POST UTME MOUNTAIN TOP UNIVERSITY 2018 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
Consider a firm operating in a perfectly competitive market with a given supply curve. If the firm's marginal revenue (MR) is greater than its marginal \cost (MC), what will happen to the firm's profit-maximizing output?
A. The firm will increase its output to maximize profits.
B. The firm will decrease its output to minimize losses.
C. The firm will maintain its current output level.
D. The firm will exit the market.
Question 2
A firm's production function is given by the equation Q = 2L^0.5K^0.5, where Q is the quantity produced, L is the labor, and K is the capital. If the firm wants to produce 100 units, and the wage rate is 5, what is the optimal level of capital (K)?
A. 10
B. 20
C. 50
D. 100
Question 3
A firm's demand for a good is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the supply of the good is given by the equation Qs = 2P - 100, what is the elasticity of demand?
A. 0
B. 1
C. -1
D. -2
Question 4
A firm produces two goods, X and Y, u\sing two inputs, Labour (L) and Capital (K). The production functions are given by X = 2L + 3K and Y = 4L + 2K. If the firm has 10 units of Labour and 8 units of Capital, find the total output of the firm.
A. 28
B. 30
C. 32
D. 34
Question 5
A firm's budget constraint is given by the equation Y = C + I + G, where Y is the income, C is the consumption, I is the investment, and G is the government sp\ending. If the firm's income is 100 billion naira, its consumption is 50 billion naira, its investment is 20 billion naira, and its government sp\ending is 30 billion naira, what is the government sp\ending as a percentage of the income?
A. 15%
B. 20%
C. 25%
D. 30%
Question 6
A firm is considering two different production processes: one that uses a high fixed \cost and low variable \cost, and another that uses a low fixed \cost and high variable \cost. Which production process will result in the lowest average \cost?
A. The production process with the high fixed \cost and low variable \cost.
B. The production process with the low fixed \cost and high variable \cost.
C. Both production processes will result in the same average \cost.
D. The production process with the high fixed \cost and low variable \cost will result in the highest average \cost.
Question 7
The demand curve 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 is $20, what is the quantity demanded?
A. 50
B. 60
C. 70
D. 80
Question 8
In a perfectly competitive market, the supply curve is upward-sloping because
A. Firms have a fixed \cost that increases with output
B. Firms have a fixed \cost that decreases with output
C. Firms have a variable \cost that increases with output
D. Firms have a variable \cost that decreases with output
Question 9
A firm's supply function is given by Q = 50 + 2P, where Q is quantity supplied and P is price. If the firm's current price is P = 15, what is the firm's current quantity supplied?
A. 65
B. 70
C. 75
D. 80
Question 10
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 0.5, what is the percentage change in quantity demanded when the price increases by 10%?
A. 5%
B. 10%
C. 20%
D. 30%
Question 11
A firm's demand function is given by Q = 100 - 2P, where Q is quantity demanded and P is price. If the firm's current price is P = 20, what is the firm's current quantity demanded?
A. 60
B. 70
C. 80
D. 90
Question 12
A firm is producing a good with a total revenue of ₦2,000 and a total \cost of ₦1,800. If the firm's marginal revenue is ₦150 and its marginal \cost is ₦120, what is the firm's profit?
A. ₦200
B. ₦300
C. ₦400
D. ₦500
Question 13
A country's balance of payments is given by the equation BOP = X - M, where BOP is the balance of payments, X is the exports, and M is the imports. If the country's exports are 400 and imports are 200, what is the balance of payments?
A. 100
B. 200
C. 300
D. 400
Question 14
Consider a firm operating in a perfectly competitive market with a production function Q = 2L^0.5K^0.5. If the price of the good is P = 10, and the wage rate is W = 5, what is the optimal level of labor (L) if the firm wants to maximize its profit?
A. 4
B. 8
C. 16
D. 32
Question 15
The Central Bank of Nigeria (CBN) uses the following monetary policy tools to control inflation: Open Market Operations (OMO), Reserve Requirements, and Moral Suasion. Which of the following is NOT a monetary policy tool?
A. Open Market Operations (OMO)
B. Reserve Requirements
C. Moral Suasion
D. Fiscal Policy

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