Practice Post UTME CALEB UNIVERSITY economics 2019 Past Questions

Question 1

A firm's production function is given by Q = 2L^0.5H^0.5, where Q is output, L is labor, and H is capital. If the firm increases labor from 100 to 121 units, and capital from 100 to 121 units, by how much will output increase?

A. 10 units

B. 20 units

Correct C. 30 units

D. 40 units

Correct Answer: C

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Question 2

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

A. ₦1 trillion

Correct B. ₦2 trillion

C. ₦3 trillion

D. ₦4 trillion

Correct Answer: B

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Question 3

A firm's demand function is given by Q = 100 - 2P, where Q is quantity demanded and P is price. If the firm increases price from ₦10 to ₦15, by how much will quantity demanded decrease?

A. 10 units

Correct B. 20 units

C. 30 units

D. 40 units

Correct Answer: B

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Question 4

A country's balance of payments is given by the following table:\n| Category | Value |\n| --- | --- |\n| Exports | ₦5 trillion |\n| Imports | ₦6 trillion |\n| Net Factor Income | ₦1 trillion |\n| Net Transfer | ₦2 trillion |\nWhat is the country's balance of payments deficit?

A. ₦1 trillion

B. ₦2 trillion

Correct C. ₦3 trillion

D. ₦4 trillion

Correct Answer: C

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Question 5

A firm's production function is given by Q = 2L^0.5H^0.5, where Q is output, L is labor, and H is capital. If the firm increases labor from 100 to 121 units, and capital from 100 to 121 units, what is the marginal product of labor?

A. 1 unit

Correct B. 2 units

C. 3 units

D. 4 units

Correct Answer: B

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Question 6

Consider a firm operating in a perfectly competitive market. If the firm's average total \cost (ATC) curve intersects the average revenue (AR) curve at a point where the ATC is decrea\sing, what can be concluded about the firm's production level?

Correct A. The firm is producing at a level where it is minimizing its \costs.

B. The firm is producing at a level where it is maximizing its profits.

C. The firm is producing at a level where it is minimizing its \costs and maximizing its profits.

D. The firm is producing at a level where it is maximizing its \costs.

Correct Answer: A

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Question 7

A monopolistically competitive firm faces a demand curve that is downward sloping. If the firm increases its output, what happens to its price?

A. The price increases.

Correct B. The price decreases.

C. The price remains the same.

D. The price becomes perfectly inelastic.

Correct Answer: B

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Question 8

A consumer's indifference curve is represented by the equation ( u(x,y) = 2x + 3y ). If the consumer's income is ₦1000 and the prices of x and y are ₦2 and ₦3 respectively, what is the consumer's optimal bundle?

Correct A. (10, 5)

B. (15, 3)

C. (20, 2)

D. (25, 1)

Correct Answer: A

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Question 9

A firm's production function is given by \( Q = 2L^2 + 3K \). If the firm's output is 100 units and the wage rate is ₦10 per unit of labor, what is the firm's optimal level of capital?

A. 20 units

Correct B. 30 units

C. 40 units

D. 50 units

Correct Answer: B

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Question 10

A consumer's utility function is given by ( u(x,y) = xy ). If the consumer's income is ₦1000 and the prices of x and y are ₦2 and ₦3 respectively, what is the consumer's optimal bundle?

A. (10, 5)

Correct B. (15, 3)

C. (20, 2)

D. (25, 1)

Correct Answer: B

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Question 11

A firm's production function is given by Q = 100K^\( 1/2 \)L^\( 1/2 \), where Q is output, K is capital and L is labor. If the firm's capital and labor inputs are increased by 20% and 15% respectively, what is the percentage change in output?

A. 10%

Correct B. 12%

C. 15%

D. 18%

Correct Answer: B

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Question 12

A consumer's utility function is given by U = 2x + 3y, where x and y are the quantities of two goods. If the consumer's income is ₦1000 and the prices of the two goods are ₦5 and ₦3 respectively, what is the consumer's optimal bundle of goods?

