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POST UTME AFE BABALOLA UNIVERSITY 2021 Economics | Objective

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Question 1 View Details

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%?

Correct A. 5%

B. 10%

C. 15%

D. 20%

Correct Answer: A

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Question 2 View Details

A central bank increases the reserve requirement for commercial banks. What is the effect on the money supply?

A. Increase

Correct B. Decrease

C. No change

D. Uncertain

Correct Answer: B

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Question 3 View Details

A firm's production function is given by Q = 10L^0.5K^0.5, where Q is the quantity produced, L is the labor input, and K is the capital input. If the price of labor is $10 per hour and the price of capital is $20 per hour, and if the firm wants to maximize its profit, what is the optimal combination of labor and capital?

Correct A. L = 100, K = 100

B. L = 50, K = 50

C. L = 200, K = 200

D. L = 150, K = 150

Correct Answer: A

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Question 4 View Details

A country's GDP is $100 billion, its government exp\enditure is $20 billion, and its private consumption is $60 billion. What is the country's national income?

Correct A. $100 billion

B. $80 billion

C. $120 billion

D. $140 billion

Correct Answer: A

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Question 5 View Details

A firm's demand function is given by 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%?

Correct A. 5%

B. 10%

C. 15%

D. 20%

Correct Answer: A

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Question 6 View Details

A consumer's indifference curve is downward sloping. What does this imply about the consumer's marginal rate of substitution (MRS) between two goods?

A. The MRS is cons\tant.

Correct B. The MRS is decrea\sing.

C. The MRS is increa\sing.

D. The MRS is zero.

Correct Answer: B

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Question 7 View Details

A firm's production function is given by Q = 2L^0.5K^0.5. What is the firm's output when labor (L) is 16 and capital (K) is 9?

A. 24

B. 36

Correct C. 48

D. 60

Correct Answer: C

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Question 8 View Details

A consumer's budget constraint is given by 2X + 3Y = 12. If the consumer's income is 12 and the price of good X is 2, what is the consumer's optimal bundle of goods X and Y?

Correct A. X = 2, Y = 4

B. X = 4, Y = 2

C. X = 6, Y = 0

D. X = 0, Y = 6

Correct Answer: A

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Question 9 View Details

A firm's demand function is given by Q = 100 - 2P. If the firm's marginal revenue (MR) is 20, what is the firm's optimal price?

A. 20

Correct B. 30

C. 40

D. 50

Correct Answer: B

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Question 10 View Details

A consumer's indifference curve is given by the equation U = 2X + 3Y. If the consumer's income is 12 and the price of good X is 2, what is the consumer's optimal bundle of goods X and Y?

Correct A. X = 2, Y = 4

B. X = 4, Y = 2

C. X = 6, Y = 0

D. X = 0, Y = 6

Correct Answer: A

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Question 11 View Details

Determine the returns to scale for a firm with a production function Q = 2L^2K, where Q is output, L is labor, and K is capital.

A. Increa\sing Returns to Scale

B. Decrea\sing Returns to Scale

Correct C. Cons\tant Returns to Scale

D. No Returns to Scale

Correct Answer: C

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Question 12 View Details

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

Correct A. Price increases and quantity decreases

B. Price decreases and quantity increases

C. Price increases and quantity increases

D. Price decreases and quantity decreases

Correct Answer: A

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Question 13 View Details

A country's balance of payments is in equilibrium when the current account is equal to the capital account. What is the value of the exchange rate that achieves this equilibrium?

A. €1 = $1.50

B. €1 = $1.25

Correct C. €1 = $1.00

D. €1 = $0.80

Correct Answer: C

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Question 14 View Details

A firm's production function is given by Q = 3L^0.5K^0.5, where Q is output, L is labor, and K is capital. What is the marginal product of labor?

Correct A. MP_L = 1.5L^$ -0.5 $K^0.5

B. MP_L = 1.5L^0.5K^$ -0.5 $

C. MP_L = 1.5L^0.5K^0.5

D. MP_L = 1.5L^$ -0.5 $K^$ -0.5 $

Correct Answer: A

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Question 15 View Details

A country's GDP is given by the equation GDP = C + I + G + $ X - M $, where C is consumption, I is investment, G is government sp\ending, X is exports, and M is imports. If the country's GDP is $100 billion, and C = $30 billion, I = $20 billion, G = $10 billion, X = $20 billion, and M = $15 billion, what is the value of the trade balance?

A. $5 billion

Correct B. $10 billion

C. $15 billion

D. $20 billion

Correct Answer: B

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Question 16 View Details

A firm's demand curve is given by Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the price elasticity of demand is -2, what is the percentage change in quantity demanded when the price increases by 10%?

Correct A. 20%

B. 30%

C. 40%

D. 50%

Correct Answer: A

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Question 17 View Details

A country's budget is given by the following equation: G = 1000 + 0.5Y, where G is government exp\enditure and Y is national income. If the government exp\enditure is 1200, what is the value of national income?

A. 2000

Correct B. 2500

C. 3000

D. 3500

Correct Answer: B

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Question 18 View Details

A firm's \cost function is given by C = 100 + 2Q, where C is the total \cost and Q is the quantity produced. If the firm produces 50 units, what is the total \cost?

A. 150

B. 200

Correct C. 250

D. 300

Correct Answer: C

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Question 19 View Details

A country's balance of payments is given by the following equation: BOP = X - M, where BOP is the balance of payments, X is exports, and M is imports. If the country's exports are 1000 and imports are 800, what is the balance of payments?

A. 200

Correct B. 300

C. 400

D. 500

Correct Answer: B

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Question 20 View Details

A firm's revenue function is given by R = 200Q - 0.5Q^2, where R is revenue and Q is quantity sold. If the firm sells 100 units, what is the revenue?

A. 15000

B. 18000

Correct C. 20000

D. 22000

Correct Answer: C

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Question 21 View Details

A monopolist faces a demand curve given by Q = 100 - 2P. The monopolist's marginal \cost is MC = 10. Find the profit-maximizing price and quantity.

Correct A. P = 40, Q = 60

B. P = 30, Q = 70

C. P = 20, Q = 80

D. P = 50, Q = 50

Correct Answer: A

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Question 22 View Details

A consumer's utility function is given by U(x, y) = 2x + 3y. The consumer's budget constraint is 2x + 3y = 12. Find the consumer's optimal bundle of x and y.

Correct A. x = 2, y = 4

B. x = 3, y = 3

C. x = 4, y = 2

D. x = 1, y = 5

Correct Answer: A

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Question 23 View Details

A firm's \cost function is given by C(q) = 10q + 100. The firm's revenue function is given by R(q) = 20q. Find the firm's profit-maximizing quantity.

A. q = 5

Correct B. q = 10

C. q = 15

D. q = 20

Correct Answer: B

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Question 24 View Details

A consumer's demand function is given by Q = 100 - 2P. The consumer's income is ₦1000. Find the consumer's optimal price and quantity.

Correct A. P = 40, Q = 60

B. P = 30, Q = 70

C. P = 20, Q = 80

D. P = 50, Q = 50

Correct Answer: A

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Question 25 View Details

A firm's supply function is given by Q = 2P + 10. The firm's fixed \cost is ₦100. Find the firm's profit-maximizing price and quantity.

A. P = 20, Q = 50

Correct B. P = 30, Q = 60

C. P = 40, Q = 70

D. P = 50, Q = 80

Correct Answer: B

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