POST UTME ABU 2023 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
The law of diminishing marginal utility states that as the quantity of a good consumed increases, the marginal utility derived from each additional unit of the good decreases. Which of the following is a consequence of this law?
A. The total utility of the good increases at a decrea\sing rate.
B. The marginal utility of the good remains cons\tant.
C. The law of diminishing marginal utility is only applicable to normal goods.
D. The law of diminishing marginal utility is only applicable to inferior goods.
Question 2
A firm has a production function Q = 2L^\( 1/2 \)K^\( 1/2 \). If the price of labor is ₦100 and the price of capital is ₦200, what is the \cost-minimizing level of capital?
A. 10 units
B. 20 units
C. 30 units
D. 40 units
Question 3
The government of Nigeria has implemented a policy to increase the production of rice through the use of irrigation. However, the policy has been criticized for its potential impact on the environment. Which of the following is a potential environmental impact of the policy?
A. Increased water pollution
B. Decreased water table
C. Increased soil salinization
D. Decreased biodiversity
Question 4
A firm is considering investing in a new project that has a net present value (NPV) of ₦1,500,000. The firm's \cost of capital is 10% per annum. What is the internal rate of return (IRR) of the project?
A. 12%
B. 15%
C. 18%
D. 20%
Question 5
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 is the percentage change in output?
A. 10%
B. 20%
C. 30%
D. 40%
Question 6
A consumer has the following utility function: U = 2x + 3y, where x and y are the quantities of two goods. If the prices of the two goods are $2 and $3 respectively, and the consumer has a budget of $10, what is the optimal combination of x and y?
A. x = 2, y = 3
B. x = 3, y = 2
C. x = 4, y = 1
D. x = 1, y = 4
Question 7
The demand function for a product is given by Q = 100 - 2p. If the supply function is given by Q = 2p - 10, find the equilibrium price and quantity.
A. (20,60)
B. (30,50)
C. (40,40)
D. (50,30)
Question 8
A consumer's utility function is given by U(x,y) = 2x + 3y. If the consumer's income is ₦100 and the prices of x and y are ₦5 and ₦10 respectively, find the consumer's optimal bundle of x and y.
A. (10,10)
B. (15,5)
C. (20,0)
D. (0,20)
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, find the percentage change in quantity demanded when the price increases by 10%.
A. 5%
B. 10%
C. 15%
D. 20%
Question 10
A firm is producing a product with a cons\tant marginal \cost of ₦50 and a cons\tant marginal revenue of ₦75. If the demand for the product is given by the equation Q = 100 - 2P, where Q is the quantity demanded and P is the price, what is the profit-maximizing quantity and price?
A. Q = 25, P = ₦50
B. Q = 50, P = ₦75
C. Q = 75, P = ₦100
D. Q = 100, P = ₦125
Question 11
The Central Bank of Nigeria (CBN) uses monetary policy tools to control inflation. Which of the following is NOT a monetary policy tool used by the CBN?
A. Open Market Operations (OMO)
B. Reserve Requirements
C. Fiscal Policy
D. Quantitative Ea\sing
Question 12
The supply of a product is given by the equation Qs = 50 + 3P, where Qs is the quantity supplied and P is the price. If the price elasticity of supply is 2, find the percentage change in quantity supplied when the price increases by 15%.
A. 7.5%
B. 10%
C. 12.5%
D. 15%
Question 13
A monopolist's demand curve is given by Q = 100 - 2P. If the firm's marginal revenue is given by MR = 200 - 4Q, what is the firm's optimal price?
A. ₦20
B. ₦30
C. ₦40
D. ₦50
Question 14
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, what is the percentage change in output?
A. 10%
B. 20%
C. 30%
D. 40%
Question 15
The government can use the following monetary policy tools to stabilize the economy
A. Monetary policy tools include open market operations, reserve requirements, and the discount rate
B. Monetary policy tools include taxation, government sp\ending, and automatic stabilizers
C. Monetary policy tools include fiscal policy, automatic stabilizers, and government sp\ending
D. Monetary policy tools include monetary policy, taxation, and automatic stabilizers

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