POST UTME ACHIEVERS UNIVERSITY 2024 Economics | Objective

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Question 1
In a perfectly competitive market, the equilibrium price and quantity are determined by the intersection of the market demand and supply curves. However, if the market demand curve is downward sloping and the market supply curve is upward sloping, what will be the effect on the equilibrium price and quantity if the government imposes a price ceiling of ₦100?
A. The price will rise to ₦100, and the quantity will increase.
Correct B. The price will fall below ₦100, and the quantity will decrease.
C. The price will remain at ₦100, and the quantity will remain unchanged.
D. The price will rise above ₦100, and the quantity will decrease.

Correct Answer: B

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Question 2
A firm's production function is given by Q = 2L^0.5K^0.5, where Q is the output, L is the labor, and K is the capital. If the firm's labor and capital are increased by 20% and 15% respectively, what will be the percentage change in the output?
A. -5%
B. -10%
C. 0%
Correct D. +10%

Correct Answer: D

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Question 3
The government of Nigeria has implemented a policy to increase the production of rice by 20% in the next year. If the current price of rice is ₦150 per ki\logram, and the demand for rice is given by Q = 100 - 2P, where Q is the quantity demanded and P is the price, what will be the new price of rice?
A. ₦120
Correct B. ₦140
C. ₦160
D. ₦180

Correct Answer: B

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Question 4
A consumer has a budget of ₦1000 and a preference for two goods, A and B. The prices of the goods are ₦200 and ₦300 respectively. If the consumer's utility function is given by U = 2A + 3B, where U is the utility, A is the quantity of good A, and B is the quantity of good B, what will be the consumer's optimal consumption bundle?
Correct A. A = 2, B = 1
B. A = 3, B = 2
C. A = 4, B = 3
D. A = 5, B = 4

Correct Answer: A

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Question 5
The national income of Nigeria is given by Y = C + I + G, where Y is the national income, C is the consumption, I is the investment, and G is the government exp\enditure. If the consumption is ₦500 billion, the investment is ₦200 billion, and the government exp\enditure is ₦300 billion, what will be the national income?
A. ₦1000 billion
B. ₦1100 billion
Correct C. ₦1200 billion
D. ₦1300 billion

Correct Answer: C

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Question 6
The concept of scarcity in economics implies that the production of one good is limited by the availability of resources, which can be used to produce other goods. This is an example of a trade-off between:
A. GDP and GNP
B. Opportunity Cost and Consumer Surplus
Correct C. Scarcity and Choice
D. Economic Growth and Development

Correct Answer: C

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Question 7
The following diagram shows a production possibility frontier (PPF) for a country that produces only two goods, A and B. If the country decides to produce more of good A, the opportunity \cost of producing good A is:
Correct A. The amount of good B that must be given up to produce one more unit of good A
B. The amount of good A that must be given up to produce one more unit of good B
C. The total amount of goods A and B that can be produced
D. The total amount of resources available to produce goods A and B

Correct Answer: A

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Question 8
The following table shows the data for a country's GDP and GNP for the year 2020:
Correct A. GDP = ₦100 billion, GNP = ₦120 billion
B. GDP = ₦120 billion, GNP = ₦100 billion
C. GDP = ₦150 billion, GNP = ₦180 billion
D. GDP = ₦180 billion, GNP = ₦150 billion

Correct Answer: A

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Question 9
The following diagram shows a balance of payments (BOP) for a country that imports and exports goods:
A. The country has a trade deficit
Correct B. The country has a trade surplus
C. The country has a balance of payments deficit
D. The country has a balance of payments surplus

Correct Answer: B

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Question 10
The following table shows the data for a country's agricultural production for the year 2020:
Correct A. The country's agricultural production increased by 10% compared to the previous year
B. The country's agricultural production decreased by 10% compared to the previous year
C. The country's agricultural production remained the same as the previous year
D. The country's agricultural production increased by 20% compared to the previous year

Correct Answer: A

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Question 11
A country's GDP is ₦10 trillion, and its GNP is ₦12 trillion. What is the net factor income from abroad?
Correct A. ₦2 trillion
B. ₦1 trillion
C. ₦3 trillion
D. ₦4 trillion

