Practice Post UTME UNIOSUN economics 2021 Past Questions

Question 1

A consumer's indifference curve is downward sloping and convex to the origin. What is the implication of this shape for the consumer's marginal rate of substitution (MRS)?

A. The MRS is cons\tant

Correct B. The MRS is decrea\sing

C. The MRS is increa\sing

D. The MRS is zero

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. ₦400

C. ₦500

D. ₦600

Correct Answer: A

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Question 3

A country's balance of payments is in equilibrium when its current account is equal to its capital account. What is the implication of this equilibrium for the country's exchange rate?

A. The exchange rate will appreciate

B. The exchange rate will depreciate

Correct C. The exchange rate will remain cons\tant

D. The exchange rate will fluctuate

Correct Answer: C

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Question 4

A consumer's budget constraint is given by the equation 2x + 3y = 12. What is the consumer's opportunity \cost of purcha\sing one more unit of good x?

A. 2

Correct B. 3

C. 4

D. 5

Correct Answer: B

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Question 5

A firm is producing a good with a marginal \cost (MC) of ₦10 and a marginal revenue (MR) of ₦15. What is the firm's profit-maximizing quantity?

A. 100 units

Correct B. 150 units

C. 200 units

D. 250 units

Correct Answer: B

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Question 6

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, find the price at which the quantity demanded is 60 units.

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 7

A firm's production function is given by Q = 2L^0.5K^0.5, where Q is the output, L is the labor and K is the capital. If the firm uses 100 units of labor and 400 units of capital, find the output.

A. 200

B. 400

Correct C. 600

D. 800

Correct Answer: C

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Question 8

The government of a country imposes a tax on a product, which increases the price of the product by 20%. If the demand for the product is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price, find the new demand equation.

A. Qd = 80 - 2P

Correct B. Qd = 100 - 4P

C. Qd = 120 - 2P

D. Qd = 100 - 6P

Correct Answer: B

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Question 9

A country's balance of payments is given by the equation BOP = X - M, where BOP is the balance of payments, X is the exports and M is the imports. If the country's exports are ₦100 billion and its imports are ₦120 billion, find the balance of payments.

A. ₦20 billion

B. ₦40 billion

C. ₦60 billion

Correct D. ₦80 billion

Correct Answer: D

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Question 10

A firm's \cost function is given by C = 2L + 3K, where C is the \cost, L is the labor and K is the capital. If the firm uses 100 units of labor and 400 units of capital, find the \cost.

A. ₦200

B. ₦400

Correct C. ₦600

D. ₦800

Correct Answer: C

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Question 11

The Marshall-Lerner condition states that if the sum of the elasticities of demand for imports and exports is greater than 1, then a devaluation of the currency will lead to an improvement in the balance of payments. Which of the following scenarios would lead to a violation of the Marshall-Lerner condition?

A. A decrease in the price of imports and an increase in the price of exports

B. An increase in the price of imports and a decrease in the price of exports

C. A decrease in the price of imports and a decrease in the price of exports

Correct D. An increase in the price of imports and an increase in the price of exports

Correct Answer: D

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Question 12

A firm is considering two different production processes to produce a certain good. Process A has a fixed \cost of ₦100,000 and a variable \cost of ₦50 per unit. Process B has a fixed \cost of ₦150,000 and a variable \cost of ₦30 per unit. If the selling price of the good is ₦70 per unit, which process should the firm choose to maximize its profit?

Correct A. Process A

B. Process B

C. Both processes are equally profitable

D. Neither process is profitable

Correct Answer: A

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Question 13

The government of a country is considering a policy to increase the production of a certain good. The good is produced u\sing a production function Q = 2L^0.5K^0.5, where Q is the quantity produced, L is the labor input, and K is the capital input. If the government wants to increase the production of the good by 20%, what should be the percentage increase in the labor input?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 14

A country's GDP is ₦1,000,000,000, its imports are ₦200,000,000, and its exports are ₦300,000,000. What is the country's balance of trade?

