Practice Post UTME REDEEMERS UNIVERSITY economics 2020 Past Questions

Question 1

A firm's production function is given by Q = 2L^$ 1/2 $K^$ 1/2 $, where Q is output, L is labor and K is capital. If the firm wants to increase output by 10% while keeping labor cons\tant, what percentage increase in capital is required?

A. 5%

B. 10%

Correct C. 20%

D. 25%

Correct Answer: C

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Question 2

A consumer's utility function is given by U = 2x + 3y, where x and y are the quantities of two goods. If the consumer's income is ₦1000 and the prices of the two goods are ₦2 and ₦3 respectively, what is the consumer's optimal bundle of goods?

Correct A. x = 200, y = 150

B. x = 300, y = 100

C. x = 400, y = 50

D. x = 500, y = 0

Correct Answer: A

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Question 3

A monopolist faces a demand curve given by P = 100 - 2Q, where P is price and Q is quantity. If the firm's marginal \cost is cons\tant at ₦20, what is the firm's optimal quantity?

A. 20

Correct B. 30

C. 40

D. 50

Correct Answer: B

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Question 4

A government wants to reduce the price of a commodity by 10% u\sing a subsidy. If the initial price is ₦100 and the subsidy is ₦10, what is the new price?

Correct A. ₦90

B. ₦95

C. ₦100

D. ₦105

Correct Answer: A

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Question 5

A firm's production function is given by Q = 2L^$ 1/2 $K^$ 1/2 $, where Q is output, L is labor and K is capital. If the firm wants to increase output by 10% while keeping labor cons\tant, what percentage increase in capital is required?

A. 5%

B. 10%

Correct C. 20%

D. 25%

Correct Answer: C

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Question 6

In the context of agricultural development in Nigeria, what is the primary objective of the government's 'Green Revolution' initiative?

Correct A. To increase food production and reduce reliance on imports

B. To promote the use of organic farming methods

C. To improve the livelihoods of small-scale farmers

D. To increase the production of cash crops

Correct Answer: A

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Question 7

A firm produces 100 units of a good at a \cost of ₦10 per unit. If the market price of the good is ₦15 per unit, what is the firm's revenue?

A. 10000

Correct B. 15000

C. 20000

D. 25000

Correct Answer: B

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Question 8

A country's balance of payments is in surplus if its exports exceed its imports. True or False?

A. True

Correct B. False

C. It dep\ends on the context

D. More information is needed

Correct Answer: B

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Question 9

A firm's \cost function is given by C(x) = 2x^2 + 5x + 1. What is the marginal \cost when x = 10?

A. 41

Correct B. 42

C. 43

D. 44

Correct Answer: B

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Question 10

A country's government imposes a tax on imports. What is the effect on the supply curve?

A. The supply curve shifts to the left

Correct B. The supply curve shifts to the right

C. The supply curve remains unchanged

D. More information is needed

Correct Answer: B

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Question 11

Consider a firm operating in a perfectly competitive market with a production function Q = 2L^0.5K^0.5. If the price of the good is $10 and the firm's \cost function is C(L,K) = 2L + 3K, what is the optimal level of labor (L) and capital (K) that maximizes profit?

Correct A. $ L = 4, K = 4 $

B. $ L = 8, K = 2 $

C. $ L = 2, K = 8 $

D. $ L = 16, K = 1 $

Correct Answer: A

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Question 12

A consumer has the following utility function: U(x,y) = 2x + 3y. If the prices of x and y are $5 and $3 respectively, and the consumer's income is $20, what is the optimal bundle of x and y that maximizes utility?

A. $ x = 2, y = 4 $

Correct B. $ x = 4, y = 2 $

C. $ x = 1, y = 6 $

D. $ x = 3, y = 3 $

Correct Answer: B

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Question 13

Consider a closed economy with a GDP of $100 billion and a GNP of $120 billion. If the net factor income from abroad is $20 billion, what is the value of the country's net foreign investment?

A. ( $10 billion )

Correct B. ( $20 billion )

C. ( $30 billion )

D. ( $40 billion )

Correct Answer: B

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Question 14

A firm is operating in a perfectly competitive market with a production function Q = 2L^0.5K^0.5. If the price of the good is $10 and the firm's \cost function is C(L,K) = 2L + 3K, what is the optimal level of labor (L) and capital (K) that minimizes \cost?

Correct A. $ L = 4, K = 4 $

B. $ L = 8, K = 2 $

C. $ L = 2, K = 8 $

D. $ L = 16, K = 1 $

Correct Answer: A

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Question 15

Consider a firm operating in a perfectly competitive market with a production function Q = 2L^0.5K^0.5. If the price of the good is $10 and the firm's \cost function is C(L,K) = 2L + 3K, what is the optimal level of labor (L) and capital (K) that maximizes profit?

Correct A. $ L = 4, K = 4 $

B. $ L = 8, K = 2 $

C. $ L = 2, K = 8 $

D. $ L = 16, K = 1 $

Correct Answer: A

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Question 16

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 17

A monopolist faces a demand curve given by Q = 100 - 2P and a marginal \cost curve given by MC = 10 + 2Q. If the firm produces 20 units, what is the profit-maximizing price?

A. ₦50

B. ₦60

Correct C. ₦70

D. ₦80

Correct Answer: C

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Question 18

The supply of a product is given by the equation Qs = 50 + 2P, where Qs is the quantity supplied and P is the price. If the price elasticity of supply is 0.8, what is the percentage change in quantity supplied when the price increases by 15%?

A. 12%

Correct B. 15%

C. 18%

D. 20%

Correct Answer: B

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Question 19

A firm produces two goods, X and Y, u\sing two inputs, labor and capital. The production functions are given by X = 2L + 3K and Y = 3L + 2K, where L is labor and K is capital. If the firm has 10 units of labor and 5 units of capital, what is the total output?

A. 20

B. 25

Correct C. 30

D. 35

Correct Answer: C

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Question 20

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 and the value of imports is ₦80, what is the balance of payments?

Correct A. ₦20

B. ₦30

C. ₦40

D. ₦50

Correct Answer: A

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Question 21

A monopolist faces a demand curve given by Q = 100 - 2P and a \cost function C(Q) = 2Q^2 + 10Q. What is the profit-maximizing price?

A. ₦50

Correct B. ₦60

C. ₦70

D. ₦80

Correct Answer: B

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Question 22

A firm's production function is given by Q = 2L^2, where L is labor. If the wage rate is ₦50 per hour, what is the marginal product of labor?

Correct A. 4L

B. 2L

C. L

D. 1/L

Correct Answer: A

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Question 23

A consumer's budget constraint is given by 2X + 3Y = 12, where X and Y are the quantities of two goods. If the consumer's utility function is given by U(X, Y) = XY, what is the optimal bundle of goods?

Correct A. (2, 4)

B. (4, 2)

C. (6, 1)

D. (1, 6)

Correct Answer: A

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Question 24

A firm's revenue function is given by R(Q) = 2Q^2 - 10Q, where Q is output. If the firm's \cost function is given by C(Q) = 5Q^2 + 20Q, what is the profit-maximizing output?

A. 5

Correct B. 10

C. 15

D. 20

Correct Answer: B

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Question 25

A consumer's demand curve for a good is given by Q = 100 - 2P, where P is price. If the consumer's income is ₦1000 and the price of a complementary good is ₦200, what is the optimal quantity of the good?

A. 40

Correct B. 50

C. 60

D. 70

Correct Answer: B

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