POST UTME IGBINEDION UNIVERSITY 2024 Economics | Objective

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Question 1
A perfectly competitive market has the following characteristics: (i) price maker, (ii) price taker, (iii) homogeneous product, (iv) free entry and exit. Which of the following statements is NOT true about a perfectly competitive market?
Correct A. A firm in a perfectly competitive market can influence the market price.
B. A firm in a perfectly competitive market can produce any quantity of the product.
C. A firm in a perfectly competitive market can enter or exit the market freely.
D. A firm in a perfectly competitive market is a price taker.

Correct Answer: A

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Question 2
The following diagram shows the production function of a firm. What is the value of the output when the input is 5 units?
A. 10
Correct B. 20
C. 30
D. 40

Correct Answer: B

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Question 3
A firm is producing a good with the following production function: Q = 2L^2. If the firm wants to produce 16 units of the good, how many units of labor should it hire?
A. 2
B. 4
Correct C. 6
D. 8

Correct Answer: C

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Question 4
The following table shows the demand and supply curves for a good. What is the equilibrium price and quantity of the good?
A. P = 10, Q = 20
Correct B. P = 15, Q = 30
C. P = 20, Q = 40
D. P = 25, Q = 50

Correct Answer: B

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Question 5
The following diagram shows the production function of a firm. What is the value of the output when the input is 10 units?
A. 30
B. 60
Correct C. 90
D. 120

Correct Answer: C

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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, 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 7
A firm is producing a product with a total revenue of ₦1,500 and a total \cost of ₦1,000. If the price elasticity of demand is 0.5, what is the price elasticity of supply?
A. 0.5
Correct B. 1
C. 2
D. 3

Correct Answer: B

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Question 8
A country's balance of payments is given by the equation BOP = X - M, where X is the value of exports and M is the value of imports. If the value of exports is ₦1,500 and the value of imports is ₦1,000, what is the balance of payments?
Correct A. ₦500
B. ₦1,000
C. ₦1,500
D. ₦2,000

Correct Answer: A

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Question 9
A firm is producing a product with a marginal revenue of ₦100 and a marginal \cost of ₦80. If the price elasticity of demand is 0.5, what is the optimal quantity to produce?
A. 10
B. 20
Correct C. 30
D. 40

Correct Answer: C

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Question 10
A country's inflation rate is given by the equation IR = \( P - P0 \)/P0, where P is the current price level and P0 is the base price level. If the current price level is ₦1,500 and the base price level is ₦1,000, what is the inflation rate?
A. 50%
Correct B. 60%
C. 70%
D. 80%

Correct Answer: B

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Question 11
A firm operating in a perfectly competitive market has a total revenue function given by TR = 100x - 2x^2, where x is the number of units sold. If the firm's marginal revenue (MR) is 80, what is the value of x?
A. 10
Correct B. 20
C. 30
D. 40

Correct Answer: B

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Question 12
A consumer's utility function is given by U(x, y) = 2x + 3y, where x and y are the quantities of two goods consumed. If the consumer's budget constraint is 100, and the prices of the two goods 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 = 20, y = 2

Correct Answer: A

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Question 13
A country's balance of payments (BOP) is given by the following equation: BOP = X - M, where X is the value of exports and M is the value of imports. If the country's exports are $100 million and its imports are $120 million, what is the country's BOP?
A. $20 million surplus
Correct B. $20 million deficit
C. $10 million surplus
D. $10 million deficit

Correct Answer: B

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Question 14
A firm's demand function is given by Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the firm's supply function is Qs = 2P - 10, what is the equilibrium price?
A. $20
B. $30
Correct C. $40
D. $50

Correct Answer: C

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Question 15
A consumer's demand for a good is given by Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the consumer's income is $100 and the price of the good is $20, what is the consumer's willingness to pay?
A. $50
Correct B. $60
C. $70
D. $80

Correct Answer: B

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Question 16
The Heckscher-Ohlin model assumes that countries specialize in the production of goods for which they have a comparative advantage. However, this model has been criticized for its inability to explain the phenomenon of 'unbalanced trade'. What is the primary reason for this criticism?
A. The model assumes that countries have identical production functions.
B. The model fails to account for the role of techno\logy in determining comparative advantage.
Correct C. The model assumes that countries have identical \endowments of factors of production.
D. The model fails to account for the role of government policies in determining trade patterns.

Correct Answer: C

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Question 17
A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \), where Q is output, L is labor, and K is capital. If the firm's current labor and capital inputs are 16 and 9 respectively, what is the marginal product of labor?
Correct A. 0.5
B. 1
C. 2
D. 4

Correct Answer: A

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Question 18
The National Bureau of Statistics (NBS) reports that Nigeria's GDP at cons\tant 2010 prices was ₦120,000 billion in 2020. If the population of Nigeria in 2020 was 200 million, what was the per capita GDP?
A. ₦600
B. ₦6000
Correct C. ₦60,000
D. ₦600,000

Correct Answer: C

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Question 19
A farmer in Nigeria produces maize and soybeans on a 100-hectare farm. The marginal product of maize is 20 tons per hectare, while the marginal product of soybeans is 15 tons per hectare. If the farmer allocates 60 hectares to maize and 40 hectares to soybeans, what is the total output of the farm?
A. 1200
B. 1500
Correct C. 1800
D. 2000

Correct Answer: C

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Question 20
The Nigerian government has implemented a policy to increase the production of rice by 20% per annum for the next 5 years. If the current production of rice is 2 million tons, what will be the production of rice after 5 years?
A. 10,485,760
B. 12,345,678
Correct C. 15,625,000
D. 20,000,000

Correct Answer: C

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Question 21
A firm's production function is given by Q = 3L^2K, where Q is output, L is labor, and K is capital. If the firm's current labor and capital inputs are 4 and 9 respectively, what is the total product of the firm?
A. 648
B. 864
Correct C. 1080
D. 1296

Correct Answer: C

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Question 22
The Nigerian government has implemented a policy to increase the production of maize by 15% per annum for the next 3 years. If the current production of maize is 1.5 million tons, what will be the production of maize after 3 years?
A. 2,197,500
B. 2,625,000
Correct C. 3,125,000
D. 3,906,250

Correct Answer: C

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Question 23
A firm's production function is given by Q = 2L^2K^2, where Q is output, L is labor, and K is capital. If the firm's current labor and capital inputs are 3 and 6 respectively, what is the total product of the firm?
A. 648
B. 864
Correct C. 1080
D. 1296

Correct Answer: C

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Question 24
Consider a small open economy with a fixed exchange rate. The country's trade balance is given by the equation: TB = \( X - M \) + \( F - I \), where TB is the trade balance, X is the value of exports, M is the value of imports, F is the foreign aid, and I is the investment. If the country's exports increase by 10% and imports decrease by 5%, while foreign aid increases by 2% and investment remains cons\tant, what is the new trade balance?
A. 5% increase
B. 10% increase
Correct C. 15% increase
D. 20% increase

Correct Answer: C

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Question 25
Suppose a monopolist faces a demand curve given by Qd = 100 - 2P and a \cost function C(Q) = 10Q + 5Q^2. Find the profit-maximizing quantity and price.
A. Q = 20, P = 40
B. Q = 30, P = 50
Correct C. Q = 40, P = 60
D. Q = 50, P = 70

Correct Answer: C

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