Practice Post UTME ELIZADE UNIVERSITY economics 2024 Past Questions

Question 1

Consider a perfectly competitive market with two firms, A and B. Firm A has a \cost function C_A(q) = 2q^2 + 10q + 5, while Firm B has a \cost function C_B(q) = 3q^2 + 8q + 2. If the market price is P = 20, and the firms produce q_A = 5 units and q_B = 3 units, respectively, what is the total revenue of Firm A?

Correct A. ₦150

B. ₦200

C. ₦250

D. ₦300

Correct Answer: A

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Question 2

A firm's demand function is given by Q = 100 - 2P. If the firm produces 40 units, what is the price elasticity of demand?

A. 0.5

B. 1

C. 2

Correct D. -1

Correct Answer: D

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Question 3

A consumer's utility function is given by U(x, y) = 2x + 3y. If the consumer's income is ₦100 and the prices of x and y are ₦5 and ₦3, respectively, what is the consumer's optimal bundle?

A. (10, 10)

Correct B. (15, 5)

C. (20, 0)

D. (0, 20)

Correct Answer: B

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Question 4

A firm's supply function is given by Q = 2P - 10. If the market price is P = 15, what is the quantity supplied?

A. 10

Correct B. 20

C. 30

D. 40

Correct Answer: B

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Question 5

A central bank increases the money supply by 10%. What is the effect on the price level?

A. 10% decrease

Correct B. 10% increase

C. 5% decrease

D. 5% increase

Correct Answer: B

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Question 6

A firm's production function is given by Q = 2L^0.5H^0.5, where Q is output, L is labor and H is capital. If the firm wants to increase output by 20% while keeping labor cons\tant, what percentage increase in capital is required?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 7

A country's GDP is $100 billion, its imports are $20 billion and its exports are $30 billion. What is its balance of payments?

A. $10 billion surplus

Correct B. $10 billion deficit

C. $20 billion surplus

D. $20 billion deficit

Correct Answer: B

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Question 8

A consumer's utility function is given by U = 2x + 3y, where x and y are the quantities of two goods. If the consumer's budget is $100 and the prices of the two goods are $10 and $20 respectively, what is the consumer's optimal bundle?

Correct A. (5, 5)

B. (10, 10)

C. (15, 15)

D. (20, 20)

Correct Answer: A

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Question 9

A firm's production function is given by Q = 2L^0.5H^0.5, where Q is output, L is labor and H is capital. If the firm wants to increase output by 20% while keeping labor cons\tant, what percentage increase in capital is required?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 10

A country's GDP is $100 billion, its imports are $20 billion and its exports are $30 billion. What is its balance of payments?

A. $10 billion surplus

Correct B. $10 billion deficit

C. $20 billion surplus

D. $20 billion deficit

Correct Answer: B

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Question 11

A perfectly competitive firm's supply curve is upward-sloping because it is a

Correct A. price-taker

B. price-maker

C. price-setter

D. price-follower

Correct Answer: A

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Question 12

The demand for a product is represented by the equation Qd = 100 - 2P. If the price of the product is $20, what is the quantity demanded?

A. 10

Correct B. 20

C. 30

D. 40

Correct Answer: B

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Question 13

A country's balance of payments account is in equilibrium when its current account is equal to its capital account. If the current account is $100 billion and the capital account is $50 billion, what is the balance of payments deficit?

Correct A. -50

B. -100

C. -150

D. -200

Correct Answer: A

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Question 14

A firm's production function is given by Q = 2L + 3K. If the firm has 10 units of labor and 5 units of capital, what is the total output?

A. 25

B. 30

Correct C. 35

D. 40

Correct Answer: C

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Question 15

A country's GDP is $100 billion and its GNP is $120 billion. What is the net factor income from abroad?

A. 10

Correct B. 20

C. 30

D. 40

Correct Answer: B

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Question 16

Consider a firm operating in a perfectly competitive market. If the firm's average \cost curve (AC) intersects the demand curve (D) at point E, and the marginal \cost curve (MC) intersects the demand curve (D) at point F, what is the likely outcome for the firm's profit?

Correct A. The firm will make a normal profit.

B. The firm will make an economic profit.

C. The firm will make a loss.

D. The firm will break even.

Correct Answer: A

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Question 17

A country's balance of payments (BOP) is in equilibrium when the current account (CA) and the capital account (KA) are balanced. If the CA is in surplus, what is the likely outcome for the KA?

A. The KA will be in surplus.

Correct B. The KA will be in deficit.

C. The KA will be balanced.

D. The KA will be zero.

Correct Answer: B

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Question 18

A firm is considering investing in a new project with an initial investment of ₦1,000,000 and a projected return of ₦1,200,000 per year for 5 years. What is the net present value (NPV) of the project if the discount rate is 10%?

A. ₦1,000,000

B. ₦1,200,000

Correct C. ₦1,500,000

D. ₦2,000,000

Correct Answer: C

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Question 19

A country is experiencing a recession, and the government is considering implementing a fiscal policy to stimulate the economy. Which of the following fiscal policies would be most effective in stimulating the economy?

Correct A. Increa\sing government sp\ending

B. Reducing taxes

C. Increa\sing interest rates

D. Reducing government sp\ending

Correct Answer: A

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Question 20

A firm is operating in a monopoly market and is considering increa\sing its price. What is the likely outcome for the firm's profit?

Correct A. The firm's profit will increase.

B. The firm's profit will decrease.

C. The firm's profit will remain the same.

D. The firm's profit will be zero.

Correct Answer: A

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Question 21

Consider a country with a balance of payments deficit. If the central bank decides to intervene by selling foreign exchange to importers, what is the likely effect on the exchange rate?

A. The exchange rate will appreciate

Correct B. The exchange rate will depreciate

C. The exchange rate will remain unchanged

D. The exchange rate will fluctuate

Correct Answer: B

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Question 22

A monopolistically competitive firm faces a demand curve with a cons\tant elasticity of -2. If the firm's marginal revenue curve is given by MR = 10 - 2Q, what is the firm's optimal output level?

A. Q = 5

Correct B. Q = 10

C. Q = 15

D. Q = 20

Correct Answer: B

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Question 23

A country has a production function given by Q = 10K^0.5L^0.5. If the country's capital stock increases by 20% and labor increases by 15%, what is the percentage change in output?

A. 10%

B. 15%

Correct C. 20%

D. 25%

Correct Answer: C

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Question 24

A firm has a budget constraint given by 2Q + 3I = 100. If the firm's output (Q) increases by 20% and its investment (I) increases by 15%, what is the new budget constraint?

A. 2Q + 3I = 120

B. 2Q + 3I = 130

Correct C. 2Q + 3I = 140

D. 2Q + 3I = 150

Correct Answer: C

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Question 25

A monopolist faces a demand curve with a cons\tant elasticity of -3. If the firm's marginal revenue curve is given by MR = 20 - 3Q, what is the firm's optimal output level?

A. Q = 5

Correct B. Q = 10

C. Q = 15

D. Q = 20

Correct Answer: B

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