Correct Answer: A

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Question 12
A firm's production function is given by Q = 2L^0.5K^0.5. If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, and the firm wants to maximize its profit, what is the optimal level of labor?
A. 10 units
Correct B. 20 units
C. 30 units
D. 40 units

Correct Answer: B

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Question 13
A country's balance of payments is given by the following table. What is the value of the trade balance?
A. ₦500 billion
B. ₦1 trillion
Correct C. ₦1.5 trillion
D. ₦2 trillion

Correct Answer: C

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Question 14
A firm's demand function is given by Q = 100 - 2P. If the price elasticity of demand is -2, what is the optimal price?
A. ₦50
B. ₦75
Correct C. ₦100
D. ₦125

Correct Answer: C

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Question 15
A country's GDP is ₦10 trillion, and its GNP is ₦12 trillion. What is the net factor income from abroad?
Correct A. ₦2 trillion
B. ₦1 trillion
C. ₦3 trillion
D. ₦4 trillion

Correct Answer: A

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Question 16
A firm's production function is given by Q = 2L^0.5 K^0.5. If the firm's current output is 4 units and the number of workers (L) is 9, find the minimum number of machines (K) required to produce this output.
A. 1
B. 4
C. 9
Correct D. 16

Correct Answer: D

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Question 17
The government of a country has decided to implement a new economic policy aimed at reducing inflation. The policy involves increa\sing the interest rate to 10% and reducing the money supply by 5%. Assuming the demand for money is given by M = 1000 + 0.5Y, where Y is the GDP, and the supply of money is given by M = 2000 + 0.8Y, find the new equilibrium GDP.
A. 5000
Correct B. 6000
C. 7000
D. 8000

Correct Answer: B

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Question 18
A consumer's utility function is given by U = 2x^0.5 y^0.5, where x and y are the quantities of two goods. If the consumer's income is 100 and the prices of the two goods are 5 and 10 respectively, find the consumer's optimal bundle of goods.
A. x = 10, y = 20
B. x = 20, y = 10
Correct C. x = 15, y = 15
D. x = 5, y = 5

Correct Answer: C

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Question 19
A firm's production function is given by Q = 3L^0.7 K^0.3. If the firm's current output is 27 units and the number of workers (L) is 8, find the minimum number of machines (K) required to produce this output.
A. 1
B. 4
C. 9
Correct D. 16

Correct Answer: D

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Question 20
The demand for a product is given by Q = 100 - 2P, where P is the price of the product. If the supply of the product is given by Q = 2P - 50, find the equilibrium price and quantity.
A. P = 25, Q = 50
Correct B. P = 50, Q = 100
C. P = 75, Q = 150
D. P = 100, Q = 200

Correct Answer: B

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Question 21
A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \), where Q is output, L is labor and K is capital. If the firm's labor and capital are 4 and 9 respectively, what is the output?
A. 12
B. 16
Correct C. 20
D. 24

Correct Answer: C

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Question 22
A country's GDP is ₦100 billion, its imports are ₦20 billion and its exports are ₦15 billion. What is its balance of trade?
Correct A. ₦5 billion
B. ₦10 billion
C. ₦15 billion
D. ₦20 billion

Correct Answer: A

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Question 23
A firm's demand function is given by Q = 100 - 2P, where Q is quantity demanded and P is price. If the price is ₦50, what is the quantity demanded?
A. 40
Correct B. 50
C. 60
D. 70

Correct Answer: B

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Question 24
A country's GNP is ₦120 billion, its GDP is ₦100 billion and its net factor income from abroad is ₦10 billion. What is its GNP?
A. ₦110 billion
Correct B. ₦120 billion
C. ₦130 billion
D. ₦140 billion

Correct Answer: B

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Question 25
A firm's supply function is given by Q = 2P, where Q is quantity supplied and P is price. If the price is ₦20, what is the quantity supplied?
A. 10
Correct B. 20
C. 30
D. 40

Correct Answer: B

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