POST UTME BABCOCK UNIVERSITY 2020 Economics | Objective

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Question 1 View Details
A government imposes a tax on a firm's profits. The tax rate is 20% of the firm's profits. If the firm's profits are ₦1,000,000, what is the amount of tax the firm must pay?
Correct A. ₦200,000
B. ₦250,000
C. ₦300,000
D. ₦400,000

Correct Answer: A

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Question 2 View Details
A monopolist faces a demand curve given by Q = 100 - 2P. The monopolist's marginal \cost curve is MC = 10. What is the monopolist's optimal price?
A. ₦25
Correct B. ₦30
C. ₦35
D. ₦40

Correct Answer: B

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Question 3 View Details
A consumer's utility function is given by U = 2x + 3y. The consumer's budget constraint is 2x + 3y = 12. What is the consumer's optimal bundle of x and y?
A. x = 2, y = 4
Correct B. x = 3, y = 3
C. x = 4, y = 2
D. x = 5, y = 1

Correct Answer: B

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Question 4 View Details
A firm's production function is given by Q = 2L + 3K. The firm's \cost function is given by C = 10L + 20K. What is the firm's optimal input bundle of L and K?
Correct A. L = 2, K = 3
B. L = 3, K = 2
C. L = 4, K = 1
D. L = 5, K = 0

Correct Answer: A

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Question 5 View Details
A firm's demand curve is given by Q = 100 - 2P. The firm's marginal \cost curve is MC = 10. What is the firm's optimal price?
A. ₦25
Correct B. ₦30
C. ₦35
D. ₦40

Correct Answer: B

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Question 6 View Details
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's current labor and capital inputs are 100 units and 400 units respectively, calculate the marginal product of labor (MPL).
A. 25
Correct B. 50
C. 100
D. 200

Correct Answer: B

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Question 7 View Details
A country's GDP is ₦10 trillion, and its GNP is ₦11 trillion. What is the value of net factor income from abroad?
Correct A. ₦1 trillion
B. ₦100 billion
C. ₦500 billion
D. ₦1.5 trillion

Correct Answer: A

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Question 8 View Details
A firm's demand function is given by Q = 100 - 2P, where Q is quantity demanded and P is price. If the firm's current price is ₦50, calculate the elasticity of demand.
A. 0.5
B. 1
Correct C. 2
D. 5

Correct Answer: C

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Question 9 View Details
A country's economic growth rate is 5% per annum, and its population growth rate is 2% per annum. What is the rate of growth of per capita income?
Correct A. 3%
B. 5%
C. 7%
D. 10%

Correct Answer: A

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Question 10 View Details
A firm's total revenue function is given by TR = 100Q - 2Q^2, where TR is total revenue and Q is quantity sold. If the firm sells 10 units, calculate the marginal revenue (MR).
A. 80
B. 90
Correct C. 100
D. 110

Correct Answer: C

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Question 11 View Details
Suppose the demand for a product is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the supply of the product is given by the equation Qs = 2P - 50, where Qs is the quantity supplied, find the equilibrium price and quantity.
A. P = 25, Q = 75
Correct B. P = 50, Q = 100
C. P = 75, Q = 125
D. P = 100, Q = 150

Correct Answer: B

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Question 12 View Details
A country's balance of payments account is given by the following equation: BOP = X - M, where X is the value of exports and M is the value of imports. If the value of exports is $100 million and the value of imports is $80 million, what is the balance of payments?
Correct A. $10 million surplus
B. $10 million deficit
C. $20 million surplus
D. $20 million deficit

Correct Answer: A

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Question 13 View Details
A firm's \cost function is given by the equation C = 2Q^2 + 10Q + 100, where C is the total \cost and Q is the quantity produced. If the firm produces 10 units, what is the total \cost?
A. $250
B. $300
Correct C. $350
D. $400

