POST UTME COAL CITY UNIVERSITY 2025 Economics | Objective

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Question 1
Consider a firm operating in a perfectly competitive market with a production function Q = 2L^0.5K^0.5. If the firm's current output is 16 units, and the price per unit is ₦100, what is the firm's total revenue?
A. ₦1600
Correct B. ₦3200
C. ₦6400
D. ₦12800

Correct Answer: B

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Question 2
A government is considering a tax on a particular good. The supply and demand curves for the good are given by Qs = 100 - 2P and Qd = 150 + 3P, respectively. If the government imposes a tax of ₦10 per unit on the good, what is the new equilibrium price?
A. ₦20
B. ₦30
Correct C. ₦40
D. ₦50

Correct Answer: C

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Question 3
A firm is considering investing in a new project with a net present value (NPV) of ₦100,000. If the firm's \cost of capital is 10% per annum, what is the present value of the project?
Correct A. ₦90,909
B. ₦100,000
C. ₦110,110
D. ₦120,000

Correct Answer: A

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Question 4
A government is considering a budget with the following allocations: ₦100 million for education, ₦50 million for healthcare, and ₦20 million for infrastructure. What is the total budget?
A. ₦170 million
Correct B. ₦170.5 million
C. ₦170.5 million
D. ₦170.5 million

Correct Answer: B

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Question 5
A firm is considering investing in a new project with a payback period of 5 years. If the firm's \cost of capital is 10% per annum, what is the internal rate of return (IRR) of the project?
A. 10%
Correct B. 12%
C. 15%
D. 18%

Correct Answer: B

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Question 6
Consider a country with a trade deficit of ₦500 billion and a current account deficit of ₦300 billion. If the country's exchange rate is ₦200 per dollar, what is the value of the trade deficit in dollars?
A. $2.5 billion
Correct B. $3.75 billion
C. $5 billion
D. $7.5 billion

Correct Answer: B

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Question 7
A firm's demand function is given by Q = 100 - 2P + 3X, where Q is the quantity demanded, P is the price, and X is an exogenous variable. If the price is ₦50 and the exogenous variable is 10, what is the quantity demanded?
A. 20
B. 40
Correct C. 60
D. 80

Correct Answer: C

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Question 8
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, where Q_A is the quantity of good A produced, L is the amount of labor used, and K is the amount of capital used. If the firm uses 100 units of labor and 100 units of capital, what is the quantity of good A produced?
A. 10
B. 20
Correct C. 30
D. 40

Correct Answer: C

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Question 9
A firm's \cost function is given by C = 100 + 2Q + 3Q^2, where C is the total \cost and Q is the quantity produced. If the firm produces 10 units, what is the total \cost?
A. ₦1300
B. ₦1500
Correct C. ₦1700
D. ₦1900

Correct Answer: C

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Question 10
A country's GDP is ₦10 trillion, and its government exp\enditure is ₦2 trillion. If the country's savings rate is 20%, what is the private sector's consumption?
A. ₦4 trillion
Correct B. ₦5 trillion
C. ₦6 trillion
D. ₦7 trillion

Correct Answer: B

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Question 11
A firm operating in a perfectly competitive market is characterized by which of the following?
A. Monopolistic competition
Correct B. Perfect competition
C. Monopoly
D. Oligopoly

Correct Answer: B

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Question 12
A consumer's indifference curve is a graphical representation of the trade-offs between two goods. Which of the following statements is true about indifference curves?
Correct A. Indifference curves are downward-sloping and convex
B. Indifference curves are upward-sloping and concave
C. Indifference curves are downward-sloping and concave
D. Indifference curves are upward-sloping and convex

Correct Answer: A

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Question 13
A firm's production function is given by Q = 2L^0.5K^0.5. What is the returns to scale of this production function?
Correct A. Increa\sing returns to scale
B. Decrea\sing returns to scale
C. Cons\tant returns to scale
D. No returns to scale

