POST UTME BELLS UNIVERSITY 2022 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
U\sing the concept of returns to scale, explain why a firm may experience decrea\sing returns to scale in the short run but increa\sing returns to scale in the long run.
A. In the short run, a firm may experience decrea\sing returns to scale due to fixed \costs, but in the long run, it can increase its production and experience increa\sing returns to scale.
B. A firm always experiences increa\sing returns to scale in the long run.
C. Decrea\sing returns to scale is a characteristic of the long run, not the short run.
D. Increa\sing returns to scale is a characteristic of the short run, not the long run.
Question 2
A government is considering implementing a new tax on luxury goods to reduce income inequality. The tax is expected to increase the price of luxury goods by 20% and reduce the demand for these goods by 15%. If the initial price of luxury goods is ₦1000 and the initial demand is 1000 units, calculate the new price and demand for luxury goods.
A. New Price = ₦1200, New Demand = 850 units
B. New Price = ₦1200, New Demand = 900 units
C. New Price = ₦1000, New Demand = 850 units
D. New Price = ₦1000, New Demand = 900 units
Question 3
The money supply in an economy is the total amount of money available for use in the economy. Which of the following is a component of the money supply?
A. Currency in circulation
B. Deposits in commercial banks
C. Time deposits in commercial banks
D. All of the above
Question 4
A country's inflation rate is given by the equation π = \( P_t - P_{t-1} \) / P_{t-1} * 100. If the country's current price index is 120 and the previous price index is 100, what is the country's inflation rate?
A. 20%
B. 25%
C. 30%
D. 35%
Question 5
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 price elasticity of demand is 0.5, what is the price at which the quantity demanded is 60?
A. ₦20
B. ₦30
C. ₦40
D. ₦50
Question 6
A firm's production function is given by \( Q = 2K^{\frac{1}{2}}L^{\frac{1}{2}} \). If the marginal product of capital is 10, what is the value of the marginal product of labor?
A. 5
B. 10
C. 15
D. 20
Question 7
A country's GDP is given by the equation GDP = C + I + G + \( X - M \). If the country's consumption is ₦500 billion, investment is ₦200 billion, government sp\ending is ₦300 billion, exports are ₦400 billion, and imports are ₦200 billion, what is the country's GDP?
A. ₦1200 billion
B. ₦1500 billion
C. ₦1800 billion
D. ₦2000 billion
Question 8
A firm is producing 100 units of a good at a \cost of ₦100 per unit. If the firm increases its production to 120 units, the \cost per unit decreases to ₦90. What is the total \cost of producing 120 units of the good?
A. ₦10,800
B. ₦11,000
C. ₦11,200
D. ₦11,400
Question 9
A country's money supply is given by the equation M = kPY, where M is the money supply, k is a cons\tant, P is the price level, and Y is the real GDP. If the country's money supply is $100 billion, the price level is 2, and the real GDP is 50, what is the value of the cons\tant k?
A. 0.5
B. 1
C. 2
D. 5
Question 10
A firm is considering investing in a new project that has a net present value (NPV) of ₦1.5 million and a payback period of 2 years. If the firm's \cost of capital is 10%, calculate the internal rate of return (IRR) of the project.
A. IRR = 12%
B. IRR = 15%
C. IRR = 18%
D. IRR = 20%
Question 11
U\sing the concept of supply and demand, explain why a price ceiling may lead to a shortage in the market.
A. A price ceiling may lead to a shortage in the market because it restricts the supply of a good.
B. A price ceiling may lead to a shortage in the market because it increases the demand for a good.
C. A price ceiling may lead to a shortage in the market because it has no effect on the supply and demand of a good.
D. A price ceiling may lead to a shortage in the market because it decreases the demand for a good.
Question 12
A country's GDP is given by the equation GDP = C + I + G + \( X - M \), where C is consumption, I is investment, G is government sp\ending, X is exports, and M is imports. If the country's GDP is $100 billion, consumption is $50 billion, investment is $20 billion, government sp\ending is $30 billion, exports are $40 billion, and imports are $20 billion, what is the value of the country's net exports?
A. $10 billion
B. $20 billion
C. $30 billion
D. $40 billion
Question 13
Consider a firm operating in a perfectly competitive market with a production function Q = 2L^0.5K^0.5. If the firm's current input prices are w = 10 and r = 20, and it currently employs 4 units of labor and 2 units of capital, calculate the firm's current output and the returns to scale.
A. Q = 8, Decrea\sing Returns to Scale
B. Q = 16, Increa\sing Returns to Scale
C. Q = 4, Cons\tant Returns to Scale
D. Q = 2, Decrea\sing Returns to Scale
Question 14
The elasticity of demand is a measure of how responsive the quantity demanded of a good is to changes in its price. Which of the following is an example of a good with a high elasticity of demand?
A. A luxury good
B. A necessity good
C. A good with a high income elasticity of demand
D. A good with a low income elasticity of demand
Question 15
The revenue of a firm is the total amount of money received from the sale of its goods or services. Which of the following is a component of the revenue of a firm?
A. Sales revenue
B. Cost of goods sold
C. Operating expenses
D. All of the above

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows
Help others prepare! Share this practice hub: