Practice Post UTME IGBINEDION UNIVERSITY economics 2021 Past Questions

Question 1

The government of Nigeria has introduced a new policy to increase agricultural production. The policy includes providing subsidies to farmers, improving irrigation systems, and increa\sing the use of fertilizers. However, the policy also includes a provision to increase the price of fertilizers by 20%. What is the opportunity \cost of this policy?

Correct A. The increase in the price of fertilizers will lead to a decrease in the quantity of fertilizers demanded by farmers.

B. The increase in the price of fertilizers will lead to an increase in the quantity of fertilizers demanded by farmers.

C. The increase in the price of fertilizers will lead to a decrease in the quantity of fertilizers supplied by farmers.

D. The increase in the price of fertilizers will lead to an increase in the quantity of fertilizers supplied by farmers.

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 2

A consumer is faced with the following budget constraint: 2x + 3y = 12. The consumer's utility function is given by u(x,y) = 2x + 3y. What is the consumer's optimal bundle of x and y?

Correct A. (2,4)

B. (4,2)

C. (6,0)

D. (0,6)

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 3

A firm is producing a good u\sing two inputs, labor and capital. The production function is given by Q = 2L^0.5K^0.5. The firm's \cost function is given by C = 10L + 20K. What is the firm's optimal input bundle of labor and capital?

Correct A. (4,8)

B. (8,4)

C. (16,2)

D. (2,16)

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 4

A government is considering a tax on a particular good. The demand for the good is given by Q = 100 - 2P, and the supply of the good is given by Q = 2P. What is the optimal tax rate?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 5

A consumer is faced with the following budget constraint: 2x + 3y = 12. The consumer's utility function is given by u(x,y) = 2x + 3y. What is the consumer's optimal bundle of x and y?

Correct A. (2,4)

B. (4,2)

C. (6,0)

D. (0,6)

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 6

A firm's production function is given by Q = 100L^0.5K^0.5, where Q is output, L is labor and K is capital. If the firm's labor and capital are 10 and 20 respectively, calculate the opportunity \cost of an additional unit of labor.

A. ₦50

Correct B. ₦100

C. ₦200

D. ₦500

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 7

A consumer's budget constraint is given by P1Q1 + P2Q2 = I, where P1 and P2 are prices of two goods, Q1 and Q2 are quantities consumed and I is income. If the consumer's income is ₦1000, and prices of the two goods are ₦5 and ₦10 respectively, and the consumer sp\ends ₦500 on the first good, calculate the quantity of the second good consumed.

A. 10

B. 20

Correct C. 30

D. 40

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 8

A firm's demand function is given by Q = 100 - 2P, where Q is quantity demanded and P is price. If the firm's marginal revenue is ₦50, calculate the price elasticity of demand.

Correct A. 0.5

B. 1

C. 2

D. 5

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 9

A firm's supply function is given by Q = 2P, where Q is quantity supplied and P is price. If the firm's marginal \cost is ₦20, calculate the price elasticity of supply.

Correct A. 0.5

B. 1

C. 2

D. 5

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 10

A firm's production function is given by Q = 100L^0.5K^0.5, where Q is output, L is labor and K is capital. If the firm's labor and capital are 10 and 20 respectively, calculate the opportunity \cost of an additional unit of capital.

A. ₦50

Correct B. ₦100

C. ₦200

D. ₦500

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 11

The elasticity of demand for a commodity is given by the formula \( eta = \frac{P}{Q} \frac{dQ}{dP} \). If the price of the commodity increases by 10% and the quantity demanded decreases by 5%, what is the elasticity of demand?

A. 0.5

Correct B. 1.0

C. 1.5

D. 2.0

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 12

A firm is producing a good with a production function \( Q = 2L^2 + 3K^2 \), where ( L ) is labor and ( K ) is capital. If the firm is currently producing 100 units of the good with 10 units of labor and 5 units of capital, what is the marginal product of labor?

