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POST UTME AL-HIKMAH UNIVERSITY 2024 Economics | Objective

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Question 1

Determine the value of the elasticity of demand for a product whose price elasticity of demand is 0.8 and whose quantity demanded decreases by 15% when the price increases by 10%.

Correct A. 0.6

B. 0.8

C. 1.2

D. 1.5

Correct Answer: A

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Question 2

A firm is operating in a perfectly competitive market with a demand curve given by Q = 100 - 2P. If the firm's marginal \cost is 10, what is the optimal price it should charge?

A. 40

Correct B. 50

C. 60

D. 70

Correct Answer: B

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Question 3

A monopolist faces a demand curve given by Q = 100 - 2P and has a marginal \cost of 10. If the firm's total revenue is maximized at a price of 60, what is the quantity sold?

A. 20

B. 30

Correct C. 40

D. 50

Correct Answer: C

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Question 4

A country's GDP is 100 billion naira and its GNP is 120 billion naira. What is the value of the net factor income from abroad?

A. 10 billion naira

Correct B. 20 billion naira

C. 30 billion naira

D. 40 billion naira

Correct Answer: B

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Question 5

A government budget has a total exp\enditure of 50 billion naira and a total revenue of 40 billion naira. What is the budget deficit?

A. 5 billion naira

Correct B. 10 billion naira

C. 15 billion naira

D. 20 billion naira

Correct Answer: B

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Question 6

The government of Nigeria has implemented a policy to increase the production of rice through the use of irrigation. However, the policy has led to a decrease in the production of other crops such as maize and sorghum. What is the likely effect of this policy on the overall agricultural sector?

A. Increase in agricultural output

Correct B. Decrease in agricultural output

C. No effect on agricultural output

D. Increase in agricultural output, but with a decrease in the production of other crops

Correct Answer: B

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Question 7

A firm is considering two different production processes for its product. Process A has a fixed \cost of ₦100,000 and a variable \cost of ₦50 per unit. Process B has a fixed \cost of ₦150,000 and a variable \cost of ₦30 per unit. If the firm produces 10,000 units of the product, what is the total \cost of production for each process?

Correct A. Process A: ₦1,500,000, Process B: ₦1,200,000

B. Process A: ₦1,200,000, Process B: ₦1,500,000

C. Process A: ₦1,000,000, Process B: ₦1,000,000

D. Process A: ₦1,500,000, Process B: ₦1,500,000

Correct Answer: A

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Question 8

The demand for a product is given by the equation Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the price is ₦50, what is the quantity demanded?

A. 50

Correct B. 100

C. 150

D. 200

Correct Answer: B

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Question 9

A country's balance of payments is given by the equation BOP = X - M, where BOP is the balance of payments, X is the value of exports, and M is the value of imports. If the value of exports is ₦1,000,000 and the value of imports is ₦800,000, what is the balance of payments?

Correct A. ₦200,000

B. ₦100,000

C. ₦300,000

D. ₦400,000

Correct Answer: A

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Question 10

A firm is considering the production of a new product. The firm has a fixed \cost of ₦500,000 and a variable \cost of ₦20 per unit. If the firm produces 50,000 units of the product, what is the total \cost of production?

A. ₦1,000,000

Correct B. ₦1,500,000

C. ₦2,000,000

D. ₦2,500,000

Correct Answer: B

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Question 11

The supply of a product is given by the equation Q = 2P + 100, where Q is the quantity supplied and P is the price. If the price is ₦50, what is the quantity supplied?

A. 150

B. 200

Correct C. 250

D. 300

Correct Answer: C

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Question 12

A country's GDP is given by the equation GDP = C + I + G + \( X - M \), where GDP is the Gross Domestic Product, C is the consumption, I is the investment, G is the government sp\ending, X is the value of exports, and M is the value of imports. If the consumption is ₦1,000,000, the investment is ₦500,000, the government sp\ending is ₦200,000, the value of exports is ₦1,000,000, and the value of imports is ₦800,000, what is the GDP?

A. ₦3,000,000

Correct B. ₦3,500,000

C. ₦4,000,000

D. ₦4,500,000

Correct Answer: B

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Question 13

A firm is considering the production of a new product. The firm has a fixed \cost of ₦200,000 and a variable \cost of ₦15 per unit. If the firm produces 30,000 units of the product, what is the total \cost of production?

A. ₦450,000

B. ₦600,000

Correct C. ₦750,000

D. ₦900,000

Correct Answer: C

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Question 14

A consumer's utility function is given by U(x, y) = 2x^0.5y^0.5. If the consumer's income is ₦1000 and the prices of x and y are ₦10 and ₦20 respectively, what is the consumer's optimal bundle of x and y?

A. x = 20, y = 10

B. x = 10, y = 20

Correct C. x = 15, y = 15

D. x = 25, y = 5

Correct Answer: C

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Question 15

The agricultural sector in Nigeria is characterized by a high degree of market imperfection. What is the likely effect of this on the country's agricultural productivity?

A. Increased productivity

Correct B. Decreased productivity

C. No effect on productivity

D. Increased productivity due to government subsidies

Correct Answer: B

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Question 16

A firm's \cost function is given by C(x) = 100 + 2x + 0.01x^2. What is the firm's marginal \cost when x = 100?

A. ₦120

B. ₦150

Correct C. ₦180

D. ₦200

Correct Answer: C

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Question 17

A country's balance of payments is given by BOP = X - M. If the country's exports are ₦1000 and imports are ₦800, what is the country's balance of payments?

Correct A. ₦200

B. ₦300

C. ₦400

D. ₦500

Correct Answer: A

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Question 18

A firm's revenue function is given by R(x) = 100x - 0.01x^2. What is the firm's marginal revenue when x = 50?

A. ₦95

Correct B. ₦100

C. ₦105

D. ₦110

Correct Answer: B

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Question 19

A country's production function is given by Q = 100K^0.5L^0.5. If the country's capital is 100 and labor is 50, what is the country's output?

A. 1000

B. 1200

Correct C. 1500

D. 2000

Correct Answer: C

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Question 20

A firm's production function is given by Q = 100K^0.5L^0.5. If the firm's capital is 100 and labor is 50, what is the firm's marginal product of labor?

A. 1.5

Correct B. 2.5

C. 3.5

D. 4.5

Correct Answer: B

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Question 21

A firm is operating in a perfectly competitive market with a downward-sloping demand curve. If the firm increases its output from 100 units to 120 units, and the price falls from ₦100 to ₦90, what is the price elasticity of demand?

A. 0.5

B. 1

Correct C. 2

D. 3

Correct Answer: C

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Question 22

A consumer has a utility function given by ( 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 = 100, y = 50

B. x = 50, y = 100

C. x = 200, y = 0

D. x = 0, y = 200

Correct Answer: A

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Question 23

A firm is operating in a monopoly market with a demand curve given by \( Q = 100 - 2P \). If the firm's marginal \cost is ₦10, what is the firm's optimal price?

A. ₦50

Correct B. ₦60

C. ₦70

D. ₦80

Correct Answer: B

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Question 24

A firm is operating in a perfectly competitive market with a production function given by \( Q = 2L^{1/2}K^{1/2} \). If the firm's output is 100 units and the wage rate is ₦10 per unit of labor, what is the firm's optimal capital?

A. 100

Correct B. 200

C. 300

D. 400

Correct Answer: B

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Question 25

A consumer has a utility function given by ( U(x, y) = x^{2} + 2y ). 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 = 100, y = 50

B. x = 50, y = 100

C. x = 200, y = 0

D. x = 0, y = 200

Correct Answer: A

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