POST UTME COVENANT UNIVERSITY 2023 Economics | Objective

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Question 1
The agricultural sector in Nigeria is a significant contributor to the country's GDP. However, the sector is also characterized by low productivity and limited access to credit. What is the most likely cause of these problems?
A. Lack of investment in agricultural research and development
B. Limited access to credit and high interest rates
C. Low productivity due to inadequate use of techno\logy
D. Government policies that favor the industrial sector
Question 2
A firm is producing a good with a production function Q = 2L^0.5K^0.5, where L is labor and K is capital. If the price of labor is ₦50 per unit and the price of capital is ₦100 per unit, find the optimal combination of labor and capital that minimizes the \cost of production.
A. L = 10, K = 20
B. L = 20, K = 10
C. L = 15, K = 15
D. L = 5, K = 25
Question 3
The government of Nigeria has implemented a policy to increase the production of electricity in the country. The policy includes increa\sing the importation of electricity-generating equipment and providing subsidies to electricity-generating companies. However, the policy has led to an increase in the price of electricity in the country. What is the likely effect of this policy on the Nigerian economy?
A. An increase in the production of electricity in Nigeria will lead to a decrease in the price of electricity in the country, resulting in an increase in the demand for electricity.
B. The policy will lead to an increase in the production of electricity in Nigeria, resulting in an increase in the price of electricity in the country.
C. The policy will lead to a decrease in the production of electricity in Nigeria, resulting in a decrease in the price of electricity in the country.
D. The policy will have no effect on the production of electricity in Nigeria.
Question 4
A firm is producing a good with a cons\tant marginal \cost and a decrea\sing average \cost. The firm's revenue is given by the equation R = 100x - 2x^2, where x is the number of units produced. What is the firm's profit-maximizing output?
A. 20 units
B. 30 units
C. 40 units
D. 50 units
Question 5
The supply of a product is given by the equation Qs = 2P^2 + 100, where Qs is the quantity supplied and P is the price. If the demand for the product is given by the equation Qd = 100 - 2P, find the equilibrium price and quantity.
A. P = ₦20, Q = 60
B. P = ₦30, Q = 80
C. P = ₦40, Q = 100
D. P = ₦50, Q = 120
Question 6
A country's GDP is calculated as the sum of its consumption, investment, government sp\ending, and net exports. If the country experiences a decrease in its consumption, what will happen to its GDP?
A. GDP will increase
B. GDP will decrease
C. GDP will remain unchanged
D. GDP will increase in the short run but decrease in the long run
Question 7
The government of Nigeria has implemented a policy to increase the production of rice in the country. The policy includes providing subsidies to farmers, improving irrigation systems, and increa\sing the availability of fertilizers. However, the policy has also led to an increase in the price of rice. U\sing the concept of elasticity of supply, explain why the price of rice has increased.
A. The price of rice has increased due to the increase in supply caused by the government's policy.
B. The price of rice has increased due to the decrease in supply caused by the government's policy.
C. The price of rice has increased due to the increase in production \costs caused by the government's policy.
D. The price of rice has increased due to the decrease in demand caused by the government's policy.
Question 8
A monopolistically competitive firm faces a downward-sloping demand curve. If the firm increases its price, what will happen to its revenue?
A. Revenue will increase
B. Revenue will decrease
C. Revenue will remain unchanged
D. Revenue will increase in the short run but decrease in the long run
Question 9
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 returns to scale, explain how the government can use economies of scale to increase efficiency and reduce \costs in the production of a public good.
A. The government can use economies of scale to increase efficiency and reduce \costs by producing a large quantity of the public good, thereby reducing the average \cost per unit.
B. The government can use economies of scale to increase efficiency and reduce \costs by outsourcing the production of the public good to private companies.
C. The government can use economies of scale to increase efficiency and reduce \costs by u\sing advanced techno\logy to increase productivity.
D. The government can use economies of scale to increase efficiency and reduce \costs by reducing the quality of the public good.
Question 10
A firm is producing at a point on its production possibilities frontier (PPF). If the firm experiences an increase in the price of one of its inputs, what will happen to its production?
A. Production will increase
B. Production will decrease
C. Production will remain unchanged
D. Production will increase in the short run but decrease in the long run
Question 11
The agricultural sector in Nigeria contributes significantly to the country's GDP. However, the sector is plagued by low productivity and inefficiencies. Which of the following policies would most likely address these issues?
A. Investing in agricultural research and development
B. Providing subsidies to farmers
C. Implementing a value-added tax on agricultural products
D. Establishing a national agricultural bank
Question 12
A government is considering a policy to promote industrialization in a developing country. U\sing the concept of comparative advantage, explain how the government can use trade policies to promote industrialization and increase economic growth.
A. The government can use trade policies such as tariffs and quotas to protect domestic industries and promote industrialization.
B. The government can use trade policies such as free trade agreements and investment incentives to attract foreign investment and promote industrialization.
C. The government can use trade policies such as export subsidies and tax breaks to promote industrialization and increase economic growth.
D. The government can use trade policies such as import substitution and export promotion to promote industrialization and increase economic growth.
Question 13
The government of Nigeria has implemented a policy to increase the production of rice in the country. The policy includes providing subsidies to farmers and increa\sing the importation of rice. However, the policy has led to a decrease in the price of rice in the international market. What is the likely effect of this policy on the Nigerian economy?
A. An increase in the production of rice in Nigeria will lead to a decrease in the price of rice in the international market, resulting in a decrease in the revenue of Nigerian farmers.
B. The policy will lead to an increase in the production of rice in Nigeria, resulting in an increase in the revenue of Nigerian farmers.
C. The policy will lead to a decrease in the production of rice in Nigeria, resulting in a decrease in the revenue of Nigerian farmers.
D. The policy will have no effect on the production of rice in Nigeria.
Question 14
A firm is producing a good with a cons\tant marginal \cost and a decrea\sing average \cost. The firm's revenue is given by the equation R = 100x - 2x^2, where x is the number of units produced. What is the firm's profit-maximizing output?
A. 20 units
B. 30 units
C. 40 units
D. 50 units
Question 15
A consumer is faced with the following utility function: U(x,y) = 2x + 3y. The consumer's income is ₦1,000 and the prices of x and y are ₦10 and ₦20 respectively. What is the consumer's optimal bundle of x and y?
A. x = 50, y = 25
B. x = 75, y = 12.5
C. x = 100, y = 0
D. x = 0, y = 50

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