Practice Post UTME IGBINEDION UNIVERSITY economics 2020 Past Questions

Question 1

The National Bureau of Statistics (NBS) reported that Nigeria's GDP grew by 3.2% in the first quarter of 2020. However, the growth rate was largely driven by the non-oil sector, which expanded by 6.1%. What is the implication of this growth rate for the country's economic development?

A. The growth rate indicates a strong and sustainable economic recovery.

B. The growth rate is a sign of a weak and fragile economy.

Correct C. The growth rate suggests that the non-oil sector is driving economic growth, but the oil sector is still a major contributor.

D. The growth rate is a result of a surge in oil prices, which is not sustainable.

Correct Answer: C

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Question 2

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

A. ₦250

B. ₦300

Correct C. ₦350

D. ₦400

Correct Answer: C

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Question 3

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 ₦3 respectively, what is the consumer's optimal bundle of x and y?

A. (10, 10)

Correct B. (15, 5)

C. (20, 0)

D. (0, 20)

Correct Answer: B

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Question 4

The balance of payments (BOP) accounts for a country can be represented by the following equation: BOP = CA + FA + IA. If the current account (CA) is in surplus by ₦100 billion, the financial account (FA) is in deficit by ₦50 billion, and the income account (IA) is in surplus by ₦20 billion, what is the overall balance of payments?

Correct A. ₦70 billion surplus

B. ₦30 billion deficit

C. ₦50 billion surplus

D. ₦20 billion deficit

Correct Answer: A

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Question 5

A firm's supply function is given by Q = 2P - 10. If the price of the good is ₦20, how many units of the good will the firm supply?

A. 10

Correct B. 20

C. 30

D. 40

Correct Answer: B

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Question 6

Consider a firm operating in a perfectly competitive market with a production function given by Q = 2L^\( 1/2 \)K^\( 1/2 \). If the firm's current input prices are w = 10 and r = 20, and it currently uses L = 4 and K = 9, calculate the firm's current total \cost.

Correct A. ₦1,440

B. ₦1,680

C. ₦1,920

D. ₦2,160

Correct Answer: A

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Question 7

A country's GDP is given by the equation Y = C + I + G + \( X - M \). If the country's current consumption is ₦1,200 billion, investment is ₦300 billion, government sp\ending is ₦500 billion, exports are ₦800 billion, and imports are ₦400 billion, calculate the country's current GDP.

A. ₦2,800 billion

Correct B. ₦3,000 billion

C. ₦3,200 billion

D. ₦3,400 billion

Correct Answer: B

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Question 8

A firm's demand function is given by Q = 100 - 2P. If the firm's current price is ₦20, calculate the firm's current quantity demanded.

A. 20 units

Correct B. 40 units

C. 60 units

D. 80 units

Correct Answer: B

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Question 9

Consider a firm operating in a perfectly competitive market with a production function given by Q = 2L^\( 1/2 \)K^\( 1/2 \). If the firm's current input prices are w = 10 and r = 20, and it currently uses L = 4 and K = 9, calculate the firm's current marginal \cost.

A. ₦10

B. ₦20

Correct C. ₦30

D. ₦40

Correct Answer: C

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Question 10

A country's GDP is given by the equation Y = C + I + G + \( X - M \). If the country's current consumption is ₦1,200 billion, investment is ₦300 billion, government sp\ending is ₦500 billion, exports are ₦800 billion, and imports are ₦400 billion, calculate the country's current government sp\ending as a percentage of GDP.

A. 15%

B. 20%

Correct C. 25%

D. 30%

Correct Answer: C

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Question 11

The Central Bank of Nigeria (CBN) uses monetary policy to control inflation. Which of the following instruments can be used to reduce aggregate demand and subsequently reduce inflation?

Correct A. Open Market Operations (OMO)

B. Reserve Requirements

C. Cash Reserve Ratio (CRR)

D. Discount Rate

Correct Answer: A

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Question 12

A firm's production function is given by Q = 2L^0.5K^0.5. If the price of labor (w) is ₦100 and the price of capital (r) is ₦50, what is the optimal level of labor (L) if the firm wants to maximize its profit?

A. 100 units

Correct B. 200 units

C. 300 units

D. 400 units

Correct Answer: B

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Question 13

The government of Nigeria has introduced a new tax policy to increase revenue. Which of the following taxes is likely to have the highest elasticity of tax base?

