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POST UTME GREENFIELD UNIVERSITY 2022 Economics | Objective

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Question 1

A perfectly competitive market has a downward-sloping demand curve for a product. If the market price falls by 10%, what will be the percentage change in the quantity demanded?

A. 5%

Correct B. 10%

C. 15%

D. 20%

Correct Answer: B

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Question 2

A monopolist faces a market demand curve given by Q = 100 - 2P. The monopolist's marginal \cost is MC = 10. What is the profit-maximizing price and quantity?

A. P = 40, Q = 30

Correct B. P = 50, Q = 25

C. P = 60, Q = 20

D. P = 70, Q = 15

Correct Answer: B

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Question 3

A firm is producing a good with a production function given by Q = 2L^0.5K^0.5. The firm's input prices are w_L = 10 and w_K = 20. What is the firm's \cost-minimizing input bundle?

Correct A. L = 100, K = 50

B. L = 50, K = 100

C. L = 200, K = 25

D. L = 25, K = 200

Correct Answer: A

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Question 4

A consumer has a utility function given by U = 2x + 3y. The consumer's budget constraint is 2x + 3y = 30. What is the consumer's optimal bundle?

Correct A. x = 5, y = 5

B. x = 10, y = 0

C. x = 0, y = 10

D. x = 15, y = -5

Correct Answer: A

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Question 5

A firm has a \cost function given by C = 100 + 2Q + 0.5Q^2. The firm's revenue function is R = 50Q. What is the firm's profit-maximizing output level?

A. Q = 10

Correct B. Q = 20

C. Q = 30

D. Q = 40

Correct Answer: B

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Question 6

A monopolistically competitive firm faces a demand curve with a cons\tant elasticity of -2. If the firm's marginal revenue (MR) is 120, what is its marginal \cost (MC)?

A. 60

B. 80

Correct C. 100

D. 120

Correct Answer: C

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Question 7

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current labor and capital inputs are L = 16 and K = 9, respectively, what is the firm's current output?

A. 8

B. 12

Correct C. 16

D. 20

Correct Answer: C

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Question 8

A central bank increases the money supply by 10% in a closed economy. If the initial price level is 100, what is the new price level?

A. 90

B. 100

Correct C. 110

D. 120

Correct Answer: C

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Question 9

A consumer's budget constraint is given by 2x + 3y = 12. If the consumer's current consumption bundle is (x, y) = (2, 4), what is the consumer's opportunity \cost of consuming one more unit of good x?

A. 1

Correct B. 2

C. 3

D. 4

Correct Answer: B

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Question 10

A firm's total revenue (TR) is given by TR = 2x^2 + 5x + 3. If the firm's current output is x = 3, what is the firm's current total revenue?

A. 27

B. 32

Correct C. 37

D. 42

Correct Answer: C

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Question 11

Suppose the demand function for a commodity is given by Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the price elasticity of demand is -2, what is the percentage change in quantity demanded when the price increases by 10%?

Correct A. 20%

B. 30%

C. 40%

D. 50%

Correct Answer: A

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Question 12

A firm's production function is given by Q = 10L^0.5K^0.5, where Q is the output, L is the labor and K is the capital. If the firm wants to increase its output by 20% and the labor increases by 10%, what is the required percentage increase in capital?

A. 15%

Correct B. 20%

C. 25%

D. 30%

Correct Answer: B

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Question 13

A country's GDP at market price is ₦100 billion. If the government imposes a 10% sales tax on all goods and services, what is the GDP at factor \cost?

Correct A. ₦90 billion

B. ₦95 billion

C. ₦100 billion

D. ₦105 billion

Correct Answer: A

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Question 14

A consumer's budget constraint is given by 2x + 3y = 12, where x and y are the quantities of two goods. If the consumer's income is ₦12 and the price of good x is ₦2, what is the quantity of good y that the consumer can buy?

A. 2

Correct B. 3

C. 4

D. 6

Correct Answer: B

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Question 15

A firm's \cost function is given by C = 100 + 2Q + 0.5Q^2, where C is the \cost and Q is the output. If the firm produces 10 units of output, what is the total \cost?

A. ₦120

B. ₦150

Correct C. ₦180

D. ₦200

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. 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

Agricultural development in Nigeria has been hindered by the lack of access to credit by small-scale farmers. Which of the following policies would most likely address this issue?

A. Establishing a central bank to regulate the agricultural sector

B. Providing subsidies to large-scale farmers

Correct C. Creating a microfinance institution to provide credit to small-scale farmers

D. Implementing a policy of price controls

Correct Answer: C

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Question 18

A monopolist faces a demand curve given by Qd = 100 - 2P and a \cost function of C(Q) = 2Q^2. If the firm produces 20 units, what is the profit-maximizing price?

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 19

A government is considering a policy of taxation to reduce the consumption of a particular good. If the demand for the good is given by Qd = 100 - 2P and the government wants to reduce consumption by 10%, what is the optimal tax rate?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 20

A firm is considering investing in a new project with a net present value (NPV) of ₦100,000. If the firm's \cost of capital is 10%, what is the internal rate of return (IRR) of the project?

A. 5%

Correct B. 10%

C. 15%

D. 20%

Correct Answer: B

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Question 21

The production function for a firm is given by Q = 2L^0.5K^0.5, where Q is the output, L is the labor, and K is the capital. If the firm increases labor from 4 units to 9 units and capital from 9 units to 16 units, what is the percentage change in output?

A. 25%

B. 30%

Correct C. 35%

D. 40%

Correct Answer: C

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Question 22

A country's GDP is $100 billion, its imports are $20 billion, and its exports are $30 billion. What is its balance of trade?

Correct A. $10 billion

B. $20 billion

C. $30 billion

D. $40 billion

Correct Answer: A

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Question 23

A firm's \cost function is given by C = 2L + 3K, where C is the \cost, L is the labor, and K is the capital. If the firm increases labor from 2 units to 5 units and capital from 3 units to 6 units, what is the percentage change in \cost?

A. 25%

B. 30%

Correct C. 35%

D. 40%

Correct Answer: C

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Question 24

A country's GNP is $120 billion, its GDP is $100 billion, and its net factor income from abroad is $10 billion. What is its national income?

A. $130 billion

B. $140 billion

Correct C. $150 billion

D. $160 billion

Correct Answer: C

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Question 25

A firm's revenue function is given by R = 2L^2 + 3K^2, where R is the revenue, L is the labor, and K is the capital. If the firm increases labor from 2 units to 5 units and capital from 3 units to 6 units, what is the percentage change in revenue?

A. 25%

B. 30%

Correct C. 35%

D. 40%

Correct Answer: C

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