Practice Post UTME LEAD CITY UNIVERSITY economics 2018 Past Questions

Question 1

A firm's total revenue is given by the equation \( TR = 100p - 2p^2 \), where ( p ) is the price per unit. If the firm sells 200 units at a price of ₦50 per unit, what is the total revenue?

Correct A. ₦8000

B. ₦9000

C. ₦10000

D. ₦11000

Correct Answer: A

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Question 2

The Nigerian government has implemented a policy to increase the production of rice in the country. The policy includes providing subsidies to farmers and investing in irrigation infrastructure. What is the likely effect of this policy on the supply of rice in the short run?

Correct A. The supply of rice will increase

B. The supply of rice will decrease

C. The supply of rice will remain the same

D. The supply of rice will fluctuate

Correct Answer: A

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Question 3

A monopolist faces a demand curve given by \( Q = 100 - 2p \) and a \cost function given by \( C = 50 + 10Q \). What is the monopolist's profit-maximizing price?

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 4

The Nigerian economy is characterized by a high level of unemployment and underemployment. What is the likely effect of this on the country's GDP?

A. GDP will increase

Correct B. GDP will decrease

C. GDP will remain the same

D. GDP will fluctuate

Correct Answer: B

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Question 5

A firm's marginal revenue is given by the equation \( MR = 100 - 2p \), where ( p ) is the price per unit. If the firm sells 200 units at a price of ₦50 per unit, what is the marginal revenue?

Correct A. ₦100

B. ₦90

C. ₦80

D. ₦70

Correct Answer: A

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Question 6

Consider a firm operating in a perfectly competitive market. If the firm's average total \cost (ATC) curve intersects the average revenue (AR) curve at point E, where the price is ₦100, and the quantity demanded is 100 units, what is the firm's economic profit?

A. ₦10,000

B. ₦5,000

Correct C. ₦0

D. ₦-₦5,000

Correct Answer: C

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Question 7

A monopolist faces a demand curve given by Q = 100 - 2P. The firm's marginal revenue (MR) function is MR = 50 - 2Q. If the firm produces 50 units, what is the price elasticity of demand?

A. 0.5

B. 1

C. 2

Correct D. -1

Correct Answer: D

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Question 8

A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \), where L is labor and K is capital. If the firm increases labor from 4 units to 9 units, and capital remains cons\tant at 16 units, what is the percentage change in output?

A. 25%

Correct B. 50%

C. 75%

D. 100%

Correct Answer: B

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Question 9

A firm's \cost function is given by C(Q) = 2Q^2 + 10Q + 5. If the firm produces 5 units, what is the marginal \cost?

A. 10

Correct B. 15

C. 20

D. 25

Correct Answer: B

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Question 10

A firm's revenue function is given by R(Q) = 50Q - 2Q^2. If the firm produces 10 units, what is the price?

A. ₦40

Correct B. ₦50

C. ₦60

D. ₦70

Correct Answer: B

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Question 11

The concept of scarcity in economics implies that the production of one good or service is limited by the availability of resources, which can be used to produce other goods or services. This is often referred to as the law of opportunity \cost. Which of the following is an example of opportunity \cost?

A. The \cost of producing a good or service

B. The benefit of producing a good or service

Correct C. The opportunity to produce another good or service

D. The \cost of not producing a good or service

Correct Answer: C

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Question 12

Agricultural development in Nigeria has been hindered by several factors, including lack of access to credit, inadequate infrastructure, and limited market access. Which of the following policies would be most effective in addres\sing these issues?

A. Increa\sing government subsidies for agriculture

Correct B. Implementing policies to improve access to credit

C. Investing in infrastructure development

D. Promoting market access through trade agreements

Correct Answer: B

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Question 13

The concept of public finance in economics refers to the study of government revenue and exp\enditure. Which of the following is an example of a public finance policy?

