POST UTME CRAWFORD UNIVERSITY 2022 Economics | Objective

Are you preparing for POST UTME CRAWFORD UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2022 Economics (Objective) questions designed to simulate the real exam environment.

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Question 1
The concept of scarcity in economics implies that the production of one good is limited by the availability of resources, which can be used to produce other goods. This is an example of a fundamental economic problem. What is the name of this fundamental economic problem?
A. Opportunity Cost
B. Diminishing Marginal Utility
Correct C. Scarcity
D. Inefficient Allocation

Correct Answer: C

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Question 2
A firm's production function is given by Q = 2L^0.5K^0.5. 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 3
The following diagram shows the supply and demand curves for a particular good. What is the equilibrium price and quantity?
Correct A. Price = ₦100, Quantity = 100 units
B. Price = ₦150, Quantity = 150 units
C. Price = ₦200, Quantity = 200 units
D. Price = ₦250, Quantity = 250 units

Correct Answer: A

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Question 4
The following table shows the production \costs for a firm. What is the break-even point?
A. ₦1000
Correct B. ₦1500
C. ₦2000
D. ₦2500

Correct Answer: B

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Question 5
The following diagram shows the production possibility frontier for two countries. What is the opportunity \cost of producing 100 units of good X in country A?
A. 10 units of good Y
Correct B. 20 units of good Y
C. 30 units of good Y
D. 40 units of good Y

Correct Answer: B

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Question 6
A monopolistically competitive firm faces a demand curve with an elasticity of -2. If the firm increases its price by 10%, what is the percentage change in quantity demanded?
A. 20%
B. 15%
Correct C. 10%
D. 5%

Correct Answer: C

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Question 7
A firm is producing at the point where MR = MC. If the price elasticity of demand is -3 and the firm increases its price by 5%, what is the change in total revenue?
A. ₦1250
Correct B. -₦1250
C. ₦2500
D. -₦2500

Correct Answer: B

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Question 8
A perfectly competitive firm is producing at the point where P = MC. If the price elasticity of demand is -2 and the firm increases its price by 10%, what is the change in total revenue?
A. ₦2500
Correct B. -₦2500
C. ₦5000
D. -₦5000

Correct Answer: B

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Question 9
A monopolist is producing at the point where MR = MC. If the price elasticity of demand is -3 and the firm increases its price by 5%, what is the change in total revenue?
A. ₦1250
Correct B. -₦1250
C. ₦2500
D. -₦2500

Correct Answer: B

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Question 10
A firm is producing at the point where P = MC. If the price elasticity of demand is -2 and the firm increases its price by 10%, what is the change in total revenue?
A. ₦2500
Correct B. -₦2500
C. ₦5000
D. -₦5000

Correct Answer: B

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Question 11
A firm's production function is given by Q = 2K^\( 1/2 \)L^\( 1/2 \), where Q is output, K is capital, and L is labor. If the firm's capital and labor inputs are increased by 20% and 15% respectively, what is the percentage change in output?
A. 10%
Correct B. 12%
C. 15%
D. 20%

Correct Answer: B

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Question 12
A government imposes a tax on a firm's output. The firm's supply curve shifts to the left. What is the effect on the equilibrium price and quantity?
Correct A. Price increases and quantity decreases
B. Price decreases and quantity increases
C. Price increases and quantity increases
D. Price decreases and quantity decreases

Correct Answer: A

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Question 13
A country's GDP is ₦100 billion. Its GNP is ₦120 billion. What is the 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 14
A consumer has a budget constraint of ₦100. The price of good X is ₦20 and the price of good Y is ₦30. The consumer's indifference curve is given by U = 2X + 3Y. What is the consumer's optimal consumption bundle?
Correct A. X = 2, Y = 1
B. X = 3, Y = 2
C. X = 4, Y = 3
D. X = 5, Y = 4

Correct Answer: A

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Question 15
A firm's production function is given by Q = 3K^\( 1/3 \)L^\( 1/3 \). If the firm's capital and labor inputs are increased by 25% and 20% respectively, what is the percentage change in output?
A. 10%
B. 12%
Correct C. 15%
D. 20%

