Practice Post UTME UNILORIN economics 2020 Past Questions

Question 1

Consider a perfectly competitive market with two firms, A and B. Firm A has a \cost function C_A(q) = 2q^2 + 10q + 5, while Firm B has a \cost function C_B(q) = 3q^2 + 8q + 2. If the market demand is given by P = 100 - 2q, and the firms produce identical products, what is the socially optimal quantity of output?

A. 20

B. 30

Correct C. 40

D. 50

Correct Answer: C

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Question 2

A monopolist faces a market demand curve given by P = 120 - 2q. The monopolist's marginal \cost function is MC(q) = 10 + 2q. What is the monopolist's profit-maximizing quantity of output?

A. 10

B. 20

Correct C. 30

D. 40

Correct Answer: C

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Question 3

Consider a firm that produces a \single good u\sing two inputs, labor (L) and capital (K). The production function is given by Q = 2L^0.4K^0.6. The prices of labor and capital are $10 per unit and $20 per unit, respectively. If the firm's objective is to maximize profits, what is the optimal mix of labor and capital?

A. L = 10, K = 5

B. L = 5, K = 10

Correct C. L = 10, K = 10

D. L = 5, K = 5

Correct Answer: C

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Question 4

A country's GDP is given by the equation Y = C + I + G + $ X - M $. If the country's consumption function is C = 500 + 0.8Y, the investment function is I = 200 + 0.2Y, the government sp\ending function is G = 1000, the export function is X = 1500 + 0.5Y, and the import function is M = 500 + 0.2Y, what is the country's GDP?

A. 5000

B. 6000

Correct C. 7000

D. 8000

Correct Answer: C

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Question 5

A firm's demand function is given by Q = 100 - 2P. The firm's supply function is given by Q = 20 + 3P. What is the equilibrium 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 6

A monopolist faces a demand curve given by Q = 100 - 2P and a \cost function C = 2Q^2 + 10Q. What is the profit-maximizing price and quantity?

A. P = 40, Q = 30

Correct B. P = 50, Q = 25

C. P = 60, Q = 20

D. P = 70, Q = 15

Correct Answer: B

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Question 7

A firm's production function is given by Q = 2L^0.5K^0.5. If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, what is the \cost-minimizing combination of labor and capital?

A. L = 4, K = 2

Correct B. L = 2, K = 4

C. L = 1, K = 8

D. L = 8, K = 1

Correct Answer: B

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Question 8

A government imposes a tax of ₦10 per unit on a firm's output. The firm's supply curve is given by Q = 100 - 2P. What is the new supply curve after the tax is imposed?

Correct A. Q = 100 - 2P - 10

B. Q = 100 - 2P + 10

C. Q = 100 - 2P - 20

D. Q = 100 - 2P + 20

Correct Answer: A

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Question 9

A firm's production function is given by Q = 2L^0.5K^0.5. If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, what is the \cost-minimizing combination of labor and capital?

A. L = 4, K = 2

Correct B. L = 2, K = 4

C. L = 1, K = 8

D. L = 8, K = 1

Correct Answer: B

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Question 10

A government imposes a tax of ₦10 per unit on a firm's output. The firm's supply curve is given by Q = 100 - 2P. What is the new supply curve after the tax is imposed?

Correct A. Q = 100 - 2P - 10

B. Q = 100 - 2P + 10

C. Q = 100 - 2P - 20

D. Q = 100 - 2P + 20

Correct Answer: A

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Question 11

A country's GDP is calculated as the sum of the value of all final goods and services produced within its borders. However, if a country imports a significant amount of goods and services, its GDP may not accurately reflect its s\tandard of living. Which of the following is a limitation of GDP as a measure of a country's s\tandard of living?

A. GDP does not account for income inequality.

B. GDP does not account for the value of unpaid household work.

Correct C. GDP does not account for the value of imports.

D. GDP does not account for the value of exports.

Correct Answer: C

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Question 12

A firm's demand curve is downward sloping, indicating that as the price of its product increases, the quantity demanded decreases. However, if the firm is a price taker in a perfectly competitive market, it will produce at the point where its marginal revenue equals its marginal \cost. What is the relationship between the firm's demand curve and its marginal revenue curve?

