Practice Post UTME SKYLINE UNIVERSITY economics 2018 Past Questions

Question 1

The Marshall-Lerner condition states that a country will experience an improvement in its balance of payments if the sum of the percentage changes in the prices of its exports and imports exceeds a certain threshold. What is the name of the economist who first proposed this condition?

A. Alvin Hansen

B. Charles Kindleberger

C. Charles P. Kindleberger

Correct D. Alfred Marshall

Correct Answer: D

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Question 2

A consumer's indifference curve is represented by the equation ( u(x,y) = 2x + 3y ). If the consumer's income is ₦1000 and the prices of x and y are ₦5 and ₦10 respectively, what is the consumer's optimal bundle?

Correct A. (100, 50)

B. (50, 100)

C. (200, 0)

D. (0, 200)

Correct Answer: A

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Question 3

A firm is producing a good u\sing a production function \( Q = 2L^2 + 3K \). If the price of labor is ₦10 per unit and the price of capital is ₦20 per unit, and the firm's revenue is ₦1000, what is the firm's optimal input bundle?

Correct A. (10, 5)

B. (5, 10)

C. (20, 0)

D. (0, 20)

Correct Answer: A

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Question 4

A country's demand for a good is represented by the equation \( Q = 100 - 2P \). If the price of the good is ₦50, what is the quantity demanded?

Correct A. 50

B. 100

C. 150

D. 200

Correct Answer: A

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Question 5

A firm is producing a good u\sing a production function \( Q = 2L^2 + 3K \). If the price of labor is ₦10 per unit and the price of capital is ₦20 per unit, and the firm's revenue is ₦1000, what is the firm's optimal input bundle?

Correct A. (10, 5)

B. (5, 10)

C. (20, 0)

D. (0, 20)

Correct Answer: A

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Question 6

A consumer's indifference curve is represented by the equation u(x, y) = 2x + 3y. If the consumer's income is ₦1000 and the prices of x and y are ₦5 and ₦3 respectively, find the consumer's optimal bundle of x and y.

Correct A. x = 60, y = 80

B. x = 80, y = 60

C. x = 100, y = 50

D. x = 50, y = 100

Correct Answer: A

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Question 7

A firm's \cost function is given by C(q) = 2q^2 + 10q + 5. Find the firm's average \cost (AC) and marginal \cost (MC) when q = 10.

Correct A. AC = 25, MC = 30

B. AC = 30, MC = 25

C. AC = 20, MC = 20

D. AC = 15, MC = 15

Correct Answer: A

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Question 8

Agricultural development in Nigeria has been hindered by the lack of irrigation facilities. If the government decides to invest in irrigation facilities, which of the following would be the most likely outcome?

Correct A. Increased crop yields and improved food security

B. Reduced crop yields and decreased food security

C. No change in crop yields and food security

D. Increased crop yields but decreased food security

Correct Answer: A

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Question 9

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 is ₦20, find the quantity demanded.

Correct A. Qd = 80

B. Qd = 60

C. Qd = 40

D. Qd = 20

Correct Answer: A

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Question 10

A firm's revenue function is given by R(q) = 3q^2 - 2q + 1. Find the firm's marginal revenue (MR) when q = 5.

Correct A. MR = 15

B. MR = 20

C. MR = 25

D. MR = 30

Correct Answer: A

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Question 11

Consider a perfectly competitive market with n firms, each producing a homogeneous product. If the market demand curve is downward sloping and the firms are price takers, what is the equilibrium price and quantity of the product?

A. \( P = 10, Q = 100 \)

B. \( P = 20, Q = 50 \)

Correct C. \( P = 15, Q = 75 \)

D. \( P = 25, Q = 40 \)

Correct Answer: C

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Question 12

A firm's \cost function is given by (C(q) = 10q + 100). If the firm's revenue function is (R(q) = 20q), what is the profit-maximizing quantity of the product?

A. \( q = 5 \)

Correct B. \( q = 10 \)

C. \( q = 15 \)

D. \( q = 20 \)

Correct Answer: B

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Question 13

A consumer's utility function is given by (U(x, y) = 2x + 3y). If the consumer's budget constraint is \( 2x + 3y = 100 \), what is the consumer's optimal bundle of x and y?