A. x = 100, y = 200

Correct B. x = 150, y = 150

C. x = 200, y = 100

D. x = 250, y = 50

Correct Answer: B

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Question 13

A firm's demand function is given by Q = 100 - 2P, where Q is quantity demanded and P is price. If the firm's marginal revenue function is MR = 200 - 4Q, what is the firm's optimal price?

A. ₦20

B. ₦30

Correct C. ₦40

D. ₦50

Correct Answer: C

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Question 14

A government imposes a tax of ₦10 on a good that is currently priced at ₦20. If the demand for the good is given by Q = 100 - 2P, what is the new equilibrium price?

A. ₦15

B. ₦20

Correct C. ₦25

D. ₦30

Correct Answer: C

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Question 15

A firm's production function is given by Q = 100K^\( 1/2 \)L^\( 1/2 \), where Q is output, K is capital and L is labor. If the firm's capital and labor inputs are increased by 20% and 15% respectively, what is the percentage change in output?

A. 10%

Correct B. 12%

C. 15%

D. 18%

Correct Answer: B

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Question 16

The concept of scarcity in economics implies that the wants and needs of individuals are unlimited, while the resources available to satisfy these wants and needs are limited. Which of the following is a consequence of scarcity?

Correct A. Inefficient allocation of resources

B. Increased production

C. Decreased consumption

D. No impact on economic activity

Correct Answer: A

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Question 17

A country's balance of payments (BOP) accounts are used to record all economic transactions between residents and non-residents. Which of the following is a component of the BOP?

A. Current account

B. Capital account

C. Financial account

Correct D. All of the above

Correct Answer: D

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Question 18

The concept of opportunity \cost is closely related to the concept of scarcity. Which of the following is an example of opportunity \cost?

A. The \cost of producing a good or service

Correct B. The \cost of not producing a good or service

C. The \cost of importing a good or service

D. The \cost of exporting a good or service

Correct Answer: B

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Question 19

Agricultural development is a key component of economic development in many countries. Which of the following is a benefit of agricultural development?

A. Increased food security

B. Increased income for farmers

C. Increased employment opportunities

Correct D. All of the above

Correct Answer: D

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Question 20

The concept of elasticity of demand is used to measure the responsiveness of the quantity demanded of a good or service to changes in its price. Which of the following is a type of elasticity of demand?

A. Price elasticity of demand

B. Income elasticity of demand

C. Cross-price elasticity of demand

Correct D. All of the above

Correct Answer: D

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Question 21

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

Correct C. ₦40

D. ₦50

Correct Answer: C

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Question 22

A firm produces two goods, X and Y, u\sing two inputs, labor (L) and capital (K). The production functions are given by X = 2L + 3K and Y = 4L + 2K. If the firm has 10 units of labor and 5 units of capital, what is the total output?

A. 20

B. 30

Correct C. 40

D. 50

Correct Answer: C

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Question 23

The government of a country imposes a tax on a good, which increases its price by 20%. If the demand for the good is given by the equation Qd = 100 - 2P, what is the new demand equation?

A. Qd = 80 - 2.4P

Correct B. Qd = 100 - 2.4P

C. Qd = 120 - 2P

D. Qd = 80 - 2P

Correct Answer: B

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Question 24

A firm is considering two investment projects, A and B. Project A has a net present value (NPV) of ₦100,000 and a payback period of 2 years. Project B has an NPV of ₦120,000 and a payback period of 3 years. Which project should the firm choose?

A. Project A

Correct B. Project B

C. Both projects are equally good

D. Neither project is good

Correct Answer: B

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Question 25

The government of a country is considering a policy to reduce poverty. The policy involves providing a subsidy to a certain group of people. If the subsidy is ₦10,000 per person and the number of people in the group is 10,000, what is the total \cost of the policy?

Correct A. ₦100,000,000

B. ₦50,000,000

C. ₦20,000,000

D. ₦10,000,000

Correct Answer: A

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