POST UTME AL-HIKMAH UNIVERSITY 2021 Economics | Objective

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Question 1
A firm is considering two different production techno\logies: a traditional techno\logy that requires 10 units of labor and 5 units of capital to produce 100 units of output, and a modern techno\logy that requires 5 units of labor and 10 units of capital to produce 150 units of output. If the wage rate is ₦100 per unit of labor and the rental rate is ₦200 per unit of capital, which techno\logy should the firm adopt?
A. Traditional techno\logy
B. Modern techno\logy
C. Both techno\logies are equally profitable
D. Neither techno\logy is profitable
Question 2
A country's GDP is ₦100 billion, its GNP is ₦120 billion, and its net factor income from abroad is ₦10 billion. What is the country's net domestic product?
A. ₦90 billion
B. ₦100 billion
C. ₦110 billion
D. ₦120 billion
Question 3
A country's balance of payments is given by the equation BOP = X - M + \( F - I \), where BOP is the balance of payments, X is the exports, M is the imports, F is the foreign investment, and I is the domestic investment. If the country's exports are $50 billion, imports are $40 billion, foreign investment is $10 billion, and domestic investment is $20 billion, what is the country's balance of payments?
A. $10 billion
B. $20 billion
C. $30 billion
D. $40 billion
Question 4
Consider a country with a GDP of ₦10 trillion and a population of 200 million. If the country's GDP per capita is ₦50,000, what is the implied value of the country's national income?
A. ₦10 trillion
B. ₦10 trillion x 200 million
C. ₦10 trillion / 200 million
D. ₦50,000 x 200 million
Question 5
A firm is facing an increase in demand for its product. The initial demand curve is given by Q = 100 - 2P, and the new demand curve is given by Q = 120 - 2P. If the firm's marginal \cost is cons\tant at ₦50, what is the new equilibrium price?
A. ₦40
B. ₦45
C. ₦50
D. ₦55
Question 6
A country's GDP is given by the equation Y = C + I + G + \( X - M \), where Y is the GDP, C is the consumption, I is the investment, G is the government sp\ending, X is the exports, and M is the imports. If the country's GDP is $100 billion, consumption is $60 billion, investment is $20 billion, government sp\ending is $15 billion, exports are $30 billion, and imports are $25 billion, what is the country's trade balance?
A. $5 billion
B. $10 billion
C. $15 billion
D. $20 billion
Question 7
A consumer has a utility function given by U(x,y) = 2x + 3y. If the prices of x and y are ₦10 and ₦20 respectively, and the consumer has a budget of ₦100, what is the optimal bundle of x and y?
A. (10,10)
B. (20,5)
C. (15,15)
D. (25,0)
Question 8
A central bank is u\sing a monetary policy tool to reduce inflation. If the current money supply is ₦100 billion, and the central bank wants to reduce the money supply by 10%, what will be the new money supply?
A. ₦90 billion
B. ₦100 billion
C. ₦110 billion
D. ₦120 billion
Question 9
A consumer's utility function is given by the equation U = 2x + 3y, where U is the utility and x and y are the quantities of two goods. If the consumer's budget constraint is 10x + 5y = 100, what is the consumer's optimal bundle of goods?
A. x = 5, y = 10
B. x = 10, y = 5
C. x = 15, y = 3
D. x = 20, y = 2
Question 10
A firm's \cost function is given by \( C = 2L + 3K \). If the firm's output is 16 units and the price of labor is ₦20 per unit, while the price of capital is ₦30 per unit, what is the firm's optimal input combination of labor and capital?
A. (4, 2)
B. (2, 4)
C. (1, 8)
D. (8, 1)
Question 11
Consider a firm operating in a perfectly competitive market with a downward-sloping demand curve. If the firm's marginal revenue (MR) curve intersects its average variable \cost (AVC) curve at point E, where MR = AVC, and the firm's average total \cost (ATC) curve is U-shaped, what is the likely outcome for the firm's profit-maximizing output level?
A. The firm will produce at the point where MR = MC.
B. The firm will produce at the point where ATC = AVC.
C. The firm will produce at the point where MR = ATC.
D. The firm will produce at the point where AVC = ATC.
Question 12
Consider a firm operating in a perfectly competitive market with a production function given by Q = 2L^0.5K^0.5. If the firm's current input prices are w_L = 10 and w_K = 20, and the current output price is p = 50, calculate the firm's optimal input mix u\sing the Shephard's Lemma. What is the elasticity of input demand with respect to the output price?
A. \( \frac{dL}{dP} = \frac{1}{2} \frac{K^{0.5}}{L^{0.5}} \)
B. \( \frac{dK}{dP} = \frac{1}{2} \frac{L^{0.5}}{K^{0.5}} \)
C. \( \frac{dL}{dP} = \frac{1}{2} \frac{K^{0.5}}{L^{0.5}} \) and \( \frac{dK}{dP} = \frac{1}{2} \frac{L^{0.5}}{K^{0.5}} \)
D. \( \frac{dL}{dP} = \frac{1}{2} \frac{K^{0.5}}{L^{0.5}} \) and \( \frac{dK}{dP} = \frac{1}{2} \frac{L^{0.5}}{K^{0.5}} \)
Question 13
A consumer's utility function is given by \( U = 2x + 3y \), where x and y are the quantities of two goods consumed. If the prices of the goods are $2 and $3, respectively, and the consumer's income is $10, what is the optimal bundle of goods?
A. \( x = 2, y = 1 \)
B. \( x = 3, y = 2 \)
C. \( x = 4, y = 3 \)
D. \( x = 5, y = 4 \)
Question 14
A monopolist is facing a demand curve given by Qd = 100 - 2P, and its marginal revenue curve is given by MR = 2P. What is the monopolist's optimal price and quantity?
A. P = ₦20, Q = 60
B. P = ₦30, Q = 40
C. P = ₦40, Q = 20
D. P = ₦50, Q = 10
Question 15
A government imposes a tax of ₦10 on every unit of a good. If the demand curve for the good is given by Q = 100 - 2P and the supply curve is given by Q = 2P - 10, what is the new equilibrium price?
A. ₦20
B. ₦30
C. ₦40
D. ₦50

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