POST UTME COAL CITY UNIVERSITY 2019 Economics | Objective

Are you preparing for POST UTME COAL CITY UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2019 Economics (Objective) questions designed to simulate the real exam environment.

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Question 1
The Marshall-Lerner condition states that a country's balance of payments will improve if the sum of the percentage changes in its export and import prices is greater than the percentage change in its exchange rate. Which of the following scenarios would lead to an improvement in the balance of payments?
Correct A. A 10% increase in export prices and a 5% decrease in import prices
B. A 5% decrease in export prices and a 10% increase in import prices
C. A 10% increase in export prices and a 10% increase in import prices
D. A 5% decrease in export prices and a 5% decrease in import prices

Correct Answer: A

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Question 2
A monopolist faces a demand curve given by Q = 100 - 2P. The marginal revenue function is given by MR = 50 - 2Q. What is the profit-maximizing price?
A. ₦25
Correct B. ₦30
C. ₦35
D. ₦40

Correct Answer: B

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Question 3
A consumer has the following utility function: U = 2x + 3y. The budget constraint is given by 2x + 3y = 12. What is the consumer's optimal bundle?
Correct A. \( x = 2, y = 4 \)
B. \( x = 4, y = 2 \)
C. \( x = 6, y = 0 \)
D. \( x = 0, y = 8 \)

Correct Answer: A

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Question 4
A firm is considering investing in a new project with a net present value (NPV) of ₦100,000. The \cost of capital is 10%. What is the internal rate of return (IRR) of the project?
Correct A. 10%
B. 12%
C. 15%
D. 18%

Correct Answer: A

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Question 5
A country's GDP is given by the equation: GDP = C + I + G + \( X - M \). If the country's consumption is ₦100 billion, investment is ₦20 billion, government sp\ending is ₦30 billion, exports are ₦50 billion, and imports are ₦20 billion, what is the country's GDP?
A. ₦150 billion
B. ₦160 billion
C. ₦170 billion
Correct D. ₦180 billion

Correct Answer: D

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Question 6
A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \). If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, and if the firm's budget constraint is given by 100L + 200K = ₦10000, determine the optimal values of L and K.
A. L = 100, K = 50
Correct B. L = 50, K = 100
C. L = 100, K = 25
D. L = 25, K = 100

Correct Answer: B

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Question 7
A consumer's utility function is given by U = 2x + 3y. The budget constraint is given by 2x + 3y = ₦100. Determine the optimal values of x and y.
Correct A. x = 20, y = 10
B. x = 10, y = 20
C. x = 30, y = 0
D. x = 0, y = 30

Correct Answer: A

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Question 8
The demand for a commodity is given by Qd = 100 - 2P and the supply is given by Qs = 2P - 50. Determine the equilibrium price and quantity.
Correct A. P = 25, Q = 75
B. P = 50, Q = 100
C. P = 75, Q = 125
D. P = 100, Q = 150

Correct Answer: A

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Question 9
A firm's production function is given by Q = 3L^(2)K. If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, and if the firm's budget constraint is given by 100L + 200K = ₦10000, determine the optimal values of L and K.
A. L = 100, K = 50
Correct B. L = 50, K = 100
C. L = 100, K = 25
D. L = 25, K = 100

Correct Answer: B

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Question 10
A consumer's utility function is given by U = x^(2) + 2y. The budget constraint is given by 2x + 3y = ₦100. Determine the optimal values of x and y.
Correct A. x = 20, y = 10
B. x = 10, y = 20
C. x = 30, y = 0
D. x = 0, y = 30

Correct Answer: A

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Question 11
Consider a firm operating in a perfectly competitive market with a \cost function C(q) = 2q^2 + 10q + 5. If the market price is P = 15, what is the firm's profit-maximizing output level?
A. 10
Correct B. 20
C. 30
D. 40

Correct Answer: B

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Question 12
A country's balance of payments account shows a trade deficit of $100 million and a capital account surplus of $50 million. What is the overall balance of payments position?
Correct A. $50 million surplus
B. $100 million deficit
C. $150 million surplus
D. $200 million deficit

Correct Answer: A

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Question 13
A firm's demand function is given by Q = 100 - 2P. If the market price is P = 20, what is the firm's quantity demanded?
A. 40
Correct B. 60
C. 80
D. 100

Correct Answer: B

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Question 14
A firm's \cost function is given by C(q) = 3q^2 + 5q + 2. If the market price is P = 10, what is the firm's profit-maximizing output level?
A. 5
Correct B. 10
C. 15
D. 20

Correct Answer: B

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Question 15
A country's GDP is $100 billion, and its government exp\enditure is $20 billion. What is the country's government saving?
A. $10 billion
B. $20 billion
Correct C. $30 billion
D. $40 billion

Correct Answer: C

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Question 16
Consider a consumer with a utility function U(x,y) = 2x + 3y - x^2 - 2xy. If the consumer's income is ₦1000 and the prices of x and y are ₦5 and ₦3 respectively, find the optimal bundle of x and y u\sing Lagrange multipliers.
A. x = 10, y = 20
B. x = 20, y = 10
Correct C. x = 15, y = 15
D. x = 25, y = 5

Correct Answer: C

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Question 17
A firm has a production function Q = 2L + 3K, where L is labor and K is capital. If the firm's \cost function is C(L,K) = 2L + 3K + 2LK, find the firm's profit-maximizing level of labor and capital.
A. L = 5, K = 3
B. L = 3, K = 5
Correct C. L = 4, K = 4
D. L = 6, K = 2

Correct Answer: C

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Question 18
The demand function for a product is given by Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the supply function is given by Q = 2P - 10, find the equilibrium price and quantity.
A. P = 20, Q = 30
B. P = 30, Q = 20
Correct C. P = 25, Q = 25
D. P = 15, Q = 35

Correct Answer: C

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Question 19
A farmer produces wheat and maize. The production functions are given by W = 2L + 3K and M = 3L + 2K, where L is labor and K is capital. If the farmer's income is ₦1000 and the prices of wheat and maize are ₦5 and ₦3 respectively, find the optimal bundle of labor and capital u\sing Lagrange multipliers.
A. L = 10, K = 20
B. L = 20, K = 10
Correct C. L = 15, K = 15
D. L = 25, K = 5

Correct Answer: C

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Question 20
A firm has a production function Q = 2L + 3K, where L is labor and K is capital. If the firm's \cost function is C(L,K) = 2L + 3K + 2LK, find the firm's profit-maximizing level of labor and capital.
A. L = 5, K = 3
B. L = 3, K = 5
Correct C. L = 4, K = 4
D. L = 6, K = 2

Correct Answer: C

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Question 21
The demand for a commodity 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, what is the price elasticity of supply?
A. 0.5
Correct B. 1
C. 2
D. 3

Correct Answer: B

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Question 22
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, what is the total \cost?
A. $150
B. $200
Correct C. $250
D. $300

Correct Answer: C

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Question 23
A country's balance of payments is given by the equation BOP = X - M, where X is the value of exports and M is the value of imports. If the value of exports is $100 and the value of imports is $80, what is the balance of payments?
A. $10
Correct B. $20
C. $30
D. $40

Correct Answer: B

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Question 24
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 15 units, what is the total revenue?
A. $50
B. $60
Correct C. $70
D. $80

Correct Answer: C

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Question 25
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 consumption is $100, investment is $50, government sp\ending is $20, exports are $80, and imports are $60, what is the GDP?
A. $180
B. $200
Correct C. $220
D. $240

Correct Answer: C

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