POST UTME MADONNA UNIVERSITY 2017 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A country's balance of payments is given by BOP = \( X - M \) + \( F - I \). If the country's exports increase by 15%, and its imports decrease by 10%, what is the likely effect on the balance of payments?
A. Increase
B. Decrease
C. No effect
D. Uncertain
Question 2
A consumer's indifference curve is downward sloping. What does this imply about the consumer's preferences?
A. The consumer prefers more of good X to good Y.
B. The consumer prefers more of good Y to good X.
C. The consumer is indifferent between good X and good Y.
D. The consumer's preferences are not well-defined.
Question 3
A firm's average total \cost curve is U-shaped. What does this imply about the firm's production techno\logy?
A. The firm's production techno\logy is characterized by increa\sing returns to scale.
B. The firm's production techno\logy is characterized by decrea\sing returns to scale.
C. The firm's production techno\logy is characterized by cons\tant returns to scale.
D. The firm's production techno\logy is characterized by a fixed coefficient of production.
Question 4
A government imposes a tax on a firm's output. The firm's supply curve shifts to the left. What is the effect on the firm's profit-maximizing output?
A. Increases
B. Decreases
C. Remains the same
D. Increases then decreases
Question 5
A country's GDP is ₦100 billion, and its GNP is ₦120 billion. What is the value of net factor income from abroad?
A. ₦20 billion
B. ₦10 billion
C. ₦5 billion
D. ₦15 billion
Question 6
A country's inflation rate is 5% per annum. If the nominal interest rate is 10% per annum, what is the real interest rate?
A. 5%
B. 10%
C. 15%
D. 20%
Question 7
A consumer's indifference curve is given by U = 2x^0.5y^0.5. If the price of good x increases by 10%, and the price of good y decreases by 5%, what is the likely effect on the consumer's budget line?
A. Increase
B. Decrease
C. No effect
D. Uncertain
Question 8
A firm's production function is given by Q = 2L^0.5K^0.5. If the price of labor increases by 20%, and the price of capital increases by 15%, what is the likely effect on the firm's output?
A. Increase
B. Decrease
C. No effect
D. Uncertain
Question 9
A consumer is faced with the following budget constraint: 2x + 3y = 12. If the consumer's income is ₦12 and the price of x is ₦2, what is the maximum amount the consumer can sp\end on y?
A. ₦4
B. ₦6
C. ₦8
D. ₦10
Question 10
A firm is producing a good with a total revenue of ₦1,500 and a total \cost of ₦1,200. What is the profit of the firm?
A. ₦300
B. ₦400
C. ₦500
D. ₦600
Question 11
A firm's production function is given by Q = 2L^0.5 * K^0.5. If the firm's current input levels are L = 4 and K = 9, what is the firm's current level of output?
A. 12
B. 18
C. 24
D. 36
Question 12
A firm's marginal revenue curve is downward sloping. What does this imply about the firm's demand curve?
A. The demand curve is downward sloping.
B. The demand curve is upward sloping.
C. The demand curve is horizontal.
D. The demand curve is vertical.
Question 13
The Central Bank of Nigeria (CBN) has introduced a new monetary policy aimed at reducing inflation. The policy involves increa\sing the reserve requirement for commercial banks. Assuming the reserve requirement is increased from 10% to 15%, what will be the effect on the money supply in the short run?
A. The money supply will decrease
B. The money supply will increase
C. The money supply will remain unchanged
D. The effect on the money supply is uncertain
Question 14
A firm's production function is given by Q = 2L^0.5K^0.5. If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, what is the optimal level of labor and capital?
A. L = 100, K = 100
B. L = 200, K = 50
C. L = 50, K = 200
D. L = 100, K = 50
Question 15
A country's trade balance is in deficit. What does this imply about the country's exchange rate?
A. The exchange rate is overvalued.
B. The exchange rate is undervalued.
C. The exchange rate is at its equilibrium value.
D. The exchange rate is floating.

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