POST UTME WELLSPRING UNIVERSITY 2022 Economics | Objective

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Question 1 View Details
A firm operating in a perfectly competitive market is characterized by which of the following?
A. A \single price setter
Correct B. A large number of firms producing a homogeneous product
C. A firm that can influence the market price
D. A firm that produces a differentiated product

Correct Answer: B

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Question 2 View Details
The opportunity \cost of producing one more unit of a good is the
Correct A. marginal \cost
B. marginal revenue
C. average \cost
D. average revenue

Correct Answer: A

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Question 3 View Details
A monopolist's marginal revenue curve lies below the
Correct A. demand curve
B. average revenue curve
C. marginal \cost curve
D. average \cost curve

Correct Answer: A

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Question 4 View Details
The money supply in an economy is influenced by the
Correct A. central bank
B. commercial banks
C. government
D. foreign investors

Correct Answer: A

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Question 5 View Details
The inflation rate is calculated as the percentage change in the
A. GDP deflator
Correct B. consumer price index
C. producer price index
D. average price level

Correct Answer: B

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Question 6 View Details
A government imposes a tax on imported goods to raise revenue. The tax is levied at a rate of 15% of the value of the good. If the value of the good is ₦10,000, what is the amount of tax paid?
A. ₦1,000
Correct B. ₦1,500
C. ₦2,000
D. ₦2,500

Correct Answer: B

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Question 7 View Details
A firm's \cost function is given by C(q) = 2q^2 + 5q + 10. If the firm produces 10 units of the good, what is the total \cost?
A. ₦150
B. ₦250
Correct C. ₦350
D. ₦450

Correct Answer: C

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Question 8 View Details
A consumer's utility function is given by U(x,y) = 2x + 3y. If the consumer has a budget constraint of 100 and the prices of x and y are 5 and 10 respectively, what is the optimal consumption bundle?
A. (10, 0)
Correct B. (5, 5)
C. (0, 10)
D. (15, 5)

Correct Answer: B

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Question 9 View Details
A country's balance of payments is given by the following equation: BOP = \( X - M \) + \( F - I \). If the country's exports are ₦100 billion, imports are ₦80 billion, foreign investment is ₦20 billion, and domestic investment is ₦30 billion, what is the balance of payments?
A. ₦10 billion
Correct B. ₦20 billion
C. ₦30 billion
D. ₦40 billion

Correct Answer: B

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Question 10 View Details
A firm's supply function is given by Q = 2P - 10. If the price of the good is ₦20, what is the quantity supplied?
A. 10 units
Correct B. 20 units
C. 30 units
D. 40 units

Correct Answer: B

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Question 11 View Details
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 12 View Details
A firm produces two goods, X and Y, u\sing two inputs, labor (L) and capital (K). The production functions are given by X = 2L + 3K and Y = 4L + 2K. If the firm has 10 units of labor and 5 units of capital, what is the total output?
A. 30
B. 40
Correct C. 50
D. 60

Correct Answer: C

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Question 13 View Details
The government of a country is considering a policy to reduce the budget deficit. The current budget deficit is ₦100 billion, and the government wants to reduce it by 20% in the next year. If the interest rate is 10%, what is the present value of the future budget deficit?
Correct A. ₦80 billion
B. ₦90 billion
C. ₦100 billion
D. ₦110 billion

Correct Answer: A

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Question 14 View Details
A consumer has a budget constraint of ₦100, and the prices of two goods, X and Y, are ₦5 and ₦10, respectively. If the consumer's indifference curve is given by the equation U = 2X + 3Y, what is the optimal consumption bundle?
A. X = 10, Y = 20
Correct B. X = 15, Y = 15
C. X = 20, Y = 10
D. X = 25, Y = 5

