Practice Post UTME UNILAG economics 2020 Past Questions

Question 1

Consider a perfectly competitive market with many firms producing a homogeneous product. If the market price falls, what will happen to the quantity supplied?

A. The quantity supplied will decrease

Correct B. The quantity supplied will increase

C. The quantity supplied will remain unchanged

D. The quantity supplied will fluctuate

Correct Answer: B

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Question 2

A firm is producing a good with a total revenue of ₦1,500 and a total \cost of ₦1,200. What is the firm's profit?

Correct A. ₦300

B. ₦200

C. ₦100

D. ₦50

Correct Answer: A

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Question 3

A country's GDP is ₦10 trillion, and its GNP is ₦12 trillion. What is the country's net factor income from abroad?

Correct A. ₦2 trillion

B. ₦1.5 trillion

C. ₦1 trillion

D. ₦500 billion

Correct Answer: A

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Question 4

A monopolistically competitive firm faces a demand curve with a price elasticity of -2. What is the firm's optimal price?

A. ₦100

Correct B. ₦120

C. ₦150

D. ₦180

Correct Answer: B

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Question 5

A firm is producing a good with a marginal revenue of ₦50 and a marginal \cost of ₦30. What is the firm's profit-maximizing output?

A. 10 units

Correct B. 20 units

C. 30 units

D. 40 units

Correct Answer: B

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Question 6

Consider a firm that operates in a perfectly competitive market with a downward-sloping demand curve. If the firm's marginal revenue (MR) is greater than its marginal \cost (MC), what will be the effect on the firm's output?

Correct A. The firm will increase its output.

B. The firm will decrease its output.

C. The firm's output will remain unchanged.

D. The firm's output will increase, but at a decrea\sing rate.

Correct Answer: A

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Question 7

A country's GDP is calculated as the sum of all final goods and services produced within its borders. If a foreign company produces a good in a host country and sells it to a local consumer, how will this transaction affect the host country's GDP?

Correct A. The transaction will increase the host country's GDP.

B. The transaction will decrease the host country's GDP.

C. The transaction will have no effect on the host country's GDP.

D. The transaction will increase the host country's GDP, but only if the foreign company is a subsidiary of a local firm.

Correct Answer: A

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Question 8

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 increases its labor input from 4 to 9 units and holds capital cons\tant at 16 units, what will be the percentage change in output?

A. The output will increase by 25%.

Correct B. The output will increase by 50%.

C. The output will increase by 100%.

D. The output will decrease by 25%.

Correct Answer: B

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Question 9

A country's balance of payments (BOP) accounts record all transactions between its residents and non-residents. If a country's residents purchase foreign currency to pay for imports, what will be the effect on the country's BOP?

A. The country's BOP will improve.

Correct B. The country's BOP will worsen.

C. The country's BOP will remain unchanged.

D. The country's BOP will improve, but only if the country's exports increase by a greater amount.

Correct Answer: B

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Question 10

A government imposes a tax on a firm's output. If the firm's supply curve is perfectly elastic, what will be the effect on the firm's output?

A. The firm's output will increase.

Correct B. The firm's output will decrease.

C. The firm's output will remain unchanged.

D. The firm's output will increase, but at a decrea\sing rate.

Correct Answer: B

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Question 11

Consider a country that imports 60% of its coffee and exports 40% of its coffee. If the price of coffee in the international market increases by 15%, and the country's terms of trade improve, what is the impact on the country's balance of payments?

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 due to the increase in coffee prices.

Correct Answer: B

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Question 12

A firm's demand for a product is given by the equation Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the price of the product increases by 20%, what is the new quantity demanded?

A. 60

Correct B. 80

C. 100

D. 120

Correct Answer: B

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Question 13

A central bank uses the money multiplier to increase the money supply in an economy. If the reserve requirement is 20% and the money multiplier is 5, what is the new money supply?

A. ₦1000

Correct B. ₦5000

C. ₦10000

D. ₦50000

Correct Answer: B

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Question 14

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 income is ₦100 and the prices of the two goods are ₦5 and ₦10 respectively, what is the consumer's optimal bundle?

Correct A. x = 10, y = 5

B. x = 5, y = 10

C. x = 15, y = 3

D. x = 3, y = 15

Correct Answer: A

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Question 15

A firm's \cost function is given by C = 100 + 2Q, where C is the total \cost and Q is the quantity produced. If the firm produces 50 units, what is the total \cost?

A. ₦150

B. ₦250

Correct C. ₦350

D. ₦450

Correct Answer: C

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Question 16

Consider a firm operating in a perfectly competitive market with a given production function Q = 2L^0.5K^0.5. If the price of the good is $10 and the wage rate is $5 per unit of labor, what is the optimal level of labor to employ?

A. 10 units

Correct B. 20 units

C. 30 units

D. 40 units

Correct Answer: B

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Question 17

A government imposes a tax of $10 on a firm's output. If the firm's supply curve is given by Q = 100 - 2P and the demand curve is given by Q = 200 - 5P, what is the new equilibrium price and quantity?

A. Price: $20, Quantity: 50

Correct B. Price: $30, Quantity: 70

C. Price: $40, Quantity: 90

D. Price: $50, Quantity: 110

Correct Answer: B

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Question 18

A country's GDP is $100 billion, its GNP is $120 billion, and its national income is $150 billion. What is the country's net factor income from abroad?

A. $10 billion

B. $20 billion

Correct C. $30 billion

D. $40 billion

Correct Answer: C

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Question 19

A firm's production function is given by Q = 2L^0.5K^0.5. If the price of the good is $10 and the wage rate is $5 per unit of labor, what is the optimal level of capital to employ?

Correct A. 10 units

B. 20 units

C. 30 units

D. 40 units

Correct Answer: A

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Question 20

A government imposes a tax of $10 on a firm's output. If the firm's supply curve is given by Q = 100 - 2P and the demand curve is given by Q = 200 - 5P, what is the new equilibrium price and quantity?

A. Price: $20, Quantity: 50

B. Price: $30, Quantity: 70

C. Price: $40, Quantity: 90

Correct D. Price: $50, Quantity: 110

Correct Answer: D

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Question 21

Consider a firm that operates under cons\tant returns to scale. If the firm's production function is given by Q = 2L^2 + 3K, where Q is output, L is labor, and K is capital, what is the marginal product of labor (MPL) when L = 4 and K = 5?

Correct A. 12

B. 16

C. 20

D. 24

Correct Answer: A

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Question 22

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 given by 2x + 3y = 12, and the price of good x is 2, what is the consumer's optimal bundle of goods?

A. x = 2, y = 4

Correct B. x = 4, y = 2

C. x = 6, y = 0

D. x = 0, y = 6

Correct Answer: B

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Question 23

A firm's production function is given by Q = 2L^2 + 3K, where Q is output, L is labor, and K is capital. If the firm's marginal product of labor (MPL) is given by MPL = 4L, what is the firm's average product of labor (APL) when L = 4 and K = 5?

A. 8

B. 12

Correct C. 16

D. 20

Correct Answer: C

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Question 24

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 given by 2x + 3y = 12, and the price of good x is 2, what is the consumer's optimal bundle of goods?

A. x = 2, y = 4

Correct B. x = 4, y = 2

C. x = 6, y = 0

D. x = 0, y = 6

Correct Answer: B

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Question 25

A firm's production function is given by Q = 2L^2 + 3K, where Q is output, L is labor, and K is capital. If the firm's marginal product of labor (MPL) is given by MPL = 4L, what is the firm's average product of labor (APL) when L = 4 and K = 5?

A. 8

B. 12

Correct C. 16

D. 20

Correct Answer: C

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