POST UTME AL-HIKMAH UNIVERSITY 2017 Economics | Objective

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Question 1
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 price at which the quantity demanded is 50?
Correct A. ₦50
B. ₦75
C. ₦100
D. ₦125

Correct Answer: A

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Question 2
A firm's production function is given by Q = 2L + 3K, where Q is the output, L is the labor and K is the capital. If the firm has 10 units of labor and 5 units of capital, what is the maximum output?
A. 20
B. 25
Correct C. 30
D. 35

Correct Answer: C

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Question 3
The supply of a product is given by the equation Qs = 50 + 2P, where Qs is the quantity supplied and P is the price. If the price elasticity of supply is 0.8, what is the price at which the quantity supplied is 60?
A. ₦60
B. ₦80
Correct C. ₦100
D. ₦120

Correct Answer: C

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Question 4
A country's GDP is given by the equation Y = C + I + G, where Y is the GDP, C is the consumption, I is the investment and G is the government sp\ending. If the consumption is ₦100 billion, the investment is ₦50 billion and the government sp\ending is ₦20 billion, what is the GDP?
A. ₦170 billion
B. ₦180 billion
C. ₦190 billion
Correct D. ₦200 billion

Correct Answer: D

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Question 5
A firm's \cost function is given by the equation C = 2L + 3K, where C is the \cost, L is the labor and K is the capital. If the firm has 10 units of labor and 5 units of capital, what is the minimum \cost?
A. ₦20
Correct B. ₦25
C. ₦30
D. ₦35

Correct Answer: B

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Question 6
A country's balance of payments is in equilibrium when its current account and capital account are balanced. Which of the following is a correct statement about the balance of payments?
A. The balance of payments is a statement of a country's international transactions over a specific period.
Correct B. The balance of payments is a statement of a country's international transactions over a specific period, including current and capital account transactions.
C. The balance of payments is a statement of a country's international transactions over a specific period, including current account transactions only.
D. The balance of payments is a statement of a country's international transactions over a specific period, including capital account transactions only.

Correct Answer: B

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Question 7
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's labor and capital inputs are increased by 10% and 20% respectively, what is the percentage change in output?
A. 10%
B. 20%
Correct C. 30%
D. 40%

Correct Answer: C

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Question 8
A country's GDP is given by the equation GDP = C + I + G + \( X - M \). If the country's consumption, investment, government sp\ending, exports, and imports are 100, 50, 20, 80, and 60 respectively, what is the country's GDP?
A. ₦250
B. ₦300
Correct C. ₦350
D. ₦400

Correct Answer: C

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Question 9
A firm's demand function is given by Q = 100 - 2P. If the firm's price is increased by 10%, what is the percentage change in quantity demanded?
A. 5%
Correct B. 10%
C. 15%
D. 20%

Correct Answer: B

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Question 10
A country's supply function is given by Q = 100 + 2P. If the country's price is increased by 10%, what is the percentage change in quantity supplied?
A. 5%
Correct B. 10%
C. 15%
D. 20%

Correct Answer: B

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Question 11
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, calculate the percentage change in quantity demanded when the price increases by 10%.
Correct A. 5%
B. 10%
C. 20%
D. 30%

Correct Answer: A

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Question 12
Agricultural sector is the backbone of Nigeria's economy. Discuss the role of agricultural sector in Nigeria's economic development.
Correct A. Agricultural sector is the backbone of Nigeria's economy and plays a crucial role in the country's economic development.
B. Agricultural sector is not impor\tant in Nigeria's economic development.
C. Agricultural sector is a major source of employment in Nigeria.
D. Agricultural sector is a major contributor to Nigeria's GDP.

Correct Answer: A

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Question 13
The government of Nigeria imposes a tax of 10% on all imports. If the value of imports is ₦100,000, calculate the amount of tax paid.
Correct A. ₦10,000
B. ₦5,000
C. ₦15,000
D. ₦20,000

Correct Answer: A

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Question 14
The balance of payments (BOP) of a country is a statistical statement that summarizes all economic transactions between the residents and non-residents of a country over a specific period of time. Discuss the components of BOP.
Correct A. Current account, capital account, and financial account are the components of BOP.
B. Current account, capital account, and financial account are not the components of BOP.
C. Current account and capital account are the components of BOP.
D. Current account and financial account are the components of BOP.

