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POST UTME PAN-ATLANTIC UNIVERSITY 2017 Economics | Objective

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Question 1

A firm's revenue function is given by R(x) = 2x^2 + 10x + 5, where x is the number of units produced. If the firm's marginal revenue function is MR(x) = 4x + 10, find the value of x that maximizes revenue.

A. 5

Correct B. 10

C. 15

D. 20

Correct Answer: B

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Question 2

A country's GDP is given by the equation GDP = C + I + G + $ X - M $, where C is consumption, I is investment, G is government sp\ending, X is exports, and M is imports. If the country's GDP is $100 billion, consumption is $60 billion, investment is $20 billion, government sp\ending is $15 billion, exports are $25 billion, and imports are $10 billion, find the value of X.

A. 30

B. 35

Correct C. 40

D. 45

Correct Answer: C

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Question 3

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 produce 100 units of output, and labor is 16 units, find the value of K.

A. 25

B. 30

Correct C. 35

D. 40

Correct Answer: C

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Question 4

A country's national income is given by the equation Y = C + I + G + $ X - M $, where Y is national income, C is consumption, I is investment, G is government sp\ending, X is exports, and M is imports. If the country's national income is $120 billion, consumption is $70 billion, investment is $25 billion, government sp\ending is $20 billion, exports are $30 billion, and imports are $15 billion, find the value of X.

A. 35

B. 40

C. 45

Correct D. 50

Correct Answer: D

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Question 5

A firm's \cost function is given by C(x) = 2x^2 + 10x + 5, where x is the number of units produced. If the firm produces 10 units, find the total \cost.

A. 105

B. 110

Correct C. 115

D. 120

Correct Answer: C

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Question 6

In a perfectly competitive market, the equilibrium price and quantity are determined by the intersection of the market demand and supply curves. However, if the government imposes a tax on the producers, the supply curve shifts to the left. What is the effect of this tax on the equilibrium price and quantity?

Correct A. The equilibrium price increases, and the equilibrium quantity decreases.

B. The equilibrium price decreases, and the equilibrium quantity increases.

C. The equilibrium price remains the same, and the equilibrium quantity decreases.

D. The equilibrium price increases, and the equilibrium quantity remains the same.

Correct Answer: A

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Question 7

A firm is considering investing in a new project that has a net present value (NPV) of ₦120,000. If the \cost of capital is 10% per annum, what is the internal rate of return (IRR) of the project?

Correct A. 12%

B. 15%

C. 18%

D. 20%

Correct Answer: A

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Question 8

A country's balance of payments (BOP) is in equilibrium when the current account and capital account are balanced. If the country's current account deficit is ₦500 billion and the capital account surplus is ₦200 billion, what is the net capital outflow?

Correct A. ₦300 billion

B. ₦400 billion

C. ₦500 billion

D. ₦600 billion

Correct Answer: A

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Question 9

A monopolist faces a demand curve given by Q = 100 - 2P. If the marginal revenue (MR) is ₦50, what is the price elasticity of demand?

A. 0.5

B. 1.0

Correct C. 2.0

D. 3.0

Correct Answer: C

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Question 10

A firm is considering investing in a new project that has a net present value (NPV) of ₦150,000. If the \cost of capital is 12% per annum, what is the internal rate of return (IRR) of the project?

A. 15%

Correct B. 18%

C. 20%

D. 22%

Correct Answer: B

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Question 11

In the context of returns to scale, what is the relationship between the production function and the scale of production?

Correct A. The production function is homogeneous of degree 1.

B. The production function is homogeneous of degree 2.

C. The production function is homogeneous of degree 3.

D. The production function is homogeneous of degree 4.

Correct Answer: A

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Question 12

A farmer in Nigeria produces maize and soybeans on a 100-hectare farm. The total revenue from maize is ₦1,500,000, and the total revenue from soybeans is ₦2,000,000. What is the total revenue from both crops?