Correct A. Value Added Tax (VAT)

B. Pay As You Earn (PAYE)

C. Company Income Tax

D. Customs Duty

Correct Answer: A

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Question 14

A consumer's budget constraint is given by 2x + 3y = 12. If the price of good x is ₦2 and the price of good y is ₦3, what is the consumer's optimal bundle of goods?

Correct A. x = 2, y = 4

B. x = 4, y = 2

C. x = 6, y = 0

D. x = 0, y = 4

Correct Answer: A

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Question 15

The Nigerian government has implemented a policy to increase agricultural production. Which of the following policies is likely to have the highest impact on agricultural production?

A. Subsidy on fertilizers

B. Subsidy on irrigation equipment

Correct C. Extension services

D. Market information services

Correct Answer: C

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Question 16

A monopolistically competitive firm faces a demand curve with a cons\tant elasticity of -2. If the firm's marginal revenue (MR) curve is given by MR = 100 - 2Q, where Q is the quantity sold, what is the firm's optimal quantity?

A. 20 units

Correct B. 30 units

C. 40 units

D. 50 units

Correct Answer: B

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Question 17

A consumer has a budget of ₦1000 and faces the following prices for two goods: good A \costs ₦200 and good B \costs ₦300. If the consumer's indifference curves are represented by the equation U = 2x + 3y, where x and y are the quantities of goods A and B respectively, what is the consumer's optimal bundle?

Correct A. x = 2, y = 1

B. x = 3, y = 2

C. x = 4, y = 3

D. x = 5, y = 4

Correct Answer: A

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Question 18

A firm's production function is given by Q = 2L^0.5K^0.5, where L and K are the quantities of labor and capital respectively. If the firm's \cost function is given by C = 100L + 200K, what is the firm's optimal input bundle?

Correct A. L = 4, K = 9

B. L = 9, K = 4

C. L = 16, K = 9

D. L = 9, K = 16

Correct Answer: A

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Question 19

A market is in equilibrium with a price of ₦50 and a quantity of 100 units. If the demand curve is given by Qd = 200 - 2P and the supply curve is given by Qs = 2P - 100, what is the price elasticity of demand?

Correct A. 0.5

B. 1

C. 2

D. 3

Correct Answer: A

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Question 20

A firm's production function is given by Q = 3L^0.5K^0.5, where L and K are the quantities of labor and capital respectively. If the firm's \cost function is given by C = 150L + 250K, what is the firm's optimal input bundle?

Correct A. L = 9, K = 16

B. L = 16, K = 9

C. L = 25, K = 16

D. L = 16, K = 25

Correct Answer: A

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Question 21

A market is in equilibrium with a price of ₦75 and a quantity of 150 units. If the demand curve is given by Qd = 300 - 3P and the supply curve is given by Qs = 3P - 150, what is the price elasticity of demand?

A. 1.5

Correct B. 2

C. 2.5

D. 3

Correct Answer: B

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Question 22

A firm's production function is given by Q = 2L^0.5K^0.5, where L and K are the quantities of labor and capital respectively. If the firm's \cost function is given by C = 100L + 200K, what is the firm's optimal input bundle?

Correct A. L = 4, K = 9

B. L = 9, K = 4

C. L = 16, K = 9

D. L = 9, K = 16

Correct Answer: A

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Question 23

A market is in equilibrium with a price of ₦50 and a quantity of 100 units. If the demand curve is given by Qd = 200 - 2P and the supply curve is given by Qs = 2P - 100, what is the price elasticity of demand?

A. 0.5

B. 1

C. 2

D. 3

Correct Answer: VIEW ANSWER

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Question 24

A country's GDP is calculated as the sum of the value of all final goods and services produced within its borders. However, this calculation excludes the value of intermediate goods and services. What is the term for this exclusion?

Correct A. Value Added

B. Gross National Product

C. Net National Product

D. Implicit Deflator

Correct Answer: A

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Question 25

A perfectly competitive market is characterized by a large number of firms producing a homogeneous product. What is the term for the price at which a firm is willing and able to produce a given quantity of a good?

A. Supply Curve

B. Demand Curve

C. Marginal Revenue

Correct D. Marginal Cost

Correct Answer: D

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