POST UTME FUTA 2018 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
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
B. Decrease
C. No effect
D. Unknown
Question 2
A monopolist faces a market demand curve given by Qd = 100 - 2P and a marginal revenue curve given by MR = 20 - 2P. If the firm's marginal \cost is cons\tant at MC = 10, what is the profit-maximizing price and quantity?
A. \( P = 30, Q = 50 \)
B. \( P = 40, Q = 60 \)
C. \( P = 50, Q = 70 \)
D. \( P = 60, Q = 80 \)
Question 3
Consider a country that imports 100 units of a good from another country and exports 50 units of another good to that country. If the terms of trade are given by the ratio of export price to import price, what is the value of the terms of trade?
A. ( 0.5 )
B. ( 1 )
C. ( 1.5 )
D. ( 2 )
Question 4
The Marshall-Lerner condition states that a country will experience an improvement in its balance of payments if the sum of the percentage changes in its export and import prices exceeds the percentage change in its exchange rate. Which of the following scenarios would lead to an improvement in Nigeria's balance of payments?
A. A 10% increase in Nigeria's export price and a 5% decrease in its import price
B. A 5% decrease in Nigeria's export price and a 10% increase in its import price
C. A 10% increase in Nigeria's export price and a 10% increase in its import price
D. A 5% decrease in Nigeria's export price and a 5% decrease in its import price
Question 5
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%
C. 10%
D. 5%
Question 6
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?
A. x = 10, y = 5
B. x = 5, y = 10
C. x = 10, y = 10
D. x = 5, y = 5
Question 7
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.
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.
Question 8
A government imposes a tax on a particular good. What is the effect of this tax on the supply curve of the good?
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.
Question 9
A firm has a production function given by Q = 2L^0.5K^0.5. If the firm's labor and capital inputs are given by L = 100 and K = 100, what is the firm's output?
A. ( 200 )
B. ( 400 )
C. ( 600 )
D. ( 800 )
Question 10
A firm's production function is given by Q = 2L + 3K. If the firm's \cost function is given by C = 10L + 20K, what is the firm's profit function?
A. P = 2L + 3K - 10L - 20K
B. P = 2L + 3K + 10L + 20K
C. P = 2L + 3K - 10L + 20K
D. P = 2L + 3K + 10L - 20K
Question 11
A country's agricultural sector is characterized by a high degree of price rigidity. This means that farmers are reluc\tant to adjust their prices in response to changes in market conditions. What is the likely effect of this price rigidity on the country's agricultural sector?
A. Increased production and employment
B. Decreased production and employment
C. No effect on production and employment
D. Increased prices and decreased production
Question 12
A consumer's utility function is given by U = 2x + 3y. If the consumer's budget constraint is given by 2x + 3y = 100, what is the consumer's optimal bundle?
A. x = 20, y = 30
B. x = 30, y = 20
C. x = 40, y = 10
D. x = 10, y = 40
Question 13
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
C. 300 units
D. 400 units
Question 14
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
C. 6 units
D. 8 units
Question 15
A government imposes a tax on a particular good, which leads to a decrease in its demand. The tax revenue is used to finance a public good that benefits all consumers of the good. What is the effect of this tax on the welfare of consumers?
A. Increased welfare
B. Decreased welfare
C. No effect on welfare
D. Increased welfare for some consumers and decreased welfare for others

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