Correct A. ₦3,500,000

B. ₦3,000,000

C. ₦2,500,000

D. ₦2,000,000

Correct Answer: A

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Question 13

A government in Nigeria imposes a tax of ₦500 on every liter of petrol sold. If the price of petrol is ₦150 per liter, what is the tax rate?

Correct A. 3.33%

B. 2.67%

C. 1.33%

D. 0.67%

Correct Answer: A

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Question 14

A company in Nigeria produces a product that has a fixed \cost of ₦100,000 and a variable \cost of ₦50 per unit. If the selling price is ₦75 per unit, what is the break-even point?

Correct A. 1,000 units

B. 2,000 units

C. 3,000 units

D. 4,000 units

Correct Answer: A

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Question 15

A government in Nigeria wants to reduce poverty by increa\sing the minimum wage. If the current minimum wage is ₦20,000 per month and the government wants to increase it by 10%, what will be the new minimum wage?

A. ₦22,000

Correct B. ₦24,000

C. ₦26,000

D. ₦28,000

Correct Answer: B

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Question 16

U\sing the concept of opportunity \cost, explain why a country may choose to import a good even if it can be produced domestically.

A. The opportunity \cost of producing the good domestically is lower than the \cost of importing it.

B. The opportunity \cost of importing the good is lower than the \cost of producing it domestically.

Correct C. The opportunity \cost of producing the good domestically is higher than the \cost of importing it.

D. The opportunity \cost of importing the good is higher than the \cost of producing it domestically.

Correct Answer: C

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Question 17

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current output is 16 units and the wage rate is ₦100 per hour, what is the minimum amount of capital required to produce this output?

A. ₦400

B. ₦800

Correct C. ₦1600

D. ₦3200

Correct Answer: C

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Question 18

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 consumer's optimal bundle of x and y?

Correct A. x = 10, y = 5

B. x = 5, y = 10

C. x = 15, y = 3

D. x = 3, y = 15

Correct Answer: A

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Question 19

A firm's \cost function is given by C = 2L + 3K. If the firm's current output is 16 units and the wage rate is ₦100 per hour, what is the minimum amount of capital required to produce this output?

A. ₦400

B. ₦800

Correct C. ₦1600

D. ₦3200

Correct Answer: C

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Question 20

A consumer's budget constraint is given by 2x + 3y = 100. If the consumer's utility function is U = 2x + 3y, what is the consumer's optimal bundle of x and y?

Correct A. x = 10, y = 5

B. x = 5, y = 10

C. x = 15, y = 3

D. x = 3, y = 15

Correct Answer: A

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Question 21

A firm's production function is given by Q = 2L^$ 1/2 $K^$ 1/2 $. If the firm's current input levels are L = 16 and K = 9, calculate the marginal product of labor.

A. 1

B. 2

Correct C. 4

D. 8

Correct Answer: C

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Question 22

A consumer's budget constraint is given by P_x x + P_y y = 100. If P_x = 10 and P_y = 5, and the consumer's current consumption levels are x = 5 and y = 10, calculate the consumer's optimal consumption bundle.

Correct A. (10, 20)

B. (20, 10)

C. (5, 5)

D. (0, 0)

Correct Answer: A

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Question 23

A firm's \cost function is given by C = 2L + 3K. If the firm's current input levels are L = 10 and K = 5, calculate the firm's total \cost.

A. 50

Correct B. 60

C. 70

D. 80

Correct Answer: B

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Question 24

A monopoly firm's demand function is given by P = 100 - 2Q. If the firm's current output level is Q = 20, calculate the firm's revenue.

A. 1000

Correct B. 1200

C. 1400

D. 1600

Correct Answer: B

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Question 25

A firm's production function is given by Q = 3L^2K. If the firm's current input levels are L = 4 and K = 3, calculate the firm's marginal product of labor.

A. 12

Correct B. 24

C. 36

D. 48

Correct Answer: B

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