POST UTME ELIZADE UNIVERSITY 2020 Economics | Objective

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Question 1
A country's government has decided to implement a new tax on all imported goods. The tax rate is 15% of the good's value. If a consumer buys a pair of shoes worth ₦15,000, how much tax will they pay?
Correct A. ₦1,500
B. ₦2,250
C. ₦3,750
D. ₦4,500

Correct Answer: A

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Question 2
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 increases labor from 100 to 121 units, and capital from 100 to 121 units, what is the percentage change in output?
A. 10%
Correct B. 20%
C. 30%
D. 40%

Correct Answer: B

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Question 3
A country's GDP is ₦1,000,000,000. If the country's population is 20 million, and the average GDP per capita is ₦50,000, what is the country's GDP per capita?
A. ₦40,000
Correct B. ₦50,000
C. ₦60,000
D. ₦70,000

Correct Answer: B

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Question 4
A firm's \cost function is given by C = 2L + 3K, where C is \cost, L is labor, and K is capital. If the firm increases labor from 100 to 121 units, and capital from 100 to 121 units, what is the percentage change in \cost?
A. 10%
Correct B. 20%
C. 30%
D. 40%

Correct Answer: B

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Question 5
A country's government has decided to implement a new tax on all imported goods. The tax rate is 15% of the good's value. If a consumer buys a pair of shoes worth ₦15,000, and the tax rate is increased to 20%, how much more tax will they pay?
A. ₦250
Correct B. ₦500
C. ₦750
D. ₦1,000

Correct Answer: B

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Question 6
A firm is operating under a perfectly competitive market structure. If the firm's marginal revenue (MR) is equal to its marginal \cost (MC), what will be the effect on the firm's output and price?
A. The firm will increase output and price.
B. The firm will decrease output and price.
Correct C. The firm will maintain output and price.
D. The firm will increase output but decrease price.

Correct Answer: C

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Question 7
A country's GDP is ₦100 billion, and its GNP is ₦120 billion. What is the value of net factor income from abroad?
Correct A. ₦20 billion
B. ₦10 billion
C. ₦5 billion
D. ₦15 billion

Correct Answer: A

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Question 8
A monopolist faces a demand curve given by Q = 100 - 2P. The firm's marginal \cost (MC) is ₦10. What is the profit-maximizing price and quantity?
Correct A. P = ₦40, Q = 30
B. P = ₦30, Q = 40
C. P = ₦20, Q = 50
D. P = ₦50, Q = 20

Correct Answer: A

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Question 9
A firm is facing a production function given by Q = 2L^0.5K^0.5. If the firm's labor (L) increases from 4 to 9, and capital (K) remains cons\tant at 16, what is the percentage change in output?
A. 25%
Correct B. 50%
C. 75%
D. 100%

Correct Answer: B

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Question 10
A country's economy is experiencing a recession. The government decides to implement a fiscal policy to stimulate aggregate demand. Which of the following fiscal policy tools is most likely to be effective in this situation?
Correct A. Increase government sp\ending
B. Decrease taxes
C. Increase interest rates
D. Decrease government sp\ending

Correct Answer: A

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Question 11
A monopolist faces a demand curve given by Q = 100 - 2P and a \cost function C(Q) = 2Q^2 + 10Q. What is the profit-maximizing quantity of output?
A. 50
B. 75
Correct C. 100
D. 125

Correct Answer: C

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Question 12
A consumer's utility function is given by U(x, y) = 2x + 3y. The budget constraint is 2x + 3y = 12. Find the consumer's optimal bundle of x and y.
A. x = 2, y = 4
B. x = 4, y = 2
Correct C. x = 3, y = 3
D. x = 1, y = 5

Correct Answer: C

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Question 13
A country's balance of payments is given by the following equation: BOP = X - M - \( I - S \). If X = 100, M = 50, I = 20, and S = 30, what is the balance of payments?
Correct A. 20
B. 30
C. 40
D. 50

Correct Answer: A

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Question 14
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm wants to produce 100 units of output, and the price of labor is 10, and the price of capital is 20, what is the optimal combination of labor and capital?
A. L = 10, K = 20
B. L = 20, K = 10
Correct C. L = 15, K = 15
D. L = 5, K = 25

Correct Answer: C

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Question 15
A government wants to implement a tax on a good that is currently priced at 10. The demand for the good is given by Q = 100 - 2P, and the supply of the good is given by Q = 2P. What is the optimal tax rate?
A. 20%
Correct B. 30%
C. 40%
D. 50%

Correct Answer: B

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Question 16
A firm operating in a perfectly competitive market is characterized by which of the following?
A. A \single price maker
Correct B. Many firms producing a homogeneous product
C. A firm with market power
D. A firm with a fixed price

Correct Answer: B

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Question 17
The money multiplier is affected by the reserve requirement ratio. If the reserve requirement ratio increases, what happens to the money multiplier?
A. Increases
Correct B. Decreases
C. Remains the same
D. Is unaffected

Correct Answer: B

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Question 18
Agricultural development in Nigeria has been hindered by which of the following?
A. Lack of irrigation facilities
B. Inadequate funding
C. Poor infrastructure
Correct D. All of the above

Correct Answer: D

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Question 19
The law of diminishing marginal returns states that as the quantity of a variable input increases, the marginal product of that input will eventually decrease. What is the reason for this decrease?
Correct A. The law of diminishing marginal returns is a result of the increa\sing marginal \cost of production
B. The law of diminishing marginal returns is a result of the decrea\sing marginal product of labor
C. The law of diminishing marginal returns is a result of the increa\sing marginal product of capital
D. The law of diminishing marginal returns is a result of the decrea\sing marginal product of land

Correct Answer: A

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Question 20
The balance of payments accounts are used to record all international transactions between a country and the rest of the world. What is the purpose of the current account?
Correct A. To record all international transactions in goods and services
B. To record all international transactions in capital and financial flows
C. To record all international transactions in the balance of payments
D. To record all international transactions in the current account

Correct Answer: A

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Question 21
The concept of returns to scale is crucial in unders\tanding the behavior of firms in a market economy. Which of the following best describes the relationship between output and input in the case of increa\sing returns to scale?
A. Output increases at a decrea\sing rate as input increases
Correct B. Output increases at an increa\sing rate as input increases
C. Output increases at a cons\tant rate as input increases
D. Output decreases as input increases

Correct Answer: B

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Question 22
A government may impose a tax on a good to reduce its consumption. However, this tax may also lead to a decrease in the supply of the good. Which of the following best describes the effect of this tax on the equilibrium price and quantity of the good?
A. The equilibrium price and quantity of the good increase
Correct B. The equilibrium price of the good increases, but the quantity decreases
C. The equilibrium price of the good decreases, but the quantity increases
D. The equilibrium price and quantity of the good decrease

Correct Answer: B

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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 increases its labor from 4 to 9 units, and its capital from 9 to 16 units, what is the percentage change in output?
A. 10%
B. 20%
Correct C. 30%
D. 40%

Correct Answer: C

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Question 24
A government budget is given by the equation G = T + B, where G is the government exp\enditure, T is the tax revenue, and B is the budget deficit. If the government exp\enditure is 100, the tax revenue is 80, and the budget deficit is 20, what is the value of G?
A. 80
B. 100
Correct C. 120
D. 140

Correct Answer: C

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Question 25
A firm's demand function is given by Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the price is 20, what is the quantity demanded?
A. 40
Correct B. 60
C. 80
D. 100

Correct Answer: B

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