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POST UTME FUTA 2018 Economics | Objective

Are you preparing for POST UTME FUTA exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2018 Economics (Objective) questions designed to simulate the real exam environment.

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Question 1

U\sing the concept of diminishing marginal utility, explain why a consumer may prefer to purchase a smaller quantity of a product at a higher price rather than a larger quantity at a lower price.

A. The consumer values the product's quality over its quantity.

B. The consumer is willing to pay a premium for the product's brand reputation.

Correct C. The consumer is experiencing diminishing marginal utility, making the higher price more acceptable.

D. The consumer is trying to save money by buying in bulk.

Correct Answer: C

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Question 2

A firm's demand curve is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the firm's supply curve is given by the equation Qs = 2P - 50, where Qs is the quantity supplied, find the equilibrium price and quantity.

A. P = 25, Q = 75

Correct B. P = 50, Q = 100

C. P = 75, Q = 125

D. P = 100, Q = 150

Correct Answer: B

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Question 3

A country's GDP is given by the equation GDP = C + I + G + $ X - M $, where C is consumption, I is investment, G is government sp\ending, X is exports, and M is imports. If the country's GDP is $100 billion, consumption is $50 billion, investment is $20 billion, government sp\ending is $30 billion, exports are $40 billion, and imports are $20 billion, find the country's GDP.

Correct A. $100 billion

B. $120 billion

C. $140 billion

D. $160 billion

Correct Answer: A

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Question 4

U\sing the concept of opportunity \cost, explain why a firm may choose to produce a smaller quantity of a product at a higher price rather than a larger quantity at a lower price.

A. The firm values the product's quality over its quantity.

B. The firm is willing to pay a premium for the product's brand reputation.

Correct C. The firm is experiencing opportunity \cost, making the higher price more acceptable.

D. The firm is trying to save money by buying in bulk.

Correct Answer: C

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Question 5

A firm's production function is given by the equation Q = 2L^0.5K^0.5, where Q is the quantity produced, L is labor, and K is capital. If the firm has 100 units of labor and 100 units of capital, find the quantity produced.

A. 100 units

B. 200 units

Correct C. 300 units

D. 400 units

Correct Answer: C

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Question 6

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

A. The MRS is cons\tant and equal to the slope of the indifference curve.

Correct B. The MRS is decrea\sing as the consumer moves along the indifference curve.

C. The MRS is increa\sing as the consumer moves along the indifference curve.

D. The MRS is zero and the consumer is indifferent between the two goods.

Correct Answer: B

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Question 7

A government imposes a tax on a particular good. What is the effect of this tax on the supply curve of the good?

Correct A. The supply curve shifts to the left.

B. The supply curve shifts to the right.

C. The supply curve remains unchanged.

D. The supply curve becomes perfectly inelastic.

Correct Answer: A

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Question 8

A firm is producing a good u\sing two inputs, labor and capital. The production function is given by Q = 2L^0.5K^0.5. What is the marginal product of labor (MPL) when L = 4 and K = 9?

A. MPL = 1.5

Correct B. MPL = 2.5

C. MPL = 3.5

D. MPL = 4.5

Correct Answer: B

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Question 9

A country's GDP is increa\sing at a rate of 5% per annum, while its population is increa\sing at a rate of 2% per annum. What is the effect on the country's per capita income?

Correct A. Per capita income is increa\sing at a rate of 3% per annum.

B. Per capita income is increa\sing at a rate of 5% per annum.

C. Per capita income is decrea\sing at a rate of 2% per annum.

D. Per capita income is cons\tant.

Correct Answer: A

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Question 10

A firm is producing a good u\sing two inputs, labor and capital. The production function is given by Q = 2L^0.5K^0.5. What is the total product of labor (TPL) when L = 4 and K = 9?

A. TPL = 12

Correct B. TPL = 16

C. TPL = 20

D. TPL = 24

Correct Answer: B

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Question 11

A monopolistically competitive firm faces a demand curve with elasticity of -2. If the firm increases its price by 10%, what is the percentage change in quantity demanded?

A. 20%

B. 15%

Correct C. 10%

D. 5%

Correct Answer: C

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Question 12

A consumer's indifference curve is given 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 ₦3 respectively, what is the consumer's optimal bundle?

