POST UTME OSUSTECH 2025 Economics | Objective

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Question 1
Consider a firm operating in a perfectly competitive market with a given production function Q = 2L^0.5K^0.5. If the price of the product is P = 100, and the wage rate is W = 20, what is the optimal level of labor (L) that the firm should hire to maximize its profit?
A. 10
Correct B. 20
C. 30
D. 40

Correct Answer: B

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Question 2
A country's GDP is calculated as the sum of the value of all final goods and services produced within its borders. If the country's GDP is ₦10,000,000,000 and the government sp\ends ₦2,000,000,000 on infrastructure, what is the country's national income?
Correct A. ₦8,000,000,000
B. ₦10,000,000,000
C. ₦12,000,000,000
D. ₦14,000,000,000

Correct Answer: A

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Question 3
A firm's demand function is given by Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the firm's revenue is R = 200, what is the price elasticity of demand?
Correct A. 0.5
B. 1
C. 2
D. 3

Correct Answer: A

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Question 4
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm hires 10 units of labor and 20 units of capital, what is the marginal product of labor?
A. 1
Correct B. 2
C. 3
D. 4

Correct Answer: B

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Question 5
A country's GNP is ₦10,000,000,000 and its GDP is ₦9,000,000,000. What is the country's net factor income from abroad?
Correct A. ₦1,000,000,000
B. ₦2,000,000,000
C. ₦3,000,000,000
D. ₦4,000,000,000

Correct Answer: A

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Question 6
In a perfectly competitive market, the supply curve is upward-sloping because firms are willing to produce more only if they can sell their output at a higher price. However, this is not the case in a market with a \single seller, where the supply curve is horizontal. What is the name of this market structure?
A. Perfect Competition
Correct B. Monopoly
C. Oligopoly
D. Monopolistic Competition

Correct Answer: B

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Question 7
A country's GDP is the sum of the value of all final goods and services produced within its borders. However, this measure does not account for the value of intermediate goods and services used in the production process. What is the name of the measure that includes the value of intermediate goods and services?
A. GDP
B. GDP (Gross Domestic Product)
C. GNP (Gross National Product)
Correct D. GNI (Gross National Income)

Correct Answer: D

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Question 8
A firm's production function is given by Q = 2L^0.5K^0.5, where Q is output, L is labor, and K is capital. If the firm wants to increase its output by 20%, how much should it increase its labor and capital?
Correct A. L increases by 10%, K increases by 10%
B. L increases by 20%, K increases by 20%
C. L increases by 10%, K increases by 20%
D. L increases by 20%, K increases by 10%

Correct Answer: A

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Question 9
A country's agricultural sector is characterized by a high degree of government intervention, including price controls and subsidies. What is the likely effect of these policies on the country's agricultural sector?
A. Increased production and efficiency
Correct B. Decreased production and efficiency
C. No effect on production and efficiency
D. Increased production but decreased efficiency

Correct Answer: B

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Question 10
A firm is considering two different production techno\logies: one that requires a high level of labor but low level of capital, and another that requires a low level of labor but high level of capital. What is the name of the concept that describes the firm's decision to choose one techno\logy over the other?
Correct A. Returns to Scale
B. Economies of Scale
C. Diseconomies of Scale
D. Diminishing Returns

Correct Answer: A

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Question 11
The concept of scarcity in economics implies that the production of one good is limited by the availability of resources that could be used to produce another good. Which of the following is a correct statement regarding the opportunity \cost of producing a good?
Correct A. The opportunity \cost is the value of the next best alternative that is given up when a choice is made.
B. The opportunity \cost is the value of the good that is produced.
C. The opportunity \cost is the value of the resource that is used to produce the good.
D. The opportunity \cost is the value of the good that is not produced.

Correct Answer: A

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Question 12
A consumer's utility function is given by 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?
A. x = 100, y = 100
Correct B. x = 80, y = 120
C. x = 120, y = 80
D. x = 100, y = 100

Correct Answer: B

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Question 13
The government of Nigeria has implemented a policy to increase agricultural production. Which of the following is a likely consequence of this policy?
A. An increase in the price of agricultural products.
Correct B. An increase in the production of agricultural products.
C. A decrease in the price of agricultural products.
D. A decrease in the production of agricultural products.

Correct Answer: B

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Question 14
A country's balance of payments is in surplus if the value of its exports exceeds the value of its imports. Which of the following is a correct statement regarding the balance of payments?
Correct A. A balance of payments surplus is a sign of a strong economy.
B. A balance of payments deficit is a sign of a strong economy.
C. A balance of payments surplus is a sign of a weak economy.
D. A balance of payments deficit is a sign of a weak economy.

Correct Answer: A

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Question 15
A firm's production function is given by Q = 2L + 3K. If the firm's output is 100 units and the price of labor is ₦10 per unit and the price of capital is ₦20 per unit, what is the firm's optimal combination of labor and capital?
Correct A. L = 20, K = 30
B. L = 30, K = 20
C. L = 40, K = 10
D. L = 10, K = 40

Correct Answer: A

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Question 16
The government of Nigeria has implemented a policy to increase industrial production. Which of the following is a likely consequence of this policy?
A. An increase in the price of industrial products.
Correct B. An increase in the production of industrial products.
C. A decrease in the price of industrial products.
D. A decrease in the production of industrial products.

Correct Answer: B

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Question 17
A consumer's budget constraint is given by 2x + 3y = 100. If the consumer's utility function is U(x, y) = 2x + 3y, what is the consumer's optimal bundle of x and y?
Correct A. x = 20, y = 30
B. x = 30, y = 20
C. x = 40, y = 10
D. x = 10, y = 40

Correct Answer: A

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Question 18
The government of Nigeria has implemented a policy to increase agricultural production. Which of the following is a likely consequence of this policy?
A. An increase in the price of agricultural products.
Correct B. An increase in the production of agricultural products.
C. A decrease in the price of agricultural products.
D. A decrease in the production of agricultural products.

Correct Answer: B

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Question 19
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current labor and capital inputs are 16 and 9 units respectively, what is the marginal product of labor?
A. 0.5
B. 1
Correct C. 2
D. 3

Correct Answer: C

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Question 20
A country's import demand function is given by M = 100 - 2P + 3Y. If the price of imports is 50 and the country's income is 200, what is the quantity of imports demanded?
A. 150
Correct B. 200
C. 250
D. 300

Correct Answer: B

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Question 21
A monopolist's inverse demand function is given by P = 100 - 2Q. If the firm's marginal \cost is 20, what is the profit-maximizing quantity?
A. 20
B. 30
Correct C. 40
D. 50

Correct Answer: C

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Question 22
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current labor and capital inputs are 16 and 9 units respectively, what is the total product of labor?
A. 32
Correct B. 64
C. 128
D. 256

Correct Answer: B

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Question 23
A country's export supply function is given by X = 50 + 2P - 3Y. If the price of exports is 70 and the country's income is 250, what is the quantity of exports supplied?
A. 150
B. 200
Correct C. 250
D. 300

Correct Answer: C

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Question 24
A monopolist's inverse demand function is given by P = 100 - 2Q. If the firm's marginal \cost is 20, what is the profit-maximizing price?
A. 80
B. 90
Correct C. 100
D. 110

Correct Answer: C

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Question 25
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current labor and capital inputs are 16 and 9 units respectively, what is the average product of labor?
A. 2
Correct B. 4
C. 8
D. 16

Correct Answer: B

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