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POST UTME MADONNA UNIVERSITY 2022 Economics | Objective

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Question 1

The demand for a commodity 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%?

Correct A. 5%

B. 10%

C. 15%

D. 20%

Correct Answer: A

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Question 2

A firm produces two goods, A and B. The production function for good A is Q_A = 10L + 5K, where L is labor and K is capital. The production function for good B is Q_B = 8L + 3K. If the firm has 100 units of labor and 50 units of capital, how many units of good A and good B will the firm produce?

A. Good A: 500, Good B: 400

Correct B. Good A: 600, Good B: 300

C. Good A: 700, Good B: 200

D. Good A: 800, Good B: 100

Correct Answer: B

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Question 3

The following diagram shows the supply and demand curves for a commodity. If the price elasticity of supply is 2 and the price elasticity of demand is 0.5, what is the change in quantity supplied and quantity demanded when the price increases by 10%?

Correct A. Quantity Supplied: 10%, Quantity Demanded: 5%

B. Quantity Supplied: 5%, Quantity Demanded: 10%

C. Quantity Supplied: 15%, Quantity Demanded: 15%

D. Quantity Supplied: 20%, Quantity Demanded: 20%

Correct Answer: A

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Question 4

A country's balance of payments is given by the equation BOP = X - M, where X is the value of exports and M is the value of imports. If the value of exports is 100 and the value of imports is 80, what is the balance of payments?

Correct A. ₦20

B. ₦30

C. ₦40

D. ₦50

Correct Answer: A

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Question 5

The following diagram shows the production possibilities frontier for two countries, A and B. If country A has a comparative advantage in producing good X and country B has a comparative advantage in producing good Y, what is the opportunity \cost of producing good X in country A?

Correct A. Good Y

B. Good Z

C. Service

D. Capital

Correct Answer: A

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Question 6

A government decides to implement a policy to reduce carbon emissions. The policy involves a tax on companies that emit high levels of carbon dioxide. The tax is set at ₦100 per ton of CO2 emitted. If a company emits 500 tons of CO2 per year, how much will it pay in taxes per year?

A. ₦50,000

Correct B. ₦100,000

C. ₦200,000

D. ₦500,000

Correct Answer: B

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Question 7

A consumer has a budget of ₦10,000 to sp\end on two goods: a smartphone and a laptop. The price of the smartphone is ₦5,000 and the price of the laptop is ₦8,000. If the consumer buys the smartphone, how much money will they have left to sp\end on the laptop?

A. ₦0

Correct B. ₦2,000

C. ₦5,000

D. ₦10,000

Correct Answer: B

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Question 8

A firm produces two goods: A and B. The production of good A requires 2 units of labor and 3 units of capital, while the production of good B requires 3 units of labor and 2 units of capital. If the firm has 12 units of labor and 15 units of capital, how many units of good A can it produce?

A. 6

B. 8

Correct C. 10

D. 12

Correct Answer: C

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Question 9

A country's GDP is ₦1,000,000,000,000. The country's government decides to implement a policy to reduce inequality by redistributing wealth from the rich to the poor. If the policy is successful and the country's Gini coefficient decreases by 10%, what will be the new Gini coefficient?

A. 0.20

Correct B. 0.30

C. 0.40

D. 0.50

Correct Answer: B

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Question 10

A firm's demand function is given by Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the firm's marginal revenue is ₦50, how much will it produce?

A. 20

B. 30

Correct C. 40

D. 50

Correct Answer: C

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Question 11

The government of Nigeria has implemented a policy to increase agricultural production by providing subsidies to farmers. However, this policy has led to a decrease in the production of other crops. What is the opportunity \cost of this policy?

Correct A. The decrease in production of other crops

B. The increase in production of subsidized crops

C. The decrease in income of farmers

D. The increase in food prices

Correct Answer: A

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Question 12

A firm is producing a good with a marginal \cost of ₦10 and a marginal revenue of ₦15. What is the profit-maximizing level of output?

