POST UTME REDEEMERS UNIVERSITY 2024 Economics | Objective

Are you preparing for POST UTME REDEEMERS UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2024 Economics (Objective) questions designed to simulate the real exam environment.

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Question 1
Consider a perfectly competitive market with a downward-sloping demand curve and an upward-sloping supply curve. If the market price is initially at P1 and the quantity demanded is Q1, and then the demand curve shifts to the left, what will happen to the equilibrium price and quantity?
Correct A. The equilibrium price will increase and the quantity demanded will decrease.
B. The equilibrium price will decrease and the quantity demanded will increase.
C. The equilibrium price will remain the same and the quantity demanded will decrease.
D. The equilibrium price will increase and the quantity demanded will increase.

Correct Answer: A

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Question 2
A firm's production function is given by Q = 2L^0.5K^0.5, where Q is the quantity produced, L is the labor input, and K is the capital input. If the firm wants to produce 100 units of output, and the wage rate is ₦100 per hour and the rental rate of capital is ₦50 per hour, what is the optimal combination of labor and capital?
A. L = 100, K = 100
B. L = 50, K = 200
C. L = 200, K = 50
Correct D. L = 100, K = 50

Correct Answer: D

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Question 3
Consider a tax on a good that is perfectly inelastic. If the pre-tax price is ₦100 and the quantity demanded is 100 units, and the tax rate is 20%, what will be the new equilibrium price and quantity?
A. New price = ₦120, New quantity = 100
Correct B. New price = ₦120, New quantity = 80
C. New price = ₦100, New quantity = 80
D. New price = ₦80, New quantity = 100

Correct Answer: B

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Question 4
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 wants to maximize its revenue, what price should it charge?
A. P = ₦20
Correct B. P = ₦30
C. P = ₦40
D. P = ₦50

Correct Answer: B

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Question 5
Consider a market with a downward-sloping demand curve and an upward-sloping supply curve. If the market price is initially at P1 and the quantity demanded is Q1, and then the supply curve shifts to the right, what will happen to the equilibrium price and quantity?
Correct A. The equilibrium price will decrease and the quantity demanded will increase.
B. The equilibrium price will increase and the quantity demanded will decrease.
C. The equilibrium price will remain the same and the quantity demanded will increase.
D. The equilibrium price will decrease and the quantity demanded will decrease.

Correct Answer: A

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Question 6
A firm's demand for a raw material is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price of the raw material. If the price of the raw material increases by 20%, calculate the percentage change in the quantity demanded.
A. 10%
Correct B. 20%
C. 30%
D. 40%

Correct Answer: B

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Question 7
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 increases by 15% and the consumption increases by 10%, calculate the percentage change in the investment.
A. 5%
B. 10%
Correct C. 15%
D. 20%

Correct Answer: C

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Question 8
A firm's \cost function is given by the equation C = 100 + 2Q + 0.5Q^2, where C is the total \cost and Q is the quantity produced. If the firm produces 100 units, calculate the total \cost.
A. ₦2500
B. ₦3000
Correct C. ₦3500
D. ₦4000

Correct Answer: C

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Question 9
A consumer's utility function is given by the equation U = 2X + 3Y, where U is the utility and 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, calculate the optimal quantities of the two goods.
Correct A. X = 200, Y = 300
B. X = 300, Y = 200
C. X = 400, Y = 100
D. X = 100, Y = 400

Correct Answer: A

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Question 10
A firm's supply function is given by the equation Qs = 50 + 2P, where Qs is the quantity supplied and P is the price. If the price increases by 20%, calculate the percentage change in the quantity supplied.
A. 10%
Correct B. 20%
C. 30%
D. 40%

Correct Answer: B

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Question 11
The Marshall-Lerner condition states that a country's balance of payments will improve if the sum of the elasticities of demand for imports and exports exceeds 1. Which of the following scenarios would lead to an improvement in the balance of payments?
A. A 10% increase in the price of imports leads to a 5% decrease in imports.
B. A 5% increase in the price of exports leads to a 2% decrease in exports.
Correct C. A 10% decrease in the price of imports leads to a 5% increase in imports.
D. A 5% decrease in the price of exports leads to a 2% increase in exports.

