Practice post utme abu economics 2023 Past Questions

Question 1

In a perfectly competitive market, the supply curve is upward-sloping because

Correct A. Firms are willing to supply more at higher prices

B. Firms are willing to supply less at lower prices

C. Firms are willing to supply more at lower prices

D. Firms are willing to supply less at higher prices

Correct Answer: A

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Question 2

A monopolist's marginal revenue (MR) curve lies below the average revenue (AR) curve because

A. The monopolist is willing to supply more at higher prices

Correct B. The monopolist is willing to supply less at lower prices

C. The monopolist is willing to supply more at lower prices

D. The monopolist is willing to supply less at higher prices

Correct Answer: B

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Question 3

The government can use the following fiscal policy tools to stabilize the economy

A. Fiscal policy tools include taxation, government sp\ending, and monetary policy

Correct B. Fiscal policy tools include taxation, government sp\ending, and automatic stabilizers

C. Fiscal policy tools include monetary policy, automatic stabilizers, and government sp\ending

D. Fiscal policy tools include taxation, monetary policy, and automatic stabilizers

Correct Answer: B

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Question 4

A consumer's indifference curve is downward-sloping because

Correct A. The consumer is willing to give up more of one good to get more of another good

B. The consumer is willing to give up less of one good to get more of another good

C. The consumer is willing to give up the same amount of one good to get more of another good

D. The consumer is willing to give up more of one good to get less of another good

Correct Answer: A

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Question 5

The government can use the following monetary policy tools to stabilize the economy

Correct 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

Correct Answer: A

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Question 6

Consider a firm operating in a perfectly competitive market with a production function Q = 2L^0.5K^0.5. If the firm's current input prices are w = 10 and r = 20, and it currently employs 4 units of labor and 2 units of capital, calculate the firm's current total revenue, total \cost, and profit. Assume that the market price of the firm's output is p = 50.

A. ₦200

B. ₦300

Correct C. ₦400

D. ₦500

Correct Answer: C

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Question 7

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)

Correct B. (15,5)

C. (20,0)

D. (0,20)

Correct Answer: B

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Question 8

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.

Correct A. (20,60)

B. (30,50)

C. (40,40)

D. (50,30)

Correct Answer: A

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Question 9

A country's GDP is ₦100 billion, its imports are ₦20 billion, and its exports are ₦30 billion. Calculate the country's GNP.

A. ₦110 billion

Correct B. ₦120 billion

C. ₦130 billion

D. ₦140 billion

Correct Answer: B

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Question 10

A central bank increases the money supply in an economy by 10%. What is the likely effect on the price level?

A. Decrease

Correct B. Increase

C. No change

D. Uncertain

Correct Answer: B

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Question 11

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?

Correct 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.

Correct Answer: A

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Question 12

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 balance of payments equilibrium?

A. The country has a trade deficit.

Correct B. The country has a trade surplus.

C. The country has a capital account surplus.

D. The country has a current account deficit.

Correct Answer: B

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Question 13

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%

Correct C. 30%

D. 40%

Correct Answer: C

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Question 14

A consumer's budget constraint is given by 2x + 3y = 12. If the consumer's income increases by 20%, what is the new budget constraint?

A. 2x + 3y = 14.4

Correct B. 2x + 3y = 16.8

C. 2x + 3y = 18.2

D. 2x + 3y = 20.6

Correct Answer: B

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Question 15

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

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 16

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

Correct C. Increased soil salinization

D. Decreased biodiversity

Correct Answer: C

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Question 17

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%

Correct B. 15%

C. 18%

D. 20%

Correct Answer: B

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Question 18

The Central Bank of Nigeria (CBN) has implemented a monetary policy to reduce inflation. The policy involves increa\sing the reserve requirement for commercial banks. What is the likely effect of this policy on the money supply?

A. Increase in money supply

Correct B. Decrease in money supply

C. No change in money supply

D. Increase in interest rates

Correct Answer: B

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Question 19

A consumer is faced with a choice between two goods: a smartphone and a laptop. The consumer has a budget of ₦100,000 and the prices of the smartphone and laptop are ₦80,000 and ₦60,000, respectively. What is the opportunity \cost of purcha\sing the smartphone?

A. ₦20,000

Correct B. ₦30,000

C. ₦40,000

D. ₦50,000

Correct Answer: B

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Question 20

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

Correct C. Increased soil salinization

D. Decreased biodiversity

Correct Answer: C

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Question 21

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%.

Correct A. 5%

B. 10%

C. 15%

D. 20%

Correct Answer: A

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Question 22

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%.

Correct A. 7.5%

B. 10%

C. 12.5%

D. 15%

Correct Answer: A

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Question 23

The government of Nigeria has implemented a policy to increase the production of rice by 20% in the next year. If the current production level is 10 million tons, what will be the new production level?

A. 12 million tons

Correct B. 12.2 million tons

C. 12.4 million tons

D. 12.6 million tons

Correct Answer: B

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Question 24

The central bank of Nigeria has increased the reserve requirement for commercial banks from 10% to 12%. If a commercial bank has a deposit of ₦100 million, what will be the new reserve requirement?

A. ₦12 million

Correct B. ₦12.5 million

C. ₦13 million

D. ₦13.5 million

Correct Answer: B

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Question 25

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 new price when the quantity demanded increases by 10%.

A. ₦50

Correct B. ₦55

C. ₦60

D. ₦65

Correct Answer: B

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POST UTME ABU 2023 Economics | Objective

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