A. \( x = 20, y = 30 \)

B. \( x = 30, y = 20 \)

Correct C. \( x = 25, y = 25 \)

D. \( x = 35, y = 15 \)

Correct Answer: C

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Question 14

A monopolist's demand curve is given by \( p = 100 - 2q \). If the firm's marginal \cost function is (MC(q) = 10), what is the monopolist's profit-maximizing quantity?

A. \( q = 20 \)

B. \( q = 30 \)

Correct C. \( q = 25 \)

D. \( q = 35 \)

Correct Answer: C

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Question 15

A central bank implements a monetary policy by increa\sing the reserve requirement for commercial banks. What is the effect of this policy on the money supply?

A. Increases the money supply

Correct B. Decreases the money supply

C. Has no effect on the money supply

D. Increases the interest rate

Correct Answer: B

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Question 16

Consider a perfectly competitive market with n firms, each producing a homogeneous product. If the market demand curve is given by Qd = 100 - 2P, and the marginal \cost (MC) of each firm is cons\tant at ₦10, what is the equilibrium price and quantity?

A. ₦50, 50 units

Correct B. ₦40, 60 units

C. ₦30, 70 units

D. ₦20, 80 units

Correct Answer: B

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Question 17

A monopolist faces a demand curve given by Qd = 100 - 2P. If the marginal revenue (MR) is given by MR = 200 - 2Q, what is the profit-maximizing quantity and price?

A. 50 units, ₦40

Correct B. 60 units, ₦30

C. 70 units, ₦20

D. 80 units, ₦10

Correct Answer: B

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Question 18

Consider a firm operating in a perfectly competitive market. If the market demand curve is given by Qd = 100 - 2P, and the marginal revenue (MR) is given by MR = 200 - 2Q, what is the relationship between the marginal revenue product (MRP) and the marginal product (MP)?

A. MRP = MP

Correct B. MRP > MP

C. MRP < MP

D. MRP = -MP

Correct Answer: B

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Question 19

A consumer's utility function is given by U = 2x + 3y, where x and y are the quantities of two goods consumed. If the budget constraint is given by 2x + 3y = ₦100, and the consumer's income is ₦120, what is the optimal bundle of goods?

A. x = 20, y = 10

Correct B. x = 15, y = 15

C. x = 10, y = 20

D. x = 5, y = 25

Correct Answer: B

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Question 20

A firm's \cost function is given by C = 2x + 3x^2, where x is the quantity of output produced. If the selling price is ₦10 per unit, and the firm produces 10 units, what is the profit?

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 21

A firm's revenue function is given by R(x) = 2x^2 + 5x + 1, where x is the number of units produced. If the firm's marginal revenue function is MR(x) = 4x + 5, find the value of x that maximizes revenue.

A. 1

Correct B. 2

C. 3

D. 4

Correct Answer: B

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Question 22

A consumer's utility function is given by U(x,y) = 2x + 3y, where x is the number of units of good X and y is the number of units of good Y. If the consumer's budget constraint is 2x + 3y = 12, find the optimal values of x and y.

A. x = 2, y = 4

Correct B. x = 3, y = 3

C. x = 4, y = 2

D. x = 5, y = 1

Correct Answer: B

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Question 23

A firm's \cost function is given by C(x) = 2x^2 + 5x + 1, where x is the number of units produced. If the firm's revenue function is R(x) = 4x^2 + 5x + 1, find the value of x that minimizes \cost.

Correct A. 1

B. 2

C. 3

D. 4

Correct Answer: A

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Question 24

A consumer's budget constraint is given by 2x + 3y = 12, where x is the number of units of good X and y is the number of units of good Y. If the consumer's utility function is U(x,y) = 2x + 3y, find the optimal values of x and y.

A. x = 2, y = 4

Correct B. x = 3, y = 3

C. x = 4, y = 2

D. x = 5, y = 1

Correct Answer: B

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Question 25

A firm's revenue function is given by R(x) = 2x^2 + 5x + 1, where x is the number of units produced. If the firm's marginal revenue function is MR(x) = 4x + 5, find the value of x that maximizes revenue.

A. 1

Correct B. 2

C. 3

D. 4

Correct Answer: B

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