POST UTME BOWEN UNIVERSITY 2023 Economics | Objective

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Question 1
The returns to scale in a production function can be classified into three types: increa\sing, decrea\sing, and cons\tant. Which of the following is an example of a production function with cons\tant returns to scale?
A. Q = 2K^\( 1/2 \) L^\( 1/2 \)
Correct B. Q = 3K L
C. Q = 2K L
D. Q = 4K L^(2)

Correct Answer: B

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Question 2
A consumer's utility function is given by U(x, y) = 2x^\( 1/2 \) y^\( 1/2 \). 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?
A. x = 20, y = 10
B. x = 10, y = 20
Correct C. x = 15, y = 15
D. x = 25, y = 5

Correct Answer: C

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Question 3
The government of Nigeria has implemented a policy to increase agricultural production. Which of the following is a potential benefit of this policy?
A. Increased employment opportunities
Correct B. Improved food security
C. Increased foreign exchange earnings
D. Reduced poverty

Correct Answer: B

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Question 4
A firm's production function is given by Q = 2K^\( 1/2 \) L^\( 1/2 \). If the firm's capital and labor inputs are increased by 20% and 15% respectively, what is the resulting change in output?
A. 10% increase
B. 15% increase
Correct C. 20% increase
D. 25% increase

Correct Answer: C

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Question 5
A consumer's budget constraint is given by 2x + 3y = 12. If the consumer's utility function is U(x, y) = x^\( 1/2 \) y^\( 1/2 \), what is the consumer's optimal bundle?
Correct A. x = 3, y = 2
B. x = 2, y = 3
C. x = 4, y = 1
D. x = 1, y = 4

Correct Answer: A

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Question 6
A consumer's utility function is given by ( U(x,y) = 2x + 3y - x^2 - 2y^2 ). Find the marginal utility of x when x = 2 and y = 3.
A. -2
Correct B. 4
C. 6
D. 8

Correct Answer: B

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Question 7
Agricultural production in Nigeria can be represented by the Cobb-Douglas production function \( Q = 10K^{0.4}L^{0.6} \), where Q is output, K is capital, and L is labor. If the price of capital is ₦100 per unit and the price of labor is ₦50 per unit, find the optimal combination of capital and labor that maximizes profit.
Correct A. K = 100, L = 50
B. K = 50, L = 100
C. K = 100, L = 100
D. K = 50, L = 50

Correct Answer: A

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Question 8
The demand function for a commodity is given by \( p = 100 - 2q \), where p is price and q is quantity demanded. If the supply function is \( p = 50 + 2q \), find the equilibrium price and quantity.
A. p = 50, q = 25
Correct B. p = 75, q = 25
C. p = 100, q = 25
D. p = 75, q = 50

Correct Answer: B

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Question 9
The National Bureau of Statistics (NBS) reports that the Gross Domestic Product (GDP) of Nigeria for a particular year was ₦15 trillion. If the population of Nigeria was 200 million, find the per capita income.
Correct A. ₦75,000
B. ₦75,000,000
C. ₦75
D. ₦75,000,000,000

Correct Answer: A

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Question 10
A firm produces two goods, A and B, u\sing two inputs, labor and capital. The production function for good A is \( Q_A = 2L^{0.4}K^{0.6} \) and for good B is \( Q_B = 3L^{0.6}K^{0.4} \). If the firm has 100 units of labor and 50 units of capital, find the optimal combination of labor and capital that maximizes the total output.
A. L = 50, K = 25
B. L = 25, K = 50
Correct C. L = 100, K = 50
D. L = 50, K = 100

Correct Answer: C

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Question 11
A firm's demand curve for a product is given by Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. The supply curve is given by Qs = 2P - 100. Find the equilibrium price and quantity.
A. ₦50
B. ₦75
Correct C. ₦100
D. ₦125

Correct Answer: C

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Question 12
A consumer has the following utility function: U(x, y) = 2x + 3y. The prices of x and y are ₦5 and ₦10 respectively. Find the consumer's optimal bundle of x and y.
A. x = 5, y = 10
Correct B. x = 10, y = 5
C. x = 15, y = 3
D. x = 20, y = 2

Correct Answer: B

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Question 13
A country's GDP is ₦100 billion and its imports are ₦20 billion. What is its balance of trade?
Correct A. ₦80 billion
B. ₦60 billion
C. ₦40 billion
D. ₦20 billion

Correct Answer: A

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Question 