A. The demand curve is steeper than the marginal revenue curve.

Correct B. The demand curve is flatter than the marginal revenue curve.

C. The demand curve and marginal revenue curve are identical.

D. The demand curve and marginal revenue curve are perp\endicular.

Correct Answer: B

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Question 13

A consumer's indifference curve is a graphical representation of the various combinations of two goods that yield the same level of satisfaction. If the consumer's indifference curve is convex to the origin, what does this imply about the consumer's preferences?

A. The consumer prefers more of good X to good Y.

B. The consumer prefers more of good Y to good X.

Correct C. The consumer is indifferent between good X and good Y.

D. The consumer prefers a combination of both goods X and Y.

Correct Answer: C

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Question 14

A government's budget constraint is the maximum amount of goods and services it can purchase with its available resources. If the government's budget constraint is a horizontal line, what does this imply about the government's budget?

Correct A. The government has a fixed budget.

B. The government has a variable budget.

C. The government has a budget that is increa\sing over time.

D. The government has a budget that is decrea\sing over time.

Correct Answer: A

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Question 15

A country's balance of payments accounts record all its international transactions. If the country's current account is in deficit, what does this imply about the country's trade balance?

A. The country has a trade surplus.

Correct B. The country has a trade deficit.

C. The country has a balance of trade.

D. The country has a trade deficit that is financed by foreign investment.

Correct Answer: B

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Question 16

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 percentage change in quantity demanded when the price increases by 10%?

Correct A. 5%

B. 10%

C. 15%

D. 20%

Correct Answer: A

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Question 17

A firm's \cost function is given by C(x) = 100 + 2x + 0.01x^2. If the firm produces 100 units of output, what is the total \cost of production?

A. ₦1200

B. ₦1500

Correct C. ₦1800

D. ₦2000

Correct Answer: C

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Question 18

A country's GDP is given by the equation GDP = C + I + G + $ X - M $, where C is consumption, I is investment, G is government sp\ending, X is exports, and M is imports. If the country's GDP is ₦100 billion, and the values of C, I, G, X, and M are ₦50 billion, ₦20 billion, ₦10 billion, ₦30 billion, and ₦20 billion respectively, what is the value of the country's imports?

A. ₦10 billion

Correct B. ₦20 billion

C. ₦30 billion

D. ₦40 billion

Correct Answer: B

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Question 19

A government imposes a tax on a product, cau\sing the supply curve to shift from S1 to S2. If the initial equilibrium price and quantity are ₦10 and 100 units respectively, and the new equilibrium price and quantity are ₦15 and 50 units respectively, what is the amount of tax imposed?

A. ₦100

B. ₦200

Correct C. ₦300

D. ₦400

Correct Answer: C

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Question 20

A firm's revenue function is given by R(x) = 100x - 0.01x^2. If the firm produces 200 units of output, what is the total revenue?

A. ₦19000

B. ₦20000

Correct C. ₦21000

D. ₦22000

Correct Answer: C

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Question 21

The demand for a commodity 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. ₦50

B. ₦75

Correct C. ₦100

D. ₦125

Correct Answer: C

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Question 22

A firm's production function is given by Q = 2L + 3K, where Q is the output, L is the labor and K is the capital. If the firm has 10 units of labor and 5 units of capital, what is the output?

A. 20

Correct B. 25

C. 30

D. 35

Correct Answer: B

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Question 23

The government of a country imposes a tax on a commodity, which increases the price of the commodity by 20%. If the original price of the commodity was ₦100, what is the new price?

A. ₦120

Correct B. ₦125

C. ₦130

D. ₦135

Correct Answer: B

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Question 24

A consumer's budget constraint is given by the equation 2X + 3Y = 100, where X and Y are the quantities of two goods. If the consumer's income is ₦100 and the price of good X is ₦2, what is the quantity of good Y?

A. 10

B. 15

Correct C. 20

D. 25

Correct Answer: C

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Question 25

The central bank of a country increases the money supply by 10%. If the original money supply was ₦1000, what is the new money supply?

A. ₦1100

B. ₦1105

Correct C. ₦1110

D. ₦1115

Correct Answer: C

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