Practice Post UTME LASU economics 2024 Past Questions

Question 1

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 marginal \cost is $ MC = 10 $, find the profit-maximizing price and quantity.

A. $ P = 20, Q = 40 $

B. $ P = 30, Q = 50 $

C. $ P = 40, Q = 60 $

D. $ P = 50, Q = 70 $

Question 2

Consider a firm operating in a perfectly competitive market with a given production function Q = 2L^0.5K^0.5. If the firm's current input prices are w = ₦100 and r = ₦50, and the current output price is p = ₦200, calculate the firm's optimal input bundle (L, K) u\sing the Hotelling's Lemma. Assume that the firm's objective is to maximize its profit.

A. $ L = 100, K = 50 $

B. $ L = 50, K = 100 $

C. $ L = 25, K = 100 $

D. $ L = 100, K = 25 $

Question 3

Consider a simple economy with two sectors: agriculture and manufacturing. The production function for agriculture is given by q_A = 100L^0.5K^0.5, where L is labor and K is capital. The production function for manufacturing is given by q_M = 200L^0.7K^0.3. If the economy has 100 units of labor and 50 units of capital, find the value of the output mix $ q_A/q_M $ when the economy produces both goods.

A. 0.25

B. 0.5

C. 1

D. 2

Question 4

A central bank uses monetary policy to control inflation by increa\sing the reserve requirement for commercial banks. This action will lead to a decrease in the money supply and a decrease in the price level. Which of the following statements is correct?

A. The money supply will decrease and the price level will increase.

B. The money supply will increase and the price level will decrease.

C. The money supply will decrease and the price level will decrease.

D. The money supply will increase and the price level will increase.

Question 5

Suppose the demand for a commodity is given by the inverse demand function p = 100 - 2q, where p is the price and q is the quantity demanded. If the price elasticity of demand is defined as E_d = $ dq/dp $ * $ p/q $, find the value of E_d when q = 20.

A. -10

B. -5

C. 0

D. 5

Question 6

The government of a country has a budget deficit of ₦100 billion. If the government decides to finance this deficit by printing more money, what will be the effect on the general price level?

A. The general price level will decrease.

B. The general price level will increase.

C. The general price level will remain unchanged.

D. The general price level will be unaffected.

Question 7

A government is considering a policy to reduce poverty by increa\sing the minimum wage. However, this policy may lead to higher unemployment. Which of the following statements is correct?

A. The policy will reduce poverty and increase employment.

B. The policy will reduce poverty but may lead to higher unemployment.

C. The policy will increase poverty and unemployment.

D. The policy will have no effect on poverty and unemployment.

Question 8

A firm's demand function is given by Q = 100 - 2P. If the firm's current price is ₦50, calculate the quantity demanded.

A. 50 units

B. 75 units

C. 100 units

D. 125 units

Question 9

The Marshall-Lerner condition states that a country's balance of payments will improve if the sum of the price elasticities of demand for imports and exports is greater than 1. Which of the following statements is a correct interpretation of this condition?

A. The country's trade balance will improve if the price elasticity of demand for imports is greater than 1.

B. The country's trade balance will improve if the sum of the price elasticities of demand for imports and exports is greater than 1.

C. The country's trade balance will improve if the price elasticity of demand for exports is greater than 1.

D. The country's trade balance will improve if the price elasticity of demand for imports is less than 1.

Question 10

A firm is considering two investment projects, A and B. Project A has a higher initial \cost but generates a higher return on investment. Project B has a lower initial \cost but generates a lower return on investment. Which of the following statements is correct?

A. Project A is a better investment because it has a higher return on investment.

B. Project B is a better investment because it has a lower initial \cost.

C. Both projects are equally good investments.

D. Neither project is a good investment.

Question 11

A firm's production function is given by $ Q = 2L^2 + 3K $, where Q is the output, L is the labor, and K is the capital. If the firm's \cost function is $ C = 10L + 20K $, find the \cost-minimizing input combination.

A. $ L = 2, K = 1 $

B. $ L = 1, K = 2 $

C. $ L = 3, K = 2 $

D. $ L = 2, K = 3 $

Question 12

A firm's demand curve is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. The firm's supply curve is given by the equation Qs = 2P - 10, where Qs is the quantity supplied. Find the equilibrium price and quantity.

A. P = $20, Q = 40

B. P = $30, Q = 50

C. P = $40, Q = 60

D. P = $50, Q = 70

Question 13

The following diagram shows the production possibilities frontier (PPF) for a country. What is the opportunity \cost of producing 100 units of good X?

A. 50 units of good Y

B. 75 units of good Y

C. 100 units of good Y

D. 125 units of good Y

Question 14

A country's money supply is given by the equation M = kY, where k is the money multiplier and Y is the national income. If the money multiplier is 0.5 and the national income is ₦100 billion, calculate the money supply.

A. ₦50 billion

B. ₦100 billion

C. ₦150 billion

D. ₦200 billion

Question 15

Consider a small open economy with a fixed exchange rate. If the economy experiences an increase in aggregate demand, what will happen to the balance of payments?

A. The balance of payments will improve due to increased exports.

B. The balance of payments will worsen due to increased imports.

C. The balance of payments will remain unchanged.

D. The balance of payments will improve due to increased imports.

POST UTME LASU 2024 Economics | Objective

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