POST UTME FUTA 2020 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 2020 Economics (Objective) questions designed to simulate the real exam environment.

Practice these randomly selected questions to test your readiness.

Question 1
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 -3, what is the value of the cross-price elasticity of demand?
Correct A. -1
B. 1
C. 2
D. 3

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 the quantity produced, L is the labor input, and K is the capital input. If the firm's labor and capital inputs are 4 and 9 respectively, what is the value of the marginal product of labor?
Correct A. 0.5
B. 1
C. 2
D. 3

Correct Answer: A

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Question 3
The following diagram shows the supply and demand curves for a product. If the price elasticity of supply is 2 and the price elasticity of demand is -3, what is the value of the cross-price elasticity of supply?
Correct A. -1
B. 1
C. 2
D. 3

Correct Answer: A

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Question 4
A consumer's utility function is given by U = 2x + 3y, where x and y are the quantities of two goods consumed. If the prices of the two goods are ₦10 and ₦20 respectively, and the consumer's income is ₦100, what is the value of the marginal utility of the first good?
Correct A. 0.5
B. 1
C. 2
D. 3

Correct Answer: A

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Question 5
The following diagram shows the production possibilities frontier for a country. If the country is currently producing 100 units of good X and 200 units of good Y, what is the opportunity \cost of producing one more unit of good X?
Correct A. 0.5
B. 1
C. 2
D. 3

Correct Answer: A

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Question 6
Consider a firm operating in a perfectly competitive market with a given production function Q = 2L^0.5K^0.5. If the firm's current input prices are w = ₦100 per unit of labor and r = ₦200 per unit of capital, and the market wage and rental rates are w = ₦120 per unit of labor and r = ₦220 per unit of capital, respectively, what is the optimal input combination for the firm?
A. L = 100, K = 100
B. L = 120, K = 220
Correct C. L = 150, K = 150
D. L = 200, K = 200

Correct Answer: C

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Question 7
A consumer has the following utility function: U = 2x + 3y. The prices of x and y are ₦10 and ₦20, respectively. If the consumer's income is ₦100, what is the optimal bundle of x and y?
Correct A. x = 5, y = 2
B. x = 10, y = 5
C. x = 15, y = 3
D. x = 20, y = 4

Correct Answer: A

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Question 8
Consider a firm with a production function Q = 3L^0.5K^0.5. If the firm's current input prices are w = ₦150 per unit of labor and r = ₦300 per unit of capital, and the market wage and rental rates are w = ₦180 per unit of labor and r = ₦320 per unit of capital, respectively, what is the optimal input combination for the firm?
A. L = 150, K = 150
B. L = 180, K = 320
Correct C. L = 200, K = 200
D. L = 250, K = 250

Correct Answer: C

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Question 9
A consumer has the following utility function: U = x^2 + 2y^2. The prices of x and y are ₦20 and ₦30, respectively. If the consumer's income is ₦100, what is the optimal bundle of x and y?
A. x = 5, y = 2
Correct B. x = 10, y = 5
C. x = 15, y = 3
D. x = 20, y = 4

Correct Answer: B

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Question 10
Consider a firm with a production function Q = 2L^0.5K^0.5. If the firm's current input prices are w = ₦100 per unit of labor and r = ₦200 per unit of capital, and the market wage and rental rates are w = ₦120 per unit of labor and r = ₦220 per unit of capital, respectively, what is the optimal input combination for the firm?
A. L = 100, K = 100
B. L = 120, K = 220
Correct C. L = 150, K = 150
D. L = 200, K = 200

Correct Answer: C

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Question 11
A firm's total revenue is given by the equation \( TR = 100p - \frac{p^2}{100} \), where ( p ) is the price per unit. If the firm's total revenue is maximized at a price of ₦50 per unit, what is the value of the price elasticity of demand at this price?
Correct A. -2
B. -1
C. 1
D. 2

Correct Answer: A

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Question 12
A government budget is given by the equation \( B = 1000 + 0.5Y - 0.01Y^2 \), where ( Y ) is the level of economic activity. If the government budget is balanced at a level of economic activity of ₦100 billion, what is the value of the marginal propensity to consume?
Correct A. 0.5
B. 0.6
C. 0.7
D. 0.8

