POST UTME REDEEMERS UNIVERSITY 2018 Economics | Objective

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Question 1
Determine the price elasticity of demand for a product whose price elasticity of demand is 0.5 and the quantity demanded decreases by 20% when the price increases by 10%.
A. Unit Elasticity
B. Inelastic Demand
Correct C. Elastic Demand
D. Perfectly Elastic Demand

Correct Answer: C

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Question 2
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 current input of labor is 4 units, what is the marginal product of labor?
A. 2 units
Correct B. 4 units
C. 8 units
D. 16 units

Correct Answer: B

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Question 3
A consumer's utility function is given by U = 2x + 3y. If the consumer's current income is ₦1000 and the prices of x and y are ₦5 and ₦10 respectively, what is the consumer's optimal bundle of x and y?
A. x = 20 units, y = 10 units
Correct B. x = 15 units, y = 20 units
C. x = 10 units, y = 30 units
D. x = 25 units, y = 5 units

Correct Answer: B

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Question 4
A country's GDP is ₦100 billion and its GNP is ₦120 billion. What is the country's net factor income from abroad?
A. ₦20 billion
Correct B. ₦30 billion
C. ₦40 billion
D. ₦50 billion

Correct Answer: B

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Question 5
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 current input of labor is 4 units, what is the firm's average product of labor?
A. 4 units
Correct B. 8 units
C. 12 units
D. 16 units

Correct Answer: B

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Question 6
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 percentage change in quantity demanded when the price increases by 10%?
Correct A. 5%
B. 10%
C. 15%
D. 20%

Correct Answer: A

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Question 7
A firm is producing a good with a production function F(x) = 2x^2 + 3x + 1, where x is the number of units produced. If the firm's objective is to maximize profits, what is the optimal level of production?
A. 1 unit
B. 2 units
Correct C. 3 units
D. 4 units

Correct Answer: C

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Question 8
The government of Nigeria has implemented a policy to increase agricultural production. The policy includes providing subsidies to farmers and investing in irrigation systems. What is the likely effect of this policy on the supply of agricultural products?
Correct A. Increase in supply
B. Decrease in supply
C. No change in supply
D. Increase in demand

Correct Answer: A

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Question 9
A consumer has a utility function U(x, y) = 2x + 3y, where x is the quantity of good X and y is the quantity of good Y. If the consumer's income is ₦1000 and the prices of good X and good Y are ₦5 and ₦10 respectively, what is the consumer's optimal bundle of goods?
Correct A. x = 100, y = 50
B. x = 50, y = 100
C. x = 200, y = 0
D. x = 0, y = 200

Correct Answer: A

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Question 10
A firm is producing a good with a production function F(x) = 3x^2 + 2x + 1, where x is the number of units produced. If the firm's objective is to minimize \costs, what is the optimal level of production?
A. 1 unit
B. 2 units
Correct C. 3 units
D. 4 units

Correct Answer: C

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Question 11
A firm's demand curve is given by Q = 100 - 2P, where Q is the quantity demanded and P is the price. The supply curve is given by Q = 2P + 10. Find the equilibrium price and quantity.
A. ₦50, 60
Correct B. ₦40, 70
C. ₦30, 80
D. ₦20, 90

Correct Answer: B

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Question 12
A country's export demand function is given by X = 100 - 2P, where X is the quantity exported and P is the price. The import demand function is given by M = 50 - P. Find the equilibrium price and quantity.
A. ₦20, 40
B. ₦30, 50
Correct C. ₦40, 60
D. ₦50, 70

Correct Answer: C

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Question 13
A firm's production function is given by Q = 2L + 3K, where Q is the quantity produced, L is the labor input, and K is the capital input. The \cost function is given by C = 10L + 20K. Find the marginal product of labor and the marginal product of capital.
Correct A. MP_L = 2, MP_K = 3
B. MP_L = 3, MP_K = 2
C. MP_L = 4, MP_K = 1
D. MP_L = 1, MP_K = 4

