Practice Post UTME FUTA economics 2023 Past Questions

Question 1

Consider a country with a fixed exchange rate regime. If the country's central bank sells foreign exchange to importers, what is the likely effect on the domestic money supply?

Correct A. Increase in the domestic money supply

B. Decrease in the domestic money supply

C. No effect on the domestic money supply

D. Increase in the foreign exchange reserves

Correct Answer: A

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Question 2

A firm is considering investing in a new project with the following cash flows: Year 1: -₦100, Year 2: ₦150, Year 3: ₦200. What is the net present value (NPV) of the project if the discount rate is 10%?

Correct A. ₦50

B. ₦100

C. ₦150

D. ₦200

Correct Answer: A

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Question 3

A consumer has the following utility function: U(x,y) = 2x + 3y. If the prices of x and y are ₦5 and ₦3 respectively, and the consumer's income is ₦100, what is the optimal bundle of x and y?

A. (10,20)

Correct B. (15,15)

C. (20,10)

D. (25,5)

Correct Answer: B

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Question 4

A firm is producing a good u\sing two inputs, labor (L) and capital (K). The production function is given by Q = 2L^0.5K^0.5. If the prices of labor and capital are ₦10 and ₦20 respectively, and the firm's output is 100 units, what is the optimal combination of labor and capital?

A. (10,5)

Correct B. (15,3)

C. (20,2)

D. (25,1)

Correct Answer: B

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Question 5

A country is experiencing a balance of payments deficit due to a trade deficit. What is the likely effect on the exchange rate?

A. Appreciation of the exchange rate

Correct B. Depreciation of the exchange rate

C. No effect on the exchange rate

D. Increase in the foreign exchange reserves

Correct Answer: B

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Question 6

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, find the price at which the quantity demanded is 60 units.

A. ₦50

B. ₦75

Correct C. ₦100

D. ₦125

Correct Answer: C

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Question 7

A firm is producing a good with a production function Q = 2L^0.5K^0.5, where L is labor and K is capital. If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, find the optimal level of labor and capital that maximizes profit.

Correct A. ₦1000, ₦500

B. ₦500, ₦1000

C. ₦2000, ₦1000

D. ₦1000, ₦2000

Correct Answer: A

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Question 8

A consumer has the following utility function: U = 2x + 3y, where x and y are the quantities of two goods. If the prices of the two goods are ₦50 and ₦75 respectively, find the optimal quantities of the two goods that maximize utility.

Correct A. 10, 5

B. 5, 10

C. 15, 5

D. 5, 15

Correct Answer: A

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Question 9

A firm is producing a good with a production function Q = 2L^0.5K^0.5, where L is labor and K is capital. If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, find the optimal level of labor and capital that maximizes profit.

Correct A. ₦1000, ₦500

B. ₦500, ₦1000

C. ₦2000, ₦1000

D. ₦1000, ₦2000

Correct Answer: A

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Question 10

A consumer has the following utility function: U = 2x + 3y, where x and y are the quantities of two goods. If the prices of the two goods are ₦50 and ₦75 respectively, find the optimal quantities of the two goods that maximize utility.

Correct A. 10, 5

B. 5, 10

C. 15, 5

D. 5, 15

Correct Answer: A

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Question 11

The Marshall-Lerner condition states that a country's balance of payments will improve if the sum of the elasticities of demand for imports and exports exceeds 1. Which of the following scenarios would lead to an improvement in the balance of payments?

A. An increase in the price of imports

B. A decrease in the price of exports

Correct C. An increase in the price of exports

D. A decrease in the price of imports

Correct Answer: C

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Question 12

A firm's \cost function is given by C(q) = 2q^2 + 10q + 5. If the firm produces 20 units of output, what is the total \cost of production?

A. ₦150

Correct B. ₦200

C. ₦250

D. ₦300

Correct Answer: B

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Question 13

A country's GDP is given by the equation GDP = C + I + G + \( X - M \). If the country's consumption is ₦100 billion, investment is ₦50 billion, government sp\ending is ₦75 billion, exports are ₦200 billion, and imports are ₦150 billion, what is the country's GDP?

A. ₦425 billion

Correct B. ₦450 billion

C. ₦475 billion

D. ₦500 billion

Correct Answer: B

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Question 14

A consumer's utility function is given by U(x, y) = 2x + 3y. If the consumer's income is ₦100 and the prices of x and y are ₦5 and ₦10 respectively, what is the consumer's optimal bundle?