Correct Answer: C

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Question 14 View Details
A monopolist's demand function is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the firm's marginal revenue function is given by the equation MR = 2P, find the price and quantity at which the firm maximizes its profit.
A. P = 25, Q = 75
Correct B. P = 50, Q = 100
C. P = 75, Q = 125
D. P = 100, Q = 150

Correct Answer: B

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Question 15 View Details
A consumer's budget constraint is given by the equation I = 100 - 2C, where I is the income and C is the consumption. If the consumer's indifference curve is given by the equation U = 2C, find the consumer's optimal consumption and income.
A. C = 50, I = 100
B. C = 75, I = 150
Correct C. C = 100, I = 200
D. C = 125, I = 250

Correct Answer: C

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Question 16 View Details
A firm's demand function is given by Q = 100 - 2P + 5Y. If the price elasticity of demand is cons\tant and equal to 2, what is the cross-price elasticity of demand with respect to income?
Correct A. 5
B. 10
C. 15
D. 20

Correct Answer: A

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Question 17 View Details
A country's balance of payments account is given by the following equation: BOP = \( X - M \) + \( F - I \). If the country's trade balance is in surplus by ₦100 billion and the current account is in deficit by ₦50 billion, what is the value of the capital account?
A. ₦50 billion
B. ₦75 billion
Correct C. ₦100 billion
D. ₦125 billion

Correct Answer: C

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Question 18 View Details
A firm's \cost function is given by C = 100 + 2Q + 0.5Q^2. If the firm produces 100 units of output, what is the total \cost?
A. ₦1,500
B. ₦2,000
Correct C. ₦2,500
D. ₦3,000

Correct Answer: C

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Question 19 View Details
A consumer's utility function is given by U = 2X + 3Y. If the consumer's income is ₦1,000 and the prices of X and Y are ₦50 and ₦75 respectively, what is the consumer's optimal bundle?
A. X = 10, Y = 5
Correct B. X = 15, Y = 10
C. X = 20, Y = 15
D. X = 25, Y = 20

Correct Answer: B

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Question 20 View Details
A monopolist's demand function is given by Q = 100 - 2P. If the firm's marginal revenue function is MR = 200 - 2Q, what is the firm's optimal price?
A. ₦50
B. ₦75
Correct C. ₦100
D. ₦125

Correct Answer: C

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Question 21 View Details
Determine the price elasticity of demand for a commodity whose price elasticity of supply is 0.5 and the cross-price elasticity of demand is 0.2. Assume that the demand function is given by Q = 100 - 2P + 0.1Y.
A. 0.3
Correct B. 0.5
C. 0.8
D. 1.2

Correct Answer: B

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Question 22 View Details
Calculate the marginal propensity to consume (MPC) if the consumption function is given by C = 100 + 0.5Y and the marginal propensity to save (MPS) is 0.2.
A. 0.3
B. 0.4
Correct C. 0.5
D. 0.6

Correct Answer: C

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Question 23 View Details
A farmer produces wheat u\sing the production function Q = 1000L^0.5K^0.5, where L is labor and K is capital. If the price of wheat is ₦100 per unit and the price of labor is ₦20 per unit, determine the optimal level of labor and capital.
A. L = 100, K = 100
B. L = 50, K = 200
C. L = 200, K = 50
Correct D. L = 100, K = 50

Correct Answer: D

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Question 24 View Details
A firm produces two goods, X and Y, u\sing the production functions X = 2L^0.5K^0.5 and Y = 3L^0.5K^0.5, where L is labor and K is capital. If the price of good X is ₦50 per unit and the price of good Y is ₦30 per unit, determine the optimal level of labor and capital.
A. L = 100, K = 100
B. L = 50, K = 200
C. L = 200, K = 50
Correct D. L = 100, K = 50

Correct Answer: D

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Question 25 View Details
A firm has a revenue function R = 1000 + 20Q - 0.1Q^2, where Q is the quantity sold. Determine the level of output that maximizes revenue.
A. Q = 50
B. Q = 100
Correct C. Q = 150
D. Q = 200

Correct Answer: C

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