POST UTME CALEB UNIVERSITY 2025 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A firm's demand function is given by Q = 100 - 2P. If the firm's marginal \cost is ₦10 per unit, what is the optimal price that maximizes the firm's profit?
A. ₦20
B. ₦30
C. ₦40
D. ₦50
Question 2
A monopolist faces a demand curve given by Q = 100 - 2P and has a cons\tant marginal \cost of ₦50 per unit. If the firm produces 50 units, what is the profit-maximizing price?
A. ₦75
B. ₦80
C. ₦85
D. ₦90
Question 3
A firm's production function is given by Q = 2L^0.5 * K^0.5, where Q is output, L is labor, and K is capital. If the firm's labor and capital inputs are increased by 20% and 15% respectively, what is the percentage change in output?
A. 10%
B. 12%
C. 15%
D. 18%
Question 4
A firm's \cost function is given by C(q) = 3q^2 + 10q. If the market price is P = 30, what is the profit-maximizing quantity of output?
A. 10
B. 20
C. 30
D. 40
Question 5
A firm's production function is given by Q = 2L^0.5 * K^0.5, where Q is output, L is labor, and K is capital. If the firm's labor and capital inputs are increased by 20% and 15% respectively, what is the percentage change in output?
A. 10%
B. 12%
C. 15%
D. 18%
Question 6
A firm's supply function is given by Q = 50 + 2P. If the price elasticity of supply is 2, what is the price at which the quantity supplied is 120?
A. ₦30
B. ₦40
C. ₦50
D. ₦60
Question 7
A firm's production function is given by the equation Q = 2L^0.5K^0.5, where Q is the output, L is the labor, and K is the capital. If the firm's \cost function is given by the equation C = 100L + 200K, what is the firm's profit-maximizing level of labor (L) and capital (K)?
A. L = 100, K = 100
B. L = 200, K = 200
C. L = 400, K = 400
D. L = 800, K = 800
Question 8
The Nigerian government has introduced a new policy to increase agricultural production. The policy includes providing subsidies to farmers, improving irrigation systems, and increa\sing the use of fertilizers. However, some critics argue that the policy will lead to an increase in food prices, which will negatively affect the poor. U\sing the concept of supply and demand, explain why the critics' argument may be valid.
A. The policy will lead to an increase in food prices because the demand for food is inelastic, meaning that people will continue to buy food even if the price increases.
B. The policy will lead to an increase in food prices because the supply of food will increase, but the demand for food will not increase proportionally.
C. The policy will lead to an increase in food prices because the government's subsidies will increase the \cost of production, which will be passed on to consumers.
D. The policy will lead to an increase in food prices because the policy will lead to a decrease in the supply of food, which will cause prices to rise.
Question 9
A firm operating in a perfectly competitive market has a \cost function given by C(q) = 2q^2 + 10q. If the market price is P = 30, what is the profit-maximizing quantity of output?
A. 10
B. 20
C. 30
D. 40
Question 10
A firm is producing a good with the following production function: Q = 2L^0.5K^0.5. Find the returns to scale of the firm.
A. Increa\sing returns to scale
B. Decrea\sing returns to scale
C. Cons\tant returns to scale
D. No returns to scale
Question 11
A consumer has a budget of ₦1000 and faces the following prices for two goods: Good X \costs ₦200 per unit and Good Y \costs ₦300 per unit. If the consumer sp\ends all of their budget on the two goods, what is the opportunity \cost of buying one more unit of Good X?
A. ₦100
B. ₦200
C. ₦300
D. ₦400
Question 12
Determine the price elasticity of demand for a product whose price elasticity of supply is 0.5 and the cross-price elasticity of demand is 0.8.
A. 0.2
B. 0.5
C. 0.8
D. 1.2
Question 13
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 income is ₦1000 and the prices of the two goods are ₦50 and ₦75 respectively, what is the consumer's optimal bundle of goods?
A. x = 10, y = 20
B. x = 15, y = 15
C. x = 20, y = 10
D. x = 25, y = 5
Question 14
A firm's demand function is given by Q = 100 - 2P. If the price elasticity of demand is 0.5, what is the price at which the quantity demanded is 80?
A. ₦20
B. ₦30
C. ₦40
D. ₦50
Question 15
A firm's revenue function is given by R(q) = 20q^2 - 10q. If the firm's fixed \cost is ₦500, what is the total \cost of producing 50 units?
A. ₦1250
B. ₦1500
C. ₦1750
D. ₦2000

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