Practice post utme bells university economics 2023 Past Questions

Question 1

Consider a country with a fixed exchange rate of ₦5 per US dollar. If the country's central bank sells $100 million to the foreign exchange market, what is the expected impact on the domestic money supply?

A. The money supply will increase by ₦500 million.

Correct B. The money supply will decrease by ₦500 million.

C. The money supply will remain unchanged.

D. The money supply will increase by ₦1 billion.

Correct Answer: B

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Question 2

A firm is considering two investment projects. Project A has a 5-year payback period and requires an initial investment of ₦10 million. Project B has a 3-year payback period and requires an initial investment of ₦15 million. Which project should the firm choose?

A. Project A

Correct B. Project B

C. Both projects are equally attractive

D. Neither project is attractive

Correct Answer: B

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Question 3

A country's government is considering a tax on imports. The tax rate is 10% of the import value. If the country imports goods worth $100 million, what is the expected revenue from the tax?

Correct A. ₦10 million

B. ₦100 million

C. ₦1 billion

D. ₦10 billion

Correct Answer: A

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Question 4

A firm is facing a shortage of raw materials. The firm's production function is given by Q = 2L + 3K, where Q is the quantity produced, L is the labor input, and K is the capital input. If the firm wants to increase production by 10%, what is the required increase in labor input?

A. 5% increase

Correct B. 10% increase

C. 15% increase

D. 20% increase

Correct Answer: B

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Question 5

A country's central bank is considering a monetary policy to reduce inflation. The central bank can either increase the reserve requirement or decrease the discount rate. Which policy is more effective in reducing inflation?

Correct A. Increa\sing the reserve requirement

B. Decrea\sing the discount rate

C. Both policies are equally effective

D. Neither policy is effective

Correct Answer: A

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Question 6

A monopolistically competitive firm faces a demand curve with a cons\tant elasticity of -2. If the firm's marginal revenue (MR) is 100, and its marginal \cost (MC) is 80, what is the firm's optimal price?

A. ₦120

B. ₦150

Correct C. ₦180

D. ₦200

Correct Answer: C

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Question 7

A country's GDP is ₦10 trillion, and its GNP is ₦12 trillion. If the country has a net factor income from abroad of ₦1.5 trillion, what is its net domestic product?

Correct A. ₦8.5 trillion

B. ₦9 trillion

C. ₦9.5 trillion

D. ₦10 trillion

Correct Answer: A

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Question 8

A firm's total revenue (TR) is given by the equation TR = 100Q - 2Q^2, where Q is the quantity sold. If the firm's marginal revenue (MR) is 100 - 4Q, what is the firm's optimal quantity?

A. 10 units

B. 20 units

Correct C. 30 units

D. 40 units

Correct Answer: C

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Question 9

A country's balance of payments (BOP) is given by the equation BOP = X - M, where X is the value of exports and M is the value of imports. If the country's exports are ₦5 trillion and its imports are ₦6 trillion, what is its balance of payments?

A. ₦1 trillion surplus

Correct B. ₦1 trillion deficit

C. ₦2 trillion surplus

D. ₦2 trillion deficit

Correct Answer: B

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Question 10

A firm's demand curve is given by the equation Q = 100 - 2P, where P is the price. If the firm's marginal revenue (MR) is 200 - 4P, what is the firm's optimal price?

A. ₦50

B. ₦75

Correct C. ₦100

D. ₦125

Correct Answer: C

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Question 11

A firm's demand curve is given by Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the price elasticity of demand is calculated at a point where the quantity demanded is 60 units, what is the price elasticity of demand?

A. 0.5

B. 1

Correct C. 2

D. 3

Correct Answer: C

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Question 12

A country's balance of payments is given by the following equation: BOP = X - M, where X is the value of exports and M is the value of imports. If the value of exports is $100 million and the value of imports is $80 million, what is the balance of payments?

Correct A. $20 million

B. $30 million

C. $40 million

D. $50 million

Correct Answer: A

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Question 13

A consumer's utility function is given by U = 2x + 3y, where x and y are the quantities of two goods consumed. If the consumer's budget constraint is given by 2x + 3y = $100, what is the consumer's optimal bundle of goods?

