Practice Post UTME BOWEN UNIVERSITY economics 2022 Past Questions

Question 1

Consider a perfectly competitive market with n firms. If each firm increases its output by 10%, what is the expected change in the market supply curve?

A. The market supply curve shifts to the left.

Correct B. The market supply curve shifts to the right.

C. The market supply curve remains unchanged.

D. The market supply curve shifts upward.

Correct Answer: B

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Question 2

A monopolist faces a demand curve given by Q = 100 - 2P. The monopolist's marginal \cost is MC = 10. What is the monopolist's optimal price?

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 3

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, what is the consumer's optimal bundle?

Correct A. (2, 4)

B. (4, 2)

C. (6, 0)

D. (0, 6)

Correct Answer: A

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Question 4

Consider a linear demand curve given by Q = 100 - 2P. If the price elasticity of demand is 0.5, what is the price elasticity of supply?

A. 0.5

B. 1

C. 2

Correct D. -0.5

Correct Answer: D

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Question 5

A government is considering a policy to increase agricultural production in a developing country. Which of the following policies would be most effective in achieving this goal?

A. Subsidizing fertilizers

Correct B. Providing irrigation facilities

C. Increa\sing the minimum wage for farmers

D. Reducing the price of agricultural products

Correct Answer: B

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Question 6

A government plans to increase the minimum wage by 10% to combat poverty. However, this increase will lead to a 5% decrease in employment. U\sing the concept of opportunity \cost, what is the opportunity \cost of increa\sing the minimum wage?

Correct A. 5% decrease in employment

B. 10% increase in minimum wage

C. 5% increase in employment

D. 10% decrease in employment

Correct Answer: A

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Question 7

A firm's revenue function is given by R(x) = 2x^2 + 5x + 1, where x is the number of units produced. If the firm produces 5 units, what is the total revenue?

A. ₦125

B. ₦150

Correct C. ₦175

D. ₦200

Correct Answer: C

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Question 8

A consumer's utility function is given by U(x, y) = 2x + 3y, where x is the number of units of good X consumed and y is the number of units of good Y consumed. If the consumer's income is ₦100 and the prices of good X and good Y are ₦5 and ₦3 respectively, what is the consumer's optimal bundle?

A. x = 10, y = 20

Correct B. x = 15, y = 10

C. x = 20, y = 5

D. x = 5, y = 15

Correct Answer: B

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Question 9

A firm's production function is given by Q = 2L^0.5K^0.5, where Q is the quantity produced, L is the number of labor units, and K is the number of capital units. If the firm uses 4 labor units and 9 capital units, what is the quantity produced?

A. 8

B. 10

Correct C. 12

D. 15

Correct Answer: C

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Question 10

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 ₦1000, consumption is ₦300, investment is ₦200, government sp\ending is ₦150, exports are ₦250, and imports are ₦100, what is the value of X?

A. ₦400

B. ₦450

Correct C. ₦500

D. ₦550

Correct Answer: C

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Question 11

Consider a production possibility frontier (PPF) with two goods, X and Y. If the PPF shifts outward due to an increase in the availability of resources, what is the opportunity \cost of producing more of good X?

Correct A. The opportunity \cost of producing more of good X is the amount of good Y that must be sacrificed.

B. The opportunity \cost of producing more of good X is the amount of good X that must be sacrificed.

C. The opportunity \cost of producing more of good X is the amount of good Y that must be produced.

D. The opportunity \cost of producing more of good X is the amount of good X that must be produced.

Correct Answer: A

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Question 12

A firm is producing a good with a total revenue of ₦1,500 and a total \cost of ₦1,200. If the firm's profit is ₦300, what is the price elasticity of demand for the good?

Correct A. The price elasticity of demand is 0.5.

B. The price elasticity of demand is 1.

C. The price elasticity of demand is 2.

D. The price elasticity of demand is 3.

Correct Answer: A

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Question 13

A country's GDP is ₦10,000 billion, and its GNP is ₦11,000 billion. What is the net factor income from abroad?

A. ₦1,000 billion

Correct B. ₦1,500 billion

C. ₦2,000 billion

D. ₦2,500 billion

Correct Answer: B

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Question 14

A central bank is considering a monetary policy to reduce inflation. Which of the following instruments would be most effective in achieving this goal?