A. Increa\sing taxes on luxury goods

Correct B. Implementing a value-added tax

C. Reducing government subsidies for agriculture

D. Increa\sing government sp\ending on education

Correct Answer: B

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Question 14

The concept of national income accounting in economics refers to the measurement of a country's economic activity. Which of the following is an example of a national income accounting concept?

Correct A. Gross Domestic Product (GDP)

B. Gross National Product (GNP)

C. Net Domestic Product (NDP)

D. Net National Product (NNP)

Correct Answer: A

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Question 15

The concept of scarcity in economics implies that the production of one good or service is limited by the availability of resources, which can be used to produce other goods or services. This is often referred to as the law of opportunity \cost. Which of the following is an example of opportunity \cost?

A. The \cost of producing a good or service

B. The benefit of producing a good or service

Correct C. The opportunity to produce another good or service

D. The \cost of not producing a good or service

Correct Answer: C

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Question 16

In a perfectly competitive market, the supply curve is upward-sloping because

Correct A. Firms are willing to supply more of a good as its price increases.

B. Firms are willing to supply less of a good as its price increases.

C. Firms are willing to supply the same quantity of a good regardless of its price.

D. Firms are willing to supply more of a good as its price decreases.

Correct Answer: A

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Question 17

A monopolist faces a downward-sloping demand curve because

A. The monopolist is a price-taker in the market.

Correct B. The monopolist is a price-maker in the market.

C. The monopolist faces a perfectly elastic demand curve.

D. The monopolist faces a downward-sloping demand curve.

Correct Answer: B

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Question 18

The law of diminishing marginal returns states that

Correct A. As the quantity of a variable input increases, the marginal product of that input will eventually decrease.

B. As the quantity of a variable input increases, the marginal product of that input will eventually increase.

C. As the quantity of a variable input increases, the marginal product of that input will remain cons\tant.

D. As the quantity of a variable input increases, the marginal product of that input will decrease and then increase.

Correct Answer: A

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Question 19

Agricultural development in Nigeria has been hindered by

A. Lack of access to credit and other financial services.

B. Lack of access to education and training.

C. Lack of access to markets and infrastructure.

Correct D. All of the above.

Correct Answer: D

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Question 20

The formula for calculating Gross Domestic Product (GDP) is

Correct A. C + I + G + \( X - M \)

B. C + I + G + X + M

C. C + I + G + \( X - M \) + T

D. C + I + G + X + M + T

Correct Answer: A

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Question 21

The Central Bank of Nigeria (CBN) uses monetary policy to control inflation. Which of the following is a consequence of a contractionary monetary policy?

A. Increase in interest rates

Correct B. Decrease in money supply

C. Increase in government sp\ending

D. Increase in inflation rate

Correct Answer: B

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Question 22

A firm's revenue function is given by R(x) = 2x^2 + 5x + 1. If the firm's \cost function is C(x) = x^2 + 2x + 1, what is the profit function?

Correct A. 3x^2 + 3x

B. x^2 + 3x

C. 2x^2 + 3x

D. x^2 + x

Correct Answer: A

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Question 23

A consumer's budget constraint is given by 2x + 3y = 12. If the consumer's indifference curve is given by u(x, y) = 2x + y, what is the consumer's optimal bundle?

Correct A. (3, 6)

B. (4, 4)

C. (6, 2)

D. (8, 0)

Correct Answer: A

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Question 24

The National Bureau of Statistics (NBS) releases the Gross Domestic Product (GDP) of Nigeria for the year 2020. If the GDP is ₦120 trillion, what is the GDP per capita?

A. ₦200,000

Correct B. ₦300,000

C. ₦400,000

D. ₦500,000

Correct Answer: B

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Question 25

A firm's production function is given by Q = 2L^0.5 + 3K^0.5. If the firm's \cost of labor is ₦100 per unit and the \cost of capital is ₦200 per unit, what is the firm's total \cost of production?

Correct A. ₦300L + ₦600K

B. ₦200L + ₦400K

C. ₦400L + ₦800K

D. ₦500L + ₦1000K

Correct Answer: A

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