POST UTME CHRISTOPHER UNIVERSITY 2017 Commerce | Objective

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Question 1
A firm's profit-maximizing output is determined by the intersection of its marginal revenue (MR) and marginal cost (MC) curves. What is the shape of the MR curve when the firm is operating in the perfectly competitive market?
A. Linear
Correct B. U-shaped
C. Constant
D. Increasing

Correct Answer: B

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Question 2
A consumer's indifference curve is downward sloping and convex to the origin. What is the implication of this shape on the consumer's willingness to substitute one good for another?
Correct A. The consumer is willing to substitute one good for another at a decreasing rate
B. The consumer is willing to substitute one good for another at an increasing rate
C. The consumer is indifferent to substituting one good for another
D. The consumer is unwilling to substitute one good for another

Correct Answer: A

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Question 3
A firm's production function is given by Q = 2L^0.5K^0.5. What is the marginal product of labor (MPL) when L = 4 and K = 9?
A. 1
Correct B. 2
C. 3
D. 4

Correct Answer: B

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Question 4
A consumer's budget constraint is given by P1X1 + P2X2 = I. What is the consumer's optimal bundle of goods (X1, X2) when P1 = 10, P2 = 20, and I = 200?
Correct A. (10, 10)
B. (20, 10)
C. (10, 20)
D. (20, 20)

Correct Answer: A

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Question 5
A firm's demand curve is given by Q = 100 - 2P. What is the firm's elasticity of demand when P = 20?
Correct A. Inelastic
B. Unit elastic
C. Elastic
D. Perfectly elastic

Correct Answer: A

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Question 6
A firm specializes in producing a single product, which is a combination of two inputs, labour and capital. If the production function is given by Q = 2L^(1/2)K^(1/2), where Q is the quantity produced, L is the units of labour, and K is the units of capital, what is the marginal product of labour (MPL) when L = 16 and K = 9?
Correct A. 2
B. 4
C. 6
D. 8

Correct Answer: A

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Question 7
A consumer has the following utility function: U = 2x + 3y, where x and y are the quantities of two goods consumed. If the prices of the two goods are 2 and 3 respectively, and the consumer's income is 12, what is the optimal bundle of goods that the consumer will purchase?
Correct A. (4, 2)
B. (6, 1)
C. (8, 0)
D. (0, 4)

Correct Answer: A

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Question 8
A firm has the following cost function: C = 2Q + 3Q^2, where Q is the quantity produced. If the firm's revenue function is given by R = 4Q - 2Q^2, what is the profit-maximizing quantity of output?
A. 2
Correct B. 4
C. 6
D. 8

Correct Answer: B

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Question 9
A consumer has the following indifference curve: U = 2x + 3y, where x and y are the quantities of two goods consumed. If the prices of the two goods are 2 and 3 respectively, and the consumer's income is 12, what is the optimal bundle of goods that the consumer will purchase?
Correct A. (4, 2)
B. (6, 1)
C. (8, 0)
D. (0, 4)

Correct Answer: A

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Question 10
A firm has the following production function: Q = 2L^(1/2)K^(1/2), where Q is the quantity produced, L is the units of labour, and K is the units of capital. If the firm's cost function is given by C = 2Q + 3Q^2, what is the profit-maximizing quantity of output?
A. 2
Correct B. 4
C. 6
D. 8

Correct Answer: B

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Question 11
The concept of 'Gresham's Law' in economics states that bad money drives out good money. Which of the following best describes the underlying principle of this phenomenon?
A. The law of supply and demand
B. The law of diminishing marginal utility
C. The law of comparative advantage
Correct D. The law of increasing opportunity cost

Correct Answer: D

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Question 12
A firm's production function is given by Q = 2L^0.5 + 3K^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 resulting percentage change in output?
A. 5%
Correct B. 10%
C. 15%
D. 20%

