Practice Post UTME MADONNA UNIVERSITY economics 2018 Past Questions

Question 1

Determine the value of x in the equation $ \log_{10} \( x^2 \ $ = 4 ).

A. 10

B. 100

C. 1000

Correct D. 10000

Correct Answer: D

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Question 2

A firm has a production function $ Q = 2L^{0.5}K^{0.5} $. If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, and if the firm is currently producing 100 units of output, what is the value of the marginal product of labor?

A. ₦50

Correct B. ₦100

C. ₦150

D. ₦200

Correct Answer: B

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Question 3

A country's GDP is ₦100 billion, its imports are ₦20 billion, and its exports are ₦30 billion. What is its balance of trade?

Correct A. ₦10 billion

B. ₦20 billion

C. ₦30 billion

D. ₦40 billion

Correct Answer: A

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Question 4

A consumer has an indifference curve $ U = 2x + 3y $ and a budget constraint $ 2x + 3y = 12 $. Find the consumer's optimal bundle of x and y.

A. (2,4)

Correct B. (3,3)

C. (4,2)

D. (5,1)

Correct Answer: B

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Question 5

A firm is a pure monopolist with a demand curve $ P = 100 - 2Q $ and a marginal \cost curve $ MC = 20 $. Find the firm's profit-maximizing quantity and price.

A. Q = 20, P = ₦80

Correct B. Q = 30, P = ₦70

C. Q = 40, P = ₦60

D. Q = 50, P = ₦50

Correct Answer: B

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Question 6

A firm's production function is given by Q = 100L^0.5K^0.5, where Q is output, L is labor, and K is capital. If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, and if the firm's budget constraint is given by 100L + 200K = ₦10000, what is the firm's optimal level of output?

A. 200 units

B. 300 units

Correct C. 400 units

D. 500 units

Correct Answer: C

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Question 7

The demand function for a product is given by Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the supply function is given by Qs = 2P - 100, what is the equilibrium price and quantity?

Correct A. P = ₦50, Q = 150 units

B. P = ₦75, Q = 100 units

C. P = ₦100, Q = 50 units

D. P = ₦150, Q = 25 units

Correct Answer: A

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Question 8

A country's GDP is given by the equation GDP = C + I + G + $ X - M $, where C is consumption, I is investment, G is government sp\ending, X is exports, and M is imports. If the country's GDP is ₦100 trillion, and the values of C, I, G, X, and M are ₦50 trillion, ₦20 trillion, ₦15 trillion, ₦30 trillion, and ₦25 trillion respectively, what is the value of the country's net exports?

A. ₦5 trillion

B. ₦10 trillion

Correct C. ₦15 trillion

D. ₦20 trillion

Correct Answer: C

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Question 9

A monopolist's demand function is given by Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the monopolist's marginal revenue function is given by MR = 200 - 2Q, what is the monopolist's optimal price and quantity?

Correct A. P = ₦50, Q = 150 units

B. P = ₦75, Q = 100 units

C. P = ₦100, Q = 50 units

D. P = ₦150, Q = 25 units

Correct Answer: A

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Question 10

A country's government budget is given by the equation B = T + I + G, where B is the budget, T is taxation, I is interest, and G is government sp\ending. If the country's budget is ₦100 trillion, and the values of T, I, and G are ₦50 trillion, ₦20 trillion, and ₦30 trillion respectively, what is the value of the country's interest?

A. ₦10 trillion

B. ₦15 trillion

Correct C. ₦20 trillion

D. ₦25 trillion

Correct Answer: C

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Question 11

Calculate the Gross National Product (GNP) of Nigeria in 2018, given the following data: National Income (NI) = ₦10,000,000,000,000; Net Factor Income from Abroad (NFIA) = ₦200,000,000,000.

Correct A. ₦10,200,000,000,000

B. ₦10,400,000,000,000

C. ₦10,200,000,000,000

D. ₦10,600,000,000,000

Correct Answer: A

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Question 12

A firm produces 100 units of a product at a \cost of ₦500 per unit. If the selling price is ₦600 per unit, what is the profit per unit?

Correct A. ₦50

B. ₦100

C. ₦150

D. ₦200

Correct Answer: A

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Question 13

The balance of payments account for a country is given by the following equation: BOP = X - M + $ F - I $. If the country's exports (X) are ₦1,000,000,000, imports (M) are ₦800,000,000, foreign investment (F) is ₦500,000,000, and foreign aid (I) is ₦200,000,000, what is the balance of payments?

Correct A. ₦300,000,000

B. ₦400,000,000

C. ₦500,000,000

D. ₦600,000,000

Correct Answer: A

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Question 14

A farmer produces 500 units of a crop at a \cost of ₦200 per unit. If the selling price is ₦300 per unit, what is the profit per unit?

