POST UTME SKYLINE UNIVERSITY 2021 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 2021 Economics (Objective) questions designed to simulate the real exam environment.

Practice these randomly selected questions to test your readiness.

Question 1
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. (200, 100)
B. (150, 200)
C. (100, 150)
D. (50, 50)

Correct Answer: A

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Question 2
The demand function for a product is given by \( Q_d = 100 - 2P \). If the supply function is \( Q_s = 2P - 20 \), find the equilibrium price and quantity.
Correct A. P = 30, Q = 40
B. P = 40, Q = 30
C. P = 50, Q = 20
D. P = 20, Q = 50

Correct Answer: A

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Question 3
A firm produces a product u\sing two inputs, labor and capital. The production function is given by \( Q = 2L^0.5K^0.5 \). If the firm's budget constraint is \( 2L + 3K = 100 \), find the optimal levels of labor and capital.
Correct A. L = 20, K = 30
B. L = 30, K = 20
C. L = 40, K = 15
D. L = 15, K = 40

Correct Answer: A

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Question 4
A monopolist faces a demand curve given by \( P = 100 - Q \). If the firm's marginal \cost is \( MC = 20 + 2Q \), find the monopolist's profit-maximizing output and price.
Correct A. Q = 20, P = 60
B. Q = 30, P = 50
C. Q = 40, P = 40
D. Q = 50, P = 30

Correct Answer: A

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Question 5
A firm is considering investing in a new project with a net present value (NPV) of ₦100,000. If the firm's \cost of capital is 10%, find the project's internal rate of return (IRR).
Correct A. 15%
B. 12%
C. 18%
D. 20%

Correct Answer: A

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Question 6
A country's government imposes a tax on imports to raise revenue. The tax is levied at a rate of 10% on all imported goods. If the value of imports is ₦1,000,000, what is the amount of tax collected?
A. ₦100,000
Correct B. ₦110,000
C. ₦120,000
D. ₦130,000

Correct Answer: B

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Question 7
A firm faces a demand curve given by Q = 100 - 2P. If the firm's marginal \cost is MC = 20, what is the optimal price to charge?
A. ₦20
B. ₦30
Correct C. ₦40
D. ₦50

Correct Answer: C

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Question 8
A consumer has a budget of ₦1,000 and faces a price of ₦200 for a good. If the consumer's indifference curves are given by U = 2x + 3y, where x is the quantity of the good consumed and y is the quantity of a substitute good consumed, what is the optimal quantity of the good to consume?
A. 2
Correct B. 3
C. 4
D. 5

Correct Answer: B

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Question 9
A firm produces a good u\sing two inputs, labor and capital. The production function is given by Q = 2L^0.5K^0.5, where Q is the quantity of output, L is the quantity of labor, and K is the quantity of capital. If the firm's \cost function is given by C = 100L + 200K, what is the optimal input mix?
A. L = 4, K = 1
Correct B. L = 2, K = 2
C. L = 1, K = 4
D. L = 0, K = 0

Correct Answer: B

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Question 10
A country's government imposes a tariff on imports to protect domestic industries. The tariff is levied at a rate of 20% on all imported goods. If the value of imports is ₦1,000,000, what is the amount of tariff revenue collected?
A. ₦200,000
Correct B. ₦220,000
C. ₦240,000
D. ₦260,000

Correct Answer: B

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Question 11
Consider a firm operating in a perfectly competitive market with a cons\tant returns to scale production function. If the firm's revenue function is given by R(x) = 100x - 2x^2 and the price of the good is P = 10, calculate the firm's marginal revenue (MR) and marginal \cost (MC) at the profit-maximizing output level.
A. \( MR = 100 - 4x \)
Correct B. \( MR = 100 - 2x \)
C. \( MC = 100 - 4x \)
D. \( MC = 100 - 2x \)

Correct Answer: B

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Question 12
Agricultural development in Nigeria has been hindered by the lack of access to credit for small-scale farmers. Which of the following government policies would most likely address this issue?
Correct A. Establishment of a state-owned bank to provide credit to small-scale farmers
B. Introduction of a cash transfer program to support small-scale farmers
C. Implementation of a value chain approach to agricultural development
D. Creation of a rural development agency to provide training and technical assis\tance to small-scale farmers

