POST UTME BABCOCK UNIVERSITY 2019 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A consumer's budget constraint is given by \( 2x + 3y = 12 \). If the consumer's indifference curve is represented by the equation ( u(x,y) = 2x + y ), what is the optimal bundle of x and y?
A. (3, 4)
B. (4, 3)
C. (5, 2)
D. (2, 5)
Question 2
The government of a country wants to increase its national income by 10% in a year. If the current national income is ₦100 billion, what is the required increase in the national income?
A. ₦10 billion
B. ₦11 billion
C. ₦12 billion
D. ₦13 billion
Question 3
A firm is operating in a perfectly competitive market. If the firm's marginal revenue (MR) is less than its marginal \cost (MC), what will be the firm's optimal output?
A. The firm will produce at the point where MR = MC.
B. The firm will produce at the point where MR > MC.
C. The firm will produce at the point where MR < MC.
D. The firm will produce at the point where MR = MC and MC is at its minimum.
Question 4
Consider a firm operating in a perfectly competitive market with a downward-sloping demand curve. 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 optimal quantity \( Q* \), what is the effect on the firm's total revenue (TR) if the demand curve shifts to the left?
A. The firm's TR increases
B. The firm's TR decreases
C. The firm's TR remains unchanged
D. The firm's TR increases, but at a decrea\sing rate
Question 5
A consumer's utility function is given by U(x, y) = 2x + 3y. The budget constraint is 2x + 3y = 12. Find the consumer's optimal bundle of x and y.
A. x = 2, y = 4
B. x = 4, y = 2
C. x = 3, y = 3
D. x = 1, y = 5
Question 6
A firm's production function is given by Q = 2L + 3K. The \cost of labor is ₦50 per unit and the \cost of capital is ₦100 per unit. If the firm produces 20 units of output, what is the total \cost of production?
A. ₦1500
B. ₦2000
C. ₦2500
D. ₦3000
Question 7
A firm's demand curve is given by Q = 100 - 2P. If the firm's marginal revenue is ₦50 per unit, what is the firm's price?
A. ₦25
B. ₦50
C. ₦75
D. ₦100
Question 8
The money market is a financial market where short-term debt securities are traded. What is the main function of the money market?
A. To provide long-term financing for bu\sinesses
B. To facilitate the exchange of goods and services
C. To provide short-term financing for bu\sinesses
D. To manage a country's foreign exchange reserves
Question 9
The concept of diminishing marginal utility (DMU) is a fundamental principle in consumer behavior. What is the main implication of DMU?
A. That consumers will always prefer more of a good or service
B. That consumers will always prefer less of a good or service
C. That consumers will eventually reach a point where additional units of a good or service provide no additional satisfaction
D. That consumers will always be indifferent to the quantity of a good or service
Question 10
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 is increased by 10%, what is the new quantity demanded?
A. 80
B. 90
C. 100
D. 110
Question 11
A country's balance of payments is given by the following equation: BOP = X - M. If the country's exports are ₦500 billion and imports are ₦600 billion, what is the balance of payments?
A. ₦100 billion surplus
B. ₦100 billion deficit
C. ₦500 billion surplus
D. ₦500 billion deficit
Question 12
A firm is operating in a perfectly competitive market. If the firm's marginal revenue (MR) is greater than its marginal \cost (MC), what will be the firm's optimal output?
A. The firm will produce at the point where MR = MC.
B. The firm will produce at the point where MR > MC.
C. The firm will produce at the point where MR < MC.
D. The firm will produce at the point where MR = MC and MC is at its minimum.
Question 13
The concept of comparative advantage in international trade is based on the idea that countries should specialize in producing goods for which they have a lower opportunity \cost. Which of the following is a correct example of comparative advantage?
A. Nigeria producing more oil than the United States
B. Nigeria producing more cotton than the United States
C. Nigeria producing more wheat than the United States
D. Nigeria producing more automobiles than the United States
Question 14
A consumer's utility function is given by U = 2x + 3y. If the consumer's budget constraint is 2x + 3y = ₦100, what is the optimal consumption bundle?
A. x = 20, y = 30
B. x = 30, y = 20
C. x = 40, y = 10
D. x = 10, y = 40
Question 15
Agricultural mechanization in Nigeria has been hindered by the high \cost of machinery and maintenance. However, the government has introduced a subsidy program to reduce the \cost of machinery. U\sing the concept of elasticity of demand, explain how the subsidy program will affect the demand for agricultural machinery.
A. The demand for agricultural machinery will increase, but the elasticity of demand will be inelastic.
B. The demand for agricultural machinery will decrease, and the elasticity of demand will be elastic.
C. The demand for agricultural machinery will increase, and the elasticity of demand will be elastic.
D. The demand for agricultural machinery will decrease, and the elasticity of demand will be inelastic.

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