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POST UTME AL-HIKMAH UNIVERSITY 2021 Economics | Objective

Are you preparing for POST UTME AL-HIKMAH UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2021 Economics (Objective) questions designed to simulate the real exam environment.

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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 60?

Correct A. ₦20

B. ₦30

C. ₦40

D. ₦50

Correct Answer: A

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Question 2

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

Correct B. ₦1000

C. ₦1500

D. ₦2000

Correct Answer: B

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Question 3

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)

Correct C. (15,15)

D. (25,0)

Correct Answer: C

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Question 4

The following diagram shows the supply and demand curves for a product. What is the equilibrium price and quantity?

A. ₦20, 50

Correct B. ₦30, 60

C. ₦40, 70

D. ₦50, 80

Correct Answer: B

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Question 5

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

Correct C. 40

D. 50

Correct Answer: C

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Question 6

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 $

Correct C. $ P = MC = MR $

D. $ P > MC $

Correct Answer: C

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Question 7

A country's balance of payments account is in equilibrium when the current account is equal to the capital account. If the current account is in deficit, what is the likely outcome for the exchange rate?

A. Appreciation

Correct B. Depreciation

C. Stability

D. Inflation

Correct Answer: B

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Question 8

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?

Correct A. $ P = 40, Q = 30 $

B. $ P = 50, Q = 25 $

C. $ P = 60, Q = 20 $

D. $ P = 70, Q = 15 $

Correct Answer: A

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Question 9

A government imposes a tax on a particular good, cau\sing the supply curve to shift to the left. If the demand curve is inelastic, what is the likely outcome for the price and quantity of the good?

Correct A. Price increases, quantity decreases

B. Price decreases, quantity increases

C. Price increases, quantity increases

D. Price decreases, quantity decreases

Correct Answer: A

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Question 10

A consumer's utility function is given by $ U = 2x + 3y $, where x and y are the quantities of two goods consumed. If the prices of the goods are $2 and $3, respectively, and the consumer's income is $10, what is the optimal bundle of goods?

Correct A. $ x = 2, y = 1 $

B. $ x = 3, y = 2 $

C. $ x = 4, y = 3 $

D. $ x = 5, y = 4 $

Correct Answer: A

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Question 11

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?

Correct A. x = 5, y = 10

B. x = 10, y = 5

C. x = 15, y = 0

D. x = 0, y = 15

Correct Answer: A

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Question 12

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?

Correct A. P = ₦20, Q = 60

B. P = ₦30, Q = 40

C. P = ₦40, Q = 20

D. P = ₦50, Q = 10

Correct Answer: A

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Question 13

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?

Correct A. ₦90 billion

B. ₦100 billion

C. ₦110 billion

D. ₦120 billion

Correct Answer: A

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Question 14

A monopolist is facing a demand curve given by Qd = 100 - 2P, and its marginal revenue curve is given by MR = 2P. What is the monopolist's optimal price and quantity?

Correct A. P = ₦20, Q = 60

B. P = ₦30, Q = 40

C. P = ₦40, Q = 20

D. P = ₦50, Q = 10

Correct Answer: A

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Question 15

A country is experiencing inflation at a rate of 10% per annum. If the current price level is ₦100, what will be the price level after one year?

A. ₦110

Correct B. ₦120

C. ₦130

D. ₦140

Correct Answer: B

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Question 16

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?

Correct A. ₦90 billion

B. ₦100 billion

C. ₦110 billion

D. ₦120 billion

Correct Answer: A

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Question 17

A country's national income is ₦100 billion, and its government exp\enditure is ₦30 billion. What is the country's private sector exp\enditure?

Correct A. ₦70 billion

B. ₦80 billion

C. ₦90 billion

D. ₦100 billion

Correct Answer: A

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Question 18

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?

Correct A. P = ₦20, Q = 60

B. P = ₦30, Q = 40

C. P = ₦40, Q = 20

D. P = ₦50, Q = 10

Correct Answer: A

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Question 19

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

Correct Answer: VIEW ANSWER

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Question 20

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}} $

Correct 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}} $

Correct Answer: C

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Question 21

The Nigerian government has introduced a new tax policy aimed at reducing income inequality. The policy involves a progressive tax system where the tax rate increases as income increases. If the tax rate is 10% for income up to ₦100,000, 20% for income between ₦100,001 and ₦200,000, and 30% for income above ₦200,000, what is the tax liability for an individual with an income of ₦250,000?

A. ₦30,000

B. ₦45,000

Correct C. ₦60,000

D. ₦75,000

Correct Answer: C

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Question 22

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

Correct B. Modern techno\logy

C. Both techno\logies are equally profitable

D. Neither techno\logy is profitable

Correct Answer: B

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Question 23

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?

Correct A. ₦900 billion

B. ₦950 billion

C. ₦1 trillion

D. ₦1.1 trillion

Correct Answer: A

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Question 24

A firm is facing an increase in demand for its product. The initial demand curve is given by Q = 100 - 2P, and the new demand curve is given by Q = 120 - 2P. If the firm's marginal \cost is cons\tant at ₦50, what is the new equilibrium price?

A. ₦40

Correct B. ₦45

C. ₦50

D. ₦55

Correct Answer: B

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Question 25

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

Correct B. ₦175

C. ₦200

D. ₦225

Correct Answer: B

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