Practice Post UTME MOUNTAIN TOP UNIVERSITY economics 2017 Past Questions

Question 1

Consider a firm operating in a perfectly competitive market with a downward-sloping demand curve. If the firm's marginal revenue (MR) is greater than its marginal \cost (MC), what will be the effect on the firm's output?

Correct A. The firm will increase its output.

B. The firm will decrease its output.

C. The firm's output will remain unchanged.

D. The firm will exit the market.

Correct Answer: A

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Question 2

A monopolist faces a demand curve with the following equation: Q = 100 - 2P. If the monopolist's marginal \cost is cons\tant at 10, what is the optimal price and quantity?

Correct A. P = 40, Q = 30

B. P = 50, Q = 25

C. P = 60, Q = 20

D. P = 70, Q = 15

Correct Answer: A

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Question 3

A government imposes a tax of ₦10 on a firm's output. If the firm's supply curve is given by Q = 2P - 10, what is the new supply curve?

A. Q = 2P - 20

Correct B. Q = 2P - 15

C. Q = 2P - 25

D. Q = 2P - 30

Correct Answer: B

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Question 4

A firm's production function is given by Q = 2L^2, where L is the labor input. If the firm's wage rate is ₦50 per hour, what is the optimal labor input?

A. L = 2

Correct B. L = 3

C. L = 4

D. L = 5

Correct Answer: B

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Question 5

A monopolist faces a demand curve with the following equation: Q = 100 - 2P. If the monopolist's marginal \cost is cons\tant at 10, what is the elasticity of demand?

A. Elastic

Correct B. Inelastic

C. Unit Elastic

D. Perfectly Elastic

Correct Answer: B

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Question 6

A consumer's indifference curve is given 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, find the consumer's optimal bundle of x and y.

Correct A. x = 40, y = 20

B. x = 30, y = 30

C. x = 20, y = 40

D. x = 10, y = 50

Correct Answer: A

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Question 7

A firm's production function is given by \( Q = 2L^2 + 3K^2 \). If the firm's output is 100 units and the price of labor is ₦10 per unit and the price of capital is ₦20 per unit, find the firm's optimal input bundle of labor and capital.

A. L = 5, K = 10

Correct B. L = 10, K = 5

C. L = 15, K = 3

D. L = 20, K = 2

Correct Answer: B

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Question 8

A country's GDP is given by \( GDP = C + I + G + \( X - M \ \) ). If the country's consumption is ₦500 billion, investment is ₦200 billion, government sp\ending is ₦300 billion, exports are ₦400 billion and imports are ₦200 billion, find the country's GDP.

A. ₦1.5 trillion

B. ₦1.8 trillion

Correct C. ₦2.0 trillion

D. ₦2.2 trillion

Correct Answer: C

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Question 9

A firm's production function is given by \( Q = 2L^2 + 3K^2 \). If the firm's output is 100 units and the price of labor is ₦10 per unit and the price of capital is ₦20 per unit, find the firm's optimal input bundle of labor and capital.

A. L = 5, K = 10

Correct B. L = 10, K = 5

C. L = 15, K = 3

D. L = 20, K = 2

Correct Answer: B

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Question 10

A country's inflation rate is given by \( pi = \frac{P_t - P_{t-1}}{P_{t-1}} \). If the country's current price index is 120 and the previous price index is 100, find the country's inflation rate.

Correct A. 20%

B. 30%

C. 40%

D. 50%

Correct Answer: A

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Question 11

A monopolist faces a demand curve given by Q = 100 - 2P and a \cost function C(Q) = 2Q^2 + 10Q. What is the profit-maximizing price and quantity?

Correct A. \( P = 50, Q = 25 \)

B. \( P = 75, Q = 50 \)

C. \( P = 25, Q = 50 \)

D. \( P = 50, Q = 50 \)

Correct Answer: A

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Question 12

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 combination of labor and capital?

Correct A. \( L = 100, K = 50 \)

B. \( L = 50, K = 100 \)

C. \( L = 100, K = 100 \)

D. \( L = 50, K = 50 \)

Correct Answer: A

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Question 13

A country's GDP is ₦1 trillion and its GNP is ₦1.1 trillion. What is the net factor income from abroad?