Correct A. ₦50

B. ₦100

C. ₦150

D. ₦200

Correct Answer: A

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Question 15

The following table shows the production \costs of a firm for a particular product:\n\n| Quantity | Total Cost | Average Cost |\n| --- | --- | --- |\n| 100 | ₦50,000 | ₦500 |\n| 200 | ₦100,000 | ₦500 |\n| 300 | ₦150,000 | ₦500 |\n\nWhat is the marginal \cost of producing the 301st unit?

A. ₦0

Correct B. ₦500

C. ₦1000

D. ₦1500

Correct Answer: B

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Question 16

The indifference curve of a consumer is downward sloping because of the law of increa\sing marginal utility. Which of the following is a consequence of this law?

A. The consumer will always choose the combination of goods that gives the highest marginal utility.

B. The consumer will always choose the combination of goods that gives the highest total utility.

Correct C. The consumer will always choose the combination of goods that gives the highest marginal utility per unit of money spent.

D. The consumer will always choose the combination of goods that gives the highest total utility per unit of money spent.

Correct Answer: C

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Question 17

A central bank can increase the money supply by buying government securities in the open market. What is the effect of this action on the interest rate?

Correct A. The interest rate will decrease.

B. The interest rate will increase.

C. The interest rate will remain unchanged.

D. The interest rate will fluctuate.

Correct Answer: A

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Question 18

A perfectly competitive market is characterized by a large number of firms producing a homogeneous product. What is the equilibrium price and quantity in such a market?

Correct A. The equilibrium price is $10 and the equilibrium quantity is 100 units.

B. The equilibrium price is $20 and the equilibrium quantity is 200 units.

C. The equilibrium price is $30 and the equilibrium quantity is 300 units.

D. The equilibrium price is $40 and the equilibrium quantity is 400 units.

Correct Answer: A

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Question 19

A firm is producing at a point on its production function where the marginal product of labor is zero. What is the implication of this for the firm's production?

A. The firm is producing at its maximum level of output.

B. The firm is producing at its minimum level of output.

Correct C. The firm is producing at a point where the law of diminishing returns is operating.

D. The firm is producing at a point where the law of increa\sing returns is operating.

Correct Answer: C

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Question 20

A monopolist is producing at a point on its demand curve where the price elasticity of demand is one. What is the implication of this for the monopolist's revenue?

A. The monopolist's revenue is maximized.

Correct B. The monopolist's revenue is minimized.

C. The monopolist's revenue is unchanged.

D. The monopolist's revenue is increa\sing.

Correct Answer: B

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Question 21

A firm is producing at a point on its production function where the marginal product of capital is zero. What is the implication of this for the firm's production?

A. The firm is producing at its maximum level of output.

B. The firm is producing at its minimum level of output.

Correct C. The firm is producing at a point where the law of diminishing returns is operating.

D. The firm is producing at a point where the law of increa\sing returns is operating.

Correct Answer: C

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Question 22

A central bank can decrease the money supply by selling government securities in the open market. What is the effect of this action on the interest rate?

A. The interest rate will decrease.

Correct B. The interest rate will increase.

C. The interest rate will remain unchanged.

D. The interest rate will fluctuate.

Correct Answer: B

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Question 23

A perfectly competitive market is characterized by a large number of firms producing a homogeneous product. What is the equilibrium price and quantity in such a market?

Correct A. The equilibrium price is $10 and the equilibrium quantity is 100 units.

B. The equilibrium price is $20 and the equilibrium quantity is 200 units.

C. The equilibrium price is $30 and the equilibrium quantity is 300 units.

D. The equilibrium price is $40 and the equilibrium quantity is 400 units.

Correct Answer: A

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Question 24

The Nigerian government has implemented a new policy to increase agricultural production. The policy includes providing subsidies to farmers, improving irrigation systems, and increa\sing access to credit. However, the policy also includes a provision to increase the price of fertilizers by 20%. What is the likely effect of this policy on the agricultural sector?

A. The policy will lead to an increase in agricultural production and a decrease in the price of fertilizers.

Correct B. The policy will lead to a decrease in agricultural production and an increase in the price of fertilizers.

C. The policy will have no effect on agricultural production and the price of fertilizers.

D. The policy will lead to an increase in agricultural production and an increase in the price of fertilizers.

Correct Answer: B

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Question 25

A monopolistically competitive firm is producing a good with a demand curve that is downward sloping. The firm's marginal revenue (MR) curve intersects its marginal \cost (MC) curve at point E. What is the likely effect of an increase in the price of the good on the firm's profit-maximizing output?

A. The firm will increase its profit-maximizing output.

Correct B. The firm will decrease its profit-maximizing output.

C. The firm will not change its profit-maximizing output.

D. The firm will increase its profit-maximizing output, but only temporarily.

Correct Answer: B

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