Correct Answer: A

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Question 14
A country's economic growth is measured by its GDP per capita. Which of the following statements is true about GDP per capita?
A. GDP per capita is a measure of a country's economic growth
Correct B. GDP per capita is a measure of a country's economic development
C. GDP per capita is a measure of a country's economic stability
D. GDP per capita is a measure of a country's economic inequality

Correct Answer: B

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Question 15
A consumer's budget constraint is given by P1Q1 + P2Q2 = I. What is the opportunity \cost of consuming one more unit of good 1?
Correct A. P2
B. P1
C. P1Q1
D. P2Q2

Correct Answer: A

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Question 16
A firm's marginal revenue function is given by MR = 100 - 2Q. What is the price elasticity of demand?
A. Price elasticity of demand is greater than 1
Correct B. Price elasticity of demand is less than 1
C. Price elasticity of demand is equal to 1
D. Price elasticity of demand is undefined

Correct Answer: B

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Question 17
A country's economic development is measured by its HDI. Which of the following statements is true about HDI?
A. HDI is a measure of a country's economic growth
Correct B. HDI is a measure of a country's economic development
C. HDI is a measure of a country's economic stability
D. HDI is a measure of a country's economic inequality

Correct Answer: B

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Question 18
A firm's production function is given by Q = 3L^0.5K^0.5. What is the returns to scale of this production function?
Correct A. Increa\sing returns to scale
B. Decrea\sing returns to scale
C. Cons\tant returns to scale
D. No returns to scale

Correct Answer: A

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Question 19
A country's economic growth is measured by its GDP per capita. Which of the following statements is true about GDP per capita?
A. GDP per capita is a measure of a country's economic growth
Correct B. GDP per capita is a measure of a country's economic development
C. GDP per capita is a measure of a country's economic stability
D. GDP per capita is a measure of a country's economic inequality

Correct Answer: B

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Question 20
The Marshall-Lerner condition states that if the sum of the elasticities of demand for imports and exports is greater than 1, then a devaluation of the currency will lead to an improvement in the balance of payments. What is the implication of this condition on the optimal level of devaluation?
A. Devaluation will lead to a significant improvement in the balance of payments.
Correct B. Devaluation will lead to a small improvement in the balance of payments.
C. Devaluation will lead to a worsening of the balance of payments.
D. The Marshall-Lerner condition is irrelevant to the optimal level of devaluation.

Correct Answer: B

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Question 21
A firm produces two goods, A and B, with the following \cost functions: CA = 2x + 3y and CB = 4x + 5y. If the firm produces 10 units of good A and 15 units of good B, what is the total \cost of production?
A. ₦150
Correct B. ₦200
C. ₦250
D. ₦300

Correct Answer: B

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Question 22
The national income of a country is calculated as the sum of the income earned by all individuals and bu\sinesses within the country. If the national income is ₦1,000,000 and the population of the country is 10 million, what is the average income per capita?
A. ₦100
B. ₦200
Correct C. ₦500
D. ₦1000

Correct Answer: C

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Question 23
A government imposes a tax on a particular good, leading to a decrease in the quantity demanded. What is the effect on the government's revenue from the tax?
A. The government's revenue increases.
Correct B. The government's revenue decreases.
C. The government's revenue remains the same.
D. The government's revenue becomes negative.

Correct Answer: B

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Question 24
A country's GDP is calculated as the sum of the value of all final goods and services produced within the country. If the GDP is ₦1,500,000 and the country's population is 20 million, what is the GDP per capita?
A. ₦75
B. ₦150
C. ₦300
Correct D. ₦600

Correct Answer: D

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Question 25
A government's budget is balanced when its total revenue equals its total exp\enditure. If the government's total revenue is ₦1,000,000 and its total exp\enditure is ₦1,200,000, what is the government's budget deficit?
A. ₦200,000
Correct B. ₦300,000
C. ₦400,000
D. ₦500,000

Correct Answer: B

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