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POST UTME RHEMA UNIVERSITY 2024 Economics | Objective

Are you preparing for POST UTME RHEMA 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

The concept of scarcity is closely related to the idea of opportunity \cost. Explain how the opportunity \cost of a choice is determined in a situation where a consumer has to choose between two goods, A and B, with the following prices and quantities: A = ₦100, Q = 10 units; B = ₦80, Q = 15 units. Assume that the consumer has a budget of ₦1,000.

A. The opportunity \cost is determined by the price of good B.

B. The opportunity \cost is determined by the quantity of good A.

C. The opportunity \cost is determined by the price of good A and the quantity of good B.

Correct D. The opportunity \cost is determined by the quantity of good A and the price of good B.

Correct Answer: D

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Question 2

A firm produces two goods, X and Y, u\sing two inputs, labor (L) and capital (K). The production functions are given by: X = 2L + 3K and Y = 4L + 2K. If the firm has 10 units of labor and 5 units of capital, what is the opportunity \cost of producing one more unit of good X?

A. The opportunity \cost is 0.5 units of labor.

B. The opportunity \cost is 1 unit of labor.

Correct C. The opportunity \cost is 1.5 units of labor.

D. The opportunity \cost is 2 units of labor.

Correct Answer: C

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Question 3

A country's GDP is ₦1,000 billion. The country's imports are ₦200 billion and its exports are ₦300 billion. What is the country's balance of trade?

A. ₦100 billion surplus

Correct B. ₦100 billion deficit

C. ₦200 billion surplus

D. ₦200 billion deficit

Correct Answer: B

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Question 4

A firm's demand function for a product 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 is the optimal price?

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 5

A country's GNP is ₦1,500 billion. The country's GDP is ₦1,200 billion. What is the country's net factor income from abroad?

Correct A. ₦300 billion

B. ₦200 billion

C. ₦100 billion

D. ₦50 billion

Correct Answer: A

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Question 6

The Marshall-Lerner condition states that a country's balance of payments will improve if the sum of the percentage changes in its export and import prices exceeds a certain threshold. What is the name of this threshold?

A. The Marshall-Lerner condition

B. The J-curve effect

C. The Balance of Payments constraint

Correct D. The Elasticity of Demand threshold

Correct Answer: D

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Question 7

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

Correct A. P(q) = 18q^2 - 15q + 5

B. P(q) = 18q^2 + 15q + 5

C. P(q) = 18q^2 - 15q - 5

D. P(q) = 18q^2 + 15q - 5

Correct Answer: A

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Question 8

A country's money supply is given by M = 1000 + 0.5Y. If the country's income is Y = 10000, what is the money supply?

A. ₦15000

Correct B. ₦20000

C. ₦25000

D. ₦30000

Correct Answer: B

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Question 9

A firm's demand function is given by Q = 100 - 2P. If the firm's supply function is Q = 20 + 3P, what is the equilibrium price?

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 10

A country's agricultural sector is given by the production function Q = 1000L^0.5K^0.5, where L is labor and K is capital. If the country's labor and capital are given by L = 100 and K = 100, what is the output?

A. 1000

Correct B. 2000

C. 3000

D. 4000

Correct Answer: B

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Question 11

A firm's demand curve 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 -2, what is the percentage change in quantity demanded when the price increases by 10%?

Correct A. 20%

B. 40%

C. 60%

D. 80%

Correct Answer: A

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Question 12

A monopolistically competitive firm faces a demand curve given by Qd = 100 - 2P. If the firm produces at a level where MR = MC, what is the price elasticity of demand?

Correct A. -2

B. -1

C. 1

D. 2

Correct Answer: A

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Question 13

A firm's production function is given by Q = 10L^0.5K^0.5. If the firm's output increases by 20% due to a 10% increase in labor and a 15% increase in capital, what is the marginal product of labor?

