POST UTME UI 2020 Economics | Objective

Are you preparing for POST UTME UI 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.

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Question 1
A firm's \cost function is given by ( C(x) = 2x^2 + 5x + 3 ). Find the marginal \cost function.
Correct A. ( C'(x) = 4x + 5 \)
B. ( C'(x) = 2x + 3 \)
C. ( C'(x) = x^2 + 5 \)
D. ( C'(x) = 2x^2 + 5 \)

Correct Answer: A

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Question 2
A consumer's utility function is given by ( U(x,y) = 2x + 3y ). Find the marginal utility of good x.
Correct A. \( MU_x = 2 \ \)
B. \( MU_x = 3 \ \)
C. \( MU_x = 4 \ \)
D. \( MU_x = 5 \ \)

Correct Answer: A

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Question 3
A firm's revenue function is given by ( R(x) = 10x - 2x^2 ). Find the marginal revenue function.
Correct A. \( MR = 10 - 4x \ \)
B. \( MR = 10 + 4x \ \)
C. \( MR = 2x - 10 \ \)
D. \( MR = 2x + 10 \ \)

Correct Answer: A

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Question 4
A country's GDP is given by \( GDP = 100 + 0.2Y \), where Y is the country's GNP. Find the marginal propensity to consume.
Correct A. \( MPC = 0.2 \ \)
B. \( MPC = 0.1 \ \)
C. \( MPC = 0.3 \ \)
D. \( MPC = 0.4 \ \)

Correct Answer: A

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Question 5
A firm's production function is given by \( Q = 2L^2 + 3K \), where L is labor and K is capital. Find the marginal product of labor.
A. \( MPL = 4L \ \)
Correct B. \( MPL = 2L \ \)
C. \( MPL = 3L \ \)
D. \( MPL = 5L \ \)

Correct Answer: B

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Question 6
A firm operating in a perfectly competitive market is faced with a downward-sloping demand curve. If the firm increases its output, what will happen to its average revenue?
A. Increase
B. Decrease
Correct C. Remain the same
D. Become indeterminate

Correct Answer: C

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Question 7
A country's balance of payments account shows a trade deficit of ₦100 billion. If the country's exchange rate is ₦200 per US dollar, what is the equivalent trade deficit in US dollars?
A. ₦500 billion
Correct B. ₦200 billion
C. ₦50 billion
D. ₦10 billion

Correct Answer: B

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Question 8
A firm is considering investing in a new project with the following cash flows: Year 1: ₦100 million, Year 2: ₦120 million, Year 3: ₦150 million. What is the present value of the project u\sing a discount rate of 10%?
A. ₦200 million
Correct B. ₦250 million
C. ₦300 million
D. ₦350 million

Correct Answer: B

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Question 9
A country's agricultural sector is characterized by a high degree of market power, leading to a market structure that is best described as?
A. Perfect competition
Correct B. Monopoly
C. Oligopoly
D. Monopolistic competition

Correct Answer: B

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Question 10
A firm is producing a good with the following production function: Q = 2L^0.5K^0.5. If the firm increases its labor input from 100 units to 120 units, what is the percentage change in output?
A. 10%
Correct B. 20%
C. 30%
D. 40%

Correct Answer: B

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Question 11
Consider a firm operating in a perfectly competitive market. If the firm's marginal revenue (MR) curve intersects its marginal \cost (MC) curve at point E, where MR = MC = 10, and the firm's average total \cost (ATC) curve is downward sloping, what is the firm's optimal output level?
A. 10 units
Correct B. 20 units
C. 30 units
D. 40 units

Correct Answer: B

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Question 12
A country's balance of payments (BOP) accounts can be classified into three main categories: current account, capital account, and financial account. Which of the following is NOT a component of the current account?
A. Exports
B. Imports
Correct C. Foreign Direct Investment (FDI)
D. Remit\tances

Correct Answer: C

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Question 13
A government is considering implementing a new tax policy to reduce income inequality. The policy involves increa\sing the tax rate on high-income earners and reducing the tax rate on low-income earners. What is the likely effect of this policy on the government's revenue?
Correct A. Increase in revenue
B. Decrease in revenue
C. No change in revenue
D. Uncertain effect on revenue

Correct Answer: A

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Question 14
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 firm's supply curve is given by the equation Qs = 2P - 10, where Qs is the quantity supplied, what is the equilibrium price?
A. ₦5
Correct B. ₦10
C. ₦15
D. ₦20

Correct Answer: B

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Question 15
A country's GDP can be calculated u\sing the exp\enditure approach, which includes consumption, investment, government sp\ending, and net exports. If the country's GDP is ₦100 billion, and the government sp\ending is ₦20 billion, what is the value of net exports?
A. ₦10 billion
B. ₦15 billion
C. ₦20 billion
Correct D. ₦25 billion

Correct Answer: D

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Question 16
The opportunity \cost of producing one more unit of a good is measured by the
Correct A. marginal \cost
B. marginal revenue
C. average \cost
D. average revenue

Correct Answer: A

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Question 17
A country's GDP is $100 billion, and its GNP is $120 billion. What is the value of net factor income from abroad?
A. $20 billion
Correct B. $30 billion
C. $40 billion
D. $50 billion

Correct Answer: B

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Question 18
A firm's total revenue is given by the equation TR = 100x - 2x^2, where x is the number of units sold. What is the marginal revenue when x = 10?
A. $80
B. $90
Correct C. $100
D. $110

Correct Answer: C

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Question 19
A government imposes a tax on a firm's output. The firm's supply curve shifts to the left, and the new supply curve is given by the equation S = 100 - 2x. What is the price elasticity of supply at x = 20?
A. 0.5
B. 1
Correct C. 2
D. 3

Correct Answer: C

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Question 20
A country's agricultural sector accounts for 20% of its GDP. If the country's GDP grows at a rate of 5% per annum, what is the growth rate of the agricultural sector?
Correct A. 4%
B. 5%
C. 6%
D. 7%

Correct Answer: A

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Question 21
A country's balance of payments is in equilibrium when the value of its imports equals the value of its exports. However, if the country experiences a trade deficit, it must either reduce its imports or increase its exports to achieve equilibrium. Which of the following policies would be most effective in reducing the trade deficit?
A. Reducing government sp\ending
B. Increa\sing taxes on imports
Correct C. Implementing a currency devaluation
D. Increa\sing government subsidies for exports

Correct Answer: C

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Question 22
A monopolistically competitive firm faces a downward-sloping demand curve due to product differentiation. If the firm increases its price, what will happen to its revenue?
A. Increase in revenue
Correct B. Decrease in revenue
C. No change in revenue
D. Uncertain effect on revenue

Correct Answer: B

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Question 23
A government budget is said to be in surplus when its total revenue exceeds its total exp\enditure. If the government increases its tax rate, what will happen to its budget balance?
Correct A. Increase in budget surplus
B. Decrease in budget deficit
C. No change in budget balance
D. Uncertain effect on budget balance

Correct Answer: A

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Question 24
A firm's \cost function is given by ( C(q) = 10q + 20 ). If the firm produces 5 units of output, what will be its total \cost?
A. ₦50
Correct B. ₦60
C. ₦70
D. ₦80

Correct Answer: B

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Question 25
A country's economic growth rate is measured by the rate of change of its real GDP. If the country's real GDP grows at a rate of 4% per annum, what will be the rate of change of its nominal GDP?
A. 4%
Correct B. 8%
C. 12%
D. 16%

Correct Answer: B

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