Correct Answer: A

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Question 13
A consumer's utility function is given by the equation \( U = 2x + 3y - xy \), where ( x ) and ( y ) are the quantities of two goods consumed. If the consumer's budget constraint is given by the equation \( 2x + 3y = 100 \), what is the value of the marginal rate of substitution between the two goods?
A. 1
B. 2
Correct C. 3
D. 4

Correct Answer: C

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Question 14
A firm's \cost function is given by the equation \( C = 100 + 2q + 0.01q^2 \), where ( q ) is the quantity produced. If the firm's revenue function is given by the equation \( R = 200q - 0.5q^2 \), what is the value of the marginal \cost at a quantity of 100 units?
A. ₦200
B. ₦250
Correct C. ₦300
D. ₦350

Correct Answer: C

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Question 15
A government's budget is given by the equation \( B = 1000 + 0.5Y - 0.01Y^2 \), where ( Y ) is the level of economic activity. If the government's tax revenue is given by the equation \( T = 0.2Y \), what is the value of the marginal tax rate?
A. 0.2
B. 0.3
Correct C. 0.4
D. 0.5

Correct Answer: C

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Question 16
A firm's total revenue (TR) is given by the equation TR = 100q - 2q^2, where q is the quantity sold. If the firm's marginal revenue (MR) is 80, what is the value of q?
A. 10
Correct B. 20
C. 30
D. 40

Correct Answer: B

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Question 17
A country's balance of payments (BOP) is given by the equation BOP = X - M, where X is the value of exports and M is the value of imports. If the country's exports are ₦120 billion and its imports are ₦100 billion, what is the value of the BOP?
Correct A. ₦20,000,000,000
B. ₦30,000,000,000
C. ₦40,000,000,000
D. ₦50,000,000,000

Correct Answer: A

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Question 18
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 - 10, what is the equilibrium price?
A. ₦20
B. ₦30
Correct C. ₦40
D. ₦50

Correct Answer: C

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Question 19
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 consumption is ₦500 billion, its investment is ₦200 billion, its government sp\ending is ₦300 billion, its exports are ₦120 billion, and its imports are ₦100 billion, what is the value of the GDP?
Correct A. ₦1,200,000,000,000
B. ₦1,300,000,000,000
C. ₦1,400,000,000,000
D. ₦1,500,000,000,000

Correct Answer: A

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Question 20
A firm's production function is given by the equation Q = 2L^0.5, where Q is the quantity produced and L is the labor input. If the firm's labor input is 16, what is the value of the quantity produced?
A. 8
Correct B. 16
C. 32
D. 64

Correct Answer: B

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Question 21
In a perfectly competitive market, if the demand for a good increases, what will happen to the equilibrium price and quantity?
A. Price will increase and quantity will decrease
Correct B. Price will decrease and quantity will increase
C. Price will remain the same and quantity will increase
D. Price will increase and quantity will increase

Correct Answer: B

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Question 22
A firm is producing a good with the following \cost and revenue functions: C(q) = 2q^2 + 10q and R(q) = 3q^2 - 5q. What is the profit-maximizing quantity?
A. 5
Correct B. 10
C. 15
D. 20

Correct Answer: B

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Question 23
A central bank is considering a monetary policy to reduce inflation. Which of the following tools would be most effective?
A. Increa\sing the reserve requirement
B. Increa\sing the discount rate
Correct C. Buying government securities
D. Selling foreign currency

Correct Answer: C

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Question 24
A firm is facing a downward-sloping demand curve. If the firm increases its production, what will happen to the price and quantity?
A. Price will increase and quantity will increase
B. Price will decrease and quantity will increase
C. Price will remain the same and quantity will increase
Correct D. Price will increase and quantity will decrease

Correct Answer: D

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Question 25
A country is experiencing a recession. Which of the following policies would be most effective in stimulating economic growth?
Correct A. Increa\sing government sp\ending
B. Cutting taxes
C. Increa\sing interest rates
D. Reducing government sp\ending

Correct Answer: A

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