Practice Post UTME EKSU economics 2021 Past Questions

Question 1

In a perfectly competitive market, the demand curve for a firm's product is its?

A. Supply Curve

Correct B. Demand Curve

C. Marginal Revenue Curve

D. Average Total Cost Curve

Correct Answer: B

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Question 2

A firm's average total \cost (ATC) curve is downward sloping in the short run because of?

A. Economies of scale

Correct B. Diminishing marginal returns

C. Fixed \costs

D. Variable \costs

Correct Answer: B

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Question 3

The opportunity \cost of producing one more unit of a good is represented by the?

Correct A. Marginal Product Curve

B. Average Product Curve

C. Marginal Revenue Curve

D. Average Total Cost Curve

Correct Answer: A

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Question 4

A country's balance of payments (BOP) is in equilibrium when?

A. The current account is in surplus and the capital account is in deficit

B. The current account is in deficit and the capital account is in surplus

Correct C. The current account is in equilibrium and the capital account is in equilibrium

D. The current account is in surplus and the capital account is in surplus

Correct Answer: C

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Question 5

The law of diminishing marginal utility states that as the quantity of a good consumed increases, the?

A. Marginal utility of the good increases

Correct B. Marginal utility of the good decreases

C. Total utility of the good increases

D. Total utility of the good decreases

Correct Answer: B

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Question 6

A consumer's indifference curve is downward sloping and convex to the origin. What is the implication of this shape on the consumer's marginal rate of substitution (MRS)?

A. The MRS is cons\tant

Correct B. The MRS is decrea\sing

C. The MRS is increa\sing

D. The MRS is zero

Correct Answer: B

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Question 7

A firm is operating in a perfectly competitive market with a demand curve given by Q = 100 - P. The firm's marginal \cost (MC) is cons\tant at ₦10. What is the profit-maximizing price and quantity for the firm?

A. P = ₦45, Q = 55

Correct B. P = ₦50, Q = 50

C. P = ₦55, Q = 45

D. P = ₦60, Q = 40

Correct Answer: B

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Question 8

A consumer's budget constraint is given by 2x + 3y = 12. The consumer's indifference curve is downward sloping and convex to the origin. What is the consumer's optimal bundle of x and y?

A. x = 2, y = 2

Correct B. x = 3, y = 1

C. x = 4, y = 0

D. x = 0, y = 4

Correct Answer: B

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Question 9

A firm is operating in a monopoly market with a demand curve given by Q = 100 - P. The firm's marginal \cost (MC) is cons\tant at ₦10. What is the profit-maximizing price and quantity for the firm?

A. P = ₦50, Q = 50

Correct B. P = ₦55, Q = 45

C. P = ₦60, Q = 40

D. P = ₦65, Q = 35

Correct Answer: B

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Question 10

A consumer's indifference curve is downward sloping and convex to the origin. The consumer's budget constraint is given by 2x + 3y = 12. What is the consumer's optimal bundle of x and y?

A. x = 3, y = 1

B. x = 4, y = 0

Correct C. x = 2, y = 2

D. x = 0, y = 4

Correct Answer: C

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Question 11

Consider a firm operating in a perfectly competitive market with a given production function Q = 2L^0.5K^0.5. If the firm's current input prices are w = ₦100 and r = ₦200, and the current output price is p = ₦500, calculate the firm's maximum profit.

Correct A. ₦10,000

B. ₦20,000

C. ₦30,000

D. ₦40,000

Correct Answer: A

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Question 12

A country's balance of payments account shows a trade deficit of ₦100 billion and a capital account surplus of ₦50 billion. What is the overall balance of payments position?

A. ₦50 billion surplus

Correct B. ₦50 billion deficit

C. ₦100 billion deficit

D. ₦150 billion surplus

Correct Answer: B

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Question 13

A firm's \cost function is given by C = 2L + 3K. If the firm's current input prices are w = ₦100 and r = ₦200, and the current output price is p = ₦500, calculate the firm's total \cost.

