POST UTME CALEB UNIVERSITY 2018 Economics | Objective

Are you preparing for POST UTME CALEB UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2018 Economics (Objective) questions designed to simulate the real exam environment.

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Question 1
In a perfectly competitive market, the equilibrium price and quantity are determined by the intersection of the market demand and supply curves. If the demand curve shifts to the left, what will happen to the equilibrium price and quantity?
Correct A. The equilibrium price will increase, and the equilibrium quantity will decrease.
B. The equilibrium price will decrease, and the equilibrium quantity will increase.
C. The equilibrium price will remain the same, and the equilibrium quantity will decrease.
D. The equilibrium price will increase, and the equilibrium quantity will increase.

Correct Answer: A

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Question 2
A firm's total revenue (TR) is given by the equation TR = P × Q, where P is the price per unit and Q is the quantity sold. If the price per unit increases by 10% and the quantity sold increases by 20%, what is the percentage change in total revenue?
A. 10%
B. 20%
Correct C. 30%
D. 40%

Correct Answer: C

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Question 3
A country's GDP is $100 billion, and its GNP is $120 billion. What is the net factor income from abroad?
A. $10 billion
Correct B. $20 billion
C. $30 billion
D. $40 billion

Correct Answer: B

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Question 4
A firm's \cost function is given by C(Q) = 2Q^2 + 10Q + 100. If the firm produces 20 units, what is the total \cost?
A. $1,300
B. $1,400
Correct C. $1,500
D. $1,600

Correct Answer: C

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Question 5
A country's balance of payments account shows a trade deficit of $10 billion and a capital account surplus of $20 billion. What is the overall balance of payments position?
A. $10 billion deficit
Correct B. $20 billion surplus
C. $30 billion deficit
D. $40 billion surplus

Correct Answer: B

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Question 6
A firm's demand curve for a product is given by Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the price elasticity of demand is -2, what is the percentage change in quantity demanded when the price increases by 10%?
Correct A. -20%
B. -10%
C. 0%
D. 20%

Correct Answer: A

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Question 7
A country's government is considering impo\sing a tax on a particular good. The supply curve for the good is given by Qs = 100 + 2P, where Qs is the quantity supplied and P is the price. If the government imposes a tax of ₦50 per unit, what is the new supply curve?
Correct A. Qs = 100 + 2P - 50
B. Qs = 100 + 2P + 50
C. Qs = 100 - 2P + 50
D. Qs = 100 - 2P - 50

Correct Answer: A

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Question 8
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 given by 2x + 3y = ₦100, what is the consumer's optimal bundle of goods?
Correct A. x = 20, y = 10
B. x = 10, y = 20
C. x = 15, y = 15
D. x = 25, y = 5

Correct Answer: A

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Question 9
A firm's \cost function is given by C = 100 + 2Q + 0.01Q^2, where C is the total \cost and Q is the quantity produced. If the firm produces 100 units, what is the total \cost?
A. ₦1200
B. ₦1300
Correct C. ₦1400
D. ₦1500

Correct Answer: C

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Question 10
A country's government is considering impo\sing a tax on a particular good. The demand curve for the good is given by Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the government imposes a tax of ₦50 per unit, what is the new demand curve?
Correct A. Qd = 100 - 2P - 50
B. Qd = 100 - 2P + 50
C. Qd = 100 + 2P - 50
D. Qd = 100 + 2P + 50

Correct Answer: A

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Question 11
A consumer's indifference curve is downward sloping. What does this imply about the consumer's preferences?
A. The consumer is risk-averse.
B. The consumer is risk-neutral.
Correct C. The consumer prefers more of good X to less of good X.
D. The consumer prefers more of good Y to less of good Y.