Correct Answer: A

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Question 14
A firm's revenue function is given by R = 100Q - 2Q^2, where R is the revenue and Q is the quantity sold. Find the marginal revenue and the elasticity of demand.
Correct A. MR = 100 - 4Q, ED = -1
B. MR = 100 - 2Q, ED = -2
C. MR = 100 - Q, ED = -3
D. MR = 100 + Q, ED = 1

Correct Answer: A

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Question 15
A country's balance of payments is given by BOP = X - M, where BOP is the balance of payments, X is the exports, and M is the imports. Find the equilibrium value of the balance of payments.
A. ₦50
Correct B. ₦60
C. ₦70
D. ₦80

Correct Answer: B

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Question 16
A firm's demand curve is given by Qd = 100 - 2P, and the supply curve is given by Qs = 2P - 10. Find the equilibrium price and quantity.
A. P = 20, Q = 30
Correct B. P = 15, Q = 25
C. P = 10, Q = 20
D. P = 5, Q = 15

Correct Answer: B

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Question 17
A country's GDP is ₦1,000,000,000,000, and its GNP is ₦1,100,000,000,000. What is the net factor income from abroad?
Correct A. ₦100,000,000,000
B. ₦200,000,000,000
C. ₦300,000,000,000
D. ₦400,000,000,000

Correct Answer: A

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Question 18
A consumer's utility function is given by U(x, y) = 2x + 3y. If the consumer's income is ₦1,000,000, and the prices of x and y are ₦500,000 and ₦200,000 respectively, find the consumer's optimal bundle.
Correct A. x = 2, y = 1
B. x = 1, y = 2
C. x = 3, y = 0
D. x = 0, y = 3

Correct Answer: A

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Question 19
A firm's total revenue is given by TR = 100x - 2x^2, and its total \cost is given by TC = 50x + 100. Find the firm's profit-maximizing output.
A. x = 10
Correct B. x = 20
C. x = 30
D. x = 40

Correct Answer: B

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Question 20
A monopoly firm's demand curve is given by Qd = 100 - 2P, and its marginal revenue curve is given by MR = 200 - 4P. Find the firm's profit-maximizing price and quantity.
A. P = 20, Q = 30
Correct B. P = 15, Q = 25
C. P = 10, Q = 20
D. P = 5, Q = 15

Correct Answer: B

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Question 21
The concept of elasticity of demand is most relevant in the context of a perfectly competitive market, where a small change in price leads to a large change in quantity demanded. Which of the following is a correct statement about the elasticity of demand?
Correct A. Elasticity of demand is a measure of the responsiveness of quantity demanded to changes in price.
B. Elasticity of demand is a measure of the responsiveness of quantity supplied to changes in price.
C. Elasticity of demand is a measure of the responsiveness of quantity demanded to changes in income.
D. Elasticity of demand is a measure of the responsiveness of quantity supplied to changes in income.

Correct Answer: A

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Question 22
The following diagram shows the supply and demand curves for a particular good. What is the equilibrium price and quantity of the good?
A. Price = ₦100, Quantity = 100 units
Correct B. Price = ₦150, Quantity = 50 units
C. Price = ₦200, Quantity = 200 units
D. Price = ₦250, Quantity = 250 units

Correct Answer: B

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Question 23
The following table shows the data for the agricultural sector in Nigeria for the year 2018. What is the value of the sector's contribution to the country's GDP?
A. ₦1.5 trillion
Correct B. ₦2.0 trillion
C. ₦2.5 trillion
D. ₦3.0 trillion

Correct Answer: B

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Question 24
The following diagram shows the production possibility frontier (PPF) for a country. What is the opportunity \cost of producing 100 units of good X?
A. 10 units of good Y
Correct B. 20 units of good Y
C. 30 units of good Y
D. 40 units of good Y

Correct Answer: B

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Question 25
The following table shows the data for the industrial sector in Nigeria for the year 2018. What is the value of the sector's contribution to the country's GDP?
A. ₦2.0 trillion
B. ₦2.5 trillion
Correct C. ₦3.0 trillion
D. ₦3.5 trillion

Correct Answer: C

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