Correct Answer: B

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Question 13
A company's marketing strategy involves a 20% increase in advertising expenditure and a 15% decrease in sales promotion expenditure. What is the resulting percentage change in the company's total marketing expenditure?
A. -5%
B. -10%
Correct C. 0%
D. 5%

Correct Answer: C

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Question 14
A firm's revenue function is given by R = 100p^2, where R is revenue and p is price. If the firm's price is increased by 10%, what is the resulting percentage change in revenue?
A. 10%
Correct B. 20%
C. 30%
D. 40%

Correct Answer: B

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Question 15
A company's production function is given by Q = 2L^0.5 + 3K^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 resulting percentage change in output?
A. 5%
Correct B. 10%
C. 15%
D. 20%

Correct Answer: B

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Question 16
In a perfectly competitive market, the supply curve is horizontal and the demand curve is downward-sloping. What is the equilibrium price and quantity of a product in such a market?
A. ₦1500 and 100 units
Correct B. ₦1200 and 150 units
C. ₦1800 and 80 units
D. ₦2000 and 60 units

Correct Answer: B

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Question 17
A company has a total of ₦500,000 in its current assets, which consists of ₦200,000 in cash and ₦300,000 in accounts receivable. What is the company's accounts payable?
Correct A. ₦100,000
B. ₦150,000
C. ₦200,000
D. ₦250,000

Correct Answer: A

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Question 18
A firm's cost function is given by C(q) = 2q^2 + 10q + 100. What is the marginal cost when q = 5?
A. ₦20
Correct B. ₦30
C. ₦40
D. ₦50

Correct Answer: B

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Question 19
A company has a total of ₦1,000,000 in its total assets, which consists of ₦500,000 in cash and ₦500,000 in accounts receivable. What is the company's accounts payable?
A. ₦250,000
Correct B. ₦300,000
C. ₦350,000
D. ₦400,000

Correct Answer: B

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Question 20
A firm's revenue function is given by R(q) = 10q^2 + 20q + 100. What is the marginal revenue when q = 5?
A. ₦20
Correct B. ₦30
C. ₦40
D. ₦50

Correct Answer: B

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Question 21
A company's production function is given by Q = 100L^0.5K^0.5, where Q is the quantity produced, L is the labor input, and K is the capital input. If the company increases its labor input from 100 units to 121 units, and its capital input from 100 units to 121 units, by how many percentage points will its quantity produced increase?
A. 10%
Correct B. 20%
C. 30%
D. 40%

Correct Answer: B

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Question 22
A firm is considering two different investment projects. Project A has a 10% chance of yielding a return of ₦100,000 and an 80% chance of yielding a return of ₦50,000. Project B has a 20% chance of yielding a return of ₦120,000 and a 70% chance of yielding a return of ₦40,000. Which project has the higher expected return?
Correct A. Project A
B. Project B
C. Both projects have the same expected return
D. Neither project has a higher expected return

Correct Answer: A

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Question 23
A company's revenue function is given by R = 1000Q - 20Q^2, where R is the revenue and Q is the quantity sold. If the company sells 100 units, what is its revenue?
A. ₦80,000
B. ₦90,000
Correct C. ₦100,000
D. ₦110,000

Correct Answer: C

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Question 24
A firm is considering two different production processes. Process A requires an initial investment of ₦100,000 and generates a profit of ₦20,000 per unit produced. Process B requires an initial investment of ₦150,000 and generates a profit of ₦30,000 per unit produced. If the firm produces 100 units, which process has the higher total profit?
A. Process A
Correct B. Process B
C. Both processes have the same total profit
D. Neither process has a higher total profit

Correct Answer: B

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Question 25
A company's cost function is given by C = 1000 + 20Q, where C is the cost and Q is the quantity produced. If the company produces 100 units, what is its total cost?
A. ₦120,000
B. ₦130,000
Correct C. ₦140,000
D. ₦150,000

Correct Answer: C

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