POST UTME AFE BABALOLA UNIVERSITY 2020 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A consumer's utility function is given by U = 2x + 3y. If the consumer's budget constraint is 10x + 5y = 100, find the optimal values of x and y.
A. x = 5, y = 10
B. x = 10, y = 5
C. x = 15, y = 3
D. x = 20, y = 2
Question 2
A firm's production function is given by Q = 2L^0.5K^0.5, where Q is output, L is labor, and K is capital. If the firm hires 100 workers and uses ₦100 million in capital, what is the output?
A. 200 units
B. 400 units
C. 600 units
D. 800 units
Question 3
The government of a country uses the following fiscal policy tool to control inflation: increa\sing the tax rate. What is the effect of this policy on the aggregate demand?
A. Increases
B. Decreases
C. Remains the same
D. Unchanged
Question 4
A consumer's indifference curve is downward sloping and convex to the origin. What does this imply about the consumer's preferences?
A. The consumer prefers more of good X to good Y.
B. The consumer prefers more of good Y to good X.
C. The consumer is indifferent between good X and good Y.
D. The consumer prefers less of good X to good Y.
Question 5
The concept of diminishing marginal utility is a fundamental principle in consumer theory. Explain how it influences a consumer's decision-making process when purcha\sing a bundle of goods.
A. The consumer becomes indifferent to the additional units of the good as the marginal utility decreases.
B. The consumer's willingness to pay for the good increases as the marginal utility decreases.
C. The consumer's demand for the good decreases as the marginal utility decreases.
D. The consumer's income effect increases as the marginal utility decreases.
Question 6
A firm's total revenue is given by the equation TR = 100P + 200, where TR is the total revenue and P is the price. If the price elasticity of demand is -2, what is the percentage change in total revenue when the price increases by 10%?
A. 20%
B. 40%
C. 60%
D. 80%
Question 7
A central bank increases the reserve requirement for commercial banks from 10% to 15%. What is the effect on the money supply?
A. Increase
B. Decrease
C. No change
D. Uncertain
Question 8
A firm's revenue function is given by R(q) = 20q - 0.5q^2. What is the price elasticity of demand when q = 10?
A. 0.5
B. 1
C. 2
D. 5
Question 9
A firm's demand for labor is given by L = 100 - 2P, where L is labor and P is the wage rate. If the wage rate is ₦50 per hour, what is the demand for labor?
A. 50 workers
B. 75 workers
C. 100 workers
D. 125 workers
Question 10
The money multiplier is the ratio of the change in the money supply to a change in the reserve requirement. If the reserve requirement is increased from 10% to 15%, and the money supply is currently ₦100 billion, what is the new money supply if the central bank injects ₦5 billion into the economy?
A. ₦90 billion
B. ₦95 billion
C. ₦100 billion
D. ₦105 billion
Question 11
A firm's production function is given by the equation Q = 2L^2 + 3K^2, where Q is the output and L and K are the labor and capital inputs, respectively. What is the firm's marginal product of labor (MPL) when L = 2 and K = 3?
A. 8
B. 4
C. 2
D. 6
Question 12
A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \). What is the firm's returns to scale?
A. Increa\sing returns to scale
B. Decrea\sing returns to scale
C. Cons\tant returns to scale
D. No returns to scale
Question 13
A government imposes a tax on a firm's profits. The tax rate is 20% of the firm's profits. If the firm's profits are ₦1,000,000, what is the amount of tax the firm must pay?
A. ₦200,000
B. ₦250,000
C. ₦300,000
D. ₦400,000
Question 14
A consumer's indifference curve is given by the equation U = 2x + 3y, where U is the utility and x and y are the quantities of two goods. What is the consumer's marginal rate of substitution (MRS) when x = 2 and y = 3?
A. -2/3
B. 2/3
C. 1/3
D. -1/3
Question 15
A country's GDP is given by the equation GDP = C + I + G + \( X - M \). What is the meaning of the term \( X - M \)?
A. Net exports
B. Imports
C. Exports
D. Gross domestic product

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows
Help others prepare! Share this practice hub: