Practice Post UTME MOUNTAIN TOP UNIVERSITY economics 2021 Past Questions

Question 1

The government of Nigeria has introduced a new tax policy to increase revenue. The policy involves a 10% increase in the value-added tax (VAT) rate. Assuming the demand for a product is given by the equation Q = 100 - 2P, where Q is the quantity demanded and P is the price, and the initial VAT rate is 5%, calculate the new price at which the quantity demanded will be 80 units.

A. ₦120

Correct B. ₦130

C. ₦140

D. ₦150

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 2

A farmer in Nigeria produces wheat, which is used to make bread. The production function for wheat is given by Q = 1000L^$ 1/2 $K^$ 1/2 $, where Q is the quantity of wheat produced, L is the amount of labor used, and K is the amount of capital used. If the farmer uses 100 units of labor and 200 units of capital, calculate the quantity of wheat produced.

A. 500

Correct B. 1000

C. 1500

D. 2000

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 3

The government of Nigeria has introduced a new policy to increase the production of rice. The policy involves a 20% increase in the price of rice. Assuming the demand for rice is given by the equation Q = 100 - 2P, where Q is the quantity demanded and P is the price, and the initial price is ₦100, calculate the new quantity demanded.

A. 60

Correct B. 80

C. 100

D. 120

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 4

A firm in Nigeria produces a product u\sing labor and capital. The production function for the product is given by Q = 1000L^$ 1/2 $K^$ 1/2 $, where Q is the quantity produced, L is the amount of labor used, and K is the amount of capital used. If the firm uses 100 units of labor and 200 units of capital, calculate the marginal product of labor.

A. 50

Correct B. 100

C. 150

D. 200

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 5

The government of Nigeria has introduced a new policy to increase the production of wheat. The policy involves a 20% increase in the price of wheat. Assuming the demand for wheat is given by the equation Q = 100 - 2P, where Q is the quantity demanded and P is the price, and the initial price is ₦100, calculate the new quantity demanded.

A. 60

Correct B. 80

C. 100

D. 120

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 6

The elasticity of demand for a product is measured by the percentage change in the quantity demanded in response to a 1% change in the price of the product. If the demand for a product is elastic, what can be inferred about the price elasticity of demand?

Correct A. The price elasticity of demand is greater than 1

B. The price elasticity of demand is less than 1

C. The price elasticity of demand is equal to 1

D. The price elasticity of demand is undefined

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 7

Agricultural development in Nigeria is hindered by the lack of access to credit facilities by farmers. Which of the following policies would be most effective in addres\sing this issue?

A. Providing subsidies to farmers

Correct B. Establishing a credit guarantee scheme

C. Implementing a price support scheme

D. Providing training to farmers

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 8

The government of Nigeria has introduced a new tax on luxury goods to raise revenue. What is the likely effect of this tax on the demand for luxury goods?

A. The demand for luxury goods will increase

Correct B. The demand for luxury goods will decrease

C. The demand for luxury goods will remain unchanged

D. The demand for luxury goods will be unaffected

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 9

A firm is considering the introduction of a new product. The firm's \cost function is given by C(q) = 2q^2 + 10q + 100, where q is the quantity produced. What is the marginal \cost function?

Correct A. 4q + 10

B. 2q + 5

C. q + 5

D. q + 10

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 10

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

A. The money supply will increase

Correct B. The money supply will decrease

C. The money supply will remain unchanged

D. The money supply will be unaffected

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 11

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 $10 and the wage rate is $5 per unit of labor, what is the optimal level of labor to hire?

A. 10 units

Correct B. 20 units

C. 30 units

D. 40 units

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 12

A country's GDP is $100 billion, and its government decides to implement a 10% tax on all goods and services. What is the new GDP?

Correct A. $90 billion

B. $100 billion

C. $110 billion

D. $120 billion

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 13

A firm's demand function is given by Q = 100 - 2P. If the price of the good is $20, what is the quantity demanded?

A. 40 units

Correct B. 60 units

C. 80 units

D. 100 units

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 14

A country's balance of payments is given by the following equation: BOP = X - M. If the country's exports are $100 billion and its imports are $80 billion, what is the balance of payments?

A. $10 billion

Correct B. $20 billion

C. $30 billion

D. $40 billion

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 15

A consumer's utility function is given by U = 2x + 3y. If the consumer's income is $100 and the prices of x and y are $5 and $10 respectively, what is the optimal bundle of x and y?

Correct A. (10, 20)

B. (20, 10)

C. (30, 5)

D. (5, 30)

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 16

The money multiplier is a concept in monetary economics that describes the effect of a change in the money supply on the overall level of economic activity. If the money multiplier is 4, and the central bank increases the money supply by ₦100 billion, what will be the increase in the total money supply?

Correct A. ₦400 billion

B. ₦200 billion

C. ₦50 billion

D. ₦10 billion

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 17

A firm is producing a good with a production function of Q = 2L^0.5K^0.5. If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, and the firm is currently producing 100 units of output, what is the opportunity \cost of producing one more unit of output?

A. ₦50

B. ₦100

Correct C. ₦200

D. ₦500

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 18

A monopolist is producing a good with a demand curve of P = 100 - 2Q and a marginal \cost curve of MC = 20. If the firm is currently producing 20 units of output, what is the profit-maximizing price?

A. ₦80

B. ₦90

Correct C. ₦100

D. ₦110

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 19

A country is experiencing a recession with a GDP growth rate of -2%. If the government implements a fiscal policy that increases government sp\ending by ₦100 billion, what will be the effect on the GDP growth rate?

A. -1%

B. 0%

Correct C. 1%

D. 2%

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 20

A firm is producing a good with a production function of Q = 2L^0.5K^0.5. If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, and the firm is currently producing 100 units of output, what is the total \cost of producing one more unit of output?

A. ₦50

B. ₦100

Correct C. ₦200

D. ₦500

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 21

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 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

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 22

A firm's demand function is given by $ Q = 100 - 2P $. If the firm's marginal \cost is ₦20, what is the profit-maximizing price?

A. ₦40

Correct B. ₦50

C. ₦60

D. ₦70

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 23

A country's balance of payments is given by the following table:\n| Category | Exports | Imports |\n| --- | --- | --- |\n| Goods | ₦1000 | ₦800 |\n| Services | ₦500 | ₦300 |\n| Transfer | ₦200 | ₦100 |\nWhat is the country's balance of trade?

A. ₦200

Correct B. ₦300

C. ₦400

D. ₦500

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 24

A government's budget is given by the following equation: $ G = 100 + 0.2Y $. If the government's tax revenue is ₦500, what is the government's budget deficit?

A. ₦100

B. ₦200

Correct C. ₦300

D. ₦400

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 25

A country's GDP is given by the following equation: $ GDP = C + I + G + \( X - M \ $ ). If the country's consumption is ₦1000, investment is ₦500, government sp\ending is ₦200, exports are ₦500, and imports are ₦300, what is the country's GDP?

A. ₦2500

B. ₦3000

Correct C. ₦3500

D. ₦4000

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

POST UTME MOUNTAIN TOP UNIVERSITY 2021 Economics | Objective

Master the Exam!

Help others prepare! Share this practice hub: