Practice post utme achievers university economics 2022 Past Questions

Question 1

The government of Nigeria plans to implement a new budget policy to reduce the budget deficit. The policy involves a 10% reduction in the government's exp\enditure. If the current government exp\enditure is ₦1 trillion, calculate the new government exp\enditure.

A. ₦900 billion

B. ₦1 trillion

C. ₦1.1 trillion

D. ₦1.2 trillion

Question 2

A firm's \cost function is given by TC = 2L + 3K. If the price of labor (L) is ₦50 per unit and the price of capital (K) is ₦100 per unit, calculate the total \cost of producing 10 units of output.

A. ₦500

B. ₦600

C. ₦700

D. ₦800

Question 3

A firm is considering the introduction of a new product into the market. The firm has estimated the demand for the product to be Q = 100 - 2P, where Q is the quantity demanded and P is the price. The firm's \cost function is C = 500 + 20Q. What is the profit-maximizing price and quantity of the product?

A. P = 40, Q = 60

B. P = 50, Q = 70

C. P = 60, Q = 80

D. P = 70, Q = 90

Question 4

A country's GDP is given by the equation GDP = C + I + G + \( X - M \), where GDP is the Gross Domestic Product, C is the consumption, I is the investment, G is the government sp\ending, X is the exports and M is the imports. If the consumption increases by 10%, the investment increases by 15%, the government sp\ending remains cons\tant, the exports increase by 20% and the imports decrease by 10%, what is the percentage change in the GDP?

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 current output is 16 units, and the number of workers (L) is 4, find the number of machines (K) required.

A. 4

B. 6

C. 8

D. 10

Question 6

A firm's demand for labor is given by the equation L = 100 - 2P_L, where L is the quantity of labor demanded and P_L is the wage rate. If the wage rate increases from ₦50 to ₦60, what is the change in the quantity of labor demanded?

A. The quantity of labor demanded increases by 10 units.

B. The quantity of labor demanded decreases by 10 units.

C. The quantity of labor demanded remains cons\tant.

D. The quantity of labor demanded increases by 20 units.

Question 7

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current input prices are w = ₦100 and r = ₦50, and it currently employs 4 units of labor and 2 units of capital, calculate the firm's current marginal \cost.

A. ₦25

B. ₦50

C. ₦75

D. ₦100

Question 8

A firm's total revenue (TR) is given by the equation TR = 100x - 2x^2, where x is the number of units sold. If the firm's marginal revenue (MR) is 80, find the value of x.

A. 10

B. 20

C. 30

D. 40

Question 9

A firm's production function is given by Q = 2L^2 + 3K, where Q is the quantity of output, L is the quantity of labor, and K is the quantity of capital. If the firm increases the quantity of capital from 4 units to 6 units, while holding the quantity of labor cons\tant, what is the change in the marginal product of capital?

A. The marginal product of capital increases by 2 units.

B. The marginal product of capital decreases by 2 units.

C. The marginal product of capital remains cons\tant.

D. The marginal product of capital increases by 4 units.

Question 10

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 products sold in the country. However, the policy also provides a 20% subsidy on inputs such as fertilizers and seeds for small-scale farmers. Assuming the demand for agricultural products is elastic, what is the likely effect of the tax policy on the price of agricultural products?

A. The price of agricultural products will increase by 10%

B. The price of agricultural products will decrease by 10%

C. The price of agricultural products will remain the same

D. The price of agricultural products will increase by 20%

Question 11

U\sing the concept of returns to scale, explain why a firm's production function is typically represented by a decrea\sing marginal product of labor curve.

A. The law of diminishing returns states that as the quantity of a variable input increases, while holding other inputs cons\tant, the marginal product of that input will eventually decrease.

B. The production function is typically represented by a decrea\sing marginal product of labor curve because the marginal product of labor decreases as the quantity of labor increases.

C. The firm's production function is typically represented by a decrea\sing marginal product of labor curve because the marginal product of labor increases as the quantity of labor increases.

D. The production function is typically represented by a decrea\sing marginal product of labor curve because the marginal product of labor remains cons\tant as the quantity of labor increases.

Question 12

A consumer's indifference curve is given by U = 2Q1 + Q2, where U is the level of satisfaction, Q1 and Q2 are the quantities consumed of two goods. If the consumer's current level of satisfaction is 10 units, and the quantity of good 1 consumed is 4 units, find the quantity of good 2 that the consumer is indifferent to.

A. 2

B. 4

C. 6

D. 8

Question 13

A firm's demand function is given by Q = 100 - 2P. If the firm's current price is ₦50, calculate the firm's current revenue.

A. ₦2500

B. ₦3000

C. ₦3500

D. ₦4000

Question 14

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm increases its labor input by 50% and keeps the capital input cons\tant, what is the percentage change in output?

A. 25%

B. 50%

C. 75%

D. 100%

Question 15

A government imposes a tax on a firm's output. If the firm's supply curve shifts to the left, what is the effect on the equilibrium price and quantity?

A. Price increases, quantity decreases

B. Price decreases, quantity increases

C. Price increases, quantity increases

D. Price decreases, quantity decreases

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