Correct Answer: A

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Question 15
The National Bureau of Statistics (NBS) releases the Gross Domestic Product (GDP) of Nigeria, which is ₦50 trillion. Calculate the GDP per capita.
Correct A. ₦1,250,000
B. ₦1,500,000
C. ₦1,750,000
D. ₦2,000,000

Correct Answer: A

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Question 16
The government of Nigeria has introduced a new tax policy aimed at increa\sing revenue from the agricultural sector. The policy requires farmers to pay a 10% tax on their annual income. If a farmer's annual income is ₦500,000, what is the amount of tax the farmer must pay?
Correct A. ₦50,000
B. ₦60,000
C. ₦70,000
D. ₦80,000

Correct Answer: A

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Question 17
A consumer's utility function is given by U(x,y) = 2x + 3y, where x and y are the quantities of two goods consumed. If the consumer's budget constraint is 10x + 5y = 100, what is the consumer's optimal bundle of goods?
A. (10,10)
Correct B. (15,5)
C. (20,0)
D. (0,20)

Correct Answer: B

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Question 18
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 supply of the product is given by the equation Qs = 2P - 100, what is the equilibrium price and quantity?
Correct A. (50,50)
B. (75,25)
C. (100,0)
D. (0,100)

Correct Answer: A

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Question 19
A firm's production function is given by Q = 2L + 3K, where Q is the quantity produced, L is the labor input, and K is the capital input. If the firm's \cost function is given by C = 10L + 20K, what is the firm's profit-maximizing level of labor and capital?
A. (5,5)
Correct B. (10,10)
C. (15,15)
D. (20,20)

Correct Answer: B

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Question 20
The government of Nigeria has introduced a new policy aimed at promoting industrialization. The policy requires firms to invest a minimum of ₦100 million in research and development. If a firm's current investment in research and development is ₦50 million, what is the firm's additional investment required?
A. ₦0
B. ₦50 million
Correct C. ₦100 million
D. ₦150 million

Correct Answer: C

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Question 21
The government of Nigeria has introduced a new policy to encourage the growth of the agricultural sector. The policy includes providing subsidies to farmers, improving irrigation systems, and increa\sing access to credit. However, the policy also includes a provision that allows the government to purchase excess produce from farmers at a predetermined price. This provision is likely to lead to a situation where farmers produce more than the market demand, resulting in a surplus. What is the likely effect of this provision on the agricultural sector?
Correct A. The provision will lead to an increase in the production of agricultural products, resulting in a surplus.
B. The provision will lead to a decrease in the production of agricultural products, resulting in a shortage.
C. The provision will have no effect on the production of agricultural products.
D. The provision will lead to an increase in the price of agricultural products.

Correct Answer: A

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Question 22
A country's balance of payments is in surplus, meaning that it has a higher inflow of foreign exchange than outflow. What is the likely effect of this on the country's exchange rate?
Correct A. The exchange rate will appreciate.
B. The exchange rate will depreciate.
C. The exchange rate will remain unchanged.
D. The exchange rate will fluctuate.

Correct Answer: A

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Question 23
A firm is considering the production of a new product. The firm's production function is given by Q = 2L + 3K, where Q is the quantity produced, L is the labor input, and K is the capital input. If the firm's labor and capital inputs are 10 and 5, respectively, what is the quantity produced?
A. 20
Correct B. 30
C. 40
D. 50

Correct Answer: B

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Question 24
A country's money supply is increa\sing at a rate of 10% per annum. If the country's initial money supply is ₦100 billion, what is the money supply after 5 years?
Correct A. ₦161.05 billion
B. ₦162.05 billion
C. ₦163.05 billion
D. ₦164.05 billion

Correct Answer: A

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Question 25
A firm is facing a downward-sloping demand curve for its product. If the firm's marginal revenue is ₦100 and its marginal \cost is ₦80, what is the profit-maximizing quantity?
A. 10 units
Correct B. 20 units
C. 30 units
D. 40 units

Correct Answer: B

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