

A. 30

Correct B. 60

C. 90

D. 120

Correct Answer: B

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Question 23

The demand for a particular good is given by the equation: $ Q_d = 100 - 2P $, where $ Q_d $ is the quantity demanded and ( P ) is the price of the good. If the price of the good is $10, what is the quantity demanded?

Correct A. 50

B. 60

C. 70

D. 80

Correct Answer: A

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Question 24

The supply of a particular good is given by the equation: $ Q_s = 50 + 2P $, where $ Q_s $ is the quantity supplied and ( P ) is the price of the good. If the price of the good is $10, what is the quantity supplied?

A. 60

Correct B. 70

C. 80

D. 90

Correct Answer: B

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Question 25

The government of a country has decided to implement a policy to reduce the production of a particular good. Which of the following is a likely consequence of this policy?

A. The price of the good will increase.

B. The quantity demanded of the good will increase.

Correct C. The quantity supplied of the good will decrease.

D. The production of the good will increase.

Correct Answer: C

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