POST UTME SKYLINE UNIVERSITY 2020 Economics | Objective

Are you preparing for POST UTME SKYLINE UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2020 Economics (Objective) questions designed to simulate the real exam environment.

Practice these randomly selected questions to test your readiness.

Question 1
A monopolist faces a market demand curve given by Q = 100 - 2P and a marginal revenue function MR = 200 - 2Q. Find the profit-maximizing price and quantity.
A. ₦150, 50
Correct B. ₦200, 75
C. ₦250, 100
D. ₦300, 125

Correct Answer: B

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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 inputs are L = 16 and K = 9, calculate the marginal product of labor.
A. 1.5
Correct B. 2.5
C. 3.5
D. 4.5

Correct Answer: B

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Question 3
A consumer's utility function is given by U = 2x + 3y. If the consumer's budget constraint is 2x + 3y = 12, find the consumer's optimal bundle of x and y.
Correct A. x = 2, y = 4
B. x = 4, y = 2
C. x = 6, y = 0
D. x = 0, y = 6

Correct Answer: A

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Question 4
A firm's \cost function is given by C = 2L + 3K. If the firm's current inputs are L = 4 and K = 6, calculate the marginal \cost of labor.
A. 2
Correct B. 3
C. 4
D. 5

Correct Answer: B

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Question 5
A consumer's indifference curve is given by U = 2x + 3y. If the consumer's budget constraint is 2x + 3y = 12, find the consumer's optimal bundle of x and y.
Correct A. x = 2, y = 4
B. x = 4, y = 2
C. x = 6, y = 0
D. x = 0, y = 6

Correct Answer: A

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Question 6
A firm's production function is given by Q = 2L^0.5K^0.5, where Q is output, L is labor, and K is capital. If the firm's labor and capital inputs are increased by 20% and 15% respectively, what is the percentage change in output?
A. 10%
Correct B. 12%
C. 15%
D. 18%

Correct Answer: B

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Question 7
A country's GDP is $100 billion, its imports are $20 billion, and its exports are $25 billion. What is its balance of payments?
Correct A. $5 billion surplus
B. $5 billion deficit
C. $10 billion surplus
D. $10 billion deficit

Correct Answer: A

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Question 8
A firm's demand function is given by Q = 100 - 2P, where Q is quantity demanded and P is price. If the price is increased by 10%, what is the new quantity demanded?
A. 90
Correct B. 95
C. 100
D. 105

Correct Answer: B

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Question 9
A country's GNP is $120 billion, its GDP is $100 billion, and its net factor income from abroad is $10 billion. What is its national income?
A. $130 billion
B. $140 billion
Correct C. $150 billion
D. $160 billion

Correct Answer: C

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Question 10
A firm's production function is given by Q = 3L^0.5K^0.5, where Q is output, L is labor, and K is capital. If the firm's labor and capital inputs are increased by 15% and 20% respectively, what is the percentage change in output?
A. 12%
B. 15%
Correct C. 18%
D. 20%

Correct Answer: C

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Question 11
The concept of opportunity \cost is closely related to the law of increa\sing opportunity \cost. Explain how the law of increa\sing opportunity \cost affects the production of a good.
A. The law of increa\sing opportunity \cost leads to a decrease in the production of a good.
Correct B. The law of increa\sing opportunity \cost leads to an increase in the production of a good.
C. The law of increa\sing opportunity \cost has no effect on the production of a good.
D. The law of increa\sing opportunity \cost leads to a shift in the production possibility frontier.

Correct Answer: B

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Question 12
A firm is producing a good with the following production function: Q = 2L + 3K. If the price of labor is $10 per hour and the price of capital is $20 per hour, what is the opportunity \cost of producing one more unit of the good?
A. $5
Correct B. $10
C. $15
D. $20

Correct Answer: B

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Question 13
The demand for a good is given by the equation: Qd = 100 - 2P. If the price of the good is $20, what is the quantity demanded?
Correct A. 40
B. 50
C. 60
D. 70

Correct Answer: A

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Question 14
A country is experiencing a trade deficit of $100 million. If the country's GDP is $500 billion, what is the trade deficit as a percentage of GDP?
A. 0.02%
Correct B. 0.05%
C. 0.1%
D. 0.2%