Correct Answer: C

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Question 12
A firm's production function is given by Q = 2L^0.5K^0.5. What is the return to scale of this production function?
A. Increa\sing returns to scale
B. Decrea\sing returns to scale
Correct C. Cons\tant returns to scale
D. No returns to scale

Correct Answer: C

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Question 13
A country's GDP is ₦100 billion, its imports are ₦20 billion, and its exports are ₦15 billion. What is its balance of trade?
A. ₦5 billion surplus
Correct B. ₦5 billion deficit
C. ₦10 billion surplus
D. ₦10 billion deficit

Correct Answer: B

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Question 14
A consumer's budget constraint is given by 2X + 3Y = 12. What is the opportunity \cost of good X in terms of good Y?
A. 2Y
Correct B. 3Y
C. 4Y
D. 6Y

Correct Answer: B

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Question 15
A firm's production function is given by Q = 3L^0.5K^0.5. What is the marginal product of labor?
Correct A. \( 3/2 \)L^\( -0.5 \)K^0.5
B. \( 3/2 \)L^0.5K^\( -0.5 \)
C. \( 3/2 \)L^0.5K^0.5
D. \( 3/2 \)L^\( -0.5 \)K^\( -0.5 \)

Correct Answer: A

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Question 16
The Nigerian government has implemented policies to promote agricultural development. Which of the following is a likely consequence of these policies?
Correct A. Increased food production
B. Reduced food prices
C. Increased agricultural exports
D. Decreased agricultural employment

Correct Answer: A

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Question 17
A firm produces two goods, X and Y, u\sing two inputs, labor and capital. The production function for good X is given by Q_X = 2L^0.5K^0.5, where Q_X is the quantity of good X produced, L is the amount of labor used, and K is the amount of capital used. If the firm uses 4 units of labor and 9 units of capital, how many units of good X will it produce?
A. 6
Correct B. 8
C. 10
D. 12

Correct Answer: B

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Question 18
The balance of payments (BOP) accounts for a country are divided into three main components: the current account, the capital account, and the financial account. Which of the following is a characteristic of the current account?
Correct A. It records transactions in goods and services
B. It records transactions in capital and financial assets
C. It records transactions in the production of goods and services
D. It records transactions in the distribution of goods and services

Correct Answer: A

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Question 19
A consumer has a budget constraint of $100 and a preference for two goods, X and Y. The prices of the two goods are $5 and $10, respectively. If the consumer sp\ends all of their budget on good X, how many units of good Y will they be able to purchase?
A. 0
Correct B. 2
C. 4
D. 6

Correct Answer: B

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Question 20
The Gross Domestic Product (GDP) of a country is $100 billion. The Gross National Product (GNP) is $120 billion. What is the net factor income from abroad?
A. $10 billion
Correct B. $20 billion
C. $30 billion
D. $40 billion

Correct Answer: B

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Question 21
Suppose a monopolist faces a downward-sloping demand curve and an upward-sloping supply curve. If the monopolist increases the price of the product, what will happen to the quantity demanded and the quantity supplied?
A. Quantity demanded increases, quantity supplied increases
Correct B. Quantity demanded decreases, quantity supplied decreases
C. Quantity demanded decreases, quantity supplied increases
D. Quantity demanded increases, quantity supplied decreases

Correct Answer: B

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Question 22
A consumer's indifference curve is steeper than another consumer's indifference curve. What can be concluded about the two consumers?
A. The first consumer is more risk-averse
B. The first consumer is more risk-loving
C. The first consumer has a higher marginal rate of substitution
Correct D. The first consumer has a lower marginal rate of substitution

Correct Answer: D

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Question 23
A firm is producing a good with a cons\tant marginal \cost and a downward-sloping marginal revenue curve. If the firm increases the price of the good, what will happen to the quantity produced?
A. Quantity produced increases
Correct B. Quantity produced decreases
C. Quantity produced remains the same
D. Quantity produced increases, then decreases

Correct Answer: B

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Question 24
A country's GDP is increa\sing, but its GNP is decrea\sing. What can be concluded about the country's economy?
Correct A. The country is experiencing a recession
B. The country is experiencing a depression
C. The country is experiencing a period of high inflation
D. The country is experiencing a period of low inflation

Correct Answer: A

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Question 25
A central bank increases the reserve requirement for commercial banks. What will happen to the money supply?
A. Money supply increases
Correct B. Money supply decreases
C. Money supply remains the same
D. Money supply increases, then decreases

Correct Answer: B

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