Correct Answer: A

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Question 13
A firm's total \cost function is given by TC(x) = 100 + 2x^2. If the firm's output level is 10 units, calculate the firm's average \cost (AC) and marginal \cost (MC).
Correct A. \( AC = 120 \)
B. \( AC = 140 \)
C. \( MC = 4x \)
D. \( MC = 2x \)

Correct Answer: A

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Question 14
The Nigerian government has implemented a policy to increase the production of rice through the use of irrigation. Which of the following is a potential benefit of this policy?
A. Increased employment opportunities in the agricultural sector
Correct B. Improved food security through increased rice production
C. Increased government revenue through taxes on rice sales
D. Reduced poverty rates among rural communities

Correct Answer: B

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Question 15
A firm's revenue function is given by R(x) = 100x - 2x^2. If the firm's output level is 5 units, calculate the firm's total revenue (TR) and marginal revenue (MR).
Correct A. \( TR = 200 \)
B. \( TR = 250 \)
C. \( MR = 100 - 4x \)
D. \( MR = 100 - 2x \)

Correct Answer: A

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Question 16
Suppose 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 supply of the product is given by the equation Qs = 2P - 100, where Qs is the quantity supplied, find the equilibrium price and quantity.
A. ₦200
B. ₦150
Correct C. ₦100
D. ₦50

Correct Answer: C

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Question 17
A country's balance of payments is given by the equation BOP = X - M, where X is the value of exports and M is the value of imports. If the value of exports is ₦500 billion and the value of imports is ₦600 billion, find the balance of payments.
A. ₦100 billion surplus
Correct B. ₦100 billion deficit
C. ₦500 billion surplus
D. ₦500 billion deficit

Correct Answer: B

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Question 18
A firm's production function is given by the equation Q = 2L^0.5K^0.5, where Q is the quantity produced, L is the number of labor hours, and K is the amount of capital. If the firm has 100 labor hours and ₦1000 capital, find the quantity produced.
A. 10 units
B. 20 units
Correct C. 30 units
D. 40 units

Correct Answer: C

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Question 19
A consumer's indifference curve 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 has a budget of ₦100 and the prices of the two goods are ₦10 and ₦20 respectively, find the quantities of the two goods that maximize the utility.
A. X = 5, Y = 3
B. X = 3, Y = 5
Correct C. X = 4, Y = 4
D. X = 2, Y = 6

Correct Answer: C

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Question 20
A firm's \cost function is given by the equation C = 2L + 3K, where C is the \cost, L is the number of labor hours, and K is the amount of capital. If the firm has 50 labor hours and ₦500 capital, find the \cost.
A. ₦250
B. ₦300
Correct C. ₦350
D. ₦400

Correct Answer: C

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Question 21
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. What is the implication of this condition for a country with an elasticity of demand for imports of 0.8 and an elasticity of demand for exports of 1.2?
A. The country's balance of payments will worsen.
Correct B. The country's balance of payments will improve.
C. The country's balance of payments will remain unchanged.
D. The country's balance of payments will worsen if the elasticity of demand for imports increases.

Correct Answer: B

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Question 22
A monopolistically competitive firm faces a demand curve with elasticity of -2. If the firm increases its price by 10%, what is the percentage change in quantity demanded?
Correct A. -20%
B. -10%
C. -5%
D. -15%

Correct Answer: A

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Question 23
A country's government imposes a tax on imports of 10%. If the pre-tax price of the good is ₦100, what is the new price of the good after the tax is imposed?
A. ₦110
Correct B. ₦120
C. ₦130
D. ₦140

Correct Answer: B

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Question 24
A firm's production function is given by Q = 100L^0.5K^0.5. If the firm increases its labor input by 20% and its capital input by 15%, what is the percentage change in output?
A. 10%
B. 15%
Correct C. 20%
D. 25%

Correct Answer: C

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Question 25
A country's GDP is ₦1 trillion. If the country's government imposes a tax of 10% on GDP, what is the new GDP after the tax is imposed?
A. ₦1.1 trillion
Correct B. ₦1.05 trillion
C. ₦1.1 trillion
D. ₦1.05 trillion

Correct Answer: B

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