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POST UTME KSU 2018 Economics | Objective

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Question 1 View Details

Consider a country with a GDP of ₦10 trillion and a population of 200 million. If the GDP per capita is ₦50,000, what is the implied average annual income per person in the country?

A. ₦100,000

Correct B. ₦50,000

C. ₦25,000

D. ₦10,000

Correct Answer: B

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Question 2 View Details

A firm is considering two investment projects. Project A has a 5-year payback period and requires an initial investment of ₦1.5 million. Project B has a 3-year payback period and requires an initial investment of ₦2 million. Which project should the firm choose?

Correct A. Project A

B. Project B

C. Both projects are equally attractive

D. Neither project is attractive

Correct Answer: A

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Question 3 View Details

A country's inflation rate is 8% per annum. If the current price level is ₦100, what will be the price level after 2 years?

A. ₦112

B. ₦120

Correct C. ₦128

D. ₦144

Correct Answer: C

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Question 4 View Details

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

A. 20

Correct B. 40

C. 60

D. 80

Correct Answer: B

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Question 5 View Details

A country's GDP is ₦10 trillion. If the government sp\ends ₦2 trillion on infrastructure, what is the new GDP?

A. ₦8 trillion

B. ₦10 trillion

Correct C. ₦12 trillion

D. ₦14 trillion

Correct Answer: C

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Question 6 View Details

A consumer's indifference curve is downward sloping and convex to the origin. What is the implication of this shape on the consumer's utility function?

A. The utility function is linear.

B. The utility function is concave.

Correct C. The utility function is convex.

D. The utility function is homogeneous of degree one.

Correct Answer: C

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Question 7 View Details

A country's balance of payments accounts show a trade deficit of $100 billion and a capital account surplus of $50 billion. What is the overall balance of payments position?

A. A trade deficit of $50 billion.

B. A trade surplus of $50 billion.

C. A balance of payments deficit of $50 billion.

Correct D. A balance of payments surplus of $50 billion.

Correct Answer: D

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Question 8 View Details

A firm produces two goods, X and Y, u\sing two inputs, labor and capital. The production function for good X is given by Q_X = 2L^0.5K^0.5, where L is labor and K is capital. The production function for good Y is given by Q_Y = 3L^0.2K^0.8. What is the marginal rate of technical substitution (MRTS) of labor for good X with respect to good Y?

A. MRTS_L = 1.5L^0.1K^0.2

Correct B. MRTS_L = 2L^0.3K^0.1

C. MRTS_L = 3L^0.1K^0.3

D. MRTS_L = 4L^0.2K^0.4

Correct Answer: B

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Question 9 View Details

A country's GDP is $100 billion, and its GNP is $120 billion. What is the net factor income from abroad?

A. $20 billion

Correct B. $30 billion

C. $40 billion

D. $50 billion

Correct Answer: B

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Question 10 View Details

A perfectly competitive market has a demand curve given by P = 100 - 2Q and a supply curve given by P = 10 + 2Q. What is the equilibrium price and quantity?

Correct A. P = $80, Q = 20

B. P = $90, Q = 25

C. P = $100, Q = 30

D. P = $110, Q = 35

Correct Answer: A

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Question 11 View Details

A firm's demand curve is given by Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the price elasticity of demand is -2, what is the percentage change in quantity demanded when the price increases by 10%?

A. 20%

Correct B. 30%

C. 40%

D. 50%

Correct Answer: B

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Question 12 View Details

A consumer's utility function is given by U(x,y) = 2x + 3y, where x and y are the quantities of two goods. If the consumer's income is ₦1000 and the prices of the two goods are ₦2 and ₦3 respectively, what is the consumer's optimal bundle of goods?

A. (10, 10)

B. (20, 5)

Correct C. (15, 15)

D. (5, 20)

Correct Answer: C

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Question 13 View Details

A firm's \cost function is given by C(Q) = 100 + 2Q + 0.5Q^2, where Q is the quantity produced. If the firm produces 20 units, what is the total \cost of production?

A. ₦250

B. ₦300

Correct C. ₦350

D. ₦400

Correct Answer: C

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Question 14 View Details

A consumer's indifference curve is given by the equation 2x + 3y = 6, where x and y are the quantities of two goods. If the consumer's income is ₦1000 and the prices of the two goods are ₦2 and ₦3 respectively, what is the consumer's optimal bundle of goods?