Correct Answer: C

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Question 16
Consider a perfectly competitive market with n firms, each producing a homogeneous product. If the market price is P = 10, and the inverse demand function is given by P = 100 - 2Q, where Q is the total quantity demanded, what is the total revenue (TR) of the market?
Correct A. \( TR = 100Q - 2Q^2 \)
B. \( TR = 100Q + 2Q^2 \)
C. \( TR = 100Q - Q^2 \)
D. \( TR = 100Q + Q^2 \)

Correct Answer: A

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Question 17
A monopolist faces a demand curve given by Q = 100 - 2P. The monopolist's marginal \cost (MC) is given by MC = 10 + 2Q. What is the profit-maximizing price \( P* \)?
A. \( P* = 20 \)
Correct B. \( P* = 30 \)
C. \( P* = 40 \)
D. \( P* = 50 \)

Correct Answer: B

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Question 18
A government imposes a tax of ₦10 on a firm's output. The firm's supply curve is given by Q = 100 - 2P. What is the new supply curve after the tax?
Correct A. \( Q = 100 - 2\( P + 10 \ \) )
B. \( Q = 100 - 2P + 10 \)
C. \( Q = 100 - 2\( P - 10 \ \) )
D. \( Q = 100 - 2P - 10 \)

Correct Answer: A

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Question 19
A firm's \cost function is given by C(Q) = 100 + 2Q. The firm's revenue function is given by R(Q) = 200Q. What is the firm's profit function?
Correct A. ( pi(Q) = 200Q - 100 - 2Q )
B. ( pi(Q) = 200Q - 100 + 2Q )
C. ( pi(Q) = 200Q + 100 - 2Q )
D. ( pi(Q) = 200Q + 100 + 2Q )

Correct Answer: A

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Question 20
A country's GDP is given by GDP = C + I + G + \( X - M \). If the country's consumption is ₦100 billion, investment is ₦20 billion, government sp\ending is ₦30 billion, exports are ₦50 billion, and imports are ₦20 billion, what is the country's GDP?
A. ₦200 billion
B. ₦250 billion
C. ₦300 billion
Correct D. ₦350 billion

Correct Answer: D

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Question 21
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 a point where the firm is producing at its optimal level of output, what is the implication for the firm's profit-maximizing output?
A. The firm will produce at a level of output where its marginal revenue (MR) equals its marginal \cost (MC).
Correct B. The firm will produce at a level of output where its average revenue (AR) equals its average \cost (AC).
C. The firm will produce at a level of output where its marginal revenue (MR) equals its marginal product (MP).
D. The firm will produce at a level of output where its average revenue (AR) equals its average fixed \cost (AFC).

Correct Answer: B

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Question 22
A country's GDP is calculated as the sum of the value of all final goods and services produced within its borders. However, if a foreign company produces goods within the country, but the goods are not sold within the country, how would this affect the country's GDP?
A. The country's GDP would increase by the value of the goods produced.
B. The country's GDP would decrease by the value of the goods produced.
Correct C. The country's GDP would remain unchanged.
D. The country's GDP would increase by the value of the goods sold within the country.

Correct Answer: C

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Question 23
A firm's production function is given by Q = 2L^0.5K^0.5, where Q is the output, L is the labor, and K is the capital. If the firm wants to increase its output by 20%, what percentage increase in labor and capital is required?
A. 10% increase in labor and 10% increase in capital.
Correct B. 20% increase in labor and 20% increase in capital.
C. 30% increase in labor and 30% increase in capital.
D. 40% increase in labor and 40% increase in capital.

Correct Answer: B

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Question 24
A country's GNP is calculated as the sum of its GDP plus its net factor income from abroad. If a country's GDP is ₦100 billion and its net factor income from abroad is ₦20 billion, what is its GNP?
Correct A. ₦120 billion
B. ₦100 billion
C. ₦80 billion
D. ₦60 billion

Correct Answer: A

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Question 25
A firm's \cost function is given by C = 2L + 3K, where C is the \cost, L is the labor, and K is the capital. If the firm wants to minimize its \cost, what is the optimal level of labor and capital?
A. L = 1, K = 2
Correct B. L = 2, K = 1
C. L = 3, K = 3
D. L = 4, K = 4

Correct Answer: B

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