POST UTME ACHIEVERS UNIVERSITY 2018 Economics | Objective

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Question 1
A firm's \cost function is given by C = 100 + 2L + 3K, where C is \cost, L is labor, and K is capital. If the firm's labor and capital are fixed at 100 units each, calculate the marginal \cost (MC) and average \cost (AC).
A. 2
B. 3
C. 4
D. 5
Question 2
Consider a perfectly competitive market with n firms, each producing a homogeneous product. If the market price is P = 10, and the inverse demand function is given by P = 100 - Q, where Q is the total quantity demanded, find the equilibrium quantity produced by each firm.
A. 5
B. 10
C. 20
D. 50
Question 3
A central bank is considering a monetary policy to reduce inflation. If the current inflation rate is 5% and the central bank wants to reduce it to 3% within the next 2 years, what is the required annual rate of inflation reduction?
A. 2%
B. 3%
C. 4%
D. 5%
Question 4
The concept of national income accounting is used to measure the total value of goods and services produced within a country. Which of the following is a correct example of a component of national income?
A. The value of goods and services produced within a country.
B. The value of goods and services imported into a country.
C. The value of goods and services exported from a country.
D. The value of goods and services produced in a foreign country.
Question 5
The concept of scarcity in economics implies that the production of one good is limited by the availability of resources that could be used to produce another good. Which of the following is a correct example of scarcity?
A. A farmer has 100 acres of land to plant wheat or corn.
B. A company has a limited budget to invest in either research and development or marketing.
C. A country has an abundance of natural resources.
D. A consumer has a wide range of products to choose from.
Question 6
A firm is producing a good with a production function \( Q = 2L^2 + 3K \). If the price of labor is ₦50 per hour and the price of capital is ₦100 per unit, what is the optimal level of labor and capital?
A. L = 10, K = 5
B. L = 15, K = 10
C. L = 20, K = 15
D. L = 25, K = 20
Question 7
A firm has a production function Q = 2L + 3K, where Q is the quantity produced, L is the labor input, and K is the capital input. If the firm's budget constraint is 10L + 20K = 100, and the firm wants to maximize profits, what is the optimal level of labor input?
A. 5
B. 10
C. 15
D. 20
Question 8
A firm is producing a good with a production function \( Q = 2L^2 + 3K \). If the price of labor is ₦50 per hour and the price of capital is ₦100 per unit, what is the optimal level of labor and capital?
A. L = 10, K = 5
B. L = 15, K = 10
C. L = 20, K = 15
D. L = 25, K = 20
Question 9
The concept of industrialization is closely related to the concept of economic growth. Which of the following is a correct example of industrialization?
A. The increase in the production of manufactured goods.
B. The increase in the production of services.
C. The increase in the production of crops and livestock.
D. The decrease in the production of manufactured goods.
Question 10
The concept of opportunity \cost is closely related to the concept of scarcity. Which of the following is a correct example of opportunity \cost?
A. The \cost of producing a good is the price of the resources used to produce it.
B. The \cost of producing a good is the price of the good itself.
C. The \cost of producing a good is the next best alternative that could have been produced with the same resources.
D. The \cost of producing a good is the \cost of the resources used to produce it plus the \cost of the good itself.
Question 11
The concept of agricultural development is closely related to the concept of industrialization. Which of the following is a correct example of agricultural development?
A. The increase in the production of crops and livestock.
B. The increase in the production of manufactured goods.
C. The increase in the production of services.
D. The decrease in the production of crops and livestock.
Question 12
A consumer's indifference curve is given by the equation ( u(x,y) = 2x + 3y ). If the consumer's income is ₦1,000 and the prices of x and y are ₦5 and ₦10 respectively, what is the consumer's optimal bundle?
A. x = 100, y = 50
B. x = 150, y = 30
C. x = 200, y = 20
D. x = 250, y = 10
Question 13
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%?
A. 5%
B. 10%
C. 15%
D. 20%
Question 14
A firm is producing a product with a production function F(x) = 3x^2 + 2x. If the firm's \cost function is C(x) = 20x + 30, what is the average \cost when the output is 4 units?
A. 20
B. 25
C. 30
D. 35
Question 15
A monopoly firm is producing a product with a demand function P = 100 - 2Q. If the firm's marginal \cost is 20, what is the profit-maximizing quantity?
A. 20
B. 30
C. 40
D. 50

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