Practice Post UTME UNILAG economics 2022 Past Questions

Question 1

Consider a firm operating 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 will exit the market.

Correct Answer: A

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Question 2

A country's balance of payments (BOP) accounts can be affected by a change in the exchange rate. If the exchange rate appreciates, what will be the effect on the country's net exports?

A. Net exports will increase.

Correct B. Net exports will decrease.

C. Net exports will remain unchanged.

D. The effect on net exports will be ambiguous.

Correct Answer: B

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Question 3

A firm is considering investing in a new project with the following cash flows: Year 0: -₦10,000, Year 1: ₦5,000, Year 2: ₦10,000, Year 3: ₦15,000. What is the net present value (NPV) of the project if the discount rate is 10%?

A. ₦5,000

Correct B. ₦10,000

C. ₦15,000

D. ₦20,000

Correct Answer: B

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Question 4

A country is experiencing a trade deficit due to a decrease in exports and an increase in imports. What is the likely effect on the country's currency?

A. The currency will appreciate.

Correct B. The currency will depreciate.

C. The currency will remain unchanged.

D. The effect on the currency will be ambiguous.

Correct Answer: B

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Question 5

A firm is producing a good with the following production function: Q = 2L^0.5K^0.5. If the firm's labor and capital inputs are increased by 10%, what will be the effect on output?

A. Output will increase by 10%.

Correct B. Output will increase by 20%.

C. Output will increase by 30%.

D. Output will remain unchanged.

Correct Answer: B

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Question 6

A firm's production function is given by Q = 2L^0.5H^0.5. If the price of labor (L) is ₦100 per unit and the price of capital (H) is ₦200 per unit, calculate the total \cost of producing 4 units of output.

A. ₦400

Correct B. ₦800

C. ₦1200

D. ₦1600

Correct Answer: B

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Question 7

A government budget is given by the equation B = T + I + G, where B is the budget, T is tax revenue, I is interest payments, and G is government sp\ending. If the government budget is ₦1.5 trillion, tax revenue is ₦500 billion, interest payments are ₦200 billion, and government sp\ending is ₦800 billion, calculate the value of B.

Correct A. ₦1.5 trillion

B. ₦1.7 trillion

C. ₦1.9 trillion

D. ₦2.1 trillion

Correct Answer: A

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Question 8

A central bank uses the money supply equation M = kPY to determine the money supply. If the price level (P) is 2, income (Y) is ₦1 trillion, and the velocity of money (k) is 0.8, calculate the money supply.

A. ₦800 billion

Correct B. ₦1 trillion

C. ₦1.2 trillion

D. ₦1.6 trillion

Correct Answer: B

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Question 9

A firm faces a demand curve given by Q = 100 - 2P. If the price of the good is ₦50, calculate the quantity demanded.

A. 50 units

Correct B. 75 units

C. 100 units

D. 125 units

Correct Answer: B

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Question 10

A consumer has a budget constraint given by the equation I = 100 - 2C, where I is income and C is consumption. If the consumer's income is ₦150, calculate the maximum amount the consumer can sp\end on consumption.

A. ₦50

B. ₦75

C. ₦100

Correct D. ₦125

Correct Answer: D

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Question 11

A consumer's indifference curve is downward sloping and convex to the origin. What is the implication of this shape on the consumer's willingness to trade off one good for another?

A. The consumer is willing to trade off one good for another at an increa\sing rate.

Correct B. The consumer is willing to trade off one good for another at a decrea\sing rate.

C. The consumer is indifferent to trading off one good for another.

D. The consumer is unwilling to trade off one good for another.

Correct Answer: B

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Question 12

A firm's supply curve is upward sloping. What is the implication of this shape on the firm's behavior in the market?

A. The firm is a price taker and has no control over the market price.

Correct B. The firm is a price maker and has control over the market price.

C. The firm is a monopolist and has a downward sloping demand curve.

D. The firm is a perfect competitor and has a horizontal supply curve.

Correct Answer: B

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Question 13

A country's balance of payments is in surplus. What is the implication of this on the country's exchange rate?

Correct A. The exchange rate will appreciate.

B. The exchange rate will depreciate.

C. The exchange rate will remain unchanged.

D. The exchange rate will fluctuate.

Correct Answer: A

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Question 14

A farmer's production function is given by Q = 100L^0.5K^0.5. What is the marginal product of labor (MPL) when L = 100 and K = 100?

