POST UTME FUTA 2021 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 2021 Economics (Objective) questions designed to simulate the real exam environment.

Practice these randomly selected questions to test your readiness.

Question 1
A firm operating in a perfectly competitive market is producing at the point where its marginal revenue equals its marginal \cost. What is the implication of this for the firm's profit-maximizing output?
A. The firm is producing at its minimum point on the average total \cost curve.
B. The firm is producing at its maximum point on the average total \cost curve.
C. The firm is producing at the point where its average revenue equals its average \cost.
Correct D. The firm is producing at the point where its marginal revenue equals its marginal \cost.

Correct Answer: D

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Question 2
A country's GDP is ₦100 billion, its imports are ₦20 billion, and its exports are ₦15 billion. What is its balance of trade?
A. ₦5 billion surplus
Correct B. ₦5 billion deficit
C. ₦10 billion surplus
D. ₦10 billion deficit

Correct Answer: B

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Question 3
A monopolist faces a demand curve given by Q = 100 - 2P. The firm's marginal \cost is ₦20. What is the monopolist's profit-maximizing price?
A. ₦40
B. ₦50
Correct C. ₦60
D. ₦70

Correct Answer: C

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Question 4
A consumer has a budget of ₦100 and faces a price of ₦20 for a good. The consumer's indifference curve is given by U = 2X + 3Y. What is the consumer's optimal consumption bundle?
A. X = 2, Y = 4
Correct B. X = 3, Y = 3
C. X = 4, Y = 2
D. X = 5, Y = 1

Correct Answer: B

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Question 5
A country's GNP is ₦120 billion, its GDP is ₦110 billion, and its net factor income from abroad is ₦5 billion. What is its national income?
A. ₦115 billion
B. ₦120 billion
Correct C. ₦125 billion
D. ₦130 billion

Correct Answer: C

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Question 6
A government imposes a tax on a firm's profits. The firm's supply curve shifts to the left, and the government collects more revenue. What is the effect on the firm's profit-maximizing output?
A. The firm's profit-maximizing output increases
Correct B. The firm's profit-maximizing output decreases
C. The firm's profit-maximizing output remains unchanged
D. The firm's profit-maximizing output increases, but at a lower price

Correct Answer: B

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Question 7
A consumer's indifference curve is steeper than their budget constraint. What is the effect on their optimal consumption bundle?
Correct A. The consumer consumes more of good X and less of good Y
B. The consumer consumes more of good Y and less of good X
C. The consumer consumes the same amount of both goods
D. The consumer consumes less of both goods

Correct Answer: A

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Question 8
A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \). What is the marginal product of labor (MPL) when L = 4 and K = 9?
A. 1
B. 2
Correct C. 3
D. 4

Correct Answer: C

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Question 9
A government imposes a tax on a firm's output. The firm's supply curve shifts to the right, and the government collects more revenue. What is the effect on the firm's profit-maximizing output?
Correct A. The firm's profit-maximizing output increases
B. The firm's profit-maximizing output decreases
C. The firm's profit-maximizing output remains unchanged
D. The firm's profit-maximizing output decreases, but at a higher price

Correct Answer: A

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Question 10
A consumer's indifference curve is flatter than their budget constraint. What is the effect on their optimal consumption bundle?
A. The consumer consumes more of good X and less of good Y
Correct B. The consumer consumes more of good Y and less of good X
C. The consumer consumes the same amount of both goods
D. The consumer consumes less of both goods

Correct Answer: B

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Question 11
The government of Nigeria has introduced a new tax policy aimed at increa\sing revenue from the agricultural sector. The policy requires farmers to pay a 10% tax on their annual income. If a farmer's annual income is ₦120,000, what is the amount of tax the farmer must pay?
Correct A. ₦12,000
B. ₦10,000
C. ₦8,000
D. ₦6,000

Correct Answer: A

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Question 12
A firm is producing two goods, X and Y, u\sing two inputs, labor and capital. The production function for good X is given by Q_X = 2L^0.5K^0.5, where Q_X is the quantity of good X produced, L is the amount of labor used, and K is the amount of capital used. If the firm uses 100 units of labor and 200 units of capital, how many units of good X will it produce?
A. 100
B. 200
Correct C. 300
D. 400

