POST UTME COVENANT UNIVERSITY 2025 Economics | Objective

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Question 1
The balance of payments (BOP) accounts record all international transactions between a country and the rest of the world. Which of the following is a component of the BOP accounts?
A. Current account
B. Capital account
C. Financial account
D. Goods and services account
Question 2
The concept of opportunity \cost is related to the idea of scarcity in economics. What is the opportunity \cost of choo\sing to produce more of one good over another?
A. The \cost of producing the alternative good
B. The \cost of not producing the alternative good
C. The \cost of producing the chosen good
D. The \cost of not producing the chosen good
Question 3
A firm is considering two projects: Project A has a NPV of ₦100,000 and a duration of 5 years, while Project B has a NPV of ₦120,000 and a duration of 3 years. If the firm's \cost of capital is 10% per annum, then the present value of the cash flows from Project A is
A. ₦500,000
B. ₦600,000
C. ₦700,000
D. ₦800,000
Question 4
In a perfectly competitive market, the demand curve for a firm's product is its
A. marginal revenue curve
B. marginal \cost curve
C. average revenue curve
D. average \cost curve
Question 5
A firm is facing a downward-sloping demand curve. What is the firm's optimal price?
A. The firm's marginal revenue (MR) equals its marginal \cost (MC)
B. The firm's price equals its average revenue (AR)
C. The firm's price equals its marginal revenue (MR)
D. The firm's price equals its average \cost (AC)
Question 6
A country's balance of payments (BOP) is in surplus. What does this indicate about the country's trade balance?
A. The country is exporting more than it is importing
B. The country is importing more than it is exporting
C. The country's trade balance is in equilibrium
D. The country's trade balance is uncertain
Question 7
A country's GDP is ₦10 trillion, its GNP is ₦12 trillion, and its net factor income from abroad is ₦2 trillion. Find the country's net national product.
A. ₦14 trillion
B. ₦16 trillion
C. ₦18 trillion
D. ₦20 trillion
Question 8
A firm is considering investing in a new project with a net present value (NPV) of ₦10,000. What does this indicate about the project's profitability?
A. The project is profitable
B. The project is unprofitable
C. The project has a zero NPV
D. The project's profitability is uncertain
Question 9
A firm is considering the production of two goods, X and Y. The production function for good X is given by Q_X = 2L^0.5K^0.5, where L is labor and K is capital. The production function for good Y is given by Q_Y = 3L^0.2K^0.8. If the firm has 100 units of labor and 200 units of capital, what is the optimal combination of labor and capital that maximizes the production of good X?
A. L = 50, K = 100
B. L = 75, K = 150
C. L = 100, K = 200
D. L = 150, K = 100
Question 10
A country's inflation rate is 5%. What does this indicate about the country's monetary policy?
A. The country's central bank is tightening monetary policy
B. The country's central bank is loosening monetary policy
C. The country's monetary policy is neutral
D. The country's monetary policy is uncertain
Question 11
The balance of payments (BOP) accounts record all international transactions between a country and the rest of the world. Which of the following is NOT a component of the BOP accounts?
A. Current account
B. Capital account
C. Financial account
D. Goods and services account
Question 12
A firm's production function is given by Q = 100K^0.5L^0.5, where Q is the output, K is the capital and L is the labor. If the firm wants to increase its output by 10%, what percentage increase in capital and labor is required?
A. 5% increase in capital and 5% increase in labor
B. 10% increase in capital and 10% increase in labor
C. 15% increase in capital and 15% increase in labor
D. 20% increase in capital and 20% increase in labor
Question 13
A firm's production function is given by Q = 100K^0.5L^0.5, where Q is the output, K is the capital and L is the labor. If the firm wants to increase its output by 10%, what percentage increase in capital and labor is required?
A. 5% increase in capital and 5% increase in labor
B. 10% increase in capital and 10% increase in labor
C. 15% increase in capital and 15% increase in labor
D. 20% increase in capital and 20% increase in labor
Question 14
A consumer's utility function is given by U = 2x + 3y, where U is the utility and x and y are the quantities of two goods. If the consumer's budget constraint is 100 and the prices of the two goods are 2 and 3 respectively, what is the consumer's optimal consumption bundle?
A. x = 20, y = 30
B. x = 30, y = 20
C. x = 40, y = 10
D. x = 10, y = 40
Question 15
A firm is facing a perfectly elastic demand curve. What is the firm's optimal price?
A. The firm's marginal revenue (MR) equals its marginal \cost (MC)
B. The firm's price equals its average revenue (AR)
C. The firm's price equals its marginal revenue (MR)
D. The firm's price equals its average \cost (AC)

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