Practice Post UTME BELLS UNIVERSITY economics 2024 Past Questions

Question 1

Determine the returns to scale for a firm that experiences a 20% increase in all inputs, resulting in a 25% increase in output.

A. Decrea\sing Returns to Scale

Correct B. Increa\sing Returns to Scale

C. Cons\tant Returns to Scale

D. No Returns to Scale

Correct Answer: B

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Question 2

A farmer has 100 hectares of land and can produce 200 units of wheat per hectare. If the price of wheat is ₦200 per unit, what is the opportunity \cost of producing wheat?

A. ₦40,000

Correct B. ₦80,000

C. ₦120,000

D. ₦160,000

Correct Answer: B

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Question 3

A country's GDP grows at a rate of 5% per annum, while its population grows at a rate of 2% per annum. What is the rate of growth of per capita income?

Correct A. 3%

B. 4%

C. 5%

D. 6%

Correct Answer: A

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Question 4

A firm's demand for labor is given by the equation Q = 100L^0.5, where Q is the quantity of labor demanded and L is the wage rate. If the wage rate is ₦50 per hour, how many hours of labor will be demanded?

A. 10 hours

Correct B. 20 hours

C. 30 hours

D. 40 hours

Correct Answer: B

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Question 5

A central bank increases the money supply by 10%. What will be the effect on the price level, assuming a cons\tant velocity of money?

A. No effect

B. Increase of 5%

Correct C. Increase of 10%

D. Increase of 15%

Correct Answer: C

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Question 6

Consider a small open economy with a fixed exchange rate. If the country experiences an increase in aggregate demand, what will happen to the balance of payments?

A. The balance of payments will improve due to increased exports.

Correct B. The balance of payments will worsen due to increased imports.

C. The balance of payments will remain unchanged.

D. The balance of payments will improve due to increased imports.

Correct Answer: B

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Question 7

A firm is considering two investment projects. Project A has a 5-year payback period and an internal rate of return (IRR) of 12%. Project B has a 7-year payback period and an IRR of 15%. Which project should the firm choose?

Correct A. Project A

B. Project B

C. Both projects are equally attractive

D. Neither project is attractive

Correct Answer: A

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Question 8

A government is considering a tax on a particular good. The tax will increase the price of the good by 10%. If the demand for the good is inelastic, what will happen to government revenue?

Correct A. Government revenue will increase

B. Government revenue will decrease

C. Government revenue will remain unchanged

D. Government revenue will increase, but at a decrea\sing rate

Correct Answer: A

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Question 9

A firm is facing a trade-off between \cost minimization and revenue maximization. If the firm's \cost function is C(q) = 2q^2 + 10q and the revenue function is R(q) = 3q^2 - 2q, what is the optimal quantity to produce?

A. q = 1

Correct B. q = 2

C. q = 3

D. q = 4

Correct Answer: B

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Question 10

A government is considering a policy to reduce inflation. If the current inflation rate is 5% and the government wants to reduce it to 2% within 2 years, what is the required annual rate of reduction?

A. 10%

B. 15%

Correct C. 20%

D. 25%

Correct Answer: C

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Question 11

A monopolistically competitive firm faces a demand curve given by Q = 100 - 2P. The firm's marginal revenue (MR) and marginal \cost (MC) curves are also given. If the firm is currently producing at a quantity of 60 units, what is the firm's current profit-maximizing price?

A. ₦80

B. ₦90

Correct C. ₦100

D. ₦110

Correct Answer: C

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Question 12

A country's balance of payments (BOP) accounts are given below. What is the country's net foreign exchange earnings?

A. ₦100m

Correct B. ₦200m

C. ₦300m

D. ₦400m

Correct Answer: B

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Question 13

A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \). If the firm's current labor and capital inputs are 16 and 9 units respectively, what is the firm's current output?

