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POST UTME AL-HIKMAH UNIVERSITY 2019 Economics | Objective

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Question 1

The concept of scarcity in economics implies that the production of one good is at the expense of another good. What is the opportunity \cost of producing more of a particular good?

Correct A. The value of the next best alternative good

B. The quantity of the next best alternative good

C. The price of the next best alternative good

D. The income of the next best alternative good

Correct Answer: A

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Question 2

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm wants to increase its output by 20%, what is the required percentage increase in labor and capital?

A. 10% increase in labor and 10% increase in capital

Correct B. 20% increase in labor and 20% increase in capital

C. 30% increase in labor and 30% increase in capital

D. 40% increase in labor and 40% increase in capital

Correct Answer: B

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Question 3

The Nigerian government has implemented a policy to increase agricultural production. Which of the following is a benefit of this policy?

A. Increased employment opportunities

B. Increased income for farmers

Correct C. Increased food security

D. Increased foreign exchange earnings

Correct Answer: C

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Question 4

A consumer's budget constraint is given by 2x + 3y = 12. If the consumer's utility function is U(x, y) = xy, what is the consumer's optimal consumption bundle?

A. (2, 4)

Correct B. (3, 3)

C. (4, 2)

D. (6, 1)

Correct Answer: B

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Question 5

The Nigerian economy is experiencing a recession. What is the impact of this on the country's GDP?

Correct A. GDP decreases

B. GDP remains cons\tant

C. GDP increases

D. GDP becomes negative

Correct Answer: A

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Question 6

A consumer's indifference curve is represented by the equation ( u(x, y) = 2x + 3y ). If the consumer's income is ₦1000 and the prices of x and y are ₦5 and ₦10 respectively, what is the consumer's optimal bundle?

Correct A. x = 40, y = 30

B. x = 30, y = 40

C. x = 20, y = 50

D. x = 50, y = 20

Correct Answer: A

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Question 7

A firm's \cost function is given by ( C(x) = 2x^2 + 3x + 10 ). If the firm produces 20 units of output, what is its total \cost?

A. ₦150

B. ₦200

Correct C. ₦250

D. ₦300

Correct Answer: C

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Question 8

A monopolist faces a demand curve given by \( p = 100 - 2x \). If the firm's marginal revenue is ₦20, what is its optimal output?

A. 20

B. 30

Correct C. 40

D. 50

Correct Answer: C

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Question 9

A consumer's budget constraint is given by \( 2x + 3y = 12 \). If the consumer's utility function is ( u(x, y) = xy ), what is the consumer's optimal bundle?

Correct A. x = 2, y = 4

B. x = 4, y = 2

C. x = 3, y = 3

D. x = 1, y = 5

Correct Answer: A

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Question 10

A firm's revenue function is given by ( R(x) = 100x - 2x^2 ). If the firm produces 20 units of output, what is its total revenue?

A. ₦1200

B. ₦1500

Correct C. ₦1800

D. ₦2000

Correct Answer: C

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Question 11

A firm's production function is given by Q = 100L^0.5K^0.5, where Q is output, L is labor, and K is capital. If the firm increases labor from 100 units to 121 units, while keeping capital cons\tant at 100 units, what is the percentage change in output?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 12

A consumer's demand function for a good is given by Q = 100 - 2P, where Q is quantity demanded and P is price. If the price of the good increases from ₦50 to ₦60, what is the percentage change in quantity demanded?

Correct A. -20%

B. -10%

C. 10%

D. 20%

Correct Answer: A

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Question 13

A country's GDP is ₦1,000,000,000. If the country's population is 20 million, what is the per capita GDP?

A. ₦50

Correct B. ₦100

C. ₦200

D. ₦500

Correct Answer: B

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Question 14

A firm's production function is given by Q = 100L^0.5K^0.5, where Q is output, L is labor, and K is capital. If the firm increases capital from 100 units to 121 units, while keeping labor cons\tant at 100 units, what is the percentage change in output?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 15

A country's GNP is ₦1,500,000,000. If the country's GDP is ₦1,000,000,000, what is the net factor income from abroad?

Correct A. ₦500,000,000

B. ₦750,000,000

C. ₦1,000,000,000

D. ₦1,500,000,000

Correct Answer: A

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Question 16

The concept of scarcity in economics implies that

A. There is always enough to go around

B. People's wants are unlimited

Correct C. Resources are limited

D. Economic growth is impossible

Correct Answer: C

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Question 17

A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \). If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, and if the firm wants to maximize its profit, what is the optimal combination of labor and capital?

Correct A. L = 100, K = 50

B. L = 50, K = 100

C. L = 100, K = 100

D. L = 50, K = 50

Correct Answer: A

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Question 18

A consumer's utility function is given by U = 2x + 3y. If the prices of x and y are ₦5 and ₦10 respectively, and if the consumer's income is ₦100, what is the optimal combination of x and y?

Correct A. x = 10, y = 5

B. x = 5, y = 10

C. x = 10, y = 10

D. x = 5, y = 5

Correct Answer: A

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Question 19

The diagram below shows the production possibilities frontier (PPF) of a country. If the country wants to produce 100 units of good X and 50 units of good Y, what is the opportunity \cost of producing good X?

A. 10 units of good Y

Correct B. 20 units of good Y

C. 30 units of good Y

D. 40 units of good Y

Correct Answer: B

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Question 20

The national income of a country is ₦100 billion. If the government sp\ends ₦20 billion on goods and services, and if the private sector sp\ends ₦30 billion on goods and services, what is the value of the national income?

A. ₦100 billion

Correct B. ₦120 billion

C. ₦140 billion

D. ₦160 billion

Correct Answer: B

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Question 21

Calculate the value of the definite integral \( int_{0}^{2} \( 2x^2 + 3x - 4 \ \) dx ) u\sing the fundamental theorem of calculus.

A. 16

B. 20

Correct C. 24

D. 28

Correct Answer: C

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Question 22

A firm's production function is given by \( Q = 2L^2 + 3K^2 \), where Q is the quantity produced and L and K are the units of labor and capital respectively. If the firm uses 4 units of labor and 5 units of capital, calculate the quantity produced.

A. 45

B. 50

Correct C. 55

D. 60

Correct Answer: C

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Question 23

A country's GDP is given by \( GDP = 100 + 0.2Y + 0.3C \), where Y is the country's income and C is the country's consumption. If the country's income is 500 and consumption is 300, calculate the GDP.

A. 250

B. 260

Correct C. 270

D. 280

Correct Answer: C

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Question 24

A firm's \cost function is given by \( C = 2L + 3K \), where C is the total \cost and L and K are the units of labor and capital respectively. If the firm uses 4 units of labor and 5 units of capital, calculate the total \cost.

A. 20

B. 25

Correct C. 30

D. 35

Correct Answer: C

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Question 25

A country's balance of payments is given by \( BOP = 100 + 0.2X - 0.3M \), where X is the country's exports and M is the country's imports. If the country's exports are 500 and imports are 300, calculate the balance of payments.

A. 150

B. 160

Correct C. 170

D. 180

Correct Answer: C

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