POST UTME LEAD CITY UNIVERSITY 2019 Economics | Objective

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Question 1 View Details
A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \). If the firm's current input levels are L = 4 and K = 9, what is the marginal product of labor (MPL) at these input levels?
Correct A. 1
B. 2
C. 3
D. 4

Correct Answer: A

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Question 2 View Details
Suppose a firm's demand function is given by Q = 100 - 2P. If the firm's current price is P = 20, what is the elasticity of demand at this price?
Correct A. -1
B. 0
C. 1
D. 2

Correct Answer: A

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Question 3 View Details
A firm's \cost function is given by C = 10L + 20K. If the firm's current input levels are L = 2 and K = 3, what is the total \cost of production at these input levels?
A. 50
Correct B. 60
C. 70
D. 80

Correct Answer: B

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Question 4 View Details
A firm's revenue function is given by R = 100P. If the firm's current price is P = 20, what is the total revenue at this price?
A. 1000
Correct B. 2000
C. 3000
D. 4000

Correct Answer: B

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Question 5 View Details
A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \). If the firm's current input levels are L = 4 and K = 9, what is the marginal product of capital (MPK) at these input levels?
A. 1
B. 2
C. 3
Correct D. 4

Correct Answer: D

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Question 6 View Details
The demand for a product is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the price elasticity of demand is 0.5, what is the percentage change in quantity demanded when the price increases by 10%?
A. 5%
Correct B. 10%
C. 15%
D. 20%

Correct Answer: B

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Question 7 View Details
A central bank increases 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 8 View Details
A country exports 100 units of a product at a price of $10 per unit and imports 50 units of another product at a price of $20 per unit. What is the balance of trade?
Correct A. $500 surplus
B. $500 deficit
C. $1000 surplus
D. $1000 deficit

Correct Answer: A

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Question 9 View Details
A firm has a total revenue function of TR = 100x - 2x^2, where x is the number of units sold. What is the marginal revenue when x = 20?
A. 80
B. 90
Correct C. 100
D. 110

Correct Answer: C

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Question 10 View Details
A country has a production function of Q = 100K^0.5L^0.5, where Q is the output, K is the capital and L is the labor. If the capital increases by 20% and labor remains cons\tant, what is the percentage change in output?
A. 10%
B. 15%
Correct C. 20%
D. 25%

Correct Answer: C

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Question 11 View Details
An economy is said to be experiencing a state of disequilibrium if the aggregate demand curve shifts to the right, cau\sing the price level to rise. What is the likely effect on the real GDP?
A. The real GDP will increase
Correct B. The real GDP will decrease
C. The real GDP will remain unchanged
D. The effect on real GDP is ambiguous

Correct Answer: B

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Question 12 View Details
A firm is producing a good with a production function Q = 2L^0.5K^0.5. If the price of the good is $10 and the wage rate is $20 per unit of labor, what is the optimal level of labor to hire?
A. 10 units of labor
Correct B. 20 units of labor
C. 30 units of labor
D. 40 units of labor

Correct Answer: B

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Question 13 View Details
A consumer has a utility function U = 2x + 3y, where x and y are the quantities of two goods consumed. If the prices of the goods are $5 and $10 respectively, and the consumer has a budget of $50, what is the optimal bundle of goods to consume?
A. (x, y) = (5, 2)
Correct B. (x, y) = (10, 1)
C. (x, y) = (15, 0)
D. (x, y) = (0, 5)

Correct Answer: B

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Question 14 View Details
A firm is producing a good with a production function Q = 3L^0.7K^0.3. If the price of the good is $15 and the wage rate is $25 per unit of labor, what is the optimal level of labor to hire?
A. 15 units of labor
B. 20 units of labor
Correct C. 25 units of labor
D. 30 units of labor

Correct Answer: C

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Question 15 View Details
A consumer has a utility function U = x^2 + 2y^2, where x and y are the quantities of two goods consumed. If the prices of the goods are $2 and $4 respectively, and the consumer has a budget of $20, what is the optimal bundle of goods to consume?
Correct A. (x, y) = (4, 2)
B. (x, y) = (3, 3)
C. (x, y) = (2, 4)
D. (x, y) = (1, 5)

Correct Answer: A

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Question 16 View Details
In a perfectly competitive market, a firm's short-run supply curve is a horizontal line at the minimum point of its average total \cost curve. What is the implication of this for the firm's profit-maximizing output level?
A. The firm will produce at the minimum point of its average total \cost curve.
Correct B. The firm will produce at the level of output where price equals marginal \cost.
C. The firm will produce at the level of output where price equals average total \cost.
D. The firm will produce at the level of output where price equals average variable \cost.

Correct Answer: B

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Question 17 View Details
A consumer's indifference curve is steeper than another consumer's indifference curve. What can be inferred about the two consumers?
A. The first consumer is more risk-averse than the second consumer.
B. The first consumer has a higher marginal utility of income than the second consumer.
Correct C. The first consumer has a lower marginal utility of income than the second consumer.
D. The first consumer is more risk-loving than the second consumer.

Correct Answer: C

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Question 18 View Details
A government imposes a tax on a firm's output. What is the effect of this tax on the firm's supply curve?
Correct A. The supply curve shifts to the left.
B. The supply curve shifts to the right.
C. The supply curve becomes steeper.
D. The supply curve becomes flatter.

Correct Answer: A

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Question 19 View Details
A firm's production function is given by Q = 2L^0.5K^0.5. What is the firm's marginal product of labor?
A. MP_L = 1/L
B. MP_L = 1/K
C. MP_L = 2K^0.5
Correct D. MP_L = 2L^0.5

Correct Answer: D

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Question 20 View Details
A consumer's budget constraint is given by P_1Q_1 + P_2Q_2 = I. What is the consumer's indifference curve?
Correct A. U = U\( Q_1, Q_2 \)
B. U = U\( P_1, P_2 \)
C. U = U\( I, P_1 \)
D. U = U\( I, P_2 \)

Correct Answer: A

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Question 21 View Details
Consider a firm operating in a perfectly competitive market with a production function given by Q = 2L^0.5K^0.5. If the price of the good is $10 and the wage rate is $5 per unit of labor, what is the optimal level of labor (L) that the firm should hire?
A. 10
Correct B. 20
C. 30
D. 40

Correct Answer: B

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Question 22 View Details
A country's GDP is $100 billion, and its GNP is $120 billion. What is the net factor income from abroad?
Correct A. $10 billion
B. $20 billion
C. $30 billion
D. $40 billion

Correct Answer: A

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Question 23 View Details
A firm's demand function is given by Q = 100 - 2P. If the price elasticity of demand is -2, what is the price at which the firm should sell its product?
A. $20
Correct B. $30
C. $40
D. $50

Correct Answer: B

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Question 24 View Details
A country's money supply is $500 billion, and its velocity of money is 2. What is the nominal GDP?
A. $1 trillion
Correct B. $1.5 trillion
C. $2 trillion
D. $2.5 trillion

Correct Answer: B

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Question 25 View Details
A firm's production function is given by Q = 2L^0.5K^0.5. If the price of the good is $10 and the wage rate is $5 per unit of labor, what is the optimal level of capital (K) that the firm should hire?
A. 10
Correct B. 20
C. 30
D. 40

Correct Answer: B

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