Practice Post UTME EKSU economics 2018 Past Questions

Question 1

Suppose the demand function for a commodity is given by Q = 100 - 2P and the supply function is given by Q = 2P + 10. Find the equilibrium price and quantity.

A. ₦50, 60 units

Correct B. ₦75, 50 units

C. ₦100, 40 units

D. ₦120, 30 units

Correct Answer: B

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Question 2

A firm has a total revenue function given by TR = 100x - 2x^2, where x is the number of units sold. Find the marginal revenue function.

Correct A. 100 - 4x

B. 100 - 2x

C. 100 + 2x

D. 100 + 4x

Correct Answer: A

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Question 3

A monopolist faces a demand curve given by P = 100 - 2Q. The marginal \cost function is given by MC = 10 + 2Q. Find the profit-maximizing quantity and price.

A. Q = 20, P = ₦60

B. Q = 30, P = ₦80

Correct C. Q = 40, P = ₦100

D. Q = 50, P = ₦120

Correct Answer: C

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Question 4

A government imposes a tax of ₦5 per unit on a good. The supply function is given by Q = 2P + 10. Find the new supply function after the tax is imposed.

A. Q = 2P + 20

Correct B. Q = 2P + 25

C. Q = 2P + 30

D. Q = 2P + 35

Correct Answer: B

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Question 5

A firm has a total \cost function given by TC = 100 + 2x^2, where x is the number of units produced. Find the marginal \cost function.

Correct A. 4x

B. 2x

C. 100 + 4x

D. 100 + 2x

Correct Answer: A

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Question 6

The concept of scarcity in economics implies that the wants and needs of individuals are unlimited, while the resources available to satisfy these wants and needs are limited. Which of the following is a correct statement regarding the law of diminishing marginal utility?

Correct A. As the quantity of a good consumed increases, the marginal utility derived from each additional unit decreases.

B. The law of diminishing marginal utility is applicable only to normal goods.

C. The law of diminishing marginal utility is a consequence of the law of demand.

D. The law of diminishing marginal utility is a concept that applies only to individual consumers.

Correct Answer: A

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Question 7

The supply curve of a firm is upward-sloping because the firm is a price-taker in the market. Which of the following is a correct statement regarding the relationship between the supply curve and the marginal \cost curve?

A. The supply curve is a horizontal line that intersects the marginal \cost curve at the equilibrium price.

B. The supply curve is a vertical line that intersects the marginal \cost curve at the equilibrium quantity.

Correct C. The supply curve is upward-sloping because the marginal \cost curve is downward-sloping.

D. The supply curve is downward-sloping because the marginal \cost curve is upward-sloping.

Correct Answer: C

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Question 8

The money supply in an economy is determined by the central bank. Which of the following is a correct statement regarding the relationship between the money supply and the interest rate?

Correct A. An increase in the money supply leads to a decrease in the interest rate.

B. A decrease in the money supply leads to an increase in the interest rate.

C. The money supply has no effect on the interest rate.

D. The interest rate has no effect on the money supply.

Correct Answer: A

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Question 9

The agricultural sector in Nigeria is a significant contributor to the country's GDP. Which of the following is a correct statement regarding the impact of agricultural subsidies on the agricultural sector?

Correct A. Agricultural subsidies lead to an increase in the production of crops and a decrease in the price of agricultural products.

B. Agricultural subsidies lead to a decrease in the production of crops and an increase in the price of agricultural products.

C. Agricultural subsidies have no effect on the production of crops and the price of agricultural products.

D. Agricultural subsidies lead to an increase in the production of crops and an increase in the price of agricultural products.

Correct Answer: A

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Question 10

The balance of payments (BOP) is a statistical statement that summarizes a country's transactions with the rest of the world. Which of the following is a correct statement regarding the components of the BOP?

A. The current account and the capital account are the two main components of the BOP.

B. The current account and the financial account are the two main components of the BOP.

Correct C. The current account, the capital account, and the financial account are the three main components of the BOP.

D. The current account, the capital account, and the balance of trade are the three main components of the BOP.

Correct Answer: C

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Question 11

The law of diminishing marginal utility states that as the quantity of a good consumed increases, the marginal utility derived from each additional unit of the good decreases. However, this law does not apply to which of the following goods?

Correct A. Giffen goods

B. Normal goods

C. Inferior goods

D. Luxury goods

Correct Answer: A

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Question 12

A country's balance of payments (BOP) accounts can be classified into which of the following categories?

Correct A. Current account, capital account, and financial account

B. Current account, capital account, and trade account

C. Current account, capital account, and investment account

D. Current account, capital account, and exchange account

Correct Answer: A

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Question 13

The production function is given by Q = 2L^0.5K^0.5. If the price of labor \( P_L \) is ₦100 per unit and the price of capital \( P_K \) is ₦200 per unit, what is the total \cost of producing 4 units of output?