Correct A. ₦100,000,000 surplus

B. ₦100,000,000 deficit

C. ₦200,000,000 surplus

D. ₦200,000,000 deficit

Correct Answer: A

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Question 15

A firm's demand function is given by Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the firm wants to maximize its revenue, what should be the price of the good?

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 16

The Marshall-Lerner condition states that a country will experience an improvement in its balance of payments if the sum of the elasticities of demand for imports and exports exceeds 1. What is the implication of this condition for a country with an inelastic demand for imports and exports?

Correct A. The country will experience a deterioration in its balance of payments.

B. The country will experience no change in its balance of payments.

C. The country will experience an improvement in its balance of payments.

D. The country will experience a worsening of its trade deficit.

Correct Answer: A

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Question 17

A country's GDP is calculated as the sum of the value of all final goods and services produced within its borders. What is the difference between GDP and GNP?

A. GDP includes income earned by foreign residents, while GNP excludes income earned by domestic residents.

Correct B. GDP excludes income earned by foreign residents, while GNP includes income earned by domestic residents.

C. GDP includes income earned by domestic residents, while GNP excludes income earned by foreign residents.

D. GDP excludes income earned by domestic residents, while GNP includes income earned by foreign residents.

Correct Answer: B

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Question 18

The agricultural sector in Nigeria is characterized by low productivity and limited mechanization. What is the likely impact of this on the country's economic growth?

A. The agricultural sector will experience rapid growth, leading to increased economic growth.

Correct B. The agricultural sector will experience slow growth, leading to decreased economic growth.

C. The agricultural sector will experience no change in growth, leading to stable economic growth.

D. The agricultural sector will experience rapid growth, leading to decreased economic growth.

Correct Answer: B

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Question 19

A firm's demand curve is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. What is the elasticity of demand at a price of ₦50?

A. The demand is elastic.

Correct B. The demand is inelastic.

C. The demand is unit elastic.

D. The demand is perfectly elastic.

Correct Answer: B

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Question 20

A consumer's utility function is given by the equation U = 2x + 3y, where x and y are the quantities of two goods consumed. What is the marginal utility of good x?

Correct A. MUx = 2.

B. MUx = 3.

C. MUx = 4.

D. MUx = 5.

Correct Answer: A

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Question 21

A firm's average \cost curve is U-shaped. If the firm is currently operating at a point on the curve where the marginal \cost (MC) is equal to the average \cost (AC), what can be concluded about the firm's production level?

A. The firm is producing at its minimum efficient scale.

B. The firm is producing at its maximum efficient scale.

C. The firm is producing at a point where the law of diminishing marginal returns is applicable.

Correct D. The firm is producing at a point where the law of increa\sing marginal returns is applicable.

Correct Answer: D

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Question 22

A consumer's indifference curve is given by the equation u(x, y) = 2x + 3y. If the consumer's income is ₦1000 and the prices of x and y are ₦5 and ₦3 respectively, what is the consumer's optimal bundle?

Correct A. x = 40, y = 20

B. x = 30, y = 30

C. x = 20, y = 40

D. x = 10, y = 50

Correct Answer: A

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Question 23

A firm's demand curve is given by the equation Qd = 100 - 2P. If the firm's supply curve is given by the equation Qs = 2P - 10, what is the equilibrium price and quantity?

Correct A. P = 20, Q = 30

B. P = 30, Q = 20

C. P = 40, Q = 10

D. P = 50, Q = 0

Correct Answer: A

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Question 24

A consumer's utility function is given by the equation u(x, y) = x^2 + 2y. If the consumer's income is ₦1000 and the prices of x and y are ₦5 and ₦3 respectively, what is the consumer's optimal bundle?

A. x = 20, y = 30

Correct B. x = 30, y = 20

C. x = 40, y = 10

D. x = 50, y = 0

Correct Answer: B

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Question 25

A firm's production function is given by the equation Q = 2L^2 + 3K. If the firm's \cost function is given by the equation C = 2L + 3K, what is the firm's minimum \cost?

A. ₦100

Correct B. ₦200

C. ₦300

D. ₦400

Correct Answer: B

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