A. ₦10,000

B. ₦20,000

Correct C. ₦30,000

D. ₦40,000

Correct Answer: C

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Question 14

Consider a firm operating in a perfectly competitive market with a given production function Q = 2L^0.5K^0.5. If the firm's current input prices are w = ₦100 and r = ₦200, and the current output price is p = ₦500, calculate the firm's marginal revenue product.

A. ₦10

B. ₦20

Correct C. ₦30

D. ₦40

Correct Answer: C

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Question 15

A country's balance of payments account shows a trade deficit of ₦100 billion and a capital account surplus of ₦50 billion. What is the overall balance of payments position?

A. ₦50 billion surplus

Correct B. ₦50 billion deficit

C. ₦100 billion deficit

D. ₦150 billion surplus

Correct Answer: B

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Question 16

In a perfectly competitive market, the law of diminishing marginal returns is not applicable. What is the primary reason for this?

A. The law of diminishing marginal returns is a characteristic of the production function.

B. The law of diminishing marginal returns is not relevant in the short run.

Correct C. The law of diminishing marginal returns is not applicable in a perfectly competitive market because firms can easily enter or exit the market.

D. The law of diminishing marginal returns is not applicable in a perfectly competitive market because firms produce homogeneous products.

Correct Answer: C

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Question 17

A monopolistically competitive firm faces a downward-sloping demand curve. What is the primary effect of this on the firm's profit-maximizing output?

A. The firm will produce at a higher output level.

Correct B. The firm will produce at a lower output level.

C. The firm's profit-maximizing output will be unaffected.

D. The firm will produce at an output level that is between the perfectly competitive and monopolistic output levels.

Correct Answer: B

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Question 18

A government budget is said to be balanced when the total revenue equals the total exp\enditure. What is the primary implication of this on the government's fiscal policy?

A. The government's fiscal policy is contractionary.

B. The government's fiscal policy is expansionary.

Correct C. The government's fiscal policy is neutral.

D. The government's fiscal policy is not affected.

Correct Answer: C

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Question 19

A firm's production function is given by Q = 2L^0.5K^0.5. What is the primary effect of an increase in the capital stock on the firm's output?

Correct A. The firm's output will increase by a larger amount.

B. The firm's output will increase by a smaller amount.

C. The firm's output will remain unchanged.

D. The firm's output will decrease.

Correct Answer: A

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Question 20

A consumer's indifference curve is given by the equation u(x,y) = 2x + 3y. What is the primary implication of this on the consumer's behavior?

A. The consumer is a risk-averse individual.

Correct B. The consumer is a risk-neutral individual.

C. The consumer is a risk-loving individual.

D. The consumer's behavior is unaffected by the indifference curve.

Correct Answer: B

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Question 21

Consider a firm operating in a perfectly competitive market with a downward-sloping demand curve. If the firm's marginal revenue (MR) is equal to its marginal \cost (MC), what is the optimal quantity of output to produce?

Correct A. The quantity at which MR = MC

B. The quantity at which the demand curve intersects the vertical axis

C. The quantity at which the supply curve intersects the vertical axis

D. The quantity at which the firm's average revenue (AR) equals its average \cost (AC)

Correct Answer: A

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Question 22

A consumer is faced with the following utility function: U(x,y) = 2x + 3y. If the prices of x and y are $2 and $3 respectively, and the consumer has a budget of $15, what is the optimal bundle of x and y?

Correct A. $ x=3, y=2 $

B. $ x=2, y=3 $

C. $ x=4, y=1 $

D. $ x=1, y=4 $

Correct Answer: A

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Question 23

A firm is operating in a monopoly market with a demand curve given by Qd = 100 - 2P. If the firm's marginal \cost (MC) is $10, what is the optimal price to charge?

A. $20

Correct B. $30

C. $40

D. $50

Correct Answer: B

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Question 24

Consider a closed economy with a GDP of $100 billion and a GNP of $120 billion. What is the value of net factor income from abroad?

A. $10 billion

B. $20 billion

Correct C. $30 billion

D. $40 billion

Correct Answer: C

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Question 25

A central bank is considering a monetary policy of increa\sing the money supply by 10%. If the initial money supply is $100 billion, what is the new money supply?

A. $110 billion

Correct B. $120 billion

C. $130 billion

D. $140 billion

Correct Answer: B

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