Practice Post UTME COAL CITY UNIVERSITY economics 2017 Past Questions

Question 1

A consumer's indifference curve is given 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, find the consumer's optimal bundle of x and y.

Correct A. (200, 100)

B. (150, 150)

C. (100, 200)

D. (50, 250)

Correct Answer: A

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Question 2

A country's import demand function is given by \( M = 100 - 2P \), where M is the quantity of imports and P is the price of imports. If the price of imports is ₦50, find the quantity of imports.

Correct A. 200

B. 250

C. 300

D. 350

Correct Answer: A

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Question 3

A firm's \cost function is given by ( C(q) = 100 + 2q + 0.5q^2 ). Find the firm's average \cost function.

Correct A. ( AC(q) = 100 + 2q + 0.5q^2 )

B. ( AC(q) = 100 + q + 0.5q^2 )

C. ( AC(q) = 100 + 2q + q^2 )

D. ( AC(q) = 100 + q + q^2 )

Correct Answer: A

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Question 4

A firm's production function is given by \( Q = 2L^0.5K^0.5 \). Find the firm's returns to scale.

A. Increa\sing returns to scale

B. Decrea\sing returns to scale

Correct C. Cons\tant returns to scale

D. Negative returns to scale

Correct Answer: C

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Question 5

A consumer's indifference curve is given 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, find the consumer's optimal bundle of x and y.

Correct A. (200, 100)

B. (150, 150)

C. (100, 200)

D. (50, 250)

Correct Answer: A

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Question 6

Consider a firm operating in a perfectly competitive market. If the firm's average total \cost (ATC) curve intersects the average revenue (AR) curve at a point where the firm is producing at its optimal output level, what is the implication for the firm's profit-maximizing output level?

A. The firm will produce at its minimum point on the ATC curve.

B. The firm will produce at its maximum point on the ATC curve.

Correct C. The firm will produce at its optimal output level, where ATC = AR.

D. The firm will produce at its minimum point on the AR curve.

Correct Answer: C

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Question 7

A country's GDP is ₦1,500 billion, its imports are ₦300 billion, and its exports are ₦250 billion. What is the country's net foreign exchange earnings?

Correct A. ₦200 billion

B. ₦250 billion

C. ₦300 billion

D. ₦350 billion

Correct Answer: A

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Question 8

A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \), where Q is output, L is labor, and K is capital. If the firm increases its labor input from 4 units to 6 units, and its capital input remains cons\tant at 9 units, what is the percentage change in output?

A. -10%

B. 0%

Correct C. 10%

D. 20%

Correct Answer: C

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Question 9

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 = -2, what is the firm's optimal price?

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 10

A country's inflation rate is 5% per annum, and its nominal interest rate is 10% per annum. What is the real interest rate?

A. 5%

Correct B. 6%

C. 7%

D. 8%

Correct Answer: B

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Question 11

A country's balance of payments is in equilibrium when the current account and capital account are balanced. Which of the following is a characteristic of a country with a current account deficit?

A. The country has a trade surplus.

Correct B. The country has a trade deficit.

C. The country has a capital account surplus.

D. The country has a capital account deficit.

Correct Answer: B

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Question 12

A monopolistically competitive firm faces a downward-sloping demand curve. Which of the following is a characteristic of this firm's \cost function?

A. The firm's average \cost curve is U-shaped.

Correct B. The firm's marginal \cost curve is downward-sloping.

C. The firm's average revenue curve is downward-sloping.

D. The firm's marginal \cost curve is upward-sloping.

Correct Answer: B

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Question 13

A government imposes a tax on a particular good. Which of the following is a consequence of this tax?

A. The tax revenue is used to finance government exp\enditure.

Correct B. The tax reduces the supply of the good.

C. The tax increases the demand for the good.

D. The tax has no effect on the market equilibrium.

Correct Answer: B

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Question 14

A firm's revenue function is given by R(x) = 100x - 2x^2. Which of the following is the firm's marginal revenue function?

Correct A. ( MR(x) = 100 - 4x )

B. ( MR(x) = 100 + 4x )

C. ( MR(x) = 100 - 2x )

D. ( MR(x) = 100 + 2x )

Correct Answer: A

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Question 15

A country's demand for a particular good is given by D(p) = 100 - 2p. Which of the following is the country's supply function?

A. ( S(p) = 50 + p )

Correct B. ( S(p) = 50 - p )

C. ( S(p) = 100 - p )

D. ( S(p) = 100 + p )

Correct Answer: B

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Question 16

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current input levels are L = 4 and K = 9, what is the marginal product of labor (MPL) at this point?

Correct A. 1.5

B. 2.5

C. 3.5

D. 4.5

Correct Answer: A

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Question 17

A consumer's utility function is given by U = 2x + 3y. If the consumer's budget constraint is 2x + 3y = 12, what is the consumer's optimal bundle of x and y?

Correct A. x = 2, y = 4

B. x = 3, y = 3

C. x = 4, y = 2

D. x = 5, y = 1

Correct Answer: A

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Question 18

A firm's \cost function is given by C = 2L + 3K. If the firm's current input levels are L = 4 and K = 9, what is the firm's total \cost?

A. ₦24

Correct B. ₦30

C. ₦36

D. ₦42

Correct Answer: B

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Question 19

A country's balance of payments is given by BOP = X - M. If the country's current account balance is X = ₦100 and the capital account balance is M = ₦50, what is the country's balance of payments?

Correct A. ₦50

B. ₦100

C. ₦150

D. ₦200

Correct Answer: A

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Question 20

A firm's supply function is given by P = 2Q + 10. If the firm's current output level is Q = 5, what is the firm's supply price?

A. ₦20

Correct B. ₦25

C. ₦30

D. ₦35

Correct Answer: B

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Question 21

The concept of scarcity implies that the production of one good is at the expense of another. Which of the following is a correct statement regarding the opportunity \cost of producing more of a particular good?

Correct A. The opportunity \cost is the value of the next best alternative that is given up.

B. The opportunity \cost is the value of the next best alternative that is not produced.

C. The opportunity \cost is the value of the next best alternative that is consumed.

D. The opportunity \cost is the value of the next best alternative that is not consumed.

Correct Answer: A

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Question 22

The agricultural sector in Nigeria is characterized by low productivity and limited access to credit. What is the likely impact of this on the overall economy?

A. Increased economic growth and reduced poverty.

Correct B. Decreased economic growth and increased poverty.

C. No impact on economic growth and poverty.

D. Increased economic growth and increased poverty.

Correct Answer: B

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Question 23

A monopolist produces a good at a level where the marginal revenue equals the marginal \cost. What is the likely outcome for the consumer?

A. The consumer will benefit from a lower price.

B. The consumer will benefit from a higher price.

C. The consumer will not be affected.

Correct D. The consumer will be worse off.

Correct Answer: D

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Question 24

The demand for a good is represented by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. What is the price elasticity of demand at a price of ₦50?

Correct A. 0.5

B. 1

C. 2

D. 5

Correct Answer: A

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Question 25

A government imposes a tax on a good, which leads to a decrease in the quantity demanded. What is the likely outcome for the government's revenue?

A. The revenue will increase.

Correct B. The revenue will decrease.

C. The revenue will remain the same.

D. The revenue will fluctuate.

Correct Answer: B

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