POST UTME UI 2021 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A monopolistically competitive firm faces a downward-sloping demand curve. Which of the following is a characteristic of this market structure?
A. Barriers to entry are high
B. Barriers to entry are low
C. Firms produce differentiated products
D. Firms produce homogeneous products
Question 2
A monopolist faces a demand curve given by Q = 100 - 2P and a \cost function C(Q) = 2Q^2 + 10Q. Find the profit-maximizing price and quantity.
A. P = 50, Q = 25
B. P = 75, Q = 25
C. P = 50, Q = 50
D. P = 75, Q = 50
Question 3
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: ₦30,000. U\sing the net present value (NPV) method, calculate the minimum required rate of return (MRR) for the project.
A. 10%
B. 12%
C. 15%
D. 18%
Question 4
A perfectly competitive firm's supply curve is upward-sloping because of the law of increa\sing \costs. Which of the following is NOT a reason for the law of increa\sing \costs?
A. Decrease in the firm's production level
B. Increase in the firm's fixed \costs
C. Increase in the firm's variable \costs
D. Increase in the firm's output level
Question 5
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 -2, what is the percentage change in quantity demanded when the price increases by 10%?
A. 20%
B. 15%
C. 10%
D. 5%
Question 6
A consumer's utility function is given by U = 2x + 3y, where x and y are the quantities of two goods consumed. If the consumer's budget constraint is 10x + 5y = 50, what is the consumer's optimal bundle of goods?
A. x = 2, y = 5
B. x = 3, y = 4
C. x = 4, y = 3
D. x = 5, y = 2
Question 7
A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \), where Q is output, L is labor, and K is capital. If the firm's current labor and capital inputs are 16 and 9 respectively, what is the marginal product of labor?
A. 1
B. 2
C. 3
D. 4
Question 8
U\sing the Marshall-Lerner condition, determine whether Nigeria's balance of payments will improve if the country's export price increases by 10% and import price decreases by 5%.
A. The balance of payments will improve.
B. The balance of payments will worsen.
C. The balance of payments will remain unchanged.
D. Insufficient information to determine the outcome.
Question 9
A central bank uses the following monetary policy rule: i = 2 + 0.5\( P - 2 \) - 0.1\( Y - 100 \). If the inflation rate is 3% and the output gap is 5%, what is the nominal interest rate?
A. 6%
B. 8%
C. 10%
D. 12%
Question 10
A monopolist's marginal revenue curve is downward-sloping because of the law of diminishing returns. Which of the following is NOT a reason for the law of diminishing returns?
A. Increase in the firm's fixed \costs
B. Increase in the firm's variable \costs
C. Increase in the firm's output level
D. Decrease in the firm's output level
Question 11
A consumer has a budget of ₦1000 and faces the following prices: x = ₦5, y = ₦3. The consumer's indifference curve is represented by the equation ( u(x,y) = 2x + 3y ). What is the consumer's optimal bundle?
A. x = 60, y = 40
B. x = 40, y = 60
C. x = 50, y = 50
D. x = 70, y = 30
Question 12
A central bank can use monetary policy to stabilize the economy. Which of the following is a tool of monetary policy?
A. Fiscal policy
B. Monetary policy
C. Supply-side policy
D. Demand-side policy
Question 13
A country's balance of payments (BOP) account is in deficit, with a trade deficit of ₦100 billion and a capital account surplus of ₦50 billion. U\sing the BOP identity, calculate the current account deficit.
A. ₦50 billion
B. ₦75 billion
C. ₦100 billion
D. ₦125 billion
Question 14
A government imposes a tax on a firm's output. The firm's supply curve shifts to the left. What is the effect of this tax on the firm's profit-maximizing quantity?
A. The firm's profit-maximizing quantity increases
B. The firm's profit-maximizing quantity decreases
C. The firm's profit-maximizing quantity remains the same
D. The firm's profit-maximizing quantity increases and then decreases
Question 15
Agricultural development in Nigeria has been hindered by the lack of access to credit by small-scale farmers. What is the opportunity \cost of providing credit to these farmers?
A. The opportunity \cost of providing credit to these farmers is the forgone interest income
B. The opportunity \cost of providing credit to these farmers is the forgone output
C. The opportunity \cost of providing credit to these farmers is the forgone employment
D. The opportunity \cost of providing credit to these farmers is the forgone investment

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