Practice Post UTME LASU economics 2018 Past Questions

Question 1

A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \). If the price of labor is ₦50 per unit and the price of capital is ₦100 per unit, and if the firm's budget constraint is 50L + 100K = ₦10,000, what is the optimal level of labor (L) that the firm should employ?

A. 100 units

Correct B. 200 units

C. 300 units

D. 400 units

Correct Answer: B

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Question 2

A country's GDP is ₦1,500 billion and its GNP is ₦1,600 billion. What is the net factor income from abroad?

A. ₦100 billion

Correct B. ₦200 billion

C. ₦300 billion

D. ₦400 billion

Correct Answer: B

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Question 3

A consumer's utility function is given by U = 2x + 3y. If the consumer's budget constraint is 2x + 3y = ₦100, and if the price of good x is ₦20 per unit and the price of good y is ₦30 per unit, what is the optimal level of good x (x) that the consumer should purchase?

A. 2 units

Correct B. 3 units

C. 4 units

D. 5 units

Correct Answer: B

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Question 4

A firm's \cost function is given by C = 2L + 3K. If the firm's revenue function is given by R = 4L + 5K, and if the firm's profit function is given by π = R - C, what is the optimal level of labor (L) that the firm should employ?

A. 10 units

Correct B. 20 units

C. 30 units

D. 40 units

Correct Answer: B

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Question 5

A consumer's indifference curve is given by the equation U = 2x + 3y. If the consumer's budget constraint is 2x + 3y = ₦100, and if the price of good x is ₦20 per unit and the price of good y is ₦30 per unit, what is the optimal level of good x (x) that the consumer should purchase?

A. 2 units

Correct B. 3 units

C. 4 units

D. 5 units

Correct Answer: B

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Question 6

A firm is operating on a long-run average \cost curve. If the firm's output increases from 100 units to 200 units, and the average \cost decreases from ₦100 to ₦80, what can be concluded about the firm's returns to scale?

A. Decrea\sing returns to scale

Correct B. Increa\sing returns to scale

C. Cons\tant returns to scale

D. No conclusion can be drawn

Correct Answer: B

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Question 7

The Nigerian government has implemented a policy to increase the production of rice in the country. The policy includes providing subsidies to farmers and increa\sing the importation of rice seeds. What is the likely effect of this policy on the supply of rice in Nigeria?

Correct A. Increase in supply

B. Decrease in supply

C. No change in supply

D. Increase in demand

Correct Answer: A

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Question 8

A consumer has the following utility function: U(x, y) = 2x + 3y. If the consumer's income is ₦100 and the prices of x and y are ₦20 and ₦30 respectively, what is the consumer's optimal bundle of x and y?

Correct A. x = 2, y = 1

B. x = 3, y = 2

C. x = 4, y = 3

D. x = 5, y = 4

Correct Answer: A

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Question 9

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. If the firm's output is 100 units and the price of labor is ₦50 per unit, what is the firm's optimal level of capital?

A. ₦1000

Correct B. ₦2000

C. ₦3000

D. ₦4000

Correct Answer: B

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Question 10

The Nigerian government has implemented a policy to increase the production of rice in the country. The policy includes providing subsidies to farmers and increa\sing the importation of rice seeds. What is the likely effect of this policy on the demand for rice in Nigeria?

Correct A. Increase in demand

B. Decrease in demand

C. No change in demand

D. Increase in supply

Correct Answer: A

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Question 11

A firm's total revenue is given by the equation R(x) = 2x^2 + 5x + 1, where x is the number of units sold. If the firm's marginal revenue is 10 when x = 3, what is the value of the firm's total revenue when x = 4?

A. 41

B. 43

Correct C. 45

D. 47

Correct Answer: C

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Question 12

The demand function for a product is given by the equation p(x) = 100 - 2x, where p is the price and x is the quantity demanded. If the supply function is given by the equation p(x) = 2x + 10, what is the equilibrium price and quantity?

Correct A. 20, 30

B. 30, 20

C. 40, 25

D. 50, 30

Correct Answer: A

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Question 13

A consumer's utility function is given by the equation U(x, y) = 2x + 3y, where x is the number of units of good X and y is the number of units of good Y. If the consumer's budget constraint is given by the equation 2x + 3y = 12, what is the consumer's optimal bundle of goods?

