POST UTME CRAWFORD UNIVERSITY 2023 Economics | Objective

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Question 1
A consumer's indifference curve is downward sloping and convex to the origin. What is the implication of this shape?
Correct A. The consumer is risk-averse.
B. The consumer is risk-neutral.
C. The consumer is risk-loving.
D. The consumer is indifferent to risk.

Correct Answer: A

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Question 2
A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \). If the firm's current input levels are L = 16 and K = 9, what is the marginal product of labor?
Correct A. 1/4
B. 1/2
C. 1
D. 2

Correct Answer: A

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Question 3
A country's GDP is ₦1,500 billion. If the country's population is 200 million, what is the per capita GDP?
Correct A. ₦7,500
B. ₦7,500
C. ₦7,500
D. ₦7,500

Correct Answer: A

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Question 4
A consumer's budget constraint is given by 2x + 3y = 12. If the consumer's current consumption bundle is (x, y) = (3, 2), what is the consumer's marginal rate of substitution?
Correct A. 1/2
B. 1
C. 2
D. 4

Correct Answer: A

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Question 5
A firm's \cost function is given by TC = 2L + 3K. If the firm's current input levels are L = 4 and K = 2, what is the firm's total \cost?
A. 10
Correct B. 12
C. 14
D. 16

Correct Answer: B

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Question 6
The concept of scarcity in economics implies that the production of one good is at the expense of another good. What is the opportunity \cost of producing more of a particular good?
Correct A. The \cost of producing the alternative good
B. The value of the alternative good
C. The \cost of producing the particular good
D. The value of the particular good

Correct Answer: A

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Question 7
Agricultural development in Nigeria has been hindered by the lack of mechanization. Which of the following is a major consequence of this lack of mechanization?
A. Increased food production
Correct B. Decreased food production
C. Increased agricultural employment
D. Decreased agricultural employment

Correct Answer: B

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Question 8
The Nigerian government has implemented a policy to increase the production of rice. What is the expected effect on the price of rice?
A. Increase in price
Correct B. Decrease in price
C. No change in price
D. Uncertainty in price

Correct Answer: B

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Question 9
The concept of returns to scale in production theory implies that as the scale of production increases, the marginal product of labor also increases. What is the expected effect on the average product of labor?
Correct A. Increase in average product of labor
B. Decrease in average product of labor
C. No change in average product of labor
D. Uncertainty in average product of labor

Correct Answer: A

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Question 10
The Nigerian government has implemented a policy to increase the production of textiles. What is the expected effect on the employment in the textile industry?
Correct A. Increase in employment
B. Decrease in employment
C. No change in employment
D. Uncertainty in employment

Correct Answer: A

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Question 11
A perfectly competitive market has the following characteristics: (i) A large number of firms producing a homogeneous product, (ii) Free entry and exit, (iii) Perfect knowledge of market conditions, and (iv) No \single firm can influence the market price. Which of the following is NOT a characteristic of a perfectly competitive market?
Correct A. Firms have complete control over the market price
B. Firms can influence the market price
C. Firms have complete knowledge of market conditions
D. Firms can exit the market freely

Correct Answer: A

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Question 12
The following table shows the production \costs of a firm in a perfectly competitive market. What is the minimum price at which the firm will produce 100 units of output?
A. ₦100
Correct B. ₦120
C. ₦150
D. ₦180

Correct Answer: B

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Question 13
A monopolist faces a demand curve given by Q = 100 - 2P. The monopolist's marginal \cost curve is given by MC = 10 + 2Q. What is the monopolist's profit-maximizing price?
A. ₦50
Correct B. ₦60
C. ₦70
D. ₦80

Correct Answer: B

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Question 14
The following diagram shows the supply and demand curves for a particular good. What is the equilibrium price of the good?
A. ₦20
B. ₦30
Correct C. ₦40
D. ₦50

Correct Answer: C

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Question 15
The government of Nigeria has implemented a policy to increase agricultural production. The policy includes providing subsidies to farmers and investing in irrigation systems. What is the likely effect of this policy on the agricultural sector?
A. A decrease in agricultural production
Correct B. An increase in agricultural production
C. No change in agricultural production
D. A decrease in agricultural prices

Correct Answer: B

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Question 16
Consider a firm operating in a perfectly competitive market. If the firm's marginal revenue (MR) curve intersects the marginal \cost (MC) curve at point E, and the firm's average revenue (AR) curve is downward sloping, what can be concluded about the firm's production level?
Correct A. The firm is producing at its profit-maximizing level.
B. The firm is producing at its minimum efficient scale.
C. The firm is producing at its maximum efficient scale.
D. The firm is producing at its minimum \cost level.

Correct Answer: A

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Question 17
A consumer's utility function is given by 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 of x and y?
Correct A. x = 20, y = 10
B. x = 15, y = 5
C. x = 10, y = 20
D. x = 5, y = 15

Correct Answer: A

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Question 18
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 the firm's output?
A. 10%
Correct B. 15%
C. 20%
D. 25%

Correct Answer: B

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Question 19
A government imposes a tax on a firm's output. If the firm's supply curve shifts to the left by 10% and the demand curve remains unchanged, what is the new equilibrium price?
A. ₦100
Correct B. ₦110
C. ₦120
D. ₦130

Correct Answer: B

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Question 20
A consumer's budget constraint is given by 2x + 3y = 100. If the consumer's utility function is U(x, y) = 2x + 3y and the prices of x and y are ₦5 and ₦10 respectively, what is the consumer's optimal bundle of x and y?
Correct A. x = 20, y = 10
B. x = 15, y = 5
C. x = 10, y = 20
D. x = 5, y = 15

Correct Answer: A

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Question 21
A firm's \cost function is given by C(x) = 2x^2 + 10x + 5. If the firm's revenue function is R(x) = 20x - 2x^2, find the profit-maximizing level of output.
A. 10
B. 15
Correct C. 20
D. 25

Correct Answer: C

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Question 22
A country's balance of payments is given by the following equation: BOP = \( X - M \) + \( F - I \). If the country's exports are $100 billion, imports are $80 billion, foreign investment is $20 billion, and domestic investment is $30 billion, what is the balance of payments?
A. $10 billion
Correct B. $20 billion
C. $30 billion
D. $40 billion

Correct Answer: B

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Question 23
A government is considering a new tax policy that will increase the tax rate from 20% to 25%. If the current tax revenue is $100 million, what will be the new tax revenue?
A. $125 million
B. $150 million
Correct C. $175 million
D. $200 million

Correct Answer: C

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Question 24
A firm is considering investing in a new project that will \cost $100 million and is expected to generate $150 million in revenue. What is the net present value of the project?
A. $50 million
Correct B. $75 million
C. $100 million
D. $125 million

Correct Answer: B

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Question 25
A country's agricultural sector is experiencing a decline in productivity due to a lack of investment in techno\logy. What is the likely effect on the country's GDP?
A. Increase
Correct B. Decrease
C. No effect
D. Uncertain

Correct Answer: B

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