Practice Post UTME COVENANT UNIVERSITY economics 2019 Past Questions

Question 1

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current labor and capital inputs are 16 and 9 units respectively, what is the marginal product of labor?

Correct A. 0.5

B. 1

C. 2

D. 4

Correct Answer: A

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Question 2

A monopolist faces a demand curve given by P = 100 - 2Q. If the firm's marginal \cost is MC = 20, what is the profit-maximizing quantity of output?

A. 10

B. 20

Correct C. 30

D. 40

Correct Answer: C

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Question 3

A firm's demand and supply curves are given by P = 50 + 2Q and P = 20 + Q respectively. What is the equilibrium price and quantity?

Correct A. P = 35, Q = 10

B. P = 30, Q = 15

C. P = 25, Q = 20

D. P = 20, Q = 25

Correct Answer: A

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Question 4

A country's GDP is given by the equation Y = C + I + G. If the current values of consumption, investment, and government sp\ending are 100, 50, and 20 respectively, what is the country's GDP?

A. 170

B. 180

Correct C. 190

D. 200

Correct Answer: C

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Question 5

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current labor and capital inputs are 16 and 9 units respectively, what is the total product of labor?

A. 4

B. 8

Correct C. 16

D. 32

Correct Answer: C

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Question 6

A consumer's indifference curve is represented 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, 200)

C. (100, 150)

D. (50, 50)

Correct Answer: A

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Question 7

A firm's production function is given by \( Q = 2L^{0.5}K^{0.5} \). If the firm's output is 100 units and the price of labor is ₦20 per unit, find the firm's optimal level of capital.

Correct A. ₦1000

B. ₦500

C. ₦2000

D. ₦2500

Correct Answer: A

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Question 8

A monopolist faces a demand curve given by \( Q = 100 - 2P \) and a \cost function given by \( C = 20 + 5L + 2K \). If the firm's output is 50 units, find the firm's optimal price.

Correct A. ₦50

B. ₦40

C. ₦30

D. ₦20

Correct Answer: A

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Question 9

A country's GDP is ₦100 billion and its GNP is ₦120 billion. Find the country's net factor income from abroad.

Correct A. ₦20 billion

B. ₦10 billion

C. ₦5 billion

D. ₦15 billion

Correct Answer: A

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Question 10

A central bank increases the money supply by ₦10 billion. If the velocity of money is 2, find the increase in the price level.

Correct A. 2%

B. 5%

C. 10%

D. 15%

Correct Answer: A

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Question 11

Suppose a firm is operating in a perfectly competitive market with a downward-sloping demand curve. If the firm increases its output from 100 units to 120 units, and the price falls from ₦100 to ₦90, what is the price elasticity of demand?

A. 0.5

Correct B. 1.0

C. 1.5

D. 2.0

Correct Answer: B

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Question 12

A monopolist faces a demand curve given by Q = 100 - 2P. If the firm's marginal revenue (MR) is given by MR = 200 - 2Q, what is the firm's optimal price?

A. ₦50

B. ₦60

Correct C. ₦70

D. ₦80

Correct Answer: C

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Question 13

Suppose a firm is operating in a perfectly competitive market with a downward-sloping demand curve. If the firm increases its output from 100 units to 120 units, and the price falls from ₦100 to ₦90, what is the price elasticity of demand?

A. 0.5

Correct B. 1.0

C. 1.5

D. 2.0

Correct Answer: B

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Question 14

A monopolist faces a demand curve given by Q = 100 - 2P. If the firm's marginal revenue (MR) is given by MR = 200 - 2Q, what is the firm's optimal price?

A. ₦50

B. ₦60

Correct C. ₦70

D. ₦80

Correct Answer: C

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Question 15

Suppose a firm is operating in a perfectly competitive market with a downward-sloping demand curve. If the firm increases its output from 100 units to 120 units, and the price falls from ₦100 to ₦90, what is the price elasticity of demand?

A. 0.5

Correct B. 1.0

C. 1.5

D. 2.0

Correct Answer: B

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Question 16

A consumer's indifference curve is represented by the equation ( u(x,y) = 2x + 3y ). If the consumer's income is ₦1000 and the prices of x and y are ₦2 and ₦3 respectively, find the optimal bundle of x and y.

Correct A. x = 100, y = 150

B. x = 150, y = 100

C. x = 200, y = 50

D. x = 50, y = 200

Correct Answer: A

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Question 17

A country's GDP is ₦100 billion, its imports are ₦20 billion, and its exports are ₦30 billion. Calculate its balance of trade.

Correct A. ₦10 billion surplus

B. ₦10 billion deficit

C. ₦20 billion surplus

D. ₦20 billion deficit

Correct Answer: A

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Question 18

A central bank increases the reserve requirement for commercial banks from 10% to 15%. What is the effect on the money supply?

A. Increase in money supply

Correct B. Decrease in money supply

C. No change in money supply

D. Increase in interest rates

Correct Answer: B

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Question 19

A firm's demand curve for a product is given by the equation \( Q = 100 - 2P \). If the price of the product is ₦20, calculate the quantity demanded.

A. 50 units

Correct B. 100 units

C. 150 units

D. 200 units

Correct Answer: B

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Question 20

A country's GNP is ₦120 billion, its imports are ₦25 billion, and its exports are ₦35 billion. Calculate its balance of trade.

Correct A. ₦10 billion surplus

B. ₦10 billion deficit

C. ₦20 billion surplus

D. ₦20 billion deficit

Correct Answer: A

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Question 21

A country's GDP is calculated as the sum of all final goods and services produced within its borders. However, this measure does not account for the value of intermediate goods and services used in the production process. Which of the following is a limitation of u\sing GDP as a measure of a country's economic performance?

Correct A. GDP does not account for the value of intermediate goods and services used in production.

B. GDP only measures the value of final goods and services produced within a country's borders.

C. GDP does not account for the value of capital goods used in production.

D. GDP only measures the value of labor income.

Correct Answer: A

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Question 22

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's labor and capital inputs are increased by 20% and 15% respectively, what is the percentage change in output?

A. 5%

Correct B. 10%

C. 15%

D. 20%

Correct Answer: B

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Question 23

A consumer's indifference curve is given by the equation u(x,y) = 2x + 3y, where x and y are the quantities of two goods consumed. If the consumer's income is ₦1000 and the prices of the two goods are ₦5 and ₦10 respectively, what is the consumer's optimal bundle of goods?

Correct A. x = 40, y = 20

B. x = 60, y = 10

C. x = 80, y = 5

D. x = 100, y = 0

Correct Answer: A

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Question 24

A country's balance of payments is given by the equation BOP = X - M, where X is exports and M is imports. If the country's exports are ₦500 billion and its imports are ₦600 billion, what is the country's balance of payments?

Correct A. ₦-100 billion

B. ₦100 billion

C. ₦500 billion

D. ₦600 billion

Correct Answer: A

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Question 25

A firm's demand curve is given by the equation Qd = 100 - 2P, where Qd is demand and P is price. If the firm's marginal revenue is ₦50, what is the firm's optimal price?

A. ₦20

B. ₦30

C. ₦40

Correct D. ₦50

Correct Answer: D

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