A. 100 units

Correct B. 200 units

C. 300 units

D. 400 units

Correct Answer: B

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Question 13

The central bank of Nigeria has increased the reserve requirement for commercial banks. What is the effect of this policy on the money supply?

A. Increase in money supply

Correct B. Decrease in money supply

C. No effect on money supply

D. Increase in interest rates

Correct Answer: B

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Question 14

A consumer has a budget of ₦1000 and a preference for two goods, A and B. The prices of the goods are ₦200 and ₦300 respectively. What is the consumer's budget constraint?

A. 2A + 3B = 1000

Correct B. A + 2B = 1000

C. 2A + B = 1000

D. A + B = 1000

Correct Answer: B

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Question 15

The government of Nigeria has implemented a policy to increase economic growth by investing in infrastructure. However, this policy has led to a decrease in the production of other goods. What is the opportunity \cost of this policy?

Correct A. The decrease in production of other goods

B. The increase in production of infrastructure

C. The decrease in income of workers

D. The increase in prices of goods

Correct Answer: A

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Question 16

A consumer's indifference curve is represented by the equation u(x,y) = 2x + 3y. If the consumer's income is ₦1000 and the prices of x and y are ₦5 and ₦3 respectively, what is the consumer's optimal bundle?

Correct A. x = 60, y = 40

B. x = 40, y = 60

C. x = 50, y = 50

D. x = 70, y = 30

Correct Answer: A

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Question 17

The demand for a product is given by the equation q = 100 - 2p. If the price of the product is ₦20, what is the quantity demanded?

A. 40

Correct B. 60

C. 80

D. 100

Correct Answer: B

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Question 18

A firm's \cost function is given by the equation C(q) = 100 + 2q. If the firm produces 50 units of the product, what is the total \cost?

A. ₦1500

Correct B. ₦2000

C. ₦2500

D. ₦3000

Correct Answer: B

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Question 19

A government imposes a tax of ₦10 on a product. If the demand for the product is given by the equation q = 100 - 2p and the supply is given by the equation q = 50 + p, what is the equilibrium price?

A. ₦15

B. ₦20

Correct C. ₦25

D. ₦30

Correct Answer: C

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Question 20

A firm's revenue function is given by the equation R(q) = 100q - 2q^2. If the firm produces 50 units of the product, what is the marginal revenue?

A. ₦80

B. ₦90

Correct C. ₦100

D. ₦110

Correct Answer: C

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Question 21

A firm is operating in a perfectly competitive market with a cons\tant returns to scale production function. If the price of the good it produces increases by 10%, what will be the percentage change in the firm's total revenue?

A. 0%

Correct B. 10%

C. 20%

D. 30%

Correct Answer: B

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Question 22

The Nigerian government has implemented a policy to increase agricultural production by 20% within the next two years. If the current agricultural production is ₦100 billion, what will be the total value of agricultural production after two years?

A. ₦120 billion

B. ₦125 billion

Correct C. ₦130 billion

D. ₦135 billion

Correct Answer: C

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Question 23

A monopolist is producing a good with a demand function Q = 100 - P and a \cost function C = 2Q^2 + 100Q. If the firm's marginal revenue is equal to its marginal \cost, what is the price at which the firm will produce?

A. ₦50

Correct B. ₦60

C. ₦70

D. ₦80

Correct Answer: B

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Question 24

A firm is producing a good with a production function Q = 2L^0.5K^0.5. If the firm's labor and capital inputs are increased by 20% and 15% respectively, what will be the percentage change in the firm's output?

A. 10%

B. 15%

Correct C. 20%

D. 25%

Correct Answer: C

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Question 25

The Nigerian government has implemented a policy to increase industrial production by 15% within the next three years. If the current industrial production is ₦150 billion, what will be the total value of industrial production after three years?

A. ₦172.5 billion

B. ₦175 billion

Correct C. ₦177.5 billion

D. ₦180 billion

Correct Answer: C

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