POST UTME OAU 2020 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A monopolist faces a downward-sloping demand curve for its product. If the firm increases its price, what will happen to its total revenue?
A. Total revenue will increase
B. Total revenue will decrease
C. Total revenue will remain unchanged
D. Total revenue will increase at first and then decrease
Question 2
A central bank sells $100 million worth of foreign exchange to the market. If the initial exchange rate is 1 USD = 150 Naira, what is the new exchange rate?
A. 1 USD = 160 Naira
B. 1 USD = 140 Naira
C. 1 USD = 180 Naira
D. 1 USD = 200 Naira
Question 3
A firm's \cost function is given by C = 100 + 2Q + 0.5Q^2, where Q is the firm's output. If the firm's current output is Q = 10, what is the firm's current \cost?
A. $250
B. $300
C. $350
D. $400
Question 4
A country's inflation rate is 5% per annum. If the nominal interest rate is 10% per annum, what is the real interest rate?
A. 5%
B. 6%
C. 7%
D. 8%
Question 5
The government of a country imposes a tax on a particular good. The supply curve for the good is given by Q = 100 + 2P, where Q is the quantity supplied and P is the price. If the tax is ₦10 per unit, what is the new supply curve?
A. Q = 90 + 2P
B. Q = 100 + 2P
C. Q = 110 + 2P
D. Q = 120 + 2P
Question 6
A central bank uses monetary policy to control inflation by increa\sing the reserve requirement for commercial banks. This action will lead to a decrease in the money supply because banks will have to hold more reserves and l\end less. What is the effect of this action on the interest rate?
A. The interest rate increases.
B. The interest rate decreases.
C. The interest rate remains cons\tant.
D. The interest rate becomes zero.
Question 7
A monopolist faces a demand curve given by Q = 100 - 2P and a \cost function C(Q) = 2Q^2 + 10Q. Find the profit-maximizing price and quantity.
A. ₦200, 50
B. ₦250, 75
C. ₦300, 100
D. ₦350, 125
Question 8
A firm's demand function is given by Q = 100 - 2P. If the firm's current price is P = 50, what is the elasticity of demand?
A. 0.5
B. 1
C. 2
D. 3
Question 9
A firm is considering two different production processes. Process A has a fixed \cost of ₦100,000 and a variable \cost of ₦50 per unit. Process B has a fixed \cost of ₦150,000 and a variable \cost of ₦30 per unit. If the firm produces 10,000 units, what will be the total \cost of production for each process?
A. Process A: ₦1,500,000; Process B: ₦1,200,000
B. Process A: ₦1,200,000; Process B: ₦1,500,000
C. Process A: ₦1,000,000; Process B: ₦1,400,000
D. Process A: ₦1,400,000; Process B: ₦1,000,000
Question 10
A firm faces a downward-sloping demand curve for its product. If the firm increases its price, what will happen to its total revenue?
A. Total revenue will increase
B. Total revenue will decrease
C. Total revenue will remain unchanged
D. Total revenue will increase at first and then decrease
Question 11
A consumer's indifference curve 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 consumer's optimal level of x and y?
A. \( x = 5, y = 10 \)
B. \( x = 10, y = 5 \)
C. \( x = 15, y = 3 \)
D. \( x = 20, y = 2 \)
Question 12
A firm's \cost function is given by C = 2L + 3K, where C is \cost, L is labor, and K is capital. If labor increases by 20% and capital remains cons\tant, what is the percentage change in \cost?
A. -10%
B. 0%
C. 10%
D. 20%
Question 13
A consumer's indifference curve is given by U = 2x + 3y, where x and y are the quantities of two goods. If the consumer's income is $100 and the prices of the two goods are $2 and $3 respectively, what is the consumer's optimal bundle?
A. (20, 30)
B. (30, 20)
C. (40, 10)
D. (10, 40)
Question 14
A firm is considering two different production processes. Process A has a fixed \cost of ₦100,000 and a variable \cost of ₦500 per unit produced. Process B has a fixed \cost of ₦150,000 and a variable \cost of ₦300 per unit produced. If the firm produces 200 units, which process should it choose?
A. Process A
B. Process B
C. Both processes are equally profitable
D. Neither process is profitable
Question 15
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 price at which the quantity demanded is 60?
A. ₦20
B. ₦30
C. ₦40
D. ₦50

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