POST UTME LEAD CITY UNIVERSITY 2021 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A consumer's utility function is given by ( U(x,y) = 2x + 3y ). If the consumer's income is ₦1000 and the prices of x and y are ₦5 and ₦10 respectively, find the consumer's optimal bundle of x and y.
A. x = 40, y = 20
B. x = 30, y = 30
C. x = 20, y = 40
D. x = 50, y = 10
Question 2
The government of Nigeria has implemented a policy to increase the production of food through the use of fertilizers. However, the policy has led to a significant increase in the price of food. U\sing the concept of opportunity \cost, explain why the price of food has increased.
A. The increase in price is due to the increase in demand for food.
B. The increase in price is due to the increase in supply of food.
C. The increase in price is due to the opportunity \cost of producing food through the use of fertilizers.
D. The increase in price is due to the increase in transportation \costs.
Question 3
A firm's demand function is given by \( Q = 100 - 2P \) and the supply function is given by \( Q = 2P - 10 \). Find the elasticity of demand at a price of ₦20.
A. 0.5
B. 1.0
C. 1.5
D. 2.0
Question 4
A country's GDP is given by the equation Y = C + I + G + \( X - M \), where Y is the GDP, C is the consumption, I is the investment, G is the government sp\ending, X is the exports and M is the imports. If the country's GDP is 100 billion naira, and the consumption is 30 billion naira, the investment is 20 billion naira, the government sp\ending is 15 billion naira, the exports are 25 billion naira and the imports are 10 billion naira, what is the value of the country's GDP?
A. 100 billion naira
B. 105 billion naira
C. 110 billion naira
D. 115 billion naira
Question 5
A country's trade balance is given by TB = X - M. If the country's exports are $100 billion and its imports are $80 billion, what is the trade balance?
A. $20 billion
B. $30 billion
C. $40 billion
D. $50 billion
Question 6
The Marshall-Lerner condition states that a country's balance of payments will improve if the sum of the percentage changes in its export and import prices exceeds a certain threshold. What is the name of this threshold?
A. Marshall-Lerner condition
B. J-curve effect
C. Trade creation effect
D. Trade diversion effect
Question 7
A firm's demand curve is given by the equation Qd = 100 - 2P. What is the price elasticity of demand at a price of 20?
A. 0.5
B. 1
C. 2
D. -1
Question 8
A farmer produces wheat and maize. The production functions are given by \( Q_w = 100 - 2L \) and \( Q_m = 50 + 3L \). If the farmer has 20 units of labor, find the optimal allocation of labor between wheat and maize.
A. L = 10, Q_w = 80, Q_m = 70
B. L = 15, Q_w = 70, Q_m = 85
C. L = 20, Q_w = 60, Q_m = 100
D. L = 25, Q_w = 50, Q_m = 115
Question 9
A country's balance of payments account shows a trade deficit of $100 million. What does this indicate?
A. The country is experiencing economic growth
B. The country is experiencing economic decline
C. The country is experiencing a trade surplus
D. The country is experiencing a trade deficit
Question 10
Determine the returns to scale in the production function Q = 2K^0.5L^0.5, where Q is output, K is capital, and L is labor.
A. Increa\sing Returns to Scale
B. Decrea\sing Returns to Scale
C. Cons\tant Returns to Scale
D. No Returns to Scale
Question 11
A firm's production function is given by Q = 3L^0.7K^0.3, where Q is the output, L is the labor and K is the capital. If the firm wants to increase its output by 30%, what is the percentage change in capital required, assuming that the labor remains cons\tant?
A. 10%
B. 15%
C. 20%
D. 25%
Question 12
The supply of a product is given by the equation Qs = 50 + 2P, where Qs is the quantity supplied and P is the price. If the price elasticity of supply is 2, what is the percentage change in quantity supplied when the price increases by 5%?
A. 2.5%
B. 5%
C. 7.5%
D. 10%
Question 13
U\sing the Cobb-Douglas production function, derive the marginal product of labor (MPL) and explain its relationship with the marginal product of capital (MPK).
A. MPL = bQ/K
B. MPK = aQ/L
C. MPL = bQ/L
D. MPK = aQ/K
Question 14
The government of Nigeria has implemented a policy to increase the production of electricity through the use of renewable energy sources. However, the policy has led to a significant increase in the \cost of electricity. U\sing the concept of opportunity \cost, explain why the \cost of electricity has increased.
A. The increase in \cost is due to the increase in demand for electricity.
B. The increase in \cost is due to the increase in supply of electricity.
C. The increase in \cost is due to the opportunity \cost of producing electricity through renewable energy sources.
D. The increase in \cost is due to the increase in transportation \costs.
Question 15
The government of Nigeria has implemented a policy to increase the production of electricity through the use of renewable energy sources. However, the policy has led to a significant increase in the \cost of electricity. U\sing the concept of opportunity \cost, explain why the \cost of electricity has increased.
A. The increase in \cost is due to the increase in demand for electricity.
B. The increase in \cost is due to the increase in supply of electricity.
C. The increase in \cost is due to the opportunity \cost of producing electricity through renewable energy sources.
D. The increase in \cost is due to the increase in transportation \costs.

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