Correct Answer: B

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Question 15 View Details
A firm is considering investing in a new project. The initial investment is ₦100,000, and the expected cash flows are ₦20,000 in the first year, ₦30,000 in the second year, and ₦40,000 in the third year. If the discount rate is 10%, what is the net present value of the project?
A. ₦10,000
B. ₦20,000
Correct C. ₦30,000
D. ₦40,000

Correct Answer: C

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Question 16 View Details
Suppose 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 supply of the product is given by the equation Qs = 2P - 100, where Qs is the quantity supplied, find the equilibrium price and quantity.
A. ₦50
B. ₦75
Correct C. ₦100
D. ₦125

Correct Answer: C

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Question 17 View Details
A firm's total revenue is given by the equation TR = 100x - 2x^2, where x is the number of units sold. If the firm's total \cost is given by the equation TC = 50x + 100, find the profit-maximizing level of output.
A. 20 units
B. 30 units
Correct C. 40 units
D. 50 units

Correct Answer: C

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Question 18 View Details
The government of Nigeria is considering a policy to increase the production of agricultural products. If the current GDP is ₦10 trillion and the government expects an increase of 10% in agricultural production, what will be the new GDP?
A. ₦11 trillion
Correct B. ₦11.1 trillion
C. ₦11.2 trillion
D. ₦11.3 trillion

Correct Answer: B

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Question 19 View Details
A firm is considering two different production processes. Process A has a fixed \cost of ₦50,000 and a variable \cost of ₦100 per unit. Process B has a fixed \cost of ₦75,000 and a variable \cost of ₦80 per unit. If the firm produces 1,000 units, which process will result in lower total \cost?
Correct A. Process A
B. Process B
C. Both processes are equal
D. Neither process is better

Correct Answer: A

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Question 20 View Details
The government of Nigeria is considering a policy to increase the production of industrial goods. If the current GNP is ₦15 trillion and the government expects an increase of 15% in industrial production, what will be the new GNP?
A. ₦17.25 trillion
Correct B. ₦17.5 trillion
C. ₦17.75 trillion
D. ₦18 trillion

Correct Answer: B

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Question 21 View Details
Consider a firm operating in a perfectly competitive market with a cons\tant returns to scale production function. If the firm's short-run average \cost curve intersects the long-run average \cost curve at a point where the firm is operating at its optimal scale, what is the implication for the firm's long-run supply curve?
Correct A. The firm's long-run supply curve will be perfectly elastic.
B. The firm's long-run supply curve will be perfectly inelastic.
C. The firm's long-run supply curve will be upward-sloping.
D. The firm's long-run supply curve will be downward-sloping.

Correct Answer: A

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Question 22 View Details
A country's GDP is ₦1,500 billion, its imports are ₦300 billion, and its exports are ₦200 billion. What is the country's net foreign income?
Correct A. ₦1,100 billion
B. ₦1,200 billion
C. ₦1,300 billion
D. ₦1,400 billion

Correct Answer: A

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Question 23 View Details
A firm's demand curve is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the firm's supply curve is given by the equation Qs = 2P - 50, where Qs is the quantity supplied, what is the equilibrium price and quantity?
A. P = ₦50, Q = 25
B. P = ₦75, Q = 25
Correct C. P = ₦100, Q = 50
D. P = ₦125, Q = 75

Correct Answer: C

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Question 24 View Details
A firm's production function is given by the equation Q = 2L^0.5K^0.5, where Q is the output, L is the labor, and K is the capital. If the firm's input prices are given by the equation w = ₦100 and r = ₦200, what is the firm's \cost-minimizing input bundle?
Correct A. L = 100, K = 100
B. L = 200, K = 200
C. L = 100, K = 200
D. L = 200, K = 100

Correct Answer: A

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Question 25 View Details
A country's money supply is ₦1,000 billion, its velocity of money is 2, and its price level is ₦100. What is the country's nominal GDP?
Correct A. ₦2,000 billion
B. ₦3,000 billion
C. ₦4,000 billion
D. ₦5,000 billion

Correct Answer: A

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