Correct A. 2, 2

B. 3, 1

C. 4, 0

D. 1, 3

Correct Answer: A

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Question 14

A firm's \cost function is given by the equation C(x) = 2x^2 + 5x + 1, where x is the number of units produced. If the firm's revenue function is given by the equation R(x) = 3x^2 - 2x + 1, what is the firm's profit function?

Correct A. x^2 + 3x - 2

B. x^2 + 2x - 1

C. x^2 + x + 1

D. x^2 - 2x + 1

Correct Answer: A

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Question 15

A consumer's budget constraint is given by the equation 2x + 3y = 12, where x is the number of units of good X and y is the number of units of good Y. If the consumer's utility function is given by the equation U(x, y) = 2x + 3y, what is the consumer's optimal bundle of goods?

Correct A. 2, 2

B. 3, 1

C. 4, 0

D. 1, 3

Correct Answer: A

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Question 16

U\sing the concept of opportunity \cost, explain why a country may choose to import a good even if it can be produced domestically.

Correct A. The opportunity \cost of producing the good domestically is too high.

B. The good is not produced domestically due to lack of resources.

C. The country wants to specialize in producing other goods.

D. The good is not produced domestically due to lack of techno\logy.

Correct Answer: A

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Question 17

A country's GDP is ₦10 trillion, its GNP is ₦12 trillion, and its net factor income from abroad is ₦1 trillion. What is the country's net national income?

A. ₦11 trillion

B. ₦12 trillion

Correct C. ₦13 trillion

D. ₦14 trillion

Correct Answer: C

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Question 18

A consumer has a budget of ₦1000 and faces the following prices: good A \costs ₦200, good B \costs ₦300, and good C \costs ₦400. U\sing the budget constraint, find the consumer's optimal consumption bundle.

Correct A. (2, 1, 0)

B. (1, 2, 0)

C. (0, 1, 2)

D. (1, 1, 1)

Correct Answer: A

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Question 19

U\sing the concept of comparative advantage, explain why a country may choose to specialize in producing a good even if it is not the most efficient producer.

A. The country wants to specialize in producing other goods.

Correct B. The country has a comparative advantage in producing the good.

C. The country wants to increase its trade deficit.

D. The country wants to decrease its trade surplus.

Correct Answer: B

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Question 20

A country's balance of payments is in equilibrium when its current account is equal to its capital account. What is the implication of this for the country's exchange rate?

A. The exchange rate will appreciate.

B. The exchange rate will depreciate.

Correct C. The exchange rate will remain unchanged.

D. The exchange rate will fluctuate.

Correct Answer: C

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Question 21

Consider a closed economy with a GDP of ₦100 billion and a population of 20 million. If the average annual income per capita is ₦5,000, what is the implied GDP deflator?

A. 100

B. 120

Correct C. 150

D. 180

Correct Answer: C

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Question 22

A firm's demand function is given by Q = 100 - 2P + 3X, where Q is the quantity demanded, P is the price, and X is the income. If the price is ₦50 and the income is ₦10,000, what is the quantity demanded?

A. 50

B. 75

Correct C. 100

D. 125

Correct Answer: C

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Question 23

A consumer's utility function is given by U = 2X + 3Y, where X is the quantity of good X and Y is the quantity of good Y. If the consumer's income is ₦10,000 and the prices of good X and good Y are ₦2 and ₦3 respectively, what is the optimal bundle of goods?

Correct A. \( X = 2, Y = 3 \)

B. \( X = 3, Y = 2 \)

C. \( X = 4, Y = 1 \)

D. \( X = 1, Y = 4 \)

Correct Answer: A

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Question 24

A firm's production function is given by Q = 2L + 3K, where Q is the output, L is the labor and K is the capital. If the firm hires 10 workers and uses ₦10,000 worth of capital, what is the output?

A. 20

B. 30

Correct C. 40

D. 50

Correct Answer: C

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Question 25

A country's national income is given by N = W + I + \( G - T \), where N is the national income, W is the wage income, I is the investment, G is the government exp\enditure and T is the tax revenue. If the wage income is ₦50 billion, the investment is ₦20 billion, the government exp\enditure is ₦30 billion and the tax revenue is ₦10 billion, what is the national income?

A. 80

B. 90

Correct C. 100

D. 110

Correct Answer: C

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