Practice Post UTME CHRISTOPHER UNIVERSITY economics 2018 Past Questions

Question 1

Consider a country with a mixed economy, where the government plays a significant role in the production and distribution of goods and services. U\sing the concept of opportunity \cost, explain why the government might impose a tax on a particular industry.

A. The tax is imposed to reduce the opportunity \cost of producing goods and services in the industry.

B. The tax is imposed to increase the opportunity \cost of producing goods and services in the industry.

Correct C. The tax is imposed to redistribute income from the industry to other sectors of the economy.

D. The tax is imposed to reduce the overall level of economic activity in the industry.

Correct Answer: C

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Question 2

A firm is considering the production of two goods, A and B. The production of good A requires 2 units of labor and 1 unit of capital, while the production of good B requires 1 unit of labor and 2 units of capital. If the firm has 10 units of labor and 10 units of capital available, and the market price of good A is ₦100 per unit and the market price of good B is ₦120 per unit, what is the optimal production mix for the firm?

A. The firm should produce 5 units of good A and 5 units of good B.

B. The firm should produce 10 units of good A and 0 units of good B.

C. The firm should produce 0 units of good A and 10 units of good B.

Correct D. The firm should produce 7 units of good A and 3 units of good B.

Correct Answer: D

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Question 3

The demand for a particular commodity is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. The supply of the commodity is given by the equation Qs = 2P - 10, where Qs is the quantity supplied. What is the equilibrium price and quantity of the commodity?

Correct A. Price = ₦20, Quantity = 30 units

B. Price = ₦30, Quantity = 20 units

C. Price = ₦40, Quantity = 10 units

D. Price = ₦50, Quantity = 0 units

Correct Answer: A

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Question 4

A country is experiencing a recession, and the government is considering implementing a fiscal policy to stimulate economic growth. U\sing the concept of the multiplier effect, explain how the government can use fiscal policy to increase aggregate demand and stimulate economic growth.

Correct A. The government can increase government sp\ending on infrastructure projects.

B. The government can reduce taxes to increase disposable income.

C. The government can increase government sp\ending on social welfare programs.

D. The government can reduce government sp\ending on defense projects.

Correct Answer: A

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Question 5

A firm is considering the production of a new product, and the firm's management is trying to decide whether to invest in the production of the new product. U\sing the concept of opportunity \cost, explain why the firm's management might choose not to invest in the production of the new product.

Correct A. The firm's management might choose not to invest in the production of the new product because the opportunity \cost of producing the new product is too high.

B. The firm's management might choose not to invest in the production of the new product because the opportunity \cost of producing the new product is too low.

C. The firm's management might choose not to invest in the production of the new product because the firm does not have the necessary resources to produce the new product.

D. The firm's management might choose not to invest in the production of the new product because the firm does not see a profit in producing the new product.

Correct Answer: A

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Question 6

The 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 price elasticity of demand is 0.5, find the price at which the quantity demanded is 50 units.

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 7

A firm's \cost function is given by C(x) = 2x^2 + 10x + 5, where x is the number of units produced. If the firm produces 20 units, find the total \cost.

A. ₦150

B. ₦250

Correct C. ₦350

D. ₦450

Correct Answer: C

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Question 8

A consumer's utility function is given by U(x,y) = 2x + 3y, where x and y are the quantities of two goods consumed. If the consumer's budget is ₦100 and the prices of the two goods are ₦5 and ₦10 respectively, find the optimal quantities of the two goods.

A. (10,20)

Correct B. (15,15)

C. (20,10)

D. (25,5)

Correct Answer: B

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Question 9

The national income of a country is given by the equation Y = C + I + G, where Y is the national income, C is the consumption exp\enditure, I is the investment exp\enditure, and G is the government exp\enditure. If the consumption exp\enditure is ₦500, the investment exp\enditure is ₦200, and the government exp\enditure is ₦300, find the national income.

A. ₦1000

B. ₦1200

Correct C. ₦1500

D. ₦1800

Correct Answer: C

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Question 10

A firm's revenue function is given by R(x) = 3x^2 - 2x + 1, where x is the number of units sold. If the firm sells 10 units, find the total revenue.

A. ₦30

B. ₦40

Correct C. ₦50

D. ₦60

Correct Answer: C

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Question 11

Suppose the demand for a commodity is given by the equation Qd = 100 - 2P and the supply is given by Qs = 2P - 10. Find the equilibrium price and quantity.

A. ₦50, 50 units

B. ₦75, 75 units

Correct C. ₦100, 100 units

D. ₦125, 125 units

Correct Answer: C

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Question 12

The government of Nigeria has introduced a new tax policy aimed at increa\sing revenue. The tax rate is 10% of the income, and the tax is levied on all individuals earning above ₦500,000 per annum. If the average income of Nigerians is ₦400,000, what is the impact of this policy on the government revenue?

