Practice Post UTME ESUT economics 2018 Past Questions

Question 1

A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \). If the firm's labor and capital inputs are increased by 20% and 15% respectively, what is the percentage change in output?

A. 5%

Correct B. 10%

C. 15%

D. 20%

Correct Answer: B

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Question 2

A country's balance of payments is given by the following equation: BOP = X - M + \( F - I \). If the country's exports increase by 10%, imports decrease by 5%, foreign investment increases by 15%, and domestic investment decreases by 10%, what is the percentage change in the balance of payments?

A. -5%

B. 0%

C. 5%

Correct D. 10%

Correct Answer: D

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Question 3

A firm's \cost function is given by C = 2L + 3K. If the firm's labor and capital inputs are increased by 20% and 15% respectively, what is the percentage change in total \cost?

A. 5%

B. 10%

Correct C. 15%

D. 20%

Correct Answer: C

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Question 4

A country's GDP is given by the following equation: GDP = C + I + G + \( X - M \). If the country's consumption increases by 10%, investment decreases by 5%, government sp\ending increases by 15%, exports increase by 10%, and imports decrease by 5%, what is the percentage change in GDP?

A. 5%

B. 10%

C. 15%

Correct D. 20%

Correct Answer: D

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Question 5

A firm's revenue function is given by R = 2L + 3K. If the firm's labor and capital inputs are increased by 20% and 15% respectively, what is the percentage change in total revenue?

A. 5%

B. 10%

Correct C. 15%

D. 20%

Correct Answer: C

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Question 6

The government of Nigeria has implemented a policy to increase the production of rice in the country. Assuming that the production function for rice is given by Q = 100L^0.5K^0.5, where Q is the quantity of rice produced, L is the labor input, and K is the capital input, what is the value of the returns to scale?

A. Increa\sing

B. Decrea\sing

Correct C. Cons\tant

D. Indeterminate

Correct Answer: C

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Question 7

The demand for a product is given by the equation P = 100 - 2Q, where P is the price and Q is the quantity demanded. The supply of the product is given by the equation P = 50 + Q. What is the equilibrium price and quantity?

Correct A. P = 75, Q = 25

B. P = 50, Q = 25

C. P = 100, Q = 25

D. P = 75, Q = 50

Correct Answer: A

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Question 8

A farmer produces wheat and sells it at a price of ₦100 per unit. The \cost of production is ₦80 per unit. If the farmer sells 100 units of wheat, what is the profit?

Correct A. ₦2000

B. ₦1000

C. ₦5000

D. ₦8000

Correct Answer: A

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Question 9

The government of Nigeria has implemented a policy to increase the production of rice in the country. Assuming that the production function for rice is given by Q = 100L^0.5K^0.5, where Q is the quantity of rice produced, L is the labor input, and K is the capital input, what is the value of the marginal product of labor?

Correct A. 20L^0.5K^0.5

B. 10L^0.5K^0.5

C. 5L^0.5K^0.5

D. 2L^0.5K^0.5

Correct Answer: A

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Question 10

The demand for a product is given by the equation P = 100 - 2Q, where P is the price and Q is the quantity demanded. The supply of the product is given by the equation P = 50 + Q. What is the equilibrium quantity?

Correct A. 25

B. 50

C. 75

D. 100

Correct Answer: A

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Question 11

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

Correct A. marginal revenue curve

B. average revenue curve

C. marginal \cost curve

D. average \cost curve

Correct Answer: A

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Question 12

The opportunity \cost of a choice is the value of the next best alternative that is given up when a decision is made. This concept is closely related to the law of

A. diminishing returns

B. comparative advantage

Correct C. scarcity

D. gains from trade

Correct Answer: C

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Question 13

A country's balance of payments (BOP) is a statistical statement that summarizes all economic transactions between residents and non-residents over a specific period of time. The BOP accounts include the current account and the capital account. The current account includes

Correct A. exports and imports of goods and services

B. foreign direct investment and portfolio investment

C. remit\tances and foreign aid

D. all of the above

Correct Answer: A

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Question 14

The money market is a market for short-term loans and investments. It is characterized by

A. long-term loans and investments

B. high-risk, high-return investments

Correct C. short-term loans and investments with low risk and low return

D. all of the above

Correct Answer: C

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Question 15

A firm's revenue is the total amount of money it receives from the sale of its products or services. It is calculated as the product of the price per unit and the number of units sold. The revenue function is given by

Correct A. R = P x Q

B. R = P + Q

C. R = P - Q

D. R = P / Q

Correct Answer: A

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Question 16

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

Correct A. (x,y) = (20,10)

B. (x,y) = (15,15)

C. (x,y) = (10,20)

D. (x,y) = (5,30)

Correct Answer: A

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Question 17

The following diagram shows the balance of payments for a country. What is the value of the current account balance?

A. ₦100

B. ₦200

Correct C. ₦300

D. ₦400

Correct Answer: C

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Question 18

A firm's production function is given by \( Q = 2L^2 + 3K^2 \). If the firm's output is 100 units and the wage rate is ₦10 per hour, find the optimal level of capital.

A. ₦500

B. ₦600

Correct C. ₦700

D. ₦800

Correct Answer: C

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Question 19

The following table shows the national income accounts for a country. What is the value of the gross domestic product (GDP)?

A. ₦1000

B. ₦2000

Correct C. ₦3000

D. ₦4000

Correct Answer: C

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Question 20

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

Correct A. (x,y) = (3,3)

B. (x,y) = (4,2)

C. (x,y) = (5,1)

D. (x,y) = (6,0)

Correct Answer: A

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Question 21

Consider a firm operating in a perfectly competitive market. If the firm's marginal revenue (MR) curve intersects its marginal \cost (MC) curve at a point where MR > MC, what is the most likely outcome?

A. The firm will increase production to maximize profits.

Correct B. The firm will decrease production to minimize losses.

C. The firm will maintain current production levels.

D. The firm will exit the market.

Correct Answer: B

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Question 22

A country's GDP is calculated as the sum of all final goods and services produced within its borders. If a multinational corporation (MNC) produces goods in a foreign country and exports them to the home country, how will this affect the home country's GDP?

A. The home country's GDP will increase.

B. The home country's GDP will decrease.

Correct C. The home country's GDP will remain unchanged.

D. The home country's GDP will be affected only if the MNC is owned by a domestic entity.

Correct Answer: C

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Question 23

A central bank implements a monetary policy by increa\sing the reserve requirement for commercial banks. 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 unchanged.

D. The money supply will be affected only if the commercial banks are owned by the central bank.

Correct Answer: B

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Question 24

A firm's demand curve is downward sloping, and its supply curve is upward sloping. If the firm is operating in a perfectly competitive market, what is the most likely outcome?

A. The firm will produce at the point where MR = MC.

Correct B. The firm will produce at the point where P = MC.

C. The firm will produce at the point where MR > MC.

D. The firm will produce at the point where MR < MC.

Correct Answer: B

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Question 25

A country's GNP is calculated as the sum of all final goods and services produced by its citizens, regardless of where they are produced. If a country's citizens produce goods in a foreign country and export them to the home country, how will this affect the home country's GNP?

Correct A. The home country's GNP will increase.

B. The home country's GNP will decrease.

C. The home country's GNP will remain unchanged.

D. The home country's GNP will be affected only if the goods are produced by domestic entities.

Correct Answer: A

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