POST UTME PAN-ATLANTIC UNIVERSITY 2018 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
The Nigerian government has implemented a policy to increase the production of industrial goods. The policy involves providing incentives to manufacturers. If the incentive is ₦500 per unit of industrial product, and the price of the product is ₦1000 per unit, what is the effect on the demand for industrial products?
A. The demand for industrial products will decrease
B. The demand for industrial products will increase
C. The demand for industrial products will remain unchanged
D. The effect on the demand for industrial products is uncertain
Question 2
Agricultural development in Nigeria is hindered by the lack of access to credit by small-scale farmers. What type of market failure is this an example of?
A. Monopoly
B. Monopsony
C. Market failure due to information asymmetry
D. Market failure due to externalities
Question 3
The supply curve for a product is given by the equation Qs = 100 + 2P, where Qs is the quantity supplied and P is the price. If the price elasticity of supply is 2, what is the price at which the quantity supplied is 120?
A. ₦20
B. ₦30
C. ₦40
D. ₦50
Question 4
A firm's production function is given by Q = 3L^0.5K^0.5. If the price of labor (L) is ₦150 per unit and the price of capital (K) is ₦300 per unit, calculate the returns to scale.
A. Increa\sing
B. Decrea\sing
C. Cons\tant
D. Variable
Question 5
The Central Bank of Nigeria (CBN) has implemented a monetary policy aimed at reducing inflation. The policy involves increa\sing the reserve requirement for commercial banks. If the reserve requirement is increased from 10% to 15%, what will be the effect on the money supply in the short run?
A. The money supply will decrease
B. The money supply will increase
C. The money supply will remain unchanged
D. The effect on the money supply is uncertain
Question 6
A firm is considering investing in a new project. The project has a probability of success of 0.6 and a probability of failure of 0.4. If the project is successful, the firm will earn a profit of ₦100,000, and if it fails, the firm will lose ₦50,000. What is the expected value of the project?
A. ₦30,000
B. ₦40,000
C. ₦50,000
D. ₦60,000
Question 7
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's output is 16 units when labor (L) is 4 units and capital (K) is 4 units, what is the marginal product of labor?
A. 2
B. 4
C. 8
D. 16
Question 8
A firm is considering two production techno\logies: one that uses 2 units of labor and 3 units of capital to produce 10 units of output, and another that uses 3 units of labor and 2 units of capital to produce 10 units of output. Which techno\logy is more efficient?
A. The first techno\logy is more efficient because it uses less labor and capital to produce the same output.
B. The second techno\logy is more efficient because it uses less labor and capital to produce the same output.
C. Both techno\logies are equally efficient because they produce the same output u\sing the same amount of labor and capital.
D. Neither techno\logy is more efficient because they produce the same output u\sing different amounts of labor and capital.
Question 9
U\sing the concept of elasticity of demand, explain why a firm's revenue will increase as it increases the price of its product.
A. The firm's revenue will increase as it increases the price of its product because the firm is experiencing elastic demand.
B. The firm's revenue will increase as it increases the price of its product because the firm is experiencing inelastic demand.
C. The firm's revenue will not change as it increases the price of its product because the firm is experiencing unit elastic demand.
D. The firm's revenue will decrease as it increases the price of its product because the firm is experiencing elastic demand.
Question 10
The elasticity of demand for a commodity is given by the formula \( eta = \frac{p}{x} \frac{dx}{dp} \). If the demand for a commodity is elastic, what can be concluded about the relationship between the price and quantity demanded?
A. The price and quantity demanded are inversely related.
B. The price and quantity demanded are directly related.
C. The price and quantity demanded are unrelated.
D. The price and quantity demanded are negatively related.
Question 11
The Central Bank of Nigeria (CBN) uses monetary policy tools to control inflation. Which of the following is a correct description of the effect of an increase in the reserve requirement on commercial banks?
A. The increase in reserve requirement will lead to a decrease in the money supply.
B. The increase in reserve requirement will lead to an increase in the money supply.
C. The increase in reserve requirement will have no effect on the money supply.
D. The increase in reserve requirement will lead to a decrease in the interest rate.
Question 12
A country's money supply is increa\sing at a rate of 10% per annum, while its velocity of money is decrea\sing at a rate of 5% per annum. What is the expected rate of inflation?
A. The expected rate of inflation is 5% per annum.
B. The expected rate of inflation is 10% per annum.
C. The expected rate of inflation is 15% per annum.
D. The expected rate of inflation is 20% per annum.
Question 13
A country's balance of payments is given by the equation BOP = X - M, where BOP is the balance of payments, X is the value of exports, and M is the value of imports. If the value of exports is ₦100 billion and the value of imports is ₦120 billion, what is the balance of payments?
A. ₦20 billion
B. ₦30 billion
C. ₦40 billion
D. ₦50 billion
Question 14
A firm's production function is given by Q = 3L^0.5K^0.5. If the firm's output is 9 units when labor (L) is 1 unit and capital (K) is 1 unit, what is the marginal product of capital?
A. 3
B. 6
C. 9
D. 12
Question 15
A government imposes a tax of ₦75 per unit on a firm's output. If the firm's demand function is Q = 120 - 3P and the supply function is Q = 3P - 20, calculate the tax revenue.
A. ₦1500
B. ₦2000
C. ₦2500
D. ₦3000

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