Correct A. ₦100 billion

B. ₦200 billion

C. ₦300 billion

D. ₦400 billion

Correct Answer: A

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Question 14

A firm faces a demand curve given by Q = 100 - 2P and a supply curve given by Q = 2P + 50. What is the equilibrium price and quantity?

Correct A. \( P = 25, Q = 50 \)

B. \( P = 50, Q = 25 \)

C. \( P = 75, Q = 50 \)

D. \( P = 50, Q = 75 \)

Correct Answer: A

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Question 15

A consumer has an income of ₦1000 and faces a budget constraint given by P1x + P2y = 1000. If P1 = ₦200 and P2 = ₦300, what is the consumer's optimal bundle?

Correct A. \( x = 2, y = 3 \)

B. \( x = 3, y = 2 \)

C. \( x = 4, y = 1 \)

D. \( x = 1, y = 4 \)

Correct Answer: A

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Question 16

Consider a firm operating in a perfectly competitive market with cons\tant returns to scale. If the firm's production function is given by Q = 2L + 3K, where Q is output, L is labor, and K is capital, what is the firm's marginal product of labor (MPL) when L = 10 and K = 5?

Correct A. 20

B. 15

C. 10

D. 5

Correct Answer: A

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Question 17

A country's GDP at market price is ₦1,500 billion, while its GNP at factor \cost is ₦1,600 billion. What is the net factor income from abroad?

Correct A. ₦100 billion

B. ₦50 billion

C. ₦0 billion

D. ₦-50 billion

Correct Answer: A

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Question 18

A government is planning to implement a five-year development plan to achieve a 10% annual growth rate in GDP. If the initial GDP is ₦1,000 billion, what will be the GDP after five years?

A. ₦2,593.02 billion

Correct B. ₦2,718.28 billion

C. ₦2,828.57 billion

D. ₦3,000 billion

Correct Answer: B

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Question 19

A farmer in Nigeria is considering two different farming techniques: traditional and modern. The traditional technique requires an initial investment of ₦50,000 and yields a profit of ₦20,000 per hectare. The modern technique requires an initial investment of ₦100,000 and yields a profit of ₦40,000 per hectare. If the farmer has ₦150,000 to invest, which technique should he choose?

A. Traditional technique

Correct B. Modern technique

C. Both techniques are equally profitable

D. Neither technique is profitable

Correct Answer: B

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Question 20

A firm is operating in a perfectly competitive market with decrea\sing returns to scale. If the firm's production function is given by Q = 2L^2 + 3K, where Q is output, L is labor, and K is capital, what is the firm's marginal product of labor (MPL) when L = 5 and K = 3?

Correct A. 10

B. 15

C. 20

D. 25

Correct Answer: A

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Question 21

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 -2, what is the percentage change in quantity demanded when the price increases by 10%?

Correct A. 20%

B. 30%

C. 40%

D. 50%

Correct Answer: A

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Question 22

A farmer in Nigeria produces maize and soybeans. The production \costs for maize are ₦150 per bag, and the production \costs for soybeans are ₦200 per bag. If the farmer can sell maize at ₦250 per bag and soybeans at ₦300 per bag, what is the optimal mix of maize and soybeans to produce in order to maximize profits?

Correct A. 60% maize, 40% soybeans

B. 50% maize, 50% soybeans

C. 40% maize, 60% soybeans

D. 30% maize, 70% soybeans

Correct Answer: A

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Question 23

A consumer's utility function is given by U = 2x + 3y, where x and y are the quantities of two goods consumed. If the consumer's budget constraint is 10x + 5y = 100, what is the optimal combination of x and y that maximizes utility?

Correct A. x = 5, y = 10

B. x = 10, y = 5

C. x = 15, y = 3

D. x = 20, y = 2

Correct Answer: A

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Question 24

A firm's supply function is given by 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 10%?

Correct A. 20%

B. 30%

C. 40%

D. 50%

Correct Answer: A

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Question 25

A government in Nigeria imposes a tax on a particular good. The tax revenue collected is ₦100 million, and the deadweight loss is ₦50 million. What is the excess burden of the tax?

Correct A. ₦50 million

B. ₦75 million

C. ₦100 million

D. ₦125 million

Correct Answer: A

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