POST UTME AL-HIKMAH UNIVERSITY 2021 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A firm is considering two different production techno\logies: a traditional techno\logy that requires 10 units of labor and 5 units of capital to produce 100 units of output, and a modern techno\logy that requires 5 units of labor and 10 units of capital to produce 150 units of output. If the wage rate is ₦100 per unit of labor and the rental rate is ₦200 per unit of capital, which techno\logy should the firm adopt?
A. Traditional techno\logy
B. Modern techno\logy
C. Both techno\logies are equally profitable
D. Neither techno\logy is profitable
Question 2
Consider a firm operating in a perfectly competitive market with a production function given by Q = 2L^0.5K^0.5. If the firm's current input prices are w_L = 10 and w_K = 20, and the current output price is p = 50, calculate the firm's optimal input mix u\sing the Shephard's Lemma. What is the elasticity of input demand with respect to the output price?
A. \( \frac{dL}{dP} = \frac{1}{2} \frac{K^{0.5}}{L^{0.5}} \)
B. \( \frac{dK}{dP} = \frac{1}{2} \frac{L^{0.5}}{K^{0.5}} \)
C. \( \frac{dL}{dP} = \frac{1}{2} \frac{K^{0.5}}{L^{0.5}} \) and \( \frac{dK}{dP} = \frac{1}{2} \frac{L^{0.5}}{K^{0.5}} \)
D. \( \frac{dL}{dP} = \frac{1}{2} \frac{K^{0.5}}{L^{0.5}} \) and \( \frac{dK}{dP} = \frac{1}{2} \frac{L^{0.5}}{K^{0.5}} \)
Question 3
The Nigerian government has implemented a policy aimed at promoting agricultural development. The policy involves a subsidy of ₦50 per unit of fertilizer for farmers. If the initial price of fertilizer was ₦200 per unit, what is the new price?
A. ₦150
B. ₦175
C. ₦200
D. ₦225
Question 4
A firm has a production function given by Q = 2L + 3K, where L is labor and K is capital. If the firm uses 10 units of labor and 5 units of capital, what is the output?
A. 20
B. 30
C. 40
D. 50
Question 5
A firm's production function is given by \( Q = 2L^{1/2}K^{1/2} \). If the firm's output is 16 units and the price of labor is ₦20 per unit, while the price of capital is ₦30 per unit, what is the firm's optimal input combination of labor and capital?
A. (4, 2)
B. (2, 4)
C. (1, 8)
D. (8, 1)
Question 6
The Central Bank of Nigeria has implemented a monetary policy aimed at reducing inflation. The policy involves a reduction in the money supply by 10%. If the initial money supply was ₦1 trillion, what is the new money supply?
A. ₦900 billion
B. ₦950 billion
C. ₦1 trillion
D. ₦1.1 trillion
Question 7
A consumer's indifference curve is represented by the equation u(x,y) = 2x + 3y. If the consumer's initial \endowment is (x0,y0) = (10,20), and the price of x is ₦5 and the price of y is ₦3, what is the consumer's optimal bundle?
A. x = 5, y = 10
B. x = 10, y = 5
C. x = 15, y = 0
D. x = 0, y = 15
Question 8
A country's GDP is ₦100 billion, its GNP is ₦120 billion, and its net factor income from abroad is ₦10 billion. What is the country's net domestic product?
A. ₦90 billion
B. ₦100 billion
C. ₦110 billion
D. ₦120 billion
Question 9
A central bank is u\sing a monetary policy tool to reduce inflation. If the current money supply is ₦100 billion, and the central bank wants to reduce the money supply by 10%, what will be the new money supply?
A. ₦90 billion
B. ₦100 billion
C. ₦110 billion
D. ₦120 billion
Question 10
A firm is operating under perfect competition. The market demand curve is given by Qd = 100 - 2P, and the market supply curve is given by Qs = 2P. What is the equilibrium price and quantity?
A. P = ₦20, Q = 60
B. P = ₦30, Q = 40
C. P = ₦40, Q = 20
D. P = ₦50, Q = 10
Question 11
A monopolist faces a demand curve given by Qd = 100 - 2P and a \cost function C(Q) = 10Q + 100. If the firm produces 50 units, what is the profit?
A. ₦500
B. ₦1000
C. ₦1500
D. ₦2000
Question 12
A monopolist faces a demand curve with the following equation: \( Q = 100 - 2P \). If the marginal \cost curve is given by \( MC = 10 + 2Q \), what is the profit-maximizing price and quantity?
A. \( P = 40, Q = 30 \)
B. \( P = 50, Q = 25 \)
C. \( P = 60, Q = 20 \)
D. \( P = 70, Q = 15 \)
Question 13
Consider a perfectly competitive market with n firms, each producing a homogeneous product. If the market demand curve is downward sloping and the firms are price takers, what is the equilibrium price and quantity of the product?
A. \( P = MC \)
B. \( P = MR \)
C. \( P = MC = MR \)
D. \( P > MC \)
Question 14
A consumer's indifference curve is given by the equation ( u(x,y) = 2x + 3y ). If the consumer's income is ₦1000 and the prices of x and y are ₦5 and ₦10 respectively, what is the consumer's optimal bundle of x and y?
A. (20, 10)
B. (15, 5)
C. (10, 2)
D. (5, 1)
Question 15
A consumer has a utility function given by U(x,y) = 2x + 3y. If the prices of x and y are ₦10 and ₦20 respectively, and the consumer has a budget of ₦100, what is the optimal bundle of x and y?
A. (10,10)
B. (20,5)
C. (15,15)
D. (25,0)

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