A. Increa\sing the reserve requirement

B. Increa\sing the discount rate

C. Open market sales

Correct D. Reducing the money supply

Correct Answer: D

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Question 15

A firm is considering a new investment project with a net present value (NPV) of ₦500 million. If the firm's \cost of capital is 10%, what is the internal rate of return (IRR) of the project?

A. 10%

Correct B. 12%

C. 15%

D. 18%

Correct Answer: B

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Question 16

The concept of opportunity \cost is closely related to the law of increa\sing opportunity \cost. Explain how the law of increa\sing opportunity \cost affects the production of a good with a fixed production techno\logy.

A. The law of increa\sing opportunity \cost leads to a decrease in the production of the good.

Correct B. The law of increa\sing opportunity \cost leads to an increase in the production of the good.

C. The law of increa\sing opportunity \cost has no effect on the production of the good.

D. The law of increa\sing opportunity \cost leads to a shift in the production possibility frontier.

Correct Answer: B

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Question 17

A government imposes a tax on a good to reduce its consumption. If the tax is not passed on to the consumer, what will happen to the price of the good?

Correct A. The price of the good will increase.

B. The price of the good will decrease.

C. The price of the good will remain the same.

D. The price of the good will fluctuate.

Correct Answer: A

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Question 18

A central bank uses monetary policy to reduce inflation. If the central bank increases the reserve requirement for commercial banks, what will happen to the money supply?

A. The money supply will increase.

Correct B. The money supply will decrease.

C. The money supply will remain the same.

D. The money supply will fluctuate.

Correct Answer: B

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Question 19

A farmer in Nigeria decides to cultivate a new crop. If the crop is more labor-intensive than the previous crop, what will happen to the opportunity \cost of labor?

Correct A. The opportunity \cost of labor will increase.

B. The opportunity \cost of labor will decrease.

C. The opportunity \cost of labor will remain the same.

D. The opportunity \cost of labor will fluctuate.

Correct Answer: A

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Question 20

A consumer has a budget constraint of ₦1000 and a utility function U(x, y) = 2x + 3y. If the prices of x and y are ₦5 and ₦10 respectively, what is the consumer's optimal consumption bundle?

A. x = 80, y = 100

Correct B. x = 100, y = 80

C. x = 120, y = 60

D. x = 60, y = 120

Correct Answer: B

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Question 21

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 significant increase in the \cost of production. U\sing the concept of opportunity \cost, explain why the government's policy may not be effective in increa\sing rice production.

A. The government's policy has led to a decrease in the opportunity \cost of producing rice, making it more attractive for farmers to produce rice.

Correct B. The government's policy has led to an increase in the opportunity \cost of producing rice, making it less attractive for farmers to produce rice.

C. The government's policy has no effect on the opportunity \cost of producing rice.

D. The government's policy has led to a decrease in the price of rice, making it more attractive for consumers to buy rice.

Correct Answer: B

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Question 22

A monopolistically competitive firm is producing a good with a demand curve that is downward sloping. If the firm increases its price, what will happen to its revenue?

A. The firm's revenue will increase.

Correct B. The firm's revenue will decrease.

C. The firm's revenue will remain the same.

D. The firm's revenue will increase in the short run but decrease in the long run.

Correct Answer: B

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Question 23

A firm is producing a good with a fixed \cost of ₦100,000 and a variable \cost of ₦50 per unit. If the firm sells 1,000 units of the good, what will be its total revenue?

A. ₦500,000

Correct B. ₦550,000

C. ₦600,000

D. ₦650,000

Correct Answer: B

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Question 24

A country is experiencing a recession, and the government has implemented a fiscal policy to stimulate economic growth. If the government increases its sp\ending by ₦10 billion, what will happen to the aggregate demand?

A. The aggregate demand will decrease.

Correct B. The aggregate demand will increase.

C. The aggregate demand will remain the same.

D. The aggregate demand will increase in the short run but decrease in the long run.

Correct Answer: B

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Question 25

A firm is producing a good with a demand curve that is perfectly inelastic. If the firm increases its price, what will happen to its revenue?

Correct A. The firm's revenue will increase.

B. The firm's revenue will decrease.

C. The firm's revenue will remain the same.

D. The firm's revenue will increase in the short run but decrease in the long run.

Correct Answer: A

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