A. x = 20, y = 10

Correct B. x = 30, y = 20

C. x = 40, y = 30

D. x = 50, y = 40

Correct Answer: B

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Question 14

A government's budget is given by the following equation: Budget = Taxation + Borrowing, where Taxation is the amount of taxes collected and Borrowing is the amount of money borrowed. If the amount of taxes collected is $50 million and the amount of money borrowed is $20 million, what is the government's budget?

A. $30 million

B. $40 million

Correct C. $50 million

D. $60 million

Correct Answer: C

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Question 15

A central bank's monetary policy is given by the following equation: Money Supply = M0 + M1, where M0 is the amount of money in circulation and M1 is the amount of money in the banking system. If the amount of money in circulation is $100 million and the amount of money in the banking system is $50 million, what is the money supply?

A. $50 million

B. $100 million

Correct C. $150 million

D. $200 million

Correct Answer: C

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Question 16

A firm's supply curve is given by Q = 2P + 10, where Q is the quantity supplied and P is the price. If the price elasticity of supply is calculated at a point where the quantity supplied is 30 units, what is the price elasticity of supply?

A. 0.5

B. 1

Correct C. 2

D. 3

Correct Answer: C

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Question 17

A country's balance of payments is given by the following equation: BOP = X - M, where X is the value of exports and M is the value of imports. If the value of exports is $80 million and the value of imports is $60 million, what is the balance of payments?

A. $20 million

B. $30 million

Correct C. $40 million

D. $50 million

Correct Answer: C

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Question 18

A consumer's utility function is given by U = 3x + 2y, where x and y are the quantities of two goods consumed. If the consumer's budget constraint is given by 3x + 2y = $100, what is the consumer's optimal bundle of goods?

A. x = 20, y = 10

Correct B. x = 30, y = 20

C. x = 40, y = 30

D. x = 50, y = 40

Correct Answer: B

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Question 19

Consider a country with a GDP of ₦10 trillion and a population of 200 million. If the government decides to implement a 10% value-added tax (VAT) on all goods and services, what will be the impact on the country's GDP?

A. The GDP will increase by 10%.

B. The GDP will decrease by 10%.

Correct C. The GDP will remain unchanged.

D. The GDP will increase by 20%.

Correct Answer: C

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Question 20

A firm is producing a good with a production function Q = 2L^$ 1/2 $K^$ 1/2 $, where L is labor and K is capital. If the firm increases labor from 100 to 120 units and capital from 100 to 120 units, what will be the percentage change in output?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 21

A country's balance of payments account shows a trade deficit of ₦500 billion and a current account deficit of ₦300 billion. What is the value of the capital account surplus?

A. ₦200 billion

B. ₦300 billion

C. ₦400 billion

Correct D. ₦500 billion

Correct Answer: D

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Question 22

A firm is producing a good with a production function Q = 2L^$ 1/2 $K^$ 1/2 $, where L is labor and K is capital. If the firm increases labor from 100 to 120 units and capital from 100 to 120 units, what will be the percentage change in output?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 23

A country's GDP is ₦10 trillion and its GNP is ₦12 trillion. What is the value of the net factor income from abroad?

A. ₦2 trillion

B. ₦4 trillion

Correct C. ₦6 trillion

D. ₦8 trillion

Correct Answer: C

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Question 24

Consider a perfectly competitive market with n firms, each producing a homogeneous product. If the market demand curve is given by Qd = 100 - 2P and the inverse supply curve is given by Qs = 2P - 20, what is the equilibrium price and quantity?

A. $ P = 30, Q = 40 $

Correct B. $ P = 20, Q = 60 $

C. $ P = 10, Q = 80 $

D. $ P = 40, Q = 30 $

Correct Answer: B

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Question 25

A monopolist faces a market demand curve given by Qd = 100 - 2P and a marginal revenue function MR = 2P - 20. If the firm's marginal \cost is MC = 10, what is the profit-maximizing quantity and price?

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

B. $ Q = 20, P = 30 $

C. $ Q = 10, P = 20 $

D. $ Q = 40, P = 20 $

Correct Answer: A

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