POST UTME COVENANT UNIVERSITY 2024 Economics | Objective

Are you preparing for POST UTME COVENANT UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2024 Economics (Objective) questions designed to simulate the real exam environment.

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Question 1
The demand for a product 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 2
A firm's \cost function is given by C(x) = 2x^2 + 10x + 5. If the firm produces 20 units of output, what is the total \cost?
A. 100
B. 120
Correct C. 140
D. 160

Correct Answer: C

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Question 3
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
B. 20
Correct C. 30
D. 40

Correct Answer: C

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Question 4
A firm's revenue function is given by R(x) = 3x^2 - 5x + 2. If the firm produces 15 units of output, what is the marginal revenue?
A. 10
Correct B. 20
C. 30
D. 40

Correct Answer: B

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Question 5
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. 150
B. 160
C. 170
Correct D. 180

Correct Answer: D

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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 its marginal \cost (MC) curve at two points, what can be concluded about the firm's production decision?
A. The firm will produce at the point where ATC intersects MC.
B. The firm will produce at the point where MC intersects ATC.
Correct C. The firm will produce at both points where ATC intersects MC.
D. The firm will not produce at all.

Correct Answer: C

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Question 7
A country's balance of payments (BOP) accounts can be affected by the following factors. Which one is NOT a factor?
A. Trade in goods and services
B. Investment income
C. Transfer payments
Correct D. Changes in the exchange rate

Correct Answer: D

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Question 8
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's labor (L) increases by 25% and capital (K) remains cons\tant, what is the percentage change in output (Q)?
Correct A. -12.5%
B. -25%
C. 0%
D. 25%

Correct Answer: A

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Question 9
A country's GDP can be calculated u\sing the following formula: GDP = C + I + G + \( X - M \). If the country's consumption (C) is ₦100 billion, investment (I) is ₦50 billion, government sp\ending (G) is ₦20 billion, exports (X) are ₦80 billion, and imports (M) are ₦40 billion, what is the country's GDP?
A. ₦150 billion
Correct B. ₦200 billion
C. ₦250 billion
D. ₦300 billion

Correct Answer: B

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Question 10
A central bank can use the following tools to control inflation. Which one is NOT a tool?
A. Monetary policy
B. Fiscal policy
Correct C. Supply-side policy
D. Demand-side policy

Correct Answer: C

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Question 11
A monopolist's demand curve is given by Q = 100 - 2P, and the inverse supply curve is given by P = 10 + 0.5Q. Find the equilibrium price and quantity.
A. ₦50, 50
Correct B. ₦75, 25
C. ₦100, 0
D. ₦200, 100

Correct Answer: B

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Question 12
A country's balance of payments is given by the following equation: BOP = \( X - M \) + \( F - I \). If X = ₦100 billion, M = ₦80 billion, F = ₦20 billion, and I = ₦15 billion, what is the balance of payments?
Correct A. ₦5 billion
B. ₦10 billion
C. ₦15 billion
D. ₦20 billion

Correct Answer: A

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Question 13
A firm's production function is given by Q = 100K^\( 1/2 \), where Q is the quantity produced and K is the capital stock. If the firm's capital stock is ₦100 million, what is the quantity produced?
A. 100 units
B. 200 units
Correct C. 300 units
D. 400 units

Correct Answer: C

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Question 14
A government's budget is given by the following equation: Budget = \( T - G \) + \( I - S \). If T = ₦100 billion, G = ₦80 billion, I = ₦20 billion, and S = ₦15 billion, what is the budget?
A. ₦5 billion
B. ₦10 billion
Correct C. ₦15 billion
D. ₦20 billion

Correct Answer: C

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Question 15
A country's trade balance is given by the following equation: Trade Balance = \( X - M \) + \( F - I \). If X = ₦100 billion, M = ₦80 billion, F = ₦20 billion, and I = ₦15 billion, what is the trade balance?
Correct A. ₦5 billion
B. ₦10 billion
C. ₦15 billion
D. ₦20 billion

Correct Answer: A

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Question 16
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 point E, where the price is ₦100, and the quantity supplied is 100 units, what is the opportunity \cost of producing one more unit of the good?
A. ₦100
Correct B. ₦50
C. ₦200
D. ₦250

Correct Answer: B

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Question 17
A farmer in Nigeria is considering whether to plant maize or yams on his 10-hectare farm. The expected yield of maize is 2 tons per hectare, while the expected yield of yams is 1.5 tons per hectare. If the price of maize is ₦50 per ton and the price of yams is ₦40 per ton, what is the opportunity \cost of planting yams instead of maize?
Correct A. ₦10
B. ₦20
C. ₦30
D. ₦40

Correct Answer: A

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Question 18
The demand for a product 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 percentage change in quantity demanded when the price increases by 10%?
Correct A. 5%
B. 10%
C. 15%
D. 20%

Correct Answer: A

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Question 19
A firm is producing a good with the following production function: Q = 2L^0.5K^0.5, where Q is the quantity produced, L is the labor input, and K is the capital input. If the firm wants to produce 100 units of the good, and the price of labor is ₦100 per unit, and the price of capital is ₦200 per unit, what is the minimum \cost of producing 100 units of the good?
A. ₦20,000
B. ₦30,000
Correct C. ₦40,000
D. ₦50,000

Correct Answer: C

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Question 20
A central bank in a country is considering a monetary policy to reduce inflation. The current inflation rate is 10%, and the central bank wants to reduce it to 5% within the next 2 years. If the interest rate is currently 10%, and the central bank wants to increase it to 15% within the next 2 years, what is the expected effect on the money supply?
Correct A. Increase
B. Decrease
C. No change
D. Uncertain

Correct Answer: A

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Question 21
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 ₦10 respectively, what is the consumer's optimal bundle?
A. (100, 0)
Correct B. (80, 20)
C. (60, 40)
D. (40, 60)

Correct Answer: B

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Question 22
A firm's production function is given by \( Q = 2L^{1/2}K^{1/2} \). If the firm's output is 100 units and the wage rate is ₦50 per hour, what is the minimum amount of capital the firm should employ?
A. ₦2500
Correct B. ₦5000
C. ₦7500
D. ₦10000

Correct Answer: B

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Question 23
A country's GDP is ₦100 billion and its GNP is ₦120 billion. What is the country's net factor income from abroad?
A. ₦20 billion
Correct B. ₦30 billion
C. ₦40 billion
D. ₦50 billion

Correct Answer: B

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Question 24
A firm's demand curve is given by \( Q = 100 - 2P \). If the firm's supply curve is given by \( Q = 2P - 50 \), what is the equilibrium price?
A. ₦20
Correct B. ₦30
C. ₦40
D. ₦50

Correct Answer: B

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Question 25
A country's balance of payments is given by the following table:\n| Item | Value |\n| --- | --- |\n| Exports | ₦100 billion |\n| Imports | ₦120 billion |\n| Net Factor Income | ₦20 billion |\n| Net Transfer | ₦10 billion |\nWhat is the country's balance of payments deficit?
A. ₦20 billion
Correct B. ₦30 billion
C. ₦40 billion
D. ₦50 billion

Correct Answer: B

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