POST UTME LASU 2020 Economics | Objective

Are you preparing for POST UTME LASU exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2020 Economics (Objective) questions designed to simulate the real exam environment.

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Question 1
A consumer's indifference curve is downward sloping, indicating that as the quantity of one good increases, the quantity of the other good decreases. What is the name of this phenomenon?
Correct A. Diminishing Marginal Utility
B. Diminishing Returns to Scale
C. Giffen Paradox
D. Income Effect

Correct Answer: A

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Question 2
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current production is 4 units, and the price of labor is ₦100 per unit, while the price of capital is ₦200 per unit, what is the minimum \cost of producing 4 units of output?
A. ₦400
B. ₦800
Correct C. ₦1200
D. ₦1600

Correct Answer: C

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Question 3
A country's GDP is ₦10 trillion, its GNP is ₦12 trillion, and its national income is ₦15 trillion. What is the country's net factor income from abroad?
A. ₦3 trillion
Correct B. ₦5 trillion
C. ₦7 trillion
D. ₦9 trillion

Correct Answer: B

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Question 4
A central bank uses the following monetary policy tools: open market operations, reserve requirements, and discount rate. Which of the following is NOT a tool used by the central bank?
A. Open Market Operations
B. Reserve Requirements
C. Discount Rate
Correct D. Fiscal Policy

Correct Answer: D

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Question 5
A consumer's budget constraint is given by 2x + 3y = 12. If the consumer's income is ₦12, and the price of good x is ₦2 per unit, while the price of good y is ₦3 per unit, what is the consumer's optimal bundle of goods?
Correct A. (2, 4)
B. (4, 2)
C. (6, 0)
D. (0, 6)

Correct Answer: A

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Question 6
The production function for a firm is given by Q = 2L^0.5K^0.5, where Q is the output, L is the labor and K is the capital. If the firm increases labor from 4 units to 9 units and capital from 9 units to 16 units, what is the percentage increase in output?
A. 25%
Correct B. 50%
C. 75%
D. 100%

Correct Answer: B

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Question 7
A firm is producing a good with a cons\tant elasticity of demand of -2. If the price of the good increases by 10%, what is the percentage change in quantity demanded?
Correct A. -20%
B. -10%
C. 10%
D. 20%

Correct Answer: A

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Question 8
A country's GDP is ₦100 billion, its imports are ₦20 billion, and its exports are ₦30 billion. What is the country's balance of trade?
Correct A. ₦10 billion
B. ₦20 billion
C. ₦30 billion
D. ₦40 billion

Correct Answer: A

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Question 9
A firm is producing a good with a production function Q = 2L^0.5K^0.5. If the firm increases labor from 4 units to 9 units and capital from 9 units to 16 units, what is the percentage increase in output?
A. 25%
Correct B. 50%
C. 75%
D. 100%

Correct Answer: B

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Question 10
A country's GNP is ₦120 billion, its GDP is ₦100 billion, and its net factor income from abroad is ₦20 billion. What is the country's GNP?
A. ₦100 billion
Correct B. ₦120 billion
C. ₦140 billion
D. ₦160 billion

Correct Answer: B

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Question 11
The Nigerian government has implemented policies to promote agricultural development. Which of the following is a likely consequence of these policies?
Correct A. Increased food production
B. Reduced poverty
C. Increased inequality
D. Decreased economic growth

Correct Answer: A

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Question 12
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's labor and capital inputs are increased by 20% and 15% respectively, what is the percentage change in output?
A. 10%
Correct B. 15%
C. 20%
D. 25%

Correct Answer: B

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Question 13
The Central Bank of Nigeria has increased the reserve requirement for commercial banks. What is the likely effect on the money supply?
A. Increase
Correct B. Decrease
C. No change
D. Uncertain

