Practice Post UTME OAU economics 2021 Past Questions

Question 1

A consumer's utility function is given by U = x^(2) + 2y, where x and y are the quantities of two goods consumed. If the consumer's income is ₦1500 and the prices of the two goods are ₦10 and ₦20 respectively, what is the consumer's optimal bundle of goods?

A. x = 15, y = 10

B. x = 10, y = 15

C. x = 5, y = 20

D. x = 20, y = 5

Question 2

A firm's \cost function is given by C(q) = 2q^2 + 10q + 5. What is the marginal \cost function, and how does it relate to the average \cost function?

A. The marginal \cost function is MC(q) = 4q + 10, and it is equal to the average \cost function.

B. The marginal \cost function is MC(q) = 4q + 10, and it is greater than the average \cost function.

C. The marginal \cost function is MC(q) = 4q + 10, and it is less than the average \cost function.

D. The marginal \cost function is MC(q) = 4q + 10, and it is equal to the average variable \cost function.

Question 3

A firm is considering two production processes: one that produces 100 units of output per hour with a fixed \cost of ₦5,000 and a variable \cost of ₦10 per unit, and another that produces 200 units of output per hour with a fixed \cost of ₦10,000 and a variable \cost of ₦5 per unit. Determine which process is more profitable if the firm sells its output at ₦20 per unit.

A. Process 1 is more profitable

B. Process 2 is more profitable

C. Both processes are equally profitable

D. Neither process is profitable

Question 4

A country's balance of payments is in surplus. What is the likely impact on the exchange rate?

A. The exchange rate appreciates.

B. The exchange rate depreciates.

C. The exchange rate remains unchanged.

D. The exchange rate becomes volatile.

Question 5

The demand for money in an economy is influenced by the opportunity \cost of holding money. What is the opportunity \cost of holding money, and how does it affect the demand for money?

A. The opportunity \cost of holding money is the interest that could be earned by investing in alternative assets, and it affects the demand for money by increa\sing it.

B. The opportunity \cost of holding money is the risk of holding money, and it affects the demand for money by decrea\sing it.

C. The opportunity \cost of holding money is the liquidity of holding money, and it affects the demand for money by increa\sing it.

D. The opportunity \cost of holding money is the inflation rate, and it affects the demand for money by decrea\sing it.

Question 6

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 income is ₦1000 and the prices of the two goods are ₦5 and ₦10 respectively, what is the consumer's optimal bundle of goods?

A. x = 20, y = 10

B. x = 15, y = 5

C. x = 10, y = 20

D. x = 5, y = 15

Question 7

A firm's revenue function is given by R(q) = 100q - 2q^2. What is the marginal revenue function, and how does it relate to the demand function?

A. The marginal revenue function is MR(q) = 100 - 4q, and it is equal to the demand function.

B. The marginal revenue function is MR(q) = 100 - 4q, and it is greater than the demand function.

C. The marginal revenue function is MR(q) = 100 - 4q, and it is less than the demand function.

D. The marginal revenue function is MR(q) = 100 - 4q, and it is equal to the average revenue function.

Question 8

A firm is producing a good with a cons\tant elasticity of demand of -2. If the price of the good increases by 20%, what will be the percentage change in the quantity demanded?

A. -40%

B. -20%

C. -10%

D. -5%

Question 9

A country's balance of payments is given by BOP = X - M + $ F - I $. What is the meaning of each component, and how do they relate to the country's trade deficit?

A. X is exports, M is imports, F is foreign investment, and I is domestic investment.

B. X is imports, M is exports, F is foreign investment, and I is domestic investment.

C. X is exports, M is imports, F is domestic investment, and I is foreign investment.

D. X is imports, M is exports, F is domestic investment, and I is foreign investment.

Question 10

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

A. 20 units

B. 30 units

C. 40 units

D. 50 units

Question 11

Consider a country with a GDP of ₦10 trillion and a population of 200 million. If the government decides to implement a value-added tax (VAT) of 10% on all goods and services, what will be the impact on the country's GDP?

A. The GDP will increase by 10%.

B. The GDP will decrease by 10%.

C. The GDP will remain unchanged.

D. The GDP will increase by 20%.

Question 12

A country's GDP is given by GDP = C + I + G + $ X - M $. What is the meaning of each component, and how do they relate to the country's s\tandard of living?

A. C is consumption, I is investment, G is government sp\ending, X is exports, and M is imports.

B. C is capital, I is income, G is government, X is exports, and M is imports.

C. C is consumption, I is investment, G is government sp\ending, X is imports, and M is exports.

D. C is capital, I is income, G is government, X is imports, and M is exports.

Question 13

A firm is considering two different production processes for a particular good. Process A has a fixed \cost of 100 and a variable \cost of 20 per unit, while Process B has a fixed \cost of 150 and a variable \cost of 15 per unit. If the firm produces 100 units of the good, which process will result in the lowest total \cost?

A. Process A

B. Process B

C. Both processes will result in the same total \cost

D. Neither process will result in the lowest total \cost

Question 14

A firm's \cost function is given by C(q) = 2q^2 + 10q + 5. If the firm produces 20 units, what is the total \cost?

A. ₦250

B. ₦300

C. ₦350

D. ₦400

Question 15

A country's GDP is $100 billion, and its GNP is $120 billion. What is the net factor income from abroad?

A. $10 billion

B. $20 billion

C. $30 billion

D. $40 billion

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