A. 32

B. 64

Correct C. 128

D. 256

Correct Answer: C

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Question 14

A country's budget is given below. What is the country's total exp\enditure?

A. ₦500m

B. ₦600m

Correct C. ₦700m

D. ₦800m

Correct Answer: C

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Question 15

A firm's \cost function is given by C = 2L + 3K. If the firm's current labor and capital inputs are 10 and 5 units respectively, what is the firm's current total \cost?

A. ₦50

B. ₦75

Correct C. ₦100

D. ₦125

Correct Answer: C

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Question 16

A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \), where L is labor and K is capital. If the firm's current labor and capital inputs are L = 4 and K = 9, respectively, what is the marginal product of labor?

Correct A. \( \frac{1}{2} \sqrt{\frac{K}{L}} \)

B. \( \sqrt{\frac{K}{L}} \)

C. \( \frac{1}{2} \sqrt{\frac{L}{K}} \)

D. \( \frac{K}{2L} \)

Correct Answer: A

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Question 17

A consumer's utility function is given by U = 2x + 3y, where x and y are the quantities of two goods consumed. If the consumer's budget constraint is 2x + 3y = 12, and the prices of the two goods are p_x = 2 and p_y = 3, respectively, what is the consumer's optimal bundle of goods?

Correct A. ( (x, y) = (3, 2) )

B. ( (x, y) = (2, 3) )

C. ( (x, y) = (4, 1) )

D. ( (x, y) = (1, 4) )

Correct Answer: A

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Question 18

A firm's demand function for a particular input is given by Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the firm's supply function is given by Q = 2P + 50, what is the equilibrium price and quantity?

Correct A. ( (P, Q) = (25, 50) )

B. ( (P, Q) = (50, 25) )

C. ( (P, Q) = (75, 25) )

D. ( (P, Q) = (25, 75) )

Correct Answer: A

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Question 19

A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \), where L is labor and K is capital. If the firm's current labor and capital inputs are L = 4 and K = 9, respectively, what is the marginal product of capital?

A. \( \frac{1}{2} \sqrt{\frac{L}{K}} \)

Correct B. \( \sqrt{\frac{K}{L}} \)

C. \( \frac{1}{2} \sqrt{\frac{K}{L}} \)

D. \( \frac{L}{2K} \)

Correct Answer: B

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Question 20

A consumer's utility function is given by U = 2x + 3y, where x and y are the quantities of two goods consumed. If the consumer's budget constraint is 2x + 3y = 12, and the prices of the two goods are p_x = 2 and p_y = 3, respectively, what is the consumer's optimal bundle of goods?

Correct A. ( (x, y) = (3, 2) )

B. ( (x, y) = (2, 3) )

C. ( (x, y) = (4, 1) )

D. ( (x, y) = (1, 4) )

Correct Answer: A

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Question 21

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current labor and capital inputs are L = 16 and K = 9, respectively, what is the marginal product of labor?

Correct A. 1/2

B. 1/4

C. 1/8

D. 1/16

Correct Answer: A

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Question 22

The demand for a product is given by Qd = 100 - 2P and the supply is given by Qs = 2P. If the equilibrium price is 20, what is the equilibrium quantity?

A. 40

Correct B. 60

C. 80

D. 100

Correct Answer: B

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Question 23

A country's GDP at market price is ₦1,500,000 and the implicit deflator is 1.2. What is the GDP at cons\tant price?

Correct A. ₦1,250,000

B. ₦1,500,000

C. ₦1,750,000

D. ₦2,000,000

Correct Answer: A

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Question 24

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current labor and capital inputs are L = 16 and K = 9, respectively, what is the marginal product of capital?

Correct A. 1/2

B. 1/4

C. 1/8

D. 1/16

Correct Answer: A

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Question 25

The government of a country is considering a policy to increase the money supply by 10%. What effect will this have on the price level?

Correct A. Increase

B. Decrease

C. No effect

D. Uncertain

Correct Answer: A

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