POST UTME BABCOCK UNIVERSITY 2018 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
The law of diminishing marginal utility states that as the quantity of a good consumed increases, the marginal utility derived from each additional unit
A. increases
B. decreases
C. remains cons\tant
D. becomes negative
Question 2
A firm produces two products, A and B. The production of A requires 2 hours of labor and 1 hour of capital, while the production of B requires 1 hour of labor and 2 hours of capital. If the firm has 10 hours of labor and 10 hours of capital available, and the prices of A and B are ₦100 and ₦200 respectively, find the optimal production levels of A and B, assuming that the firm's objective is to maximize profit.
A. A = 5 units, B = 5 units
B. A = 10 units, B = 0 units
C. A = 0 units, B = 10 units
D. A = 5 units, B = 10 units
Question 3
A country's inflation rate is given by the following equation: inflation rate = \( P1 - P0 \) / P0, where P1 is the current price level and P0 is the previous price level. If the current price level is ₦100 and the previous price level is ₦90, what is the inflation rate?
A. 10%
B. 20%
C. 30%
D. 40%
Question 4
A firm produces two products, A and B. The production of A requires 2 hours of labor and 1 hour of capital, while the production of B requires 1 hour of labor and 2 hours of capital. If the firm has 10 hours of labor and 10 hours of capital available, and the prices of A and B are ₦100 and ₦200 respectively, find the optimal production levels of A and B.
A. A = 5 units, B = 5 units
B. A = 10 units, B = 0 units
C. A = 0 units, B = 10 units
D. A = 5 units, B = 10 units
Question 5
A firm's \cost function is given by C = 100 + 2L + 3K, where C is \cost, L is labor, and K is capital. If the firm increases labor from 50 to 60 units and capital from 50 to 60 units, what is the percentage change in \cost?
A. 10%
B. 20%
C. 30%
D. 40%
Question 6
The supply curve shifts to the right when there is an increase in the
A. price of the good
B. price of a complementary good
C. price of a substitute good
D. techno\logy
Question 7
A firm's demand function is given by \( Q = 100 - 2P \). If the firm's marginal \cost is ₦20, what is the profit-maximizing price?
A. ₦40
B. ₦50
C. ₦60
D. ₦70
Question 8
Consider a firm operating in a perfectly competitive market. If the firm's marginal revenue (MR) curve intersects its marginal \cost (MC) curve at point E, where MR = MC, and the firm is producing at its profit-maximizing level of output, what is the implication of this intersection point on the firm's short-run production decision?
A. The firm will increase its production level to take advantage of the higher price.
B. The firm will decrease its production level to reduce \costs.
C. The firm will maintain its current production level.
D. The firm will exit the market.
Question 9
Agricultural development in Nigeria has been hindered by the lack of
A. adequate funding
B. modern techno\logy
C. skilled labor
D. all of the above
Question 10
Suppose the demand for a product is given by Qd = 100 - 2P and the supply is given by Qs = 2P. If the price is initially set at ₦10, what is the equilibrium quantity?
A. 20
B. 30
C. 40
D. 50
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 -2, what is the percentage change in quantity demanded when the price increases by 10%?
A. 20%
B. 10%
C. 5%
D. 15%
Question 12
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 -2, what is the percentage change in quantity demanded when the price increases by 10%?
A. 20%
B. 10%
C. 5%
D. 15%
Question 13
A consumer's indifference curve is represented 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 ₦3 respectively, what is the consumer's optimal bundle of x and y?
A. x = 40, y = 20
B. x = 30, y = 30
C. x = 20, y = 40
D. x = 10, y = 50
Question 14
A country's balance of payments is in equilibrium when the value of its exports equals the value of its
A. imports
B. exports
C. capital inflows
D. foreign direct investment
Question 15
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 20% and 15% respectively, what is the percentage change in output?
A. -5%
B. -10%
C. 0%
D. 5%

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