POST UTME IGBINEDION UNIVERSITY 2021 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
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
B. 1.0
C. 1.5
D. 2.0
Question 2
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
B. 90
C. 100
D. 110
Question 3
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
B. ₦140
C. ₦160
D. ₦180
Question 4
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
D. All of the above
Question 5
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?
A. (4,8)
B. (8,4)
C. (16,2)
D. (2,16)
Question 6
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?
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.
Question 7
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
B. ₦100
C. ₦200
D. ₦500
Question 8
Consider a perfectly competitive market with a downward-sloping demand curve and an upward-sloping supply curve. If the market price is initially at P1 and the quantity demanded is Q1, and then the demand curve shifts to the left, what will happen to the market equilibrium price and quantity?
A. The market equilibrium price will decrease, and the quantity demanded will increase.
B. The market equilibrium price will increase, and the quantity demanded will decrease.
C. The market equilibrium price will remain the same, and the quantity demanded will increase.
D. The market equilibrium price will decrease, and the quantity demanded will decrease.
Question 9
Consider a firm operating in a perfectly competitive market with a production function Q = 2L^0.5K^0.5. If the firm's current input prices are w = 10 and r = 20, calculate the firm's optimal input bundle (L, K) u\sing the Hotelling's Lemma.
A. L = 100, K = 100
B. L = 50, K = 50
C. L = 200, K = 200
D. L = 150, K = 150
Question 10
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
C. 50
D. 60
Question 11
A government imposes a tax of ₦10 on a firm's output. The firm's supply curve is given by Q = 100 - 2P. Find the new supply curve after the tax is imposed.
A. Q = 100 - 4P
B. Q = 100 - 6P
C. Q = 100 - 8P
D. Q = 100 - 10P
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?
A. 20
B. 30
C. 40
D. 50
Question 13
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?
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
Question 14
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.
A. 0.5
B. 1
C. 2
D. 5
Question 15
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
C. 30
D. 40

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