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POST UTME IMS U 2018 Economics | Objective

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Question 1

A firm's \cost function is given by C(x) = 2x^2 + 15x + 100. If the firm's revenue function is R(x) = 20x - 0.5x^2, find the profit-maximizing level of output, given that the firm's fixed \costs are ₦500.

A. 10

B. 15

Correct C. 20

D. 25

Correct Answer: C

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Question 2

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 supply function is Qs = 2P - 10, find the equilibrium price and quantity.

A. ₦20, Q = 30

Correct B. ₦30, Q = 40

C. ₦40, Q = 50

D. ₦50, Q = 60

Correct Answer: B

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Question 3

A consumer's utility function is given by U(x, y) = 2x + 3y. If the consumer's budget constraint is 2x + 3y = ₦100, find the optimal values of x and y.

A. x = 10, y = 20

B. x = 20, y = 10

Correct C. x = 15, y = 15

D. x = 25, y = 5

Correct Answer: C

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Question 4

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 supply function is Qs = 2P - 10, find the price elasticity of demand at the equilibrium price.

Correct A. 0.5

B. 1

C. 2

D. 3

Correct Answer: A

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Question 5

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 country's exports are ₦100 and its imports are ₦80, find the balance of payments.

Correct A. ₦20

B. ₦30

C. ₦40

D. ₦50

Correct Answer: A

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Question 6

Consider a perfectly competitive market with n firms, each producing a homogeneous product. If the market demand curve is given by Qd = 100 - 2P and the marginal \cost (MC) of each firm is 20, what is the equilibrium price and quantity?

Correct A. \( P = 30, Q = 35 \)

B. \( P = 40, Q = 30 \)

C. \( P = 50, Q = 25 \)

D. \( P = 60, Q = 20 \)

Correct Answer: A

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Question 7

A monopolist faces a demand curve given by Qd = 100 - 2P and has a marginal \cost (MC) of 20. If the firm's objective is to maximize profits, what is the optimal 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 8

A government imposes a tax of ₦10 on a firm's output. If the firm's supply curve is given by Qs = 20 + 2P and the market demand curve is given by Qd = 100 - 2P, what is the new equilibrium price and quantity?

A. \( P = 30, Q = 35 \)

Correct B. \( P = 40, Q = 30 \)

C. \( P = 50, Q = 25 \)

D. \( P = 60, Q = 20 \)

Correct Answer: B

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Question 9

Consider a firm that operates in a perfectly competitive market. If the firm's production function is given by Q = 2L^0.5 and the market wage rate is ₦50 per hour, what is the firm's optimal labor input?

A. \( L = 10 \)

Correct B. \( L = 20 \)

C. \( L = 30 \)

D. \( L = 40 \)

Correct Answer: B

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Question 10

A firm faces a production function given by Q = 2L^0.5 and a market wage rate of ₦50 per hour. If the firm's objective is to maximize profits, what is the optimal labor input?

A. \( L = 10 \)

B. \( L = 20 \)

Correct C. \( L = 30 \)

D. \( L = 40 \)

Correct Answer: C

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Question 11

A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \), where L is labor and K is capital. If the firm's current labor and capital inputs are L = 16 and K = 9, respectively, what is the firm's current output?

A. 32

B. 48

Correct C. 64

D. 80

Correct Answer: C

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Question 12

A consumer's utility function is given by U = 2x + 3y, where x and y are the quantities of two goods consumed. If the consumer's budget constraint is 4x + 5y = 20, what is the consumer's optimal bundle of goods?

A. (2, 2)

Correct B. (4, 4)

C. (6, 2)

D. (3, 5)

Correct Answer: B

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Question 13

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

A. 40

Correct B. 60

C. 80

D. 100

Correct Answer: B

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Question 14

A country's GDP is given by the equation GDP = C + I + G + \( X - M \), where C is consumption, I is investment, G is government sp\ending, X is exports, and M is imports. If the country's current GDP is 100 billion naira, and the current values of C, I, G, X, and M are 30, 20, 15, 25, and 10 billion naira, respectively, what is the value of the country's current net exports?