A. ₦400

B. ₦800

Correct C. ₦1200

D. ₦1600

Correct Answer: C

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Question 14

A monopolist faces a demand curve given by P = 100 - 2Q. The marginal revenue (MR) function is given by MR = 100 - 4Q. What is the price elasticity of demand at a quantity of 20 units?

Correct A. 0.5

B. 1

C. 2

D. 4

Correct Answer: A

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Question 15

A firm's production function is given by Q = 2L^0.5K^0.5. If the price of labor \( P_L \) is ₦100 per unit and the price of capital \( P_K \) is ₦200 per unit, what is the optimal combination of labor and capital that minimizes the \cost of producing 4 units of output?

Correct A. L = 4, K = 2

B. L = 2, K = 4

C. L = 1, K = 8

D. L = 8, K = 1

Correct Answer: A

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Question 16

Consider a country with a mixed economy, where the government imposes a tax on luxury goods. The tax revenue is used to fund public goods and services. Assuming the tax rate is 20% and the demand for luxury goods is elastic, what is the effect of the tax on the equilibrium price and quantity of luxury goods?

Correct A. The tax will increase the equilibrium price and decrease the equilibrium quantity of luxury goods.

B. The tax will decrease the equilibrium price and increase the equilibrium quantity of luxury goods.

C. The tax will have no effect on the equilibrium price and quantity of luxury goods.

D. The tax will increase the equilibrium price and increase the equilibrium quantity of luxury goods.

Correct Answer: A

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Question 17

A firm is considering two alternative production processes for a new product. Process A has a fixed \cost of ₦100,000 and a variable \cost of ₦50 per unit. Process B has a fixed \cost of ₦150,000 and a variable \cost of ₦30 per unit. If the market price of the product is ₦80 per unit, which production process should the firm choose?

Correct A. Process A

B. Process B

C. Both processes are equally profitable

D. Neither process is profitable

Correct Answer: A

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Question 18

A consumer has a budget of ₦1,000 and faces the following prices for two goods: good X \costs ₦200 and good Y \costs ₦300. If the consumer's utility function is U = 2X + 3Y, what is the optimal combination of goods X and Y that the consumer will choose?

Correct A. \( X = 2, Y = 1 \)

B. \( X = 1, Y = 2 \)

C. \( X = 3, Y = 0 \)

D. \( X = 0, Y = 3 \)

Correct Answer: A

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Question 19

A firm is facing a demand curve given by Q = 100 - 2P. If the firm's marginal \cost is cons\tant at ₦20 per unit, what is the profit-maximizing price and quantity?

Correct A. P = ₦30, Q = 40

B. P = ₦40, Q = 30

C. P = ₦50, Q = 20

D. P = ₦20, Q = 50

Correct Answer: A

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Question 20

A country is experiencing a recession, and the government decides to implement a fiscal policy to stimulate the economy. The government increases government sp\ending by ₦100 billion and cuts taxes by ₦50 billion. What is the effect of this fiscal policy on aggregate demand?

Correct A. The fiscal policy will increase aggregate demand

B. The fiscal policy will decrease aggregate demand

C. The fiscal policy will have no effect on aggregate demand

D. The fiscal policy will increase aggregate demand, but the effect will be temporary

Correct Answer: A

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Question 21

A consumer's indifference curve is given by the equation ( u(x,y) = 2x + 3y ). If the consumer's income is ₦1000 and the prices of goods x and y are ₦2 and ₦3 respectively, find the consumer's optimal bundle of goods x and y.

A. (200, 150)

B. (300, 100)

Correct C. (250, 125)

D. (150, 200)

Correct Answer: C

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Question 22

The production function for a firm is given by \( Q = 2L^2 + 3K \), where Q is the output, L is the labor and K is the capital. If the firm uses 5 units of labor and 10 units of capital, find the output.

A. 50

Correct B. 60

C. 70

D. 80

Correct Answer: B

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Question 23

A firm's demand function for a product is given by \( Q = 100 - 2P \), where Q is the quantity demanded and P is the price. If the firm wants to maximize its revenue, find the price at which it should sell the product.

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 24

A consumer's budget constraint is given by the equation \( 2x + 3y = 12 \), where x and y are the quantities of two goods. If the consumer's indifference curve is given by the equation ( u(x,y) = x + 2y ), find the consumer's optimal bundle of goods x and y.

A. (3, 2)

Correct B. (4, 1)

C. (5, 0)

D. (2, 3)

Correct Answer: B

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Question 25

A firm's production function is given by \( Q = 2L^2 + 3K \), where Q is the output, L is the labor and K is the capital. If the firm uses 5 units of labor and 10 units of capital, find the marginal product of labor.

A. 10

Correct B. 20

C. 30

D. 40

Correct Answer: B

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