Correct Answer: B

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Question 15
A central bank is u\sing the money supply multiplier to increase the money supply in an economy. If the reserve requirement is 20% and the money multiplier is 5, what is the increase in the money supply?
A. 25%
Correct B. 50%
C. 75%
D. 100%

Correct Answer: B

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Question 16
U\sing the Marshall-Lerner condition, determine the effect of a 10% devaluation of the naira on the balance of payments of Nigeria, assuming the price elasticity of demand for exports is 2 and the price elasticity of demand for imports is 1.5.
A. The devaluation will lead to a surplus in the balance of payments.
Correct B. The devaluation will lead to a deficit in the balance of payments.
C. The devaluation will have no effect on the balance of payments.
D. The devaluation will lead to a surplus in the current account and a deficit in the capital account.

Correct Answer: B

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Question 17
A firm is considering investing in a new project with the following cash flows: Year 0: -₦100,000, Year 1: ₦50,000, Year 2: ₦70,000, Year 3: ₦90,000. U\sing the net present value (NPV) method, determine the minimum discount rate at which the project will be acceptable, assuming a discount rate of 10%.
A. 10%
B. 12%
Correct C. 15%
D. 18%

Correct Answer: C

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Question 18
U\sing the Cobb-Douglas production function, determine the marginal product of labor (MPL) and the marginal product of capital (MPK) for a firm with the following production function: Q = 10L^0.5K^0.5, where Q is output, L is labor, and K is capital.
Correct A. MPL = 5L^\( -0.5 \)K^0.5, MPK = 5L^0.5K^\( -0.5 \)
B. MPL = 10L^\( -0.5 \)K^0.5, MPK = 10L^0.5K^\( -0.5 \)
C. MPL = 20L^\( -0.5 \)K^0.5, MPK = 20L^0.5K^\( -0.5 \)
D. MPL = 30L^\( -0.5 \)K^0.5, MPK = 30L^0.5K^\( -0.5 \)

Correct Answer: A

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Question 19
A firm is considering investing in a new project with the following cash flows: Year 0: -₦100,000, Year 1: ₦50,000, Year 2: ₦70,000, Year 3: ₦90,000. U\sing the internal rate of return (IRR) method, determine the IRR of the project.
A. 10%
B. 12%
Correct C. 15%
D. 18%

Correct Answer: C

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Question 20
U\sing the concept of opportunity \cost, explain why a country may choose to import a good that it could produce domestically.
A. Because the opportunity \cost of producing the good domestically is higher than the opportunity \cost of importing it.
Correct B. Because the opportunity \cost of importing the good is lower than the opportunity \cost of producing it domestically.
C. Because the opportunity \cost of producing the good domestically is lower than the opportunity \cost of importing it.
D. Because the opportunity \cost of importing the good is higher than the opportunity \cost of producing it domestically.

Correct Answer: B

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Question 21
A firm's production function is given by Q = 2L^0.5H^0.5. If the firm's current output is 16 units and the number of workers (L) is 4, find the number of machines (H) required.
A. 4
B. 9
Correct C. 16
D. 25

Correct Answer: C

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Question 22
A consumer's utility function is given by U = 2x + 3y. If the consumer's income is ₦1200 and the prices of x and y are ₦4 and ₦6 respectively, find the optimal quantities of x and y.
Correct A. x = 60, y = 40
B. x = 40, y = 60
C. x = 30, y = 50
D. x = 50, y = 30

Correct Answer: A

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Question 23
A firm is operating under perfect competition. If the market price is ₦100 and the firm's marginal \cost is ₦80, find the firm's profit-maximizing output.
Correct A. 100 units
B. 200 units
C. 300 units
D. 400 units

Correct Answer: A

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Question 24
A consumer's budget constraint is given by 2x + 3y = 12. If the consumer's utility function is U = x + 2y, find the consumer's optimal quantities of x and y.
Correct A. x = 2, y = 4
B. x = 4, y = 2
C. x = 3, y = 3
D. x = 1, y = 5

Correct Answer: A

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Question 25
A firm's production function is given by Q = 2L^0.5H^0.5. If the firm's current output is 16 units and the number of workers (L) is 4, find the number of machines (H) required.
A. 4
B. 9
Correct C. 16
D. 25

Correct Answer: C

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