Correct A. (3, 2)

B. (2, 3)

C. (1, 4)

D. (4, 1)

Correct Answer: A

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Question 15 View Details

A firm's revenue function is given by R(Q) = 100Q - 2Q^2, where Q is the quantity produced. If the firm produces 20 units, what is the total revenue?

A. ₦1200

Correct B. ₦1500

C. ₦1800

D. ₦2000

Correct Answer: B

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Question 16 View Details

Consider a firm operating in a perfectly competitive market with a production function given by Q = 2L^0.5K^0.5. If the price of the good is $10 and the wage rate is $5 per unit of labor, find the optimal level of labor and capital that the firm should employ.

Correct A. L = 100, K = 100

B. L = 50, K = 50

C. L = 200, K = 200

D. L = 150, K = 150

Correct Answer: A

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Question 17 View Details

A firm is considering the introduction of a new product. The demand for the product is given by Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the firm wants to maximize its profit, what should be the price of the product?

A. $20

Correct B. $30

C. $40

D. $50

Correct Answer: B

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Question 18 View Details

The government of Nigeria wants to increase agricultural production in the country. To achieve this, it plans to provide subsidies to farmers. If the supply of agricultural products is given by Q = 100 + 2P, where Q is the quantity supplied and P is the price, what will be the effect of the subsidy on the quantity supplied?

Correct A. Increase in quantity supplied

B. Decrease in quantity supplied

C. No change in quantity supplied

D. Increase in price

Correct Answer: A

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Question 19 View Details

A monopolist is facing a demand curve given by Q = 100 - 2P. The marginal revenue (MR) is given by MR = 2Q. If the firm wants to maximize its profit, what should be the price of the product?

A. $20

Correct B. $30

C. $40

D. $50

Correct Answer: B

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Question 20 View Details

A consumer is faced with the following budget constraint: 2X + 3Y = 100. The consumer's utility function is given by U = 2X + 3Y. If the consumer wants to maximize its utility, what should be the optimal values of X and Y?

Correct A. X = 20, Y = 30

B. X = 30, Y = 20

C. X = 40, Y = 10

D. X = 50, Y = 0

Correct Answer: A

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Question 21 View Details

The returns to scale in a production function can be classified into three categories: increa\sing, decrea\sing, and cons\tant. Which of the following statements is true about the returns to scale?

A. Increa\sing returns to scale occurs when the output increases proportionally with the increase in input factors.

B. Decrea\sing returns to scale occurs when the output decreases proportionally with the increase in input factors.

Correct C. Cons\tant returns to scale occurs when the output increases proportionally with the increase in input factors.

D. Cons\tant returns to scale occurs when the output decreases proportionally with the increase in input factors.

Correct Answer: C

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Question 22 View Details

A monopolistically competitive firm faces a downward-sloping demand curve. Which of the following is a characteristic of a monopolistically competitive firm?

A. The firm has a high degree of market power.

B. The firm faces a downward-sloping demand curve.

Correct C. The firm has a low degree of market power.

D. The firm faces a horizontal demand curve.

Correct Answer: C

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Question 23 View Details

The concept of opportunity \cost is closely related to the concept of scarcity. Which of the following statements is true about opportunity \cost?

A. Opportunity \cost is the \cost of producing one unit of a good.

B. Opportunity \cost is the \cost of producing one unit of a good relative to another good.

C. Opportunity \cost is the benefit of producing one unit of a good.

Correct D. Opportunity \cost is the \cost of not producing one unit of a good.

Correct Answer: D

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Question 24 View Details

The production function is a mathematical representation of the relationship between inputs and outputs. Which of the following is a characteristic of a production function?

A. The production function is a linear function.

Correct B. The production function is a nonlinear function.

C. The production function is a cons\tant function.

D. The production function is a decrea\sing function.

Correct Answer: B

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Question 25 View Details

The concept of market structure refers to the characteristics of a market that affect the behavior of firms. Which of the following is a characteristic of a perfectly competitive market?

A. The market has a \single buyer.

B. The market has a \single seller.

Correct C. The market has many buyers and sellers.

D. The market has a downward-sloping demand curve.

Correct Answer: C

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