POST UTME CALEB UNIVERSITY 2023 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A firm's \cost function is given by \( TC = 2L + 3K \). If the firm's output is 100 units and the price of labor is ₦20 per unit and the price of capital is ₦30 per unit, what is the optimal combination of labor and capital that the firm will choose?
A. (20, 10)
B. (15, 12)
C. (25, 8)
D. (18, 11)
Question 2
A firm is a pure monopolist with a demand function given by Q = 100 - 2P. If the firm's marginal \cost is $10, what would be the optimal price and quantity?
A. P = $20, Q = 40
B. P = $30, Q = 60
C. P = $40, Q = 80
D. P = $50, Q = 100
Question 3
A firm is producing a good with a cons\tant returns to scale production function. If the price of the good increases by 10%, what would be the effect on the firm's output?
A. The output would increase by 10%.
B. The output would decrease by 10%.
C. The output would remain unchanged.
D. The output would increase by 20%.
Question 4
A firm's demand function is given by the equation Q = 100 - 2P. If the firm's supply function is Q = 50 + 3P, what is the equilibrium price and quantity?
A. P^* = 16.67, Q^* = 25
B. P^* = 20, Q^* = 30
C. P^* = 15, Q^* = 20
D. P^* = 18.33, Q^* = 22.67
Question 5
A country's GDP is given by the equation GDP = C + I + G + \( X - M \). If the country's consumption function is C = 100 + 0.8Y, its investment function is I = 50 + 0.2Y, its government sp\ending is G = 200, its exports are X = 500, and its imports are M = 300, what is the country's GDP?
A. GDP = 1200
B. GDP = 1500
C. GDP = 1800
D. GDP = 2000
Question 6
A country's balance of payments is given by the equation BOP = X - M + \( F - I \). If the country's exports are X = 1000, its imports are M = 800, its foreign direct investment is F = 200, and its foreign investment income is I = 50, what is the country's balance of payments?
A. BOP = 350
B. BOP = 400
C. BOP = 450
D. BOP = 500
Question 7
A consumer's 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 consumer's income increases by 20%, determine the new demand equation.
A. Qd = 120 - 2P
B. Qd = 100 - 1.2P
C. Qd = 80 - 2P
D. Qd = 120 - 1.2P
Question 8
Consider a country with a GDP of ₦10 trillion and a population of 200 million. If the average annual income is ₦50,000, what is the GDP per capita?
A. ₦50,000
B. ₦200,000
C. ₦500,000
D. ₦1,000,000
Question 9
Consider a country with a large trade deficit. If the country's exchange rate is fixed, what would be the effect on the balance of payments?
A. The trade deficit would increase due to a decrease in exports.
B. The trade deficit would decrease due to an increase in imports.
C. The trade deficit would remain unchanged due to a balance in exports and imports.
D. The trade deficit would increase due to a decrease in imports.
Question 10
The Central Bank of Nigeria (CBN) uses the monetary policy instrument of reserve requirement to control the money supply in the economy. If the CBN increases the reserve requirement ratio from 10% to 15%, what will be the effect on the money multiplier?
A. The money multiplier will increase
B. The money multiplier will decrease
C. The money multiplier will remain unchanged
D. The money multiplier will increase by 50%
Question 11
A firm is considering two investment projects. Project A has a net present value (NPV) of ₦100,000 and a payback period of 5 years. Project B has an NPV of ₦120,000 and a payback period of 4 years. Which project should the firm choose?
A. Project A
B. Project B
C. Both projects are equally attractive
D. Neither project is attractive
Question 12
A firm is considering investing in a new project that has a net present value (NPV) of ₦50,000. The firm's \cost of capital is 10%. What is the internal rate of return (IRR) of the project?
A. 5%
B. 10%
C. 15%
D. 20%
Question 13
A consumer is faced with the following utility function: U(x,y) = 2x + 3y. If the prices of x and y are $2 and $3 respectively, and the consumer's income is $10, what would be the optimal consumption bundle?
A. (2,3)
B. (3,2)
C. (4,1)
D. (1,4)
Question 14
A firm is considering two different production processes to produce a product. The first process has a fixed \cost of ₦100,000 and a variable \cost of ₦50 per unit. The second process has a fixed \cost of ₦150,000 and a variable \cost of ₦30 per unit. If the selling price of the product is ₦80 per unit, determine the profit-maximizing quantity for each process.
A. Process 1: 2000 units, Process 2: 3000 units
B. Process 1: 3000 units, Process 2: 2000 units
C. Process 1: 4000 units, Process 2: 4000 units
D. Process 1: 5000 units, Process 2: 5000 units
Question 15
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 ₦5 and ₦3 respectively, what is the optimal bundle of x and y that the consumer will choose?
A. (100, 50)
B. (80, 60)
C. (120, 40)
D. (90, 55)

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