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POST UTME LAUTECH 2025 Economics | Objective

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Question 1

U\sing the Marshall-Lerner condition, determine the effect of a 10% depreciation in the exchange rate on the balance of payments of a country.

Correct A. The balance of payments will improve.

B. The balance of payments will worsen.

C. The balance of payments will remain unchanged.

D. The effect on the balance of payments is uncertain.

Correct Answer: A

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Question 2

A monopolist faces a demand curve given by \( Q = 100 - 2P \). If the marginal \cost is \( MC = 10 \), determine the profit-maximizing price and quantity.

Correct A. \( P = 40, Q = 60 \)

B. \( P = 50, Q = 70 \)

C. \( P = 60, Q = 80 \)

D. \( P = 70, Q = 90 \)

Correct Answer: A

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Question 3

A central bank uses the following monetary policy tool to control inflation: \( M = 1000 + 0.5Y \). If the current money supply is ₦1000 and the desired money supply is ₦1500, determine the required increase in output.

A. ₦500

Correct B. ₦1000

C. ₦1500

D. ₦2000

Correct Answer: B

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Question 4

U\sing the production function \( Q = 2K^0.5L^0.5 \), determine the returns to scale if the output increases by 20% when the capital and labor inputs are increased by 10% each.

Correct A. Increa\sing returns to scale

B. Decrea\sing returns to scale

C. Cons\tant returns to scale

D. No returns to scale

Correct Answer: A

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Question 5

A firm faces the following demand and supply curves: \( D = 100 - 2P, S = 20 + P \). Determine the equilibrium price and quantity.

Correct A. \( P = 40, Q = 60 \)

B. \( P = 50, Q = 70 \)

C. \( P = 60, Q = 80 \)

D. \( P = 70, Q = 90 \)

Correct Answer: A

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Question 6

A firm operates in a perfectly competitive market with a demand curve given by Q = 100 - 2P and a supply curve given by Q = 10 + 3P. What is the equilibrium price and quantity?

A. P = 20, Q = 60

Correct B. P = 30, Q = 40

C. P = 40, Q = 20

D. P = 50, Q = 10

Correct Answer: B

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Question 7

A country's GDP is ₦1,000,000,000,000. If the country's population is 200,000,000, what is the per capita GDP?

Correct A. ₦5,000

B. ₦10,000

C. ₦20,000

D. ₦50,000

Correct Answer: A

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Question 8

A firm has a total revenue function given by TR = 100Q - 2Q^2. If the firm produces 20 units, what is the marginal revenue?

A. ₦100

Correct B. ₦200

C. ₦300

D. ₦400

Correct Answer: B

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Question 9

A country experiences an inflation rate of 10% and a nominal interest rate of 12%. What is the real interest rate?

Correct A. 2%

B. 4%

C. 6%

D. 8%

Correct Answer: A

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Question 10

A firm has a demand curve given by Q = 100 - 2P and a supply curve given by Q = 10 + 3P. What is the elasticity of demand at a price of ₦20?

Correct A. 0.5

B. 1

C. 2

D. 3

Correct Answer: A

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Question 11

Consider a firm operating in a perfectly competitive market. If the firm's marginal revenue (MR) is greater than its marginal \cost (MC), what will be the effect on the firm's output?

Correct A. The firm will increase its output.

B. The firm will decrease its output.

C. The firm's output will remain unchanged.

D. The firm will not produce any output.

Correct Answer: A

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Question 12

A country's GDP is ₦100 billion, its imports are ₦20 billion, and its exports are ₦15 billion. What is its net foreign exchange earnings?

Correct A. ₦5 billion

B. ₦10 billion

C. ₦15 billion

D. ₦20 billion

Correct Answer: A

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Question 13

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's labor (L) increases by 10% and its capital (K) remains cons\tant, what will be the effect on its output?