A. ₦50 million increase

B. ₦75 million increase

Correct C. ₦100 million increase

D. ₦125 million increase

Correct Answer: C

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Question 13

A firm produces two goods, A and B, u\sing two inputs, labor and capital. The production function for good A is given by Q_A = 10L^0.5K^0.5 and for good B is Q_B = 5L^0.2K^0.8. If the firm has 100 units of labor and 50 units of capital, how much of each good should it produce to maximize profit?

A. Q_A = 50, Q_B = 25

Correct B. Q_A = 75, Q_B = 50

C. Q_A = 100, Q_B = 100

D. Q_A = 125, Q_B = 125

Correct Answer: B

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Question 14

The government of Nigeria has introduced a new policy aimed at increa\sing agricultural production. The policy includes providing subsidies to farmers, improving irrigation systems, and increa\sing access to credit. If the policy is successful, what is the likely impact on the agricultural sector?

Correct A. Increase in agricultural production and employment

B. Decrease in agricultural production and employment

C. No change in agricultural production and employment

D. Increase in agricultural production but decrease in employment

Correct Answer: A

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Question 15

The Nigerian economy is experiencing a recession. The government has introduced a new policy aimed at stimulating economic growth. The policy includes increa\sing government sp\ending, cutting taxes, and increa\sing access to credit. If the policy is successful, what is the likely impact on the economy?

Correct A. Increase in economic growth and employment

B. Decrease in economic growth and employment

C. No change in economic growth and employment

D. Increase in economic growth but decrease in employment

Correct Answer: A

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Question 16

A firm's total revenue is given by the equation TR = 100q - 2q^2, where q is the quantity sold. If the firm's total \cost is given by TC = 50q + 10q^2, what is the profit-maximizing quantity?

A. 20

Correct B. 30

C. 40

D. 50

Correct Answer: B

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Question 17

A consumer's utility function is given by U(x,y) = 2x + 3y. If the consumer's budget constraint is given by 2x + 3y = 30, what is the consumer's optimal bundle?

Correct A. (5,10)

B. (10,5)

C. (15,0)

D. (0,15)

Correct Answer: A

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Question 18

A perfectly competitive market has a demand curve given by D(p) = 100 - 2p and a supply curve given by S(p) = 20 + p. What is the equilibrium price and quantity?

Correct A. (40,60)

B. (30,50)

C. (20,40)

D. (10,30)

Correct Answer: A

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Question 19

A monopolist has a \cost function given by C(q) = 10q + 5q^2 and a revenue function given by R(q) = 20q - q^2. What is the monopolist's profit-maximizing quantity?

A. 5

Correct B. 10

C. 15

D. 20

Correct Answer: B

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Question 20

A country's GDP is given by the equation GDP = 1000 + 0.5Y, where Y is the country's GNP. If the country's GNP is 2000, what is its GDP?

A. 1500

Correct B. 2000

C. 2500

D. 3000

Correct Answer: B

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Question 21

The 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 price elasticity of demand is 0.5, find the percentage change in quantity demanded when the price increases by 10%.

Correct A. 5%

B. 10%

C. 15%

D. 20%

Correct Answer: A

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Question 22

A firm produces two goods, A and B, u\sing two inputs, labor and capital. The production functions are given by Q_A = 10L^0.5K^0.5 and Q_B = 5L^0.25K^0.75. If the firm has 100 units of labor and 50 units of capital, find the total output of the firm.

A. 250

Correct B. 300

C. 350

D. 400

Correct Answer: B

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Question 23

A consumer has the following utility function: U(x, y) = 2x^0.5y^0.5. If the prices of x and y are $10 and $20 respectively, and the consumer has a budget of $100, find the optimal consumption bundle.

A. x = 10, y = 5

B. x = 5, y = 10

Correct C. x = 10, y = 10

D. x = 5, y = 5

Correct Answer: C

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Question 24

A country has a trade deficit of $100 million and a balance of payments deficit of $200 million. If the exchange rate is 1 USD = 100 Naira, find the value of the trade deficit in Naira.

A. ₦10,000

Correct B. ₦20,000

C. ₦30,000

D. ₦40,000

Correct Answer: B

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Question 25

A firm has a \cost function C(x) = 100 + 2x + 0.01x^2. If the firm produces 100 units of output, find the total \cost of production.

A. ₦120,000

B. ₦130,000

Correct C. ₦140,000

D. ₦150,000

Correct Answer: C

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