Correct Answer: C

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Question 12
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current labor and capital inputs are L = 4 and K = 9, respectively, what is the firm's current output?
A. 6
B. 12
Correct C. 18
D. 24

Correct Answer: C

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Question 13
A government imposes a tax on a firm's output. The firm's supply curve shifts to the left. What is the effect on the firm's profit-maximizing quantity?
A. The quantity increases.
Correct B. The quantity decreases.
C. The quantity remains unchanged.
D. The quantity increases or decreases dep\ending on the elasticity of demand.

Correct Answer: B

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Question 14
A firm's demand curve is given by Q = 100 - 2P. If the firm's current price is P = 20, what is the firm's current quantity demanded?
A. 40
Correct B. 60
C. 80
D. 100

Correct Answer: B

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Question 15
A government imposes a tax on a firm's output. The firm's supply curve shifts to the left. What is the effect on the firm's revenue?
A. The revenue increases.
Correct B. The revenue decreases.
C. The revenue remains unchanged.
D. The revenue increases or decreases dep\ending on the elasticity of demand.

Correct Answer: B

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Question 16
The concept of scarcity in economics implies that the production of one good is limited by the availability of resources, which can be allocated to other goods. This is an example of a trade-off between two goods. What is the opportunity \cost of producing more of one good?
Correct A. The value of the next best alternative good
B. The quantity of the next best alternative good
C. The price of the next best alternative good
D. The demand for the next best alternative good

Correct Answer: A

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Question 17
In the context of agricultural development in Nigeria, which of the following is a major challenge facing the sector?
A. Climate change
B. Lack of infrastructure
Correct C. Inadequate funding
D. Poor agricultural practices

Correct Answer: C

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Question 18
The money supply in an economy is determined by the central bank through the use of monetary policy tools. What is the primary objective of monetary policy?
Correct A. To control inflation
B. To stabilize the exchange rate
C. To promote economic growth
D. To reduce unemployment

Correct Answer: A

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Question 19
The demand for a product is said to be elastic if a small change in price leads to a large change in quantity demanded. What is the price elasticity of demand for a product with an elasticity of 2?
A. Inelastic
B. Unit elastic
Correct C. Elastic
D. Perfectly elastic

Correct Answer: C

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Question 20
The concept of utility in economics refers to the satisfaction or pleasure derived from consuming a product. What is the law of diminishing marginal utility?
A. The more a person consumes, the more utility they derive
Correct B. The more a person consumes, the less utility they derive
C. The more a person consumes, the same utility they derive
D. The more a person consumes, the more utility they derive at a decrea\sing rate

Correct Answer: B

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Question 21
A perfectly competitive firm's supply curve is upward-sloping because of the law of increa\sing
Correct A. diminishing marginal returns
B. increa\sing opportunity \costs
C. decrea\sing marginal \costs
D. cons\tant returns to scale

Correct Answer: A

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Question 22
A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \). If the firm's current capital stock is 16 units and labor is 4 units, what is the marginal product of labor?
Correct A. 1/2
B. 1
C. 2
D. 4

Correct Answer: A

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Question 23
A country's balance of payments account is in equilibrium when the current account is equal to the capital account. If the current account is -$100 million and the capital account is $50 million, what is the net capital outflow?
Correct A. -$50 million
B. -$100 million
C. $50 million
D. $100 million

Correct Answer: A

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Question 24
A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \). If the firm's current capital stock is 16 units and labor is 4 units, what is the total product of labor?
A. 4
Correct B. 8
C. 12
D. 16

Correct Answer: B

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Question 25
A country's GDP is given by the equation Y = C + I + G + \( X - M \). If the country's consumption is $100 billion, investment is $20 billion, government sp\ending is $30 billion, exports are $50 billion, and imports are $20 billion, what is the country's GDP?
A. $180 billion
Correct B. $200 billion
C. $220 billion
D. $240 billion

Correct Answer: B

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