Correct Answer: B

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Question 14
A consumer has a budget constraint of 100 units of currency and two goods, A and B. The prices of A and B are 5 and 3 units respectively. If the consumer sp\ends 80 units on good A, what is the opportunity \cost of good B?
A. 10 units
Correct B. 15 units
C. 20 units
D. 25 units

Correct Answer: B

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Question 15
The Nigerian government has implemented a policy to increase the minimum wage. What is the likely effect on employment?
A. Increase
Correct B. Decrease
C. No change
D. Uncertain

Correct Answer: B

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Question 16
Consider a firm operating in a perfectly competitive market with a production function given by Q = 2L^0.5K^0.5. If the firm's current input prices are w = 10 and r = 20, and it is currently producing 4 units of output, what is the firm's current input mix?
A. L = 4, K = 4
Correct B. L = 16, K = 1
C. L = 1, K = 16
D. L = 2, K = 2

Correct Answer: B

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Question 17
Suppose the exchange rate between the Nigerian naira (NGN) and the US dollar (USD) is 1 USD = 500 NGN. If a Nigerian consumer has a budget of 250,000 NGN and wants to buy a laptop that \costs 500 USD, what is the maximum number of laptops the consumer can buy?
A. 2 laptops
Correct B. 3 laptops
C. 4 laptops
D. 5 laptops

Correct Answer: B

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Question 18
A consumer has a utility function given by U = 2x + 3y, where x and y are the quantities of two goods consumed. If the consumer's budget constraint is 10x + 5y = 100, and the prices of the two goods are 2 and 5 respectively, what is the consumer's optimal consumption bundle?
A. x = 10, y = 10
Correct B. x = 20, y = 5
C. x = 5, y = 20
D. x = 15, y = 15

Correct Answer: B

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Question 19
Consider a firm operating in a perfectly competitive market with a production function given by Q = 3L^0.5K^0.5. If the firm's current input prices are w = 15 and r = 30, and it is currently producing 6 units of output, what is the firm's current input mix?
A. L = 9, K = 1
B. L = 1, K = 9
Correct C. L = 3, K = 3
D. L = 6, K = 6

Correct Answer: C

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Question 20
Suppose the exchange rate between the Nigerian naira (NGN) and the South African rand (ZAR) is 1 ZAR = 200 NGN. If a Nigerian consumer has a budget of 400,000 NGN and wants to buy a smartphone that \costs 200 ZAR, what is the maximum number of smartphones the consumer can buy?
A. 2 smartphones
Correct B. 3 smartphones
C. 4 smartphones
D. 5 smartphones

Correct Answer: B

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Question 21
Consider a perfectly competitive market with n firms, each producing a homogeneous product. If the market demand curve is downward sloping and the firms are price takers, what will be the effect on the market supply curve if the price of a key input increases?
A. The market supply curve will shift to the left.
Correct B. The market supply curve will shift to the right.
C. The market supply curve will remain unchanged.
D. The market supply curve will shift downward.

Correct Answer: B

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Question 22
A monopolist faces a demand curve given by Qd = 100 - 2P and a \cost function C(Q) = 10Q + 5Q^2. What is the profit-maximizing quantity of output?
A. 20
B. 30
Correct C. 40
D. 50

Correct Answer: C

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Question 23
A country's GDP is 100 billion naira. The government sp\ends 20 billion naira on goods and services, and the private sector sp\ends 30 billion naira on goods and services. What is the country's national income?
A. 80 billion naira
B. 90 billion naira
Correct C. 100 billion naira
D. 110 billion naira

Correct Answer: C

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Question 24
A firm's demand curve is given by Qd = 100 - 2P. If the firm's marginal revenue (MR) is 20, what is the firm's marginal \cost (MC)?
A. 10
Correct B. 20
C. 30
D. 40

Correct Answer: B

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Question 25
A monopolist faces a demand curve given by Qd = 100 - 2P and a \cost function C(Q) = 10Q + 5Q^2. What is the monopolist's profit-maximizing price?
A. 20
B. 30
Correct C. 40
D. 50

Correct Answer: C

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