POST UTME CHRISTOPHER UNIVERSITY 2017 Economics | Objective

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Question 1
Consider a closed economy with a \single good, labor, and capital. If the production function is given by Q = 2L^0.5K^0.5, where Q is output, L is labor, and K is capital, and the price of the good is P = 10, calculate the value of the marginal product of labor (MPL) when L = 4 and K = 16.
Correct A. 8
B. 16
C. 32
D. 64

Correct Answer: A

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Question 2
A firm's \cost function is given by C = 100 + 2Q + 0.5Q^2, where C is total \cost and Q is output. If the firm produces 20 units of output, what is the total \cost?
A. 250
B. 300
Correct C. 350
D. 400

Correct Answer: C

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Question 3
A country's GDP is given by the equation GDP = C + I + G + \( X - M \), where C is consumption, I is investment, G is government sp\ending, X is exports, and M is imports. If the country's GDP is $100 billion, consumption is $50 billion, investment is $20 billion, government sp\ending is $30 billion, exports are $40 billion, and imports are $20 billion, what is the value of the marginal propensity to consume (MPC)?
A. 0.2
Correct B. 0.3
C. 0.4
D. 0.5

Correct Answer: B

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Question 4
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 (MR) function is given by MR = 200 - 2Q, what is the value of the elasticity of demand when Q = 20?
A. 2
Correct B. 4
C. 6
D. 8

Correct Answer: B

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Question 5
A country's inflation rate is given by the equation π = \( P - P^* \) / P^*, where π is inflation rate, P is current price level, and P^* is equilibrium price level. If the current price level is $100, the equilibrium price level is $90, and the inflation rate is 10%, what is the value of the price level one year ago?
A. 80
B. 90
C. 100
Correct D. 110

Correct Answer: D

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Question 6
Consider a firm operating in a perfectly competitive market with a production function Q = 2L^0.5K^0.5. If the firm's current input prices are w = ₦100 and r = ₦200, and it currently employs 4 units of labor and 9 units of capital, calculate the firm's current total \cost.
A. ₦1,200
Correct B. ₦1,500
C. ₦1,800
D. ₦2,000

Correct Answer: B

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Question 7
A country's GDP is ₦100 billion, its imports are ₦20 billion, and its exports are ₦15 billion. Calculate the country's balance of trade.
A. ₦5 billion surplus
Correct B. ₦5 billion deficit
C. ₦10 billion surplus
D. ₦10 billion deficit

Correct Answer: B

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Question 8
A firm's demand function is given by Q = 100 - 2P. If the firm's current price is ₦50, calculate the firm's current quantity demanded.
A. 50 units
Correct B. 75 units
C. 100 units
D. 125 units

Correct Answer: B

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Question 9
A country's GNP is ₦120 billion, its GDP is ₦110 billion, and its net factor income from abroad is ₦5 billion. Calculate the country's national income.
A. ₦125 billion
B. ₦130 billion
Correct C. ₦135 billion
D. ₦140 billion

Correct Answer: C

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Question 10
A firm's production function is given by Q = 3L^0.5K^0.5. If the firm's current input prices are w = ₦150 and r = ₦300, and it currently employs 8 units of labor and 16 units of capital, calculate the firm's current total \cost.
A. ₦2,400
B. ₦2,800
Correct C. ₦3,200
D. ₦3,600

Correct Answer: C

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Question 11
The opportunity \cost of producing one more unit of a good is equal to the
A. marginal product of labor
B. marginal product of capital
C. marginal rate of technical substitution
Correct D. marginal rate of transformation

Correct Answer: D

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Question 12
The supply curve of a firm is upward-sloping because
A. the firm is a price-taker
B. the firm is a price-maker
Correct C. the firm's production \costs are increa\sing
D. the firm's production \costs are decrea\sing

Correct Answer: C

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Question 13
The opportunity \cost of producing one more unit of a good is equal to the
A. marginal product of labor
B. marginal product of capital
C. marginal rate of technical substitution
Correct D. marginal rate of transformation

Correct Answer: D

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Question 14
The supply curve of a firm is upward-sloping because
A. the firm is a price-taker
B. the firm is a price-maker
Correct C. the firm's production \costs are increa\sing
D. the firm's production \costs are decrea\sing

Correct Answer: C

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Question 15
The opportunity \cost of producing one more unit of a good is equal to the
A. marginal product of labor
B. marginal product of capital
C. marginal rate of technical substitution
Correct D. marginal rate of transformation

Correct Answer: D

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Question 16
A monopolist faces a demand curve given by Q = 100 - 2P and a \cost function C(Q) = 2Q^2 + 10Q. Find the profit-maximizing quantity and price, assuming the monopolist has no fixed \costs.
A. Q = 20, P = 40
B. Q = 30, P = 50
Correct C. Q = 40, P = 60
D. Q = 50, P = 70

Correct Answer: C

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Question 17
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current input prices are w_L = 10 and w_K = 20, and the firm wants to maximize its profit, what is the optimal input combination?
A. L = 100, K = 400
Correct B. L = 200, K = 200
C. L = 400, K = 100
D. L = 50, K = 500

Correct Answer: B

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Question 18
A government imposes a tax of ₦10 per unit on a firm's output. If the firm's supply function is given by Q = 100 - 2P and the tax is passed on to consumers, what is the new equilibrium price and quantity?
Correct A. P = 30, Q = 40
B. P = 40, Q = 30
C. P = 50, Q = 20
D. P = 20, Q = 50

Correct Answer: A

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Question 19
A firm's demand function is given by Q = 100 - 2P and its \cost function is C(Q) = 2Q^2 + 10Q. If the firm's current price is P = 20, what is the elasticity of demand?
A. 0.5
Correct B. 1
C. 2
D. 3

Correct Answer: B

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Question 20
A country's GDP is given by GNP - \( imports - exports \). If the country's GNP is ₦100 billion, imports are ₦20 billion, and exports are ₦15 billion, what is the country's GDP?
Correct A. ₦85 billion
B. ₦90 billion
C. ₦95 billion
D. ₦100 billion

Correct Answer: A

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Question 21
The government of a country imposes a tax on imported goods to raise revenue. The tax is levied at the rate of 10% on the value of the goods. If the value of the goods is ₦100,000, what is the amount of tax paid?
Correct A. ₦10,000
B. ₦20,000
C. ₦30,000
D. ₦40,000

Correct Answer: A

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Question 22
A firm's demand function is given by Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the price is ₦50, what is the quantity demanded?
A. 50
B. 75
Correct C. 100
D. 125

Correct Answer: C

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Question 23
A country's GDP is ₦500 billion, its imports are ₦100 billion, and its exports are ₦150 billion. What is its balance of trade?
Correct A. ₦50 billion
B. ₦100 billion
C. ₦150 billion
D. ₦200 billion

Correct Answer: A

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Question 24
A central bank increases the money supply by buying government bonds from commercial banks. What is the effect on the money supply?
A. Decrease
Correct B. Increase
C. No change
D. Dep\end on the interest rate

Correct Answer: B

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Question 25
A firm's supply function is given by Q = 2P - 50, where Q is the quantity supplied and P is the price. If the price is ₦25, what is the quantity supplied?
A. 25
Correct B. 50
C. 75
D. 100

Correct Answer: B

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