A. 5

B. 10

C. 15

Correct D. 20

Correct Answer: D

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Question 15

A firm's production function is given by Q = 3L^\( 1/3 \)K^\( 2/3 \), where L is labor and K is capital. If the firm's current labor and capital inputs are L = 27 and K = 8, respectively, what is the firm's current output?

A. 27

B. 36

Correct C. 54

D. 72

Correct Answer: C

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Question 16

Consider a market with a demand function \( Q_d = 100 - 2P \) and a supply function \( Q_s = 2P - 20 \). If the market is in equilibrium, what is the price at which this occurs?

A. ₦50

Correct B. ₦75

C. ₦100

D. ₦125

Correct Answer: B

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Question 17

A country's GDP can be calculated u\sing the formula \( GDP = C + I + G + \( X - M \ \) ). If the country's consumption is ₦500 billion, investment is ₦200 billion, government sp\ending is ₦300 billion, exports are ₦400 billion, and imports are ₦200 billion, what is the country's GDP?

A. ₦1.5 trillion

B. ₦1.8 trillion

Correct C. ₦2.0 trillion

D. ₦2.2 trillion

Correct Answer: C

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Question 18

A firm's marginal revenue function is \( MR = 100 - 2Q \) and its marginal \cost function is \( MC = 20 + 3Q \). If the firm is producing 10 units, what is its marginal profit?

A. ₦20

B. ₦30

Correct C. ₦40

D. ₦50

Correct Answer: C

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Question 19

A firm's demand function is \( Q = 100 - 2P \) and its supply function is \( Q = 2P - 20 \). If the market is in equilibrium, what is the quantity at which this occurs?

A. 50 units

Correct B. 75 units

C. 100 units

D. 125 units

Correct Answer: B

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Question 20

A country's inflation rate can be calculated u\sing the formula \( pi = \frac{P_t - P_{t-1}}{P_{t-1}} \). If the current price index is 120 and the previous price index was 100, what is the inflation rate?

A. 20%

Correct B. 25%

C. 30%

D. 35%

Correct Answer: B

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Question 21

Consider a firm operating in a perfectly competitive market. If the firm's average \cost curve (AC) intersects the marginal \cost (MC) curve at a point where MC < AC, what is the likely outcome for the firm's production level?

Correct A. The firm will increase production to the point where MC = AC

B. The firm will decrease production to the point where MC = AC

C. The firm will remain at the current production level

D. The firm will increase production beyond the point where MC = AC

Correct Answer: A

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Question 22

A country's balance of payments (BOP) account is in equilibrium when the current account (CA) is equal to the capital account (KA). If the country's CA is in deficit, what is the likely outcome for the country's exchange rate?

A. The exchange rate will appreciate

Correct B. The exchange rate will depreciate

C. The exchange rate will remain unchanged

D. The exchange rate will fluctuate

Correct Answer: B

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Question 23

A consumer's indifference curve (IC) is downward sloping and convex to the origin. If the consumer's income increases, what is the likely outcome for the consumer's optimal consumption bundle?

Correct A. The consumer will move to a higher indifference curve

B. The consumer will move to a lower indifference curve

C. The consumer will remain on the same indifference curve

D. The consumer will move to a higher indifference curve but with a different optimal bundle

Correct Answer: A

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Question 24

A firm's demand curve (D) is downward sloping and the firm's supply curve (S) is upward sloping. If the price of the good increases, what is the likely outcome for the firm's quantity supplied?

A. The quantity supplied will increase

Correct B. The quantity supplied will decrease

C. The quantity supplied will remain unchanged

D. The quantity supplied will fluctuate

Correct Answer: B

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Question 25

A country's money supply (M) is increa\sing at a rate of 10% per annum. If the velocity of money (V) is cons\tant, what is the likely outcome for the country's price level?

Correct A. The price level will increase

B. The price level will decrease

C. The price level will remain unchanged

D. The price level will fluctuate

Correct Answer: A

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