Practice Post UTME UNN economics 2018 Past Questions

Question 1

Determine the equilibrium price and quantity of a perfectly competitive market when the demand function is given by Qd = 100 - 2P and the supply function is given by Qs = 2P - 10.

A. \( P = 20, Q = 60 \)

Correct B. \( P = 30, Q = 50 \)

C. \( P = 40, Q = 70 \)

D. \( P = 50, Q = 90 \)

Correct Answer: B

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Question 2

A firm operating in a perfectly competitive market has a \cost function given by C(Q) = 10 + 2Q. If the market price is P = 20, determine the firm's profit-maximizing output level.

A. \( Q = 5 \)

Correct B. \( Q = 10 \)

C. \( Q = 15 \)

D. \( Q = 20 \)

Correct Answer: B

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Question 3

A government is considering implementing a tax on a particular good. The demand function for the good is given by Qd = 100 - 2P and the supply function is given by Qs = 2P - 10. If the government wants to raise revenue of ₦1000, determine the optimal tax rate.

A. \( t = 10 \)

Correct B. \( t = 20 \)

C. \( t = 30 \)

D. \( t = 40 \)

Correct Answer: B

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Question 4

A firm is considering investing in a new project with a \cost of ₦5000 and a potential return of ₦6000. If the firm's \cost of capital is 10%, determine the net present value of the project.

A. \( NPV = ₦1000 \)

Correct B. \( NPV = ₦2000 \)

C. \( NPV = ₦3000 \)

D. \( NPV = ₦4000 \)

Correct Answer: B

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Question 5

A government is considering implementing a policy to reduce inflation. If the current inflation rate is 10% and the government wants to reduce it to 5% within 2 years, determine the required annual reduction in the money supply.

A. ( 5% )

Correct B. ( 10% )

C. ( 15% )

D. ( 20% )

Correct Answer: B

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Question 6

A firm's production function is given by Q = 2L^0.5H^0.5, where Q is the quantity produced, L is labor and H is capital. If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, and the firm's budget constraint is 2L + 3H = ₦1000, what is the firm's optimal production level?

A. 10 units

Correct B. 20 units

C. 30 units

D. 40 units

Correct Answer: B

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Question 7

A consumer's utility function is given by U = 2x + 3y, where x and y are the quantities of two goods consumed. If the prices of the two goods are ₦50 and ₦75 respectively, and the consumer's budget constraint is 2x + 3y = ₦150, what is the consumer's optimal consumption bundle?

A. x = 10, y = 5

Correct B. x = 15, y = 10

C. x = 20, y = 15

D. x = 25, y = 20

Correct Answer: B

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Question 8

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

A. ₦50

B. ₦75

Correct C. ₦100

D. ₦125

Correct Answer: C

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Question 9

A consumer's indifference curve is given by U = 2x + 3y, where x and y are the quantities of two goods consumed. If the prices of the two goods are ₦50 and ₦75 respectively, and the consumer's budget constraint is 2x + 3y = ₦150, what is the consumer's optimal consumption bundle?

A. x = 10, y = 5

Correct B. x = 15, y = 10

C. x = 20, y = 15

D. x = 25, y = 20

Correct Answer: B

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Question 10

A firm's production function is given by Q = 2L^0.5H^0.5, where Q is the quantity produced, L is labor and H is capital. If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, and the firm's budget constraint is 2L + 3H = ₦1000, what is the firm's optimal production level?

A. 10 units

Correct B. 20 units

C. 30 units

D. 40 units

Correct Answer: B

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Question 11

A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \), where L is labor and K is capital. If the firm hires 16 units of labor and 9 units of capital, what is the opportunity \cost of hiring one more unit of labor?

Correct A. ₦1250

B. ₦1500

C. ₦1750

D. ₦2000

Correct Answer: A

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Question 12

A monopolist faces a demand curve given by P = 100 - 2Q. The monopolist's marginal \cost curve is MC = 20. At what quantity will the monopolist produce?

A. 10

B. 20

Correct C. 30

D. 40

Correct Answer: C

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Question 13

A firm's total revenue is given by TR = 100Q - 2Q^2. If the firm produces 20 units, what is its total revenue?

A. ₦1200

Correct B. ₦1500

C. ₦1800

D. ₦2000

Correct Answer: B

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Question 14

A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \). If the firm hires 16 units of labor and 9 units of capital, what is the marginal product of labor?

A. 1/4

B. 1/2

Correct C. 3/4

D. 1

Correct Answer: C

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Question 15

A firm's total \cost is given by TC = 100 + 20Q + 2Q^2. If the firm produces 20 units, what is its total \cost?

A. ₦1200

B. ₦1500

Correct C. ₦1800

D. ₦2000

Correct Answer: C

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Question 16

A firm's average total \cost curve intersects its marginal \cost curve at point E, where MC = ATC. If the firm is currently producing at point D, where MC > ATC, what will be the effect on the firm's average total \cost?

A. The average total \cost will decrease.

Correct B. The average total \cost will increase.

C. The average total \cost will remain unchanged.

D. The average total \cost will first decrease and then increase.

Correct Answer: B

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Question 17

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

Correct A. ₦90 billion

B. ₦100 billion

C. ₦110 billion

D. ₦120 billion

Correct Answer: A

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Question 18

A monopolistically competitive firm faces a demand curve given by Q = 100 - 2P. The firm's marginal \cost curve is MC = 10. What is the firm's optimal price?

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 19

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's labor and capital inputs are increased by 10% and 20% respectively, what will be the effect on the firm's output?

A. Output will increase by 10%

B. Output will increase by 20%

Correct C. Output will increase by 30%

D. Output will remain unchanged

Correct Answer: C

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Question 20

A country's national income is calculated as the sum of all wages, rents, and profits earned by its citizens. If the country's GDP is ₦100 billion and the government's transfer payments are ₦10 billion, what will be the country's national income?

A. ₦90 billion

Correct B. ₦100 billion

C. ₦110 billion

D. ₦120 billion

Correct Answer: B

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Question 21

A monopolistically competitive firm faces a demand curve with a cons\tant elasticity of -2. If the firm's marginal revenue (MR) is 100, and its marginal \cost (MC) is 80, what is the firm's optimal quantity of output?

A. 50

B. 75

Correct C. 100

D. 125

Correct Answer: C

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Question 22

A firm is considering investing in a new project with the following cash flows: Year 1: -₦1000, Year 2: ₦500, Year 3: ₦1000, Year 4: ₦1500. What is the net present value (NPV) of the project if the discount rate is 10%?

Correct A. -₦200

B. ₦100

C. ₦500

D. ₦1000

Correct Answer: A

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Question 23

A consumer has the following utility function: U(x, y) = 2x + 3y. The prices of x and y are ₦5 and ₦10, respectively. What is the consumer's optimal bundle of x and y?

Correct A. (10, 5)

B. (5, 10)

C. (15, 3)

D. (20, 2)

Correct Answer: A

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Question 24

A firm is producing a good with the following production function: Q = 2L^2 + 3K. The firm's \cost function is C(L, K) = 2L + 3K. What is the firm's optimal input bundle of labor (L) and capital (K)?

A. (5, 10)

Correct B. (10, 5)

C. (15, 3)

D. (20, 2)

Correct Answer: B

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Question 25

A country's GDP is ₦100 billion. The government sp\ends ₦20 billion on goods and services. The country's imports are ₦15 billion. What is the country's national income?

A. ₦85 billion

Correct B. ₦90 billion

C. ₦95 billion

D. ₦100 billion

Correct Answer: B

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