Correct Answer: C

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Question 13
The government of Nigeria has introduced a new economic development plan aimed at reducing poverty and inequality. The plan includes the following measures: (i) increa\sing the minimum wage by 20%, (ii) providing subsidies to small-scale farmers, and (iii) investing in infrastructure development. Which of the following is a potential consequence of the plan?
A. Increased economic growth
Correct B. Reduced poverty and inequality
C. Increased unemployment
D. Increased inflation

Correct Answer: B

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Question 14
A firm is producing a good u\sing a production function given by Q = 2L^0.5K^0.5, where Q is the quantity of the good produced, L is the amount of labor used, and K is the amount of capital used. If the firm uses 100 units of labor and 200 units of capital, what is the marginal product of labor?
Correct A. 0.5
B. 1
C. 2
D. 4

Correct Answer: A

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Question 15
The government of Nigeria has introduced a new policy aimed at increa\sing the production of agricultural goods. The policy includes the following measures: (i) providing subsidies to farmers, (ii) investing in irrigation systems, and (iii) increa\sing the availability of credit to farmers. Which of the following is a potential consequence of the policy?
Correct A. Increased agricultural production
B. Reduced poverty and inequality
C. Increased unemployment
D. Increased inflation

Correct Answer: A

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Question 16
A firm's demand curve for a product is given by Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the firm's total revenue (TR) is given by TR = P * Q, find the price at which the firm's marginal revenue (MR) is equal to the price elasticity of demand (PED).
A. ₦50
B. ₦75
Correct C. ₦100
D. ₦125

Correct Answer: C

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Question 17
A country's GDP is ₦1,000,000,000. If the country's imports are ₦200,000,000 and its exports are ₦300,000,000, what is the country's balance of trade?
A. ₦100,000,000
Correct B. ₦200,000,000
C. ₦300,000,000
D. ₦400,000,000

Correct Answer: B

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Question 18
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 given by 2x + 3y = ₦100, find the consumer's optimal bundle of goods.
A. x = 20, y = 10
B. x = 15, y = 15
Correct C. x = 10, y = 20
D. x = 5, y = 25

Correct Answer: C

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Question 19
A firm's supply curve is given by Q = 2P + 10, where Q is the quantity supplied and P is the price. If the firm's marginal \cost (MC) is given by MC = 2P + 5, find the price at which the firm's supply curve intersects the MC curve.
A. ₦5
Correct B. ₦10
C. ₦15
D. ₦20

Correct Answer: B

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Question 20
A country's GNP is ₦1,500,000,000. If the country's net factor income from abroad is ₦200,000,000, what is the country's GDP?
A. ₦1,700,000,000
B. ₦1,800,000,000
Correct C. ₦1,900,000,000
D. ₦2,000,000,000

Correct Answer: C

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Question 21
A monopolistically competitive firm faces a demand curve with an elasticity of -2. If the firm increases its price by 10%, what is the percentage change in quantity demanded?
Correct A. -20%
B. -15%
C. -10%
D. -5%

Correct Answer: A

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Question 22
A firm is considering two production processes: one that \costs ₦1000 per unit and another that \costs ₦1200 per unit. If the firm produces 1000 units, which process should it choose if it wants to minimize its total \cost?
Correct A. Process 1
B. Process 2
C. It doesn't matter
D. More information is needed

Correct Answer: A

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Question 23
A monopolist faces a demand curve with a price elasticity of -3. If the firm increases its price by 15%, what is the percentage change in quantity demanded?
Correct A. -45%
B. -30%
C. -20%
D. -15%

Correct Answer: A

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Question 24
A firm is considering two production processes: one that \costs ₦1500 per unit and another that \costs ₦1800 per unit. If the firm produces 500 units, which process should it choose if it wants to minimize its total \cost?
Correct A. Process 1
B. Process 2
C. It doesn't matter
D. More information is needed

Correct Answer: A

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Question 25
A monopolistically competitive firm faces a demand curve with an elasticity of -1. If the firm increases its price by 12%, what is the percentage change in quantity demanded?
Correct A. -12%
B. -10%
C. -8%
D. -6%

Correct Answer: A

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