POST UTME WELLSPRING UNIVERSITY 2018 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
The production function for a firm is given by Q = 2L^0.5K^0.5, where Q is output, L is labor and K is capital. If the firm increases labor from 100 to 121 units and capital from 100 to 121 units, calculate the percentage change in output.
A. 10%
B. 20%
C. 30%
D. 40%
Question 2
A budget is a
A. statement of government revenue and exp\enditure
B. a plan for government revenue and exp\enditure
C. a statement of government exp\enditure only
D. a plan for government revenue only
Question 3
A government is considering a policy to reduce inflation by increa\sing the reserve requirement of commercial banks. If the current reserve requirement is 10% and the government wants to increase it by 5 percentage points, what will be the new reserve requirement?
A. 15%
B. 20%
C. 25%
D. 30%
Question 4
Consider a firm operating in a perfectly competitive market with a downward-sloping demand curve. If the firm's marginal revenue (MR) curve intersects its marginal \cost (MC) curve at point E, where MR = MC, and the price elasticity of demand is unit elastic at point E, what is the implication for the firm's profit-maximizing output?
A. The firm will produce at the point where MR = MC, and the price elasticity of demand is unit elastic.
B. The firm will produce at the point where MR = MC, but the price elasticity of demand is not unit elastic.
C. The firm will not produce at the point where MR = MC, and the price elasticity of demand is unit elastic.
D. The firm will not produce at the point where MR = MC, and the price elasticity of demand is not unit elastic.
Question 5
Consider a firm operating in a perfectly competitive market with a given production function Q = 2L^0.5K^0.5. If the firm's current input prices are w = ₦100 and r = ₦200, and it is currently producing 4 units of output, calculate the firm's current total \cost.
A. ₦800
B. ₦1200
C. ₦1600
D. ₦2000
Question 6
The money supply is the total amount of
A. currency in circulation
B. currency in banks
C. currency in circulation and in banks
D. currency in circulation and in foreign banks
Question 7
A firm is producing a good u\sing the production function Q = 2L^0.5K^0.5. If the firm is currently producing 100 units of output with 100 units of labor and 100 units of capital, calculate the total product and total \cost.
A. TP = 150, TC = 150
B. TP = 200, TC = 200
C. TP = 250, TC = 250
D. TP = 300, TC = 300
Question 8
A firm is considering investing in a new project with an initial \cost of ₦1,000,000 and expected annual profits of ₦200,000 for 5 years. If the firm's \cost of capital is 10%, calculate the net present value (NPV) of the project.
A. ₦500,000
B. ₦750,000
C. ₦1,000,000
D. ₦1,250,000
Question 9
A country's balance of payments (BOP) accounts are in equilibrium when the current account is equal to the capital account. If the country's current account is in deficit, what is the implication for the capital account?
A. The capital account will be in surplus.
B. The capital account will be in deficit.
C. The capital account will be in equilibrium.
D. The capital account will be in surplus, but the current account will be in equilibrium.
Question 10
The demand function for a good is given by P = 100 - 2Q, where P is price and Q is quantity demanded. If the supply function is given by P = 2Q + 10, calculate the equilibrium price and quantity.
A. P^* = 20, Q^* = 5
B. P^* = 25, Q^* = 7.5
C. P^* = 30, Q^* = 10
D. P^* = 35, Q^* = 12.5
Question 11
A firm is considering investing in a new project with an initial \cost of ₦500,000 and expected annual profits of ₦150,000 for 3 years. If the firm's \cost of capital is 12%, calculate the internal rate of return (IRR) of the project.
A. 15%
B. 18%
C. 20%
D. 22%
Question 12
A firm's demand curve is given by Qd = 100 - 2P, and its supply curve is given by Qs = 2P. If the firm's equilibrium price is $10, what is the firm's equilibrium quantity?
A. 20
B. 30
C. 40
D. 50
Question 13
A firm is producing a good u\sing the production function Q = 2L^0.5K^0.5. If the firm is currently producing 100 units of output with 100 units of labor and 100 units of capital, calculate the marginal product of labor and marginal product of capital.
A. MP_L = 0.5, MP_K = 0.5
B. MP_L = 1, MP_K = 1
C. MP_L = 0.25, MP_K = 0.25
D. MP_L = 0.5, MP_K = 0.25
Question 14
A firm's \cost function is given by C(q) = 2q^2 + 5q + 10. If the firm's revenue function is given by R(q) = 3q^2 + 2q + 5, what is the firm's profit function?
A. π(q) = q^2 - 3q + 5
B. π(q) = 2q^2 - 3q + 5
C. π(q) = q^2 + 2q + 5
D. π(q) = 2q^2 + 5q + 10
Question 15
The government of Nigeria is considering a policy to increase agricultural production. If the policy is expected to increase the supply of agricultural products by 10%, calculate the effect on the price of agricultural products.
A. \frac{\Delta P}{P} = -0.05
B. \frac{\Delta P}{P} = -0.1
C. \frac{\Delta P}{P} = -0.15
D. \frac{\Delta P}{P} = -0.2

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