Practice Post UTME ELIZADE UNIVERSITY economics 2018 Past Questions

Question 1

A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \), where Q is output, L is labor and K is capital. If the firm's current labor and capital inputs are 4 and 9 respectively, what is the marginal product of labor?

Correct A. \( \frac{1}{2}L^{-1/2}K^{1/2} \)

B. \( L^{1/2}K^{-1/2} \)

C. \( 2L^{-1/2}K^{1/2} \)

D. \( 4L^{1/2}K^{-1/2} \)

Correct Answer: A

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Question 2

The demand for a product is given by Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. The supply of the product is given by Qs = 2P - 100. What is the equilibrium price?

A. 50

Correct B. 75

C. 100

D. 125

Correct Answer: B

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Question 3

A farmer has 100 hectares of land and wants to plant two crops, maize and soybeans. The revenue from maize is ₦100,000 per hectare, while the revenue from soybeans is ₦120,000 per hectare. If the \cost of planting maize is ₦80,000 per hectare and the \cost of planting soybeans is ₦60,000 per hectare, what is the optimal crop mix?

A. Maize: 50 hectares, Soybeans: 50 hectares

Correct B. Maize: 60 hectares, Soybeans: 40 hectares

C. Maize: 70 hectares, Soybeans: 30 hectares

D. Maize: 80 hectares, Soybeans: 20 hectares

Correct Answer: B

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Question 4

A country's GDP is given by the equation Y = C + I + G + \( X - M \), where Y is the GDP, C is consumption, I is investment, G is government sp\ending, X is exports and M is imports. If the country's current GDP is ₦10 trillion, consumption is ₦3 trillion, investment is ₦2 trillion, government sp\ending is ₦1 trillion, exports are ₦4 trillion and imports are ₦2 trillion, what is the value of the country's net exports?

A. ₦1 trillion

B. ₦2 trillion

C. ₦3 trillion

Correct D. ₦4 trillion

Correct Answer: D

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Question 5

A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \), where Q is output, L is labor and K is capital. If the firm's current labor and capital inputs are 4 and 9 respectively, what is the marginal product of capital?

A. \( \frac{1}{2}L^{1/2}K^{-1/2} \)

B. \( L^{1/2}K^{1/2} \)

Correct C. \( 2L^{1/2}K^{-1/2} \)

D. \( 4L^{-1/2}K^{1/2} \)

Correct Answer: C

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Question 6

An increase in the price of a commodity leads to a decrease in its demand. If the demand for the commodity is elastic, what will happen to the total revenue of the firm?

A. Total revenue will increase

Correct B. Total revenue will decrease

C. Total revenue will remain the same

D. Total revenue will increase initially but then decrease

Correct Answer: B

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Question 7

A country's balance of payments is in surplus. What does this imply about the country's trade balance?

Correct A. The trade balance is in surplus

B. The trade balance is in deficit

C. The trade balance is balanced

D. The trade balance is not affected

Correct Answer: A

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Question 8

A firm is considering investing in a new project. The project has a high initial \cost but will generate a large profit in the long run. What is the opportunity \cost of investing in this project?

Correct A. The initial \cost of the project

B. The profit generated by the project

C. The opportunity \cost is not relevant in this case

D. The opportunity \cost is the profit generated by the project minus the initial \cost

Correct Answer: A

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Question 9

A country is experiencing a recession. What is the likely effect on the money supply?

A. The money supply will increase

Correct B. The money supply will decrease

C. The money supply will remain the same

D. The money supply will fluctuate

Correct Answer: B

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Question 10

A firm is considering investing in a new project. The project has a high initial \cost but will generate a large profit in the long run. What is the opportunity \cost of investing in this project?

Correct A. The initial \cost of the project

B. The profit generated by the project

C. The opportunity \cost is not relevant in this case

D. The opportunity \cost is the profit generated by the project minus the initial \cost

Correct Answer: A

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Question 11

The demand for a product is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the price elasticity of demand is -2, what is the percentage change in quantity demanded when the price increases by 10%?

Correct A. 20%

B. 30%

C. 40%

D. 50%

Correct Answer: A

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Question 12

A country's balance of payments is given by the equation BOP = X - M, where X is the value of exports and M is the value of imports. If the value of exports is 100 and the value of imports is 120, what is the balance of payments?

