Practice Post UTME MOUNTAIN TOP UNIVERSITY economics 2018 Past Questions

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?

Correct 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.

Correct Answer: A

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Question 2

A country's GDP is calculated as the sum of all final goods and services produced within its borders. However, if a foreign company produces goods within the country, but the company is owned by a foreign entity, how will this affect the country's GDP?

A. The country's GDP will increase because the foreign company is producing goods within its borders.

B. The country's GDP will decrease because the foreign company is owned by a foreign entity.

Correct C. The country's GDP will remain unchanged because the foreign company is producing goods within its borders.

D. The country's GDP will increase because the foreign company is creating jobs within its borders.

Correct Answer: C

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Question 3

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.

Correct 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.

Correct Answer: B

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Question 4

A government is considering implementing a tax on a particular good. If the tax is passed on to consumers, what will happen to the demand for the good?

A. The demand for the good will increase because consumers will be willing to pay a higher price.

Correct B. The demand for the good will decrease because consumers will be unwilling to pay a higher price.

C. The demand for the good will remain unchanged because the tax is not passed on to consumers.

D. The demand for the good will increase because consumers will be willing to pay a higher price due to the tax.

Correct Answer: B

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Question 5

A country's GNP is calculated as the sum of its GDP plus its net factor income from abroad. If a country's GDP is ₦100 billion and its net factor income from abroad is ₦20 billion, what is its GNP?

Correct A. ₦120 billion

B. ₦100 billion

C. ₦80 billion

D. ₦120 billion

Correct Answer: A

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Question 6

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, find 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 7

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

Correct C. 32

D. 34

Correct Answer: C

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Question 8

A consumer has a budget of ₦1000 and faces the following prices for two goods: Good X \costs ₦200 and Good Y \costs ₦300. If the consumer's utility function is given by U = 2X + 3Y, find the optimal bundle of goods that maximizes the consumer's utility.

A. X = 2, Y = 1

Correct B. X = 3, Y = 2

C. X = 4, Y = 3

D. X = 5, Y = 4

Correct Answer: B

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Question 9

The supply function for a commodity is given by Qs = 50 + 2P, where Qs is the quantity supplied and P is the price. If the price elasticity of supply is 0.8, find the percentage change in quantity supplied when the price increases by 15%.

A. 12%

B. 15%

Correct C. 18%

D. 20%

Correct Answer: C

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Question 10

A firm has a production function given by Q = 2L + 3K, where Q is the output, L is the Labour and K is the Capital. If the firm has 5 units of Labour and 6 units of Capital, find the output of the firm.

A. 17

B. 20

Correct C. 23

D. 25

Correct Answer: C

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Question 11

The Nigerian government has introduced a new policy to increase agricultural production in the country. The policy includes providing subsidies to farmers, improving irrigation systems, and increa\sing the use of fertilizers. However, some critics argue that the policy will lead to an increase in the country's trade deficit. Which of the following is a potential consequence of the policy?

Correct A. An increase in the country's trade deficit

B. A decrease in the country's trade deficit

C. No change in the country's trade deficit

D. An increase in the country's trade surplus

Correct Answer: A

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Question 12

A firm is producing a good with a total revenue of ₦1,500 and a total \cost of ₦1,200. If the firm's marginal revenue is ₦100 and its marginal \cost is ₦80, what is the firm's profit?

Correct A. ₦200

B. ₦300

C. ₦400

D. ₦500

Correct Answer: A

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Question 13

The Nigerian government has introduced a new tax policy to increase revenue. The policy includes a 10% increase in income tax and a 5% increase in value-added tax. If a firm's income is ₦1,000,000 and its value-added tax is ₦200,000, what is the firm's new tax liability?

A. ₦120,000

Correct B. ₦130,000

C. ₦140,000

D. ₦150,000

Correct Answer: B

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Question 14

A country's GDP is ₦1,500,000 and its GNP is ₦1,600,000. What is the country's net factor income?

A. ₦100,000

Correct B. ₦200,000

C. ₦300,000

D. ₦400,000

Correct Answer: B

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Question 15

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?

Correct A. ₦200

B. ₦300

C. ₦400

D. ₦500

Correct Answer: A

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Question 16

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

Correct C. 16

D. 32

Correct Answer: C

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Question 17

A country'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 equilibrium price (P) and quantity (Q)?

A. 25

Correct B. 50

C. 75

D. 100

Correct Answer: B

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Question 18

A country's GDP is given by the equation Y = C + I + G + $ X - M $, where Y is the GDP, C is the consumption, I is the investment, G is the government sp\ending, X is the exports, and M is the imports. If the country's consumption is 500, investment is 200, government sp\ending is 300, exports are 400, and imports are 200, what is the country's GDP?

Correct A. 1000

B. 1200

C. 1500

D. 2000

Correct Answer: A

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Question 19

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

Correct C. -1

D. -2

Correct Answer: C

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Question 20

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

Correct B. 200

C. 300

D. 400

Correct Answer: B

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Question 21

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

Correct C. 50

D. 100

Correct Answer: C

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Question 22

A country's GDP is given by the equation Y = C + I + G + $ X - M $, where Y is the GDP, C is the consumption, I is the investment, G is the government sp\ending, X is the exports, and M is the imports. If the country's consumption is 500, investment is 200, government sp\ending is 300, exports are 400, and imports are 200, what is the country's GDP?

A. 1000

B. 1200

C. 1500

D. 2000

Correct Answer: VIEW ANSWER

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Question 23

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

Correct C. Firms have a variable \cost that increases with output

D. Firms have a variable \cost that decreases with output

Correct Answer: C

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Question 24

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

Correct B. 60

C. 70

D. 80

Correct Answer: B

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Question 25

A monopolist faces a market demand curve given by Qd = 100 - 2P and a marginal revenue curve given by MR = 20 - 2Q. What is the profit-maximizing quantity?

A. 20

B. 30

Correct C. 40

D. 50

Correct Answer: C

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