A. x = 100, y = 200

Correct B. x = 150, y = 150

C. x = 200, y = 100

D. x = 250, y = 50

Correct Answer: B

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Question 13

A firm has a production function given by Q = 2L^2 + 3K. If the firm's \cost of labor is ₦10 per unit and the \cost of capital is ₦20 per unit, what is the firm's optimal level of labor and capital?

Correct A. L = 5, K = 10

B. L = 10, K = 5

C. L = 15, K = 3

D. L = 20, K = 2

Correct Answer: A

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Question 14

A government imposes a tax of ₦10 per unit on a firm's output. If the firm's supply curve is given by Q = 2P - 10 and the demand curve is given by Q = 100 - P, what is the firm's new supply curve?

Correct A. Q = 2P - 20

B. Q = 2P - 15

C. Q = 2P - 10

D. Q = 2P + 5

Correct Answer: A

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Question 15

A firm has a revenue function given by R = 2Q^2 - 10Q + 100. If the firm's \cost function is given by C = Q^2 + 5Q + 50, what is the firm's profit function?

Correct A. π = 3Q^2 - 15Q + 50

B. π = 2Q^2 - 10Q + 50

C. π = Q^2 - 5Q + 50

D. π = Q^2 + 5Q + 50

Correct Answer: A

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Question 16

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 0.5, what is the percentage change in quantity demanded when the price increases by 10%?

Correct A. 5%

B. 10%

C. 15%

D. 20%

Correct Answer: A

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Question 17

A firm is producing a product with a total revenue of ₦120,000 and a total \cost of ₦80,000. If the price elasticity of demand is 0.8, what is the price elasticity of supply?

A. 0.6

Correct B. 0.8

C. 1.0

D. 1.2

Correct Answer: B

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Question 18

The government is considering a policy to reduce inflation by increa\sing the interest rate. If the demand for money is given by the equation M = 1000 + 0.5Y, where M is the money supply and Y is the income, what is the effect of the policy on the money supply?

A. Increase

Correct B. Decrease

C. No effect

D. Unknown

Correct Answer: B

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Question 19

A consumer is faced with the following utility function: U = 2x + 3y, where x and y are the quantities of two goods. If the price of good x is ₦10 and the price of good y is ₦20, what is the optimal bundle of goods?

Correct A. x = 10, y = 5

B. x = 5, y = 10

C. x = 10, y = 10

D. x = 5, y = 5

Correct Answer: A

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Question 20

A firm is producing a product with a marginal revenue of ₦100 and a marginal \cost of ₦80. If the price elasticity of demand is 0.5, what is the optimal quantity to produce?

A. 100 units

Correct B. 200 units

C. 300 units

D. 400 units

Correct Answer: B

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Question 21

Consider a production function given by $ Q = 100K^{\frac{1}{3}}L^{\frac{2}{3}} $, where Q is output, K is capital, and L is labor. If the marginal product of labor is 20 units when K = 4 and L = 8, what is the marginal product of capital?

A. 10 units

B. 20 units

Correct C. 30 units

D. 40 units

Correct Answer: C

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Question 22

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 constraint is $ 2x + 3y = 12 $, and the price of good x is ₦4, what is the optimal quantity of good y?

A. 2 units

B. 4 units

Correct C. 6 units

D. 8 units

Correct Answer: C

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Question 23

A firm's production function is given by $ Q = 100K^{\frac{1}{2}}L^{\frac{1}{2}} $, where Q is output, K is capital, and L is labor. If the marginal product of labor is 10 units when K = 9 and L = 4, what is the marginal product of capital?

A. 5 units

B. 10 units

Correct C. 15 units

D. 20 units

Correct Answer: C

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Question 24

A government imposes a tax of ₦10 on a good that sells for ₦20. If the supply curve is given by $ Q = 2P - 10 $, where Q is quantity and P is price, what is the new equilibrium price?

A. ₦10

Correct B. ₦15

C. ₦20

D. ₦25

Correct Answer: B

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Question 25

A firm's production function is given by $ Q = 100K^{\frac{1}{3}}L^{\frac{2}{3}} $, where Q is output, K is capital, and L is labor. If the marginal product of labor is 20 units when K = 16 and L = 8, what is the marginal product of capital?

A. 10 units

B. 20 units

Correct C. 30 units

D. 40 units

Correct Answer: C

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