A. Output will increase by 10%

Correct B. Output will increase by 20%

C. Output will remain unchanged

D. Output will decrease by 10%

Correct Answer: B

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Question 14

A country's inflation rate is 5% and its interest rate is 10%. If the central bank wants to reduce inflation, what will be the effect on the interest rate?

Correct A. Interest rate will increase

B. Interest rate will decrease

C. Interest rate will remain unchanged

D. Interest rate will be zero

Correct Answer: A

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Question 15

A firm's demand function is given by Q = 100 - 2P. If the price (P) increases by 10%, what will be the effect on the quantity demanded?

A. Quantity demanded will increase by 10%

Correct B. Quantity demanded will decrease by 10%

C. Quantity demanded will remain unchanged

D. Quantity demanded will increase by 20%

Correct Answer: B

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Question 16

Consider a firm with a production function Q = 2L^0.5K^0.5, where Q is output, L is labor, and K is capital. If the firm's current input prices are w = ₦100 per unit of labor and r = ₦200 per unit of capital, and the firm's current output price is p = ₦500 per unit, calculate the firm's current profit-maximizing input combination.

A. L = 4, K = 4

Correct B. L = 8, K = 2

C. L = 2, K = 8

D. L = 16, K = 1

Correct Answer: B

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Question 17

A country's GDP is ₦10 trillion, its imports are ₦2 trillion, and its exports are ₦3 trillion. What is its balance of trade?

A. ₦1 trillion surplus

Correct B. ₦1 trillion deficit

C. ₦2 trillion surplus

D. ₦2 trillion deficit

Correct Answer: B

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Question 18

A firm's demand function is Q = 100 - 2P, where Q is quantity demanded and P is price. If the firm's current price is ₦20, how many units will it sell?

A. 20 units

Correct B. 40 units

C. 60 units

D. 80 units

Correct Answer: B

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Question 19

A country's GNP is ₦15 trillion, its GDP is ₦12 trillion, and its net factor income from abroad is ₦1 trillion. What is its national income?

A. ₦16 trillion

Correct B. ₦17 trillion

C. ₦18 trillion

D. ₦19 trillion

Correct Answer: B

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Question 20

A firm's supply function is Q = 2P + 10, where Q is quantity supplied and P is price. If the firm's current price is ₦10, how many units will it supply?

A. 20 units

B. 30 units

Correct C. 40 units

D. 50 units

Correct Answer: C

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Question 21

A firm's total revenue is given by the equation TR = 100x - 2x^2, where x is the number of units sold. If the firm's marginal revenue is 120 when x = 5, what is the firm's total revenue when x = 10?

A. ₦2500

Correct B. ₦3000

C. ₦3500

D. ₦4000

Correct Answer: B

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Question 22

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 ₦1000 and its imports are ₦800, what is the country's balance of payments?

Correct A. ₦200

B. ₦300

C. ₦400

D. ₦500

Correct Answer: A

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Question 23

A firm's demand curve is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the firm's supply curve is given by the equation Qs = 2P - 100, what is the equilibrium price?

A. ₦20

B. ₦30

Correct C. ₦40

D. ₦50

Correct Answer: C

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Question 24

A country's elasticity of demand is given by the equation E = \( ΔQd / ΔP \) × \( P / Qd \), where E is the elasticity of demand, ΔQd is the change in quantity demanded, ΔP is the change in price, P is the price, and Qd is the quantity demanded. If the country's demand curve is given by the equation Qd = 100 - 2P, what is the elasticity of demand when P = ₦30 and Qd = 40?

A. 0.5

Correct B. 1.0

C. 1.5

D. 2.0

Correct Answer: B

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Question 25

A firm's \cost function is given by the equation C(x) = 100 + 2x^2, where C(x) is the total \cost and x is the number of units produced. If the firm's revenue function is given by the equation R(x) = 100x - 2x^2, what is the firm's profit function?

Correct A. R(x) - C(x)

B. C(x) - R(x)

C. R(x) + C(x)

D. C(x) - 2R(x)

Correct Answer: A

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