Correct A. x = 10, y = 5

B. x = 5, y = 10

C. x = 15, y = 3

D. x = 3, y = 15

Correct Answer: A

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Question 15

A firm's revenue function is given by R(q) = 20q^2 - 10q + 5. If the firm produces 15 units of output, what is the total revenue?

A. ₦275

B. ₦300

Correct C. ₦325

D. ₦350

Correct Answer: C

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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. The supply of the product is given by the equation Qs = 2P - 50, where Qs is the quantity supplied. Find the equilibrium price and quantity.

A. ₦50

Correct B. ₦75

C. ₦100

D. ₦125

Correct Answer: B

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Question 17

A farmer in Nigeria produces two crops, maize and yam. The production functions for the two crops are given by Qm = 100 + 2L + 3K and Qy = 150 + 4L + 2K, where Qm is the quantity of maize produced, Qy is the quantity of yam produced, L is the amount of labor used, and K is the amount of capital used. If the farmer uses 20 units of labor and 15 units of capital, find the quantities of maize and yam produced.

A. Qm = 120, Qy = 180

B. Qm = 140, Qy = 200

Correct C. Qm = 160, Qy = 220

D. Qm = 180, Qy = 240

Correct Answer: C

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Question 18

The government of Nigeria imposes a tax on the income of its citizens. The tax function is given by T = 0.2Y, where T is the tax paid and Y is the income. If a citizen has an income of ₦100,000, find the tax paid.

Correct A. ₦20,000

B. ₦25,000

C. ₦30,000

D. ₦35,000

Correct Answer: A

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Question 19

A firm in Nigeria produces a product u\sing two inputs, labor and capital. The production function is given by Q = 100L^0.5K^0.5, where Q is the quantity produced, L is the amount of labor used, and K is the amount of capital used. If the firm uses 10 units of labor and 20 units of capital, find the quantity produced.

A. Q = 100

B. Q = 120

Correct C. Q = 140

D. Q = 160

Correct Answer: C

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Question 20

The central bank of Nigeria uses monetary policy to control inflation. The monetary policy function is given by M = 100 - 2P, where M is the money supply and P is the price level. If the price level is 10, find the money supply.

Correct A. ₦90

B. ₦80

C. ₦70

D. ₦60

Correct Answer: A

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Question 21

A farmer in Nigeria produces two crops, maize and yam. The production functions for the two crops are given by Qm = 100 + 2L + 3K and Qy = 150 + 4L + 2K, where Qm is the quantity of maize produced, Qy is the quantity of yam produced, L is the amount of labor used, and K is the amount of capital used. If the farmer uses 20 units of labor and 15 units of capital, find the quantities of maize and yam produced.

A. Qm = 120, Qy = 180

B. Qm = 140, Qy = 200

Correct C. Qm = 160, Qy = 220

D. Qm = 180, Qy = 240

Correct Answer: C

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Question 22

The government of Nigeria imposes a tax on the income of its citizens. The tax function is given by T = 0.2Y, where T is the tax paid and Y is the income. If a citizen has an income of ₦100,000, find the tax paid.

Correct A. ₦20,000

B. ₦25,000

C. ₦30,000

D. ₦35,000

Correct Answer: A

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Question 23

A firm's production function is given by Q = 2L^0.5K^0.5. If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, and if the firm's budget constraint is given by 100L + 200K = ₦10000, what is the optimal level of labor (L) that the firm should employ?

A. 10 units

Correct B. 20 units

C. 30 units

D. 40 units

Correct Answer: B

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Question 24

A perfectly competitive market has a demand curve given by Qd = 100 - 2P and a supply curve given by Qs = 2P. If the market is initially in equilibrium at a price of ₦20, what is the change in consumer surplus if the government imposes a tax of ₦5 per unit on the firm?

A. ₦1000

B. ₦2000

Correct C. ₦3000

D. ₦4000

Correct Answer: C

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Question 25

A monopolist has a production function given by Q = 2L^0.5K^0.5 and a \cost function given by C = 100L + 200K. If the price of the good is ₦100 per unit and the firm's marginal revenue is given by MR = 100 - 2Q, what is the optimal level of labor (L) that the firm should employ?

A. 10 units

B. 20 units

Correct C. 30 units

D. 40 units

Correct Answer: C

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POST UTME FUTA 2023 Economics | Objective

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