POST UTME VERITAS UNIVERSITY 2025 Economics | Objective

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Question 1
A country's economic growth is often measured by its GDP. However, GDP has some limitations. What is one of the main criticisms of GDP as a measure of economic growth?
A. GDP does not account for income inequality.
B. GDP does not account for the environmental impact of economic activity.
C. GDP does not account for the quality of goods and services produced.
D. GDP does not account for the distribution of income among different sectors of the economy.
Question 2
A firm's marginal revenue (MR) curve is typically downward-sloping. What is the main reason for this?
A. The firm's total revenue (TR) is decrea\sing at an increa\sing rate.
B. The firm's TR is increa\sing at a decrea\sing rate.
C. The firm's TR is cons\tant.
D. The firm's TR is decrea\sing at a decrea\sing rate.
Question 3
A consumer has a utility function U = 2X + 3Y. If the price of good X increases by 10% and the price of good Y increases by 15%, what is the new budget constraint?
A. 10X + 15Y = 100
B. 10X + 15Y = 120
C. 10X + 15Y = 150
D. 10X + 15Y = 180
Question 4
A consumer has a utility function U = 2X + 3Y. If the price of good X increases by 10% and the price of good Y increases by 15%, what is the new budget constraint?
A. 10X + 15Y = 100
B. 10X + 15Y = 120
C. 10X + 15Y = 150
D. 10X + 15Y = 180
Question 5
A firm's production function is given by \( Q = 2L^2 + 3K^2 \). If the firm's output is 100 units and the wage rate is ₦10 per unit of labor, find the optimal level of labor.
A. L = 5 units
B. L = 10 units
C. L = 15 units
D. L = 20 units
Question 6
Consider a firm operating in a perfectly competitive market with a production function given by Q = 2L^0.5K^0.5. If the firm's current input prices are w = ₦100 and r = ₦50, and it currently uses 10 units of labor and 5 units of capital, calculate the firm's current total \cost.
A. ₦2500
B. ₦3000
C. ₦3500
D. ₦4000
Question 7
Suppose a country's GDP is 100 billion naira, and its GNP is 120 billion naira. What is the country's net factor income from abroad?
A. 20 billion naira
B. 30 billion naira
C. 40 billion naira
D. 50 billion naira
Question 8
A firm is producing a good with a production function Q = 2L^0.5K^0.5. If the price of labor increases by 20% and the price of capital increases by 15%, what is the new production level?
A. 10
B. 12
C. 15
D. 18
Question 9
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%?
A. 5%
B. 10%
C. 15%
D. 20%
Question 10
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 4x + 5y = ₦100, and the prices of the two goods are ₦20 and ₦25 respectively, find the consumer's optimal consumption bundle.
A. x = 5, y = 2
B. x = 3, y = 4
C. x = 2, y = 5
D. x = 4, y = 3
Question 11
A monopolist faces a demand curve given by Q = 100 - 2P and a \cost function C(Q) = 2Q^2 + 10Q. Find the profit-maximizing price and quantity.
A. P = ₦20, Q = 40
B. P = ₦30, Q = 60
C. P = ₦40, Q = 80
D. P = ₦50, Q = 100
Question 12
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's output is currently 16 units and the quantity of labor is 4 units, what is the quantity of capital required?
A. 4 units
B. 8 units
C. 16 units
D. 32 units
Question 13
A firm operating in a perfectly competitive market is characterized by which of the following?
A. Monopolistic competition
B. Perfect competition
C. Oligopoly
D. Monopoly
Question 14
A country's balance of payments account is given by the following equations: \text{CA} = 100 - 20P, \text{FA} = 50 + 10P, \text{SA} = 20 - 5P. If the country's exchange rate is ₦5 per dollar, find the country's current account balance when the price level is ₦100.
A. ₦500
B. ₦600
C. ₦700
D. ₦800
Question 15
Consider a country's balance of payments account. If the country's current account surplus is 10 billion naira, and its capital account deficit is 5 billion naira, what is the country's overall balance of payments position?
A. 5 billion naira deficit
B. 5 billion naira surplus
C. 10 billion naira surplus
D. 10 billion naira deficit

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