Correct A. 20

B. 30

C. 40

D. 50

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 13

A government is considering a tax on a good that is currently priced at ₦100. The tax is expected to increase the price of the good by 20%. If the demand for the good is given by the equation \( Q = 100 - 2P \), what is the new price of the good?

A. ₦120

Correct B. ₦140

C. ₦160

D. ₦180

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 14

A firm is producing a good with a production function \( Q = 2L^2 + 3K^2 \), where ( L ) is labor and ( K ) is capital. If the firm is currently producing 100 units of the good with 10 units of labor and 5 units of capital, what is the marginal product of capital?

A. 30

B. 40

Correct C. 50

D. 60

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 15

A government is considering a budget that allocates ₦100 million to education and ₦50 million to healthcare. If the government also allocates ₦20 million to infrastructure, what is the total budget?

A. ₦170 million

B. ₦180 million

Correct C. ₦190 million

D. ₦200 million

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 16

A firm is producing a good with a production function \( Q = 2L^2 + 3K^2 \), where ( L ) is labor and ( K ) is capital. If the firm is currently producing 100 units of the good with 10 units of labor and 5 units of capital, what is the average product of labor?

A. 20

Correct B. 30

C. 40

D. 50

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 17

A government is considering a tax on a good that is currently priced at ₦100. The tax is expected to increase the price of the good by 20%. If the demand for the good is given by the equation \( Q = 100 - 2P \), what is the new quantity demanded?

A. 80

Correct B. 90

C. 100

D. 110

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 18

A firm is producing a good with a production function \( Q = 2L^2 + 3K^2 \), where ( L ) is labor and ( K ) is capital. If the firm is currently producing 100 units of the good with 10 units of labor and 5 units of capital, what is the marginal product of labor?

Correct A. 20

B. 30

C. 40

D. 50

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 19

The opportunity \cost of producing one more unit of a good is the amount of another good that must be given up in order to produce that unit. Which of the following is an example of opportunity \cost?

A. The \cost of producing one more unit of a good

B. The benefit of producing one more unit of a good

Correct C. The amount of another good that must be given up in order to produce that unit

D. The price of one more unit of a good

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 20

The law of diminishing marginal utility states that as the quantity of a good consumed increases, the marginal utility derived from each additional unit decreases. Which of the following is a consequence of this law?

A. The demand for the good increases

B. The supply of the good increases

C. The price of the good increases

Correct D. The quantity demanded of the good decreases

Correct Answer: D

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 21

The balance of payments (BOP) is a statistical statement that summarizes a country's economic transactions with the rest of the world over a specific period of time. Which of the following is a component of the BOP?

A. Current account

B. Capital account

C. Financial account

Correct D. All of the above

Correct Answer: D

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 22

The money market is a market where financial assets such as bonds, stocks, and currencies are traded. Which of the following is a characteristic of the money market?

A. It is a market for long-term loans

B. It is a market for short-term loans

Correct C. It is a market for financial assets

D. It is a market for physical goods

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 23

The agricultural sector is a significant contributor to the GDP of many countries. Which of the following is a benefit of agricultural development?

A. Increased employment opportunities

B. Increased income for farmers

C. Increased food security

Correct D. All of the above

Correct Answer: D

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 24

The industrial sector is a significant contributor to the GDP of many countries. Which of the following is a characteristic of industrial development?

A. Increased employment opportunities

B. Increased income for workers

C. Increased productivity

Correct D. All of the above

Correct Answer: D

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 25

The concept of perfect competition is a market structure in which many firms produce a homogeneous product. Which of the following is a characteristic of perfect competition?

Correct A. Many firms produce a homogeneous product

B. Firms have complete control over the market

C. Firms can set prices and output levels

D. All of the above

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

POST UTME IGBINEDION UNIVERSITY 2021 Economics | Objective

Master the Exam!

Help others prepare! Share this practice hub: