Practice post utme aaua economics 2017 Past Questions

Question 1

A consumer's indifference curve is represented 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?

A. (100, 100)

Correct B. (200, 50)

C. (50, 200)

D. (0, 0)

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 2

A firm's total revenue function is given by ( TR(q) = 100q - 2q^2 ). If the firm's marginal revenue function is ( MR(q) = 100 - 4q ), what is the firm's optimal output level?

A. 25

Correct B. 50

C. 75

D. 100

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 3

A consumer's budget constraint is given by the equation $ 2x + 3y = 12 $. If the consumer's indifference curve is represented by the equation ( u(x,y) = 2x + y ), what is the consumer's optimal bundle?

Correct A. (4, 2)

B. (3, 3)

C. (2, 4)

D. (1, 5)

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 4

A firm's demand function is given by $ q = 100 - 2p $. If the firm's marginal revenue function is ( MR(p) = 100 - 2p ), what is the firm's optimal price?

A. 20

Correct B. 30

C. 40

D. 50

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 5

A consumer's indifference curve is represented by the equation ( u(x,y) = x + 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?

Correct A. (100, 50)

B. (50, 100)

C. (0, 0)

D. (200, 0)

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 6

The government of Nigeria has introduced a new policy to increase agricultural production. The policy aims to increase the supply of agricultural products by providing subsidies to farmers. However, the policy has been criticized for being ineffective in achieving its goals. Which of the following is a possible reason for the ineffectiveness of the policy?

A. The subsidies are not sufficient to cover the \costs of production.

B. The subsidies are not targeted at the right farmers.

Correct C. The subsidies are not aligned with the market demand for agricultural products.

D. The subsidies are not sustainable in the long run.

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 7

A firm is producing a good with a cons\tant marginal \cost and a downward-sloping demand curve. The firm is currently producing at a level where the price of the good is ₦100. If the firm increases its production by 10%, what will happen to the price of the good?

A. The price will increase by 10%.

Correct B. The price will decrease by 10%.

C. The price will remain the same.

D. The price will increase by more than 10%.

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 8

A country is experiencing a trade deficit due to a large imbalance between its imports and exports. Which of the following policies would help to reduce the trade deficit?

A. Increa\sing the value of imports.

B. Decrea\sing the value of exports.

Correct C. Increa\sing the value of exports.

D. Decrea\sing the value of imports.

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 9

A firm is facing a downward-sloping demand curve for its product. The firm is currently producing at a level where the price of the good is ₦100. If the firm decreases its production by 10%, what will happen to the price of the good?

Correct A. The price will increase by 10%.

B. The price will decrease by 10%.

C. The price will remain the same.

D. The price will increase by more than 10%.

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 10

A country is experiencing a recession due to a decrease in aggregate demand. Which of the following policies would help to stimulate aggregate demand?

A. Increa\sing the money supply.

B. Decrea\sing the money supply.

Correct C. Increa\sing government sp\ending.

D. Decrea\sing government sp\ending.

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 11

A monopolistically competitive firm faces a downward-sloping demand curve. If the firm increases its output from 100 units to 120 units, and the price elasticity of demand is 0.8, what is the percentage change in total revenue?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 12

A country's GDP is ₦100 billion, and its GNP is ₦120 billion. What is the net factor income from abroad?

Correct A. ₦10 billion

B. ₦20 billion

C. ₦30 billion

D. ₦40 billion

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 13

A government budget is ₦500 billion, with ₦200 billion allocated for capital exp\enditure and ₦150 billion for recurrent exp\enditure. What is the percentage of the budget allocated for capital exp\enditure?

Correct A. 20%

B. 30%

C. 40%

D. 50%

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 14

A central bank increases the reserve requirement for commercial banks from 10% to 15%. What is the effect on the money supply?

A. Increases

Correct B. Decreases

C. Remains unchanged

D. Increases initially, then decreases

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 15

A country experiences a 10% increase in the price level, and its nominal GDP increases by 5%. What is the percentage change in real GDP?

A. 5%

Correct B. 10%

C. 15%

D. 20%

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 16

The government of Nigeria has introduced a new tax policy aimed at increa\sing revenue from the agricultural sector. The policy includes a 10% tax on all agricultural produce sold in the market. If the total revenue from the sale of agricultural produce is ₦1,500,000, what is the total tax collected by the government?

Correct A. ₦150,000

B. ₦1,500,000

C. ₦15,000,000

D. ₦150,000,000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 17

A firm produces two goods, A and B. The production of good A requires 2 units of labor and 3 units of capital, while the production of good B requires 3 units of labor and 2 units of capital. If the firm has 12 units of labor and 15 units of capital, how many units of good A and good B can the firm produce?

Correct A. 10 units of A and 8 units of B

B. 8 units of A and 10 units of B

C. 12 units of A and 6 units of B

D. 6 units of A and 12 units of B

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 18

The balance of payments (BOP) of a country is a statistical statement that summarizes all economic transactions between the residents and non-residents of the country. If the BOP of a country shows a deficit of $100 million, what does this imply?

A. The country has a trade surplus

Correct B. The country has a trade deficit

C. The country has a current account surplus

D. The country has a capital account deficit

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 19

A firm is considering two investment projects, A and B. Project A requires an initial investment of ₦100,000 and is expected to generate a return of ₦120,000 per year for 5 years. Project B requires an initial investment of ₦150,000 and is expected to generate a return of ₦180,000 per year for 5 years. Which project should the firm choose?

Correct A. Project A

B. Project B

C. Both projects are equally attractive

D. Neither project is attractive

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 20

The government of Nigeria has introduced a new agricultural policy aimed at increa\sing food production. The policy includes a subsidy of ₦50,000 per hectare for farmers who produce maize. If the government allocates ₦1 billion for the subsidy, how many hectares of maize can be produced?

A. 20,000 hectares

Correct B. 50,000 hectares

C. 100,000 hectares

D. 200,000 hectares

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 21

The concept of returns to scale in production theory implies that as the input of a variable factor increases, the output of the firm will increase at a rate that is proportional to the increase in the input. Which of the following is a characteristic of a firm operating under increa\sing returns to scale?

A. The average product of labor increases as the firm expands its production

B. The marginal product of labor decreases as the firm expands its production

Correct C. The total product of labor increases at a decrea\sing rate as the firm expands its production

D. The average product of labor decreases as the firm expands its production

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 22

A country's balance of payments is in equilibrium when the current account and capital account are balanced. Which of the following is a characteristic of a country with a current account surplus?

A. The country is experiencing a trade deficit

Correct B. The country is experiencing a trade surplus

C. The country is experiencing a capital account deficit

D. The country is experiencing a capital account surplus

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 23

The elasticity of demand for a product is measured by the percentage change in the quantity demanded in response to a 1% change in the price of the product. If the elasticity of demand for a product is 0.5, what does this imply about the responsiveness of consumers to changes in price?

A. Consumers are highly responsive to changes in price

B. Consumers are moderately responsive to changes in price

Correct C. Consumers are not responsive to changes in price

D. Consumers are highly inelastic to changes in price

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 24

A government imposes a tax on a particular good, which leads to a decrease in the quantity demanded of the good. What is the effect of this tax on the government's revenue?

A. The government's revenue increases

Correct B. The government's revenue decreases

C. The government's revenue remains the same

D. The government's revenue increases at a decrea\sing rate

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 25

A country's GDP is calculated as the sum of the value of all final goods and services produced within the country during a given period. Which of the following is NOT included in the calculation of GDP?

Correct A. The value of all intermediate goods and services

B. The value of all final goods and services

C. The value of all capital goods

D. The value of all government services

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

POST UTME AAUA 2017 Economics | Objective

Master the Exam!

Help others prepare! Share this practice hub: