POST UTME AFE BABALOLA UNIVERSITY 2024 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
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
B. 0.50
C. 0.75
D. 1.00
Question 2
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?
A. ₦90,000,000,000
B. ₦100,000,000,000
C. ₦110,000,000,000
D. ₦120,000,000,000
Question 3
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
B. 20 units
C. 30 units
D. 40 units
Question 4
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.
C. The quantity supplied of the good will decrease.
D. The production of the good will increase.
Question 5
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?
A. ₦50,000,000
B. ₦50,000,000,000
C. ₦5,000,000
D. ₦500,000
Question 6
A consumer is faced with a budget constraint of $100 and a price of $20 for a particular good. Which of the following is a likely consequence of this situation?
A. The consumer will buy 4 units of the good.
B. The consumer will buy 3 units of the good.
C. The consumer will buy 2 units of the good.
D. The consumer will not buy any units of the good.
Question 7
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?
A. ₦200,000
B. ₦250,000
C. ₦300,000
D. ₦350,000
Question 8
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.
D. The firm is operating in the long run and is maximizing profits.
Question 9
A consumer is faced with a budget constraint of $100 and a price of $20 for a particular good. Which of the following is a likely consequence of this situation?
A. The consumer will buy 4 units of the good.
B. The consumer will buy 3 units of the good.
C. The consumer will buy 2 units of the good.
D. The consumer will not buy any units of the good.
Question 10
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
B. 4
C. 6
D. 8
Question 11
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?
A. $20
B. $30
C. $40
D. $50
Question 12
A country's GDP is ₦1,500 billion, its imports are ₦400 billion, and its exports are ₦300 billion. What is its balance of trade?
A. ₦100 billion surplus
B. ₦200 billion deficit
C. ₦300 billion surplus
D. ₦400 billion deficit
Question 13
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?
A. 50
B. 60
C. 70
D. 80
Question 14
A firm is producing a good at a point where the marginal revenue is equal to the marginal \cost. Which of the following is a likely consequence of this situation?
A. The firm is producing at the maximum profit.
B. The firm is producing at the minimum \cost.
C. The firm is producing at the break-even point.
D. The firm is producing at a loss.
Question 15
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?
A. L = 20, K = 30
B. L = 30, K = 20
C. L = 40, K = 10
D. L = 10, K = 40

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