POST UTME SUMMIT UNIVERSITY 2021 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
The Nigerian government has implemented a policy to increase agricultural production by providing subsidies to farmers. However, the policy has led to an increase in the price of agricultural inputs. U\sing the concept of opportunity \cost, explain why the policy may not be effective in increa\sing agricultural production.
A. The policy has increased the opportunity \cost of farming, making it less attractive to farmers.
B. The policy has decreased the opportunity \cost of farming, making it more attractive to farmers.
C. The policy has no effect on the opportunity \cost of farming.
D. The policy has increased the opportunity \cost of farming, but it has also increased the revenue of farmers.
Question 2
A firm's production function is given by ( f(x,y) = 2x^2 + 3y^2 ). If the marginal product of x is 4x and the marginal product of y is 6y, what is the rate of change of the production function with respect to y when x = 2 and y = 3?
A. 18
B. 36
C. 54
D. 72
Question 3
A country's government imposes a tax on a particular good, cau\sing the supply curve to shift to the left. What is the effect on the equilibrium price and quantity?
A. Price increases, quantity decreases
B. Price decreases, quantity increases
C. Price increases, quantity increases
D. Price decreases, quantity decreases
Question 4
Consider a production function ( f(x,y) = 2x^2 + 3y^2 ). If the marginal product of x is 4x and the marginal product of y is 6y, what is the rate of change of the production function with respect to x when x = 2 and y = 3?
A. 8
B. 16
C. 32
D. 64
Question 5
A bank has a reserve requirement of 10% and a cash reserve ratio of 20%. If the bank has ₦100,000 in cash reserves, how much can it l\end to its customers?
A. ₦80,000
B. ₦90,000
C. ₦100,000
D. ₦110,000
Question 6
A monopolist faces a downward-sloping demand curve. If the monopolist's marginal revenue curve is below the demand curve, what is the effect of an increase in the demand for the product on the monopolist's output?
A. The monopolist's output increases.
B. The monopolist's output decreases.
C. The monopolist's output remains the same.
D. The monopolist's output increases, but only if the demand increase is large.
Question 7
A government uses a quota to limit the quantity of a good that can be imported. If the quota is binding, what is the effect of an increase in the world price of the good on the domestic price?
A. The domestic price increases.
B. The domestic price decreases.
C. The domestic price remains the same.
D. The domestic price increases, but only if the quota is small.
Question 8
A firm's production function is given by ( f(x) = 3x^2 - 2x + 1 ). If the marginal product of x is 6x - 2, what is the rate of change of the production function with respect to x when x = 1?
A. 4
B. 6
C. 8
D. 10
Question 9
The Nigerian government has implemented a policy to reduce inflation by reducing the money supply. U\sing the concept of the money multiplier, explain why the policy may not be effective in reducing inflation.
A. The policy will reduce the money supply, which will reduce the price level.
B. The policy will increase the money supply, which will reduce the price level.
C. The policy will have no effect on the money supply.
D. The policy will increase the money supply, which will increase the price level.
Question 10
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 elasticity of demand is 0.5, what is the price at which the quantity demanded is 50?
A. ₦20
B. ₦30
C. ₦40
D. ₦50
Question 11
The following table shows the demand and supply of a product. What is the equilibrium price?
A. ₦10
B. ₦20
C. ₦30
D. ₦40
Question 12
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 relationship between the market price and the marginal \cost of each firm?
A. The market price is equal to the marginal \cost of each firm.
B. The market price is greater than the marginal \cost of each firm.
C. The market price is less than the marginal \cost of each firm.
D. The market price is unrelated to the marginal \cost of each firm.
Question 13
A monopolist faces a demand curve given by Q = 100 - 2P and a \cost function C(Q) = 2Q^2 + 10Q. What is the profit-maximizing price and quantity?
A. \( P = 30, Q = 35 \)
B. \( P = 25, Q = 40 \)
C. \( P = 20, Q = 45 \)
D. \( P = 15, Q = 50 \)
Question 14
Consider a firm that produces a \single good, X, with a production function of X = 2L + 3K. The firm's objective is to minimize \costs, which are given by C = 10L + 20K. Assuming that the firm has a budget constraint of 1000, which is given by 2L + 3K = 1000, find the optimal values of L and K that minimize \costs.
A. L = 100, K = 200
B. L = 200, K = 100
C. L = 150, K = 150
D. L = 250, K = 50
Question 15
A firm's demand function is given by Q = 100 - 2P. If the firm's marginal revenue function is MR = 200 - 2Q, what is the firm's profit-maximizing price and quantity?
A. \( P = 30, Q = 35 \)
B. \( P = 25, Q = 40 \)
C. \( P = 20, Q = 45 \)
D. \( P = 15, Q = 50 \)

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