Correct A. 0.5

B. 1

C. 1.5

D. 2

Correct Answer: A

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Question 14

A country's GDP is given by the equation GDP = C + I + G + \( X - M \). If the country's GDP increases by 10% due to a 5% increase in consumption, a 10% increase in investment, and a 15% increase in government sp\ending, what is the percentage change in net exports?

Correct A. -5%

B. -10%

C. -15%

D. -20%

Correct Answer: A

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Question 15

A monopolist faces a demand curve given by Qd = 100 - 2P. If the firm produces at a level where MR = MC, what is the price?

A. 25

Correct B. 50

C. 75

D. 100

Correct Answer: B

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Question 16

A firm's \cost function is given by C(x) = 2x^2 + 5x + 10. If the firm's revenue function is R(x) = 20x - 0.5x^2, what is the profit function?

Correct A. \text{P}(x) = 15x - 1.5x^2

B. \text{P}(x) = 15x + 1.5x^2

C. \text{P}(x) = 15x - 2x^2

D. \text{P}(x) = 15x + 2x^2

Correct Answer: A

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Question 17

A farmer produces wheat and maize. The production functions for wheat and maize are given by W(x, y) = 2x^0.5y^0.5 and M(x, y) = 3x^0.5y^0.5 respectively. If the farmer has 100 units of labor and 50 units of capital, what is the maximum output of wheat?

A. 50

B. 60

Correct C. 70

D. 80

Correct Answer: C

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Question 18

A government imposes a tax on a firm's output. The firm's \cost function is given by C(x) = 2x^2 + 5x + 10 and the tax rate is 0.2. What is the new \cost function?

Correct A. C(x) = 2x^2 + 5x + 10 + 0.2x

B. C(x) = 2x^2 + 5x + 10 - 0.2x

C. C(x) = 2x^2 + 5x + 10 + 0.2x^2

D. C(x) = 2x^2 + 5x + 10 - 0.2x^2

Correct Answer: A

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Question 19

A firm's revenue function is given by R(x) = 20x - 0.5x^2. If the firm's \cost function is C(x) = 2x^2 + 5x + 10, what is the profit-maximizing level of output?

A. 10

Correct B. 20

C. 30

D. 40

Correct Answer: B

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Question 20

A government imposes a tax on a firm's output. The firm's \cost function is given by C(x) = 2x^2 + 5x + 10 and the tax rate is 0.2. What is the new profit function?

Correct A. P(x) = 15x - 1.5x^2

B. P(x) = 15x + 1.5x^2

C. P(x) = 15x - 2x^2

D. P(x) = 15x + 2x^2

Correct Answer: A

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Question 21

A firm's average total \cost (ATC) curve is U-shaped. If the firm's short-run ATC curve is initially downward sloping, what can be inferred about the firm's production techno\logy?

A. The firm's production techno\logy exhibits increa\sing returns to scale.

Correct B. The firm's production techno\logy exhibits decrea\sing returns to scale.

C. The firm's production techno\logy exhibits cons\tant returns to scale.

D. The firm's production techno\logy exhibits diminishing returns to scale.

Correct Answer: B

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Question 22

A monopolist faces a demand curve given by Q = 100 - 2P. The monopolist's marginal revenue (MR) function is given by MR = 200 - 2Q. What is the monopolist's optimal price?

A. ₦50

Correct B. ₦75

C. ₦100

D. ₦125

Correct Answer: B

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Question 23

A country's balance of payments (BOP) is in equilibrium when the current account (CA) is equal to the capital account (KA). If the country's CA is ₦100 billion and its KA is ₦50 billion, what is the country's net foreign exchange earnings?

Correct A. ₦50 billion

B. ₦75 billion

C. ₦100 billion

D. ₦125 billion

Correct Answer: A

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Question 24

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's labor (L) increases by 20% and its capital (K) remains cons\tant, what is the percentage change in output (Q)?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 25

A country's agricultural sector is characterized by a high degree of market failure. Which of the following policies would be most effective in addres\sing this market failure?

A. Price support

Correct B. Input subsidies

C. Output subsidies

D. Export incentives

Correct Answer: B

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