POST UTME CALEB UNIVERSITY 2020 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 2020 Economics (Objective) questions designed to simulate the real exam environment.

Practice these randomly selected questions to test your readiness.

Question 1
Consider a country with a balance of payments deficit. Which of the following would be a consequence of this deficit?
A. Increased foreign investment
B. Decreased domestic consumption
C. Reduced exchange rate
Correct D. Increased trade deficit

Correct Answer: D

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Question 2
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current inputs are L = 4 and K = 9, what is the marginal product of labor?
A. 1
Correct B. 2
C. 3
D. 4

Correct Answer: B

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Question 3
A consumer's indifference curve is given by U = 2x + 3y. If the consumer's current consumption bundle is (x, y) = (2, 3), what is the marginal rate of substitution?
A. 1
Correct B. 2
C. 3
D. 4

Correct Answer: B

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Question 4
A country's GDP is given by GNP - \( imports - exports \). If the country's GNP is ₦1000, imports are ₦200, and exports are ₦300, what is the country's GDP?
A. ₦800
B. ₦900
Correct C. ₦1000
D. ₦1100

Correct Answer: C

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Question 5
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current inputs are L = 4 and K = 9, what is the total product of labor?
A. 8
B. 10
Correct C. 12
D. 14

Correct Answer: C

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Question 6
Consider a production function with cons\tant returns to scale. If the output increases by 20% when the input increases by 15%, what is the value of the elasticity of output with respect to input?
A. 0.5
Correct B. 1.0
C. 1.5
D. 2.0

Correct Answer: B

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Question 7
A government imposes a tax on a firm's output. The firm's supply curve shifts to the left. What is the effect on the equilibrium price?
A. Increase
Correct B. Decrease
C. No change
D. Indeterminate

Correct Answer: B

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Question 8
A central bank increases the reserve requirement for commercial banks. What is the effect on the money supply?
A. Increase
Correct B. Decrease
C. No change
D. Indeterminate

Correct Answer: B

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Question 9
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's labor input increases by 20% and the capital input remains cons\tant, what is the percentage change in output?
A. 10%
Correct B. 20%
C. 30%
D. 40%

Correct Answer: B

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Question 10
A government imposes a tax on a firm's input. The firm's supply curve shifts to the right. What is the effect on the equilibrium price?
Correct A. Increase
B. Decrease
C. No change
D. Indeterminate

Correct Answer: A

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Question 11
A monopolistically competitive firm faces a demand curve with a cons\tant elasticity of -2. If the firm increases its price by 10%, what is the percentage change in quantity demanded?
Correct A. 20%
B. 15%
C. 10%
D. 5%

Correct Answer: A

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Question 12
A country's balance of payments account shows a trade deficit of $100 million and a capital account surplus of $50 million. What is the overall balance of payments position?
A. Trade deficit of $50 million
B. Trade surplus of $50 million
C. Capital account surplus of $50 million
Correct D. Overall balance of payments deficit of $50 million

Correct Answer: D

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Question 13
A firm's production function is given by Q = 100L^0.5K^0.5. If the firm increases its labor input by 20% and holds capital input cons\tant, what is the percentage change in output?
A. 10%
B. 15%
Correct C. 20%
D. 25%

Correct Answer: C

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Question 14
A government imposes a tax on a firm's output. The firm's supply curve shifts to the left, and the new supply curve is given by Q = 100 - 2P. What is the new equilibrium price?
A. ₦50
B. ₦75
C. ₦100
Correct D. ₦125

Correct Answer: D

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Question 15
A country's money supply is given by M = 1000 + 0.5Y. If the country's GDP is $100 billion, what is the money supply?
A. ₦500 billion
B. ₦750 billion
C. ₦1000 billion
Correct D. ₦1250 billion

Correct Answer: D

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Question 16
A firm's production function is given by Q = 100L^0.5K^0.5, where Q is output, L is labor, and K is capital. If the firm's labor and capital are increased by 20% and 15% respectively, what is the percentage change in output?
A. 10%
B. 12%
Correct C. 15%
D. 18%

Correct Answer: C

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Question 17
A government imposes a tax on a firm's output. If the firm's supply curve shifts from S1 to S2, what is the effect on the equilibrium price and quantity?
A. Price increases and quantity decreases
B. Price decreases and quantity increases
C. Price increases and quantity increases
Correct D. Price decreases and quantity decreases

Correct Answer: D

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Question 18
A consumer's budget constraint is given by 2x + 3y = 12, where x is the quantity of good X and y is the quantity of good Y. If the consumer's income increases by 20%, what is the new budget constraint?
A. 4x + 6y = 24
B. 6x + 9y = 36
Correct C. 8x + 12y = 48
D. 10x + 15y = 60

Correct Answer: C

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Question 19
A firm's production function is given by Q = 100L^0.5K^0.5, where Q is output, L is labor, and K is capital. If the firm's labor and capital are increased by 20% and 15% respectively, what is the new production function?
A. Q = 120L^0.5K^0.5
B. Q = 125L^0.5K^0.5
Correct C. Q = 130L^0.5K^0.5
D. Q = 135L^0.5K^0.5

Correct Answer: C

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Question 20
A government imposes a tax on a firm's output. If the firm's supply curve shifts from S1 to S2, what is the effect on the equilibrium price and quantity?
A. Price increases and quantity decreases
B. Price decreases and quantity increases
C. Price increases and quantity increases
Correct D. Price decreases and quantity decreases

Correct Answer: D

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Question 21
Consider a small open economy with a trade balance of -$100 million and a current account deficit of -$150 million. What is the likely effect on the exchange rate?
A. The exchange rate will appreciate.
Correct B. The exchange rate will depreciate.
C. The exchange rate will remain unchanged.
D. The exchange rate will fluctuate.

Correct Answer: B

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Question 22
A consumer has a utility function U(x,y) = 2x + 3y, where x and y are the quantities of two goods. If the prices of the goods are P_x = 4 and P_y = 6, respectively, what is the consumer's optimal bundle?
A. (x,y) = (2,1)
Correct B. (x,y) = (3,2)
C. (x,y) = (4,3)
D. (x,y) = (5,4)

Correct Answer: B

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Question 23
A firm has a \cost function C(q) = 10q + 20, where q is the quantity produced. If the firm's revenue function is R(q) = 20q, what is the firm's profit-maximizing quantity?
A. q = 2
Correct B. q = 3
C. q = 4
D. q = 5

Correct Answer: B

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Question 24
A perfectly competitive market has a demand function P = 100 - 2Q and a supply function P = 20 + Q. What is the equilibrium price and quantity?
A. P = 60, Q = 20
Correct B. P = 70, Q = 30
C. P = 80, Q = 40
D. P = 90, Q = 50

Correct Answer: B

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Question 25
A monopolist has a demand function P = 100 - Q and a marginal \cost function MC(q) = 20. What is the monopolist's profit-maximizing quantity?
A. q = 10
Correct B. q = 20
C. q = 30
D. q = 40

Correct Answer: B

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