POST UTME AL-HIKMAH UNIVERSITY 2020 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
The following table shows the balance of payments for a country in a given year. What is the value of the current account balance?
A. ₦100 billion
B. ₦200 billion
C. ₦300 billion
D. ₦400 billion
Question 2
A country is experiencing a recession, and the government is considering implementing a fiscal policy to stimulate economic growth. U\sing the concept of fiscal policy, explain why the government might choose to increase government sp\ending.
A. To increase aggregate demand and stimulate economic growth
B. To reduce the budget deficit and increase government revenue
C. To increase employment opportunities and stimulate economic growth
D. To reduce inflation and stabilize the economy
Question 3
A firm's total revenue is given by the equation \( TR = 100x - 2x^2 \), where ( x ) is the number of units sold. If the firm's marginal revenue is \( MR = 100 - 4x \), find the value of ( x ) at which the firm's marginal revenue equals its average revenue.
A. 10
B. 20
C. 30
D. 40
Question 4
A firm's production function is given by Q = 2L^0.5H^0.5, where Q is output, L is labor and H is capital. If the firm wants to increase its output by 20% while keeping labor cons\tant, what percentage increase in capital is required?
A. 10%
B. 20%
C. 30%
D. 40%
Question 5
A consumer has the following utility function: U = 2x + 3y. If the prices of x and y are ₦5 and ₦10 respectively, and the consumer has a budget of ₦50, what is the optimal consumption bundle?
A. x = 5, y = 3
B. x = 10, y = 5
C. x = 15, y = 10
D. x = 20, y = 15
Question 6
A firm's \cost function is given by C = 100 + 2Q, where C is the \cost and Q is the quantity produced. If the firm's revenue function is given by R = 200Q, what is the firm's profit-maximizing quantity?
A. 50 units
B. 100 units
C. 150 units
D. 200 units
Question 7
A firm is considering the introduction of a new product. The demand for the product is expected to be inelastic, and the firm's marginal \cost is increa\sing. U\sing the concept of elasticity of demand, explain why the firm might choose to introduce the new product.
A. Because the firm can increase its revenue by increa\sing the price of the product
B. Because the firm can increase its profit by introducing the new product and capturing a larger market share
C. Because the firm can reduce its \costs by introducing the new product and increa\sing its production
D. Because the firm can increase its market power by introducing the new product and reducing competition
Question 8
A consumer's demand function for a good is given by Q = 100 - 2P, where Q is quantity demanded and P is price. If the price of the good increases from ₦50 to ₦75, what is the percentage change in quantity demanded?
A. -20%
B. -30%
C. -40%
D. -50%
Question 9
A consumer's demand function for a good is given by Q = 100 - 2P, where Q is quantity demanded and P is price. If the price of the good increases from ₦50 to ₦75, what is the elasticity of demand?
A. Inelastic
B. Unit Elastic
C. Elastic
D. Perfectly Elastic
Question 10
Consider a firm with a production function given by Q = 2L^0.5K^0.5. If the price of the good is $10 and the wage rate is $5, what is the optimal level of labor (L) and capital (K) that the firm should employ?
A. \( L = 100, K = 100 \)
B. \( L = 25, K = 25 \)
C. \( L = 50, K = 50 \)
D. \( L = 200, K = 200 \)
Question 11
A consumer's budget constraint is given by 2x + 3y = 100, where x and y are the quantities of two goods. If the consumer's utility function is given by U = 2x + 3y, what is the consumer's optimal bundle of goods?
A. (20, 10)
B. (15, 15)
C. (10, 20)
D. (5, 25)
Question 12
The demand for a product is given by the equation \( Q = 100 - 2P \), where ( Q ) is the quantity demanded and ( P ) is the price. If the supply of the product is given by the equation \( Q = 50 + 3P \), find the equilibrium price and quantity.
A. 20
B. 30
C. 40
D. 50
Question 13
The demand for a product is given by the equation \( Q = 100 - 2P \), where ( Q ) is the quantity demanded and ( P ) is the price. If the supply of the product is given by the equation \( Q = 50 + 3P \), find the elasticity of demand at the equilibrium price.
A. 0.5
B. 1
C. 2
D. 3
Question 14
A government imposes a tax of 10% on a good. If the price of the good is $100, what is the new price of the good after the tax is imposed?
A. $90
B. $100
C. $110
D. $120
Question 15
A country is experiencing a recession, and the government is considering implementing a monetary policy to stimulate economic growth. U\sing the concept of monetary policy, explain why the government might choose to reduce interest rates.
A. To increase aggregate demand and stimulate economic growth
B. To reduce the budget deficit and increase government revenue
C. To increase employment opportunities and stimulate economic growth
D. To reduce inflation and stabilize the economy

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