A. 10

Correct B. 20

C. 30

D. 40

Correct Answer: B

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Question 13

A firm is faced with a production function given by Q = 100L^0.5K^0.5, where Q is the quantity produced, L is the labor input, and K is the capital input. If the firm wants to produce 100 units of output, how much labor and capital should it use?

Correct A. L = 10, K = 10

B. L = 20, K = 20

C. L = 30, K = 30

D. L = 40, K = 40

Correct Answer: A

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Question 14

A country is faced with a budget constraint given by the equation C + I + G = Y, where C is consumption, I is investment, G is government sp\ending, and Y is national income. If the country wants to increase its national income by 10%, how much should it increase its government sp\ending?

A. 5%

Correct B. 10%

C. 15%

D. 20%

Correct Answer: B

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Question 15

A firm is faced with a demand curve given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the firm wants to maximize its profit, what price should it charge?

A. 20

B. 30

Correct C. 40

D. 50

Correct Answer: C

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Question 16

A firm's production function is given by Q = 2L^0.5K^0.5, where Q is output, L is labor and K is capital. If the firm's labor and capital inputs increase by 10% and 20% respectively, what is the percentage change in output?

A. 5%

B. 10%

Correct C. 15%

D. 20%

Correct Answer: C

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Question 17

The Nigerian government has implemented a policy to increase the production of agricultural products. If the production of rice increases by 20% and the price of rice decreases by 10%, what is the effect on the consumer's surplus?

A. Increase by 10%

Correct B. Decrease by 10%

C. Remain the same

D. Increase by 20%

Correct Answer: B

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Question 18

A firm's production function is given by Q = 2L^0.5K^0.5, where Q is output, L is labor and K is capital. If the firm's labor and capital inputs increase by 10% and 20% respectively, what is the percentage change in output?

A. 5%

B. 10%

Correct C. 15%

D. 20%

Correct Answer: C

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Question 19

The Nigerian government has implemented a policy to increase the production of agricultural products. If the production of rice increases by 20% and the price of rice decreases by 10%, what is the effect on the consumer's surplus?

A. Increase by 10%

Correct B. Decrease by 10%

C. Remain the same

D. Increase by 20%

Correct Answer: B

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Question 20

A firm's production function is given by Q = 2L^0.5K^0.5, where Q is output, L is labor and K is capital. If the firm's labor and capital inputs increase by 10% and 20% respectively, what is the percentage change in output?

A. 5%

B. 10%

Correct C. 15%

D. 20%

Correct Answer: C

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Question 21

A consumer's indifference curve is represented by the equation ( u(x,y) = 2x + 3y ). If the consumer's income is ₦1000 and the prices of x and y are ₦5 and ₦10 respectively, find the optimal bundle of x and y.

Correct A. \( x = 80, y = 40 \)

B. \( x = 60, y = 20 \)

C. \( x = 40, y = 10 \)

D. \( x = 20, y = 5 \)

Correct Answer: A

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Question 22

A perfectly competitive market has a supply function given by \( Q_s = 2P - 100 \). If the market equilibrium price is ₦50, find the equilibrium quantity.

Correct A. \( Q = 50 \)

B. \( Q = 100 \)

C. \( Q = 200 \)

D. \( Q = 300 \)

Correct Answer: A

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Question 23

A country's balance of payments is given by the equation \( BOP = X - M \), where X is the value of exports and M is the value of imports. If the value of exports is ₦1000 and the value of imports is ₦800, find the balance of payments.

Correct A. ₦200

B. ₦300

C. ₦400

D. ₦500

Correct Answer: A

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Question 24

A government imposes a tax of ₦10 on a good that is currently priced at ₦50. If the demand for the good is given by the equation \( Q = 100 - 2P \), find the new equilibrium price and quantity.

Correct A. \( P = 40, Q = 60 \)

B. \( P = 30, Q = 70 \)

C. \( P = 20, Q = 80 \)

D. \( P = 10, Q = 90 \)

Correct Answer: A

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Question 25

A firm's \cost function is given by the equation \( C = 2Q^2 + 100Q \). If the firm produces 50 units of output, find the total \cost.

A. ₦2500

Correct B. ₦3000

C. ₦3500

D. ₦4000

Correct Answer: B

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