A. 5

Correct B. 10

C. 20

D. 50

Correct Answer: B

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Question 15

A country's agricultural sector is characterized by a downward sloping supply curve. What is the implication of this on the country's agricultural production?

A. The country's agricultural production will increase.

Correct B. The country's agricultural production will decrease.

C. The country's agricultural production will remain unchanged.

D. The country's agricultural production will fluctuate.

Correct Answer: B

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Question 16

Determine the elasticity of demand for a commodity whose price elasticity of demand is 0.8 and whose income elasticity of demand is 0.5. Assume that the income effect is indep\endent of the price effect.

A. 0.5

B. 0.8

Correct C. 1.2

D. 1.5

Correct Answer: C

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Question 17

A firm's production function is given by Q = 100K^$ 1/2 $L^$ 1/2 $, where Q is output, K is capital, and L is labor. If the price of capital is 10 and the price of labor is 5, and if the firm's budget constraint is 100K + 50L = 1000, determine the optimal values of K and L.

A. K = 10, L = 10

B. K = 20, L = 5

C. K = 5, L = 20

Correct D. K = 15, L = 15

Correct Answer: D

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Question 18

A country's GDP at market price is 100 billion naira. The government imposes a 10% sales tax on all goods and services. Determine the country's GDP at factor \cost.

A. 90 billion naira

Correct B. 95 billion naira

C. 100 billion naira

D. 105 billion naira

Correct Answer: B

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Question 19

A firm's demand function is given by Q = 100 - 2P, where Q is quantity demanded and P is price. If the firm's marginal revenue function is MR = 200 - 4Q, determine the firm's optimal price and quantity.

A. P = 20, Q = 40

Correct B. P = 30, Q = 50

C. P = 40, Q = 60

D. P = 50, Q = 70

Correct Answer: B

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Question 20

A country's GNP at market price is 120 billion naira. The government imposes a 5% tax on all imports. Determine the country's GNP at factor \cost.

A. 115 billion naira

B. 116 billion naira

Correct C. 117 billion naira

D. 118 billion naira

Correct Answer: C

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Question 21

A perfectly competitive market has a demand curve that is downward-sloping and a supply curve that is upward-sloping. What is the equilibrium price and quantity in this market?

A. The equilibrium price is P1 and the equilibrium quantity is Q1.

Correct B. The equilibrium price is P2 and the equilibrium quantity is Q2.

C. The equilibrium price is P3 and the equilibrium quantity is Q3.

D. The equilibrium price is P4 and the equilibrium quantity is Q4.

Correct Answer: B

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Question 22

A monopolist faces a demand curve with the following equation: Qd = 100 - 2P. The monopolist's marginal \cost curve is given by MC = 10 + 2Q. What is the monopolist's profit-maximizing price and quantity?

Correct A. The profit-maximizing price is $20 and the profit-maximizing quantity is 40 units.

B. The profit-maximizing price is $30 and the profit-maximizing quantity is 60 units.

C. The profit-maximizing price is $40 and the profit-maximizing quantity is 80 units.

D. The profit-maximizing price is $50 and the profit-maximizing quantity is 100 units.

Correct Answer: A

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Question 23

A country's GDP is $100 billion, its imports are $20 billion, and its exports are $30 billion. What is its balance of trade?

A. The balance of trade is a surplus of $10 billion.

Correct B. The balance of trade is a deficit of $10 billion.

C. The balance of trade is a surplus of $20 billion.

D. The balance of trade is a deficit of $20 billion.

Correct Answer: B

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Question 24

A firm's production function is given by Q = 2L^0.5K^0.5. The firm's \cost function is given by C = 10L + 20K. What is the firm's profit-maximizing level of labor and capital?

Correct A. The profit-maximizing level of labor is 100 units and the profit-maximizing level of capital is 100 units.

B. The profit-maximizing level of labor is 200 units and the profit-maximizing level of capital is 200 units.

C. The profit-maximizing level of labor is 300 units and the profit-maximizing level of capital is 300 units.

D. The profit-maximizing level of labor is 400 units and the profit-maximizing level of capital is 400 units.

Correct Answer: A

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Question 25

A country's GNP is $150 billion, its GDP is $120 billion, and its net factor income from abroad is $10 billion. What is its national income?

Correct A. The national income is $160 billion.

B. The national income is $170 billion.

C. The national income is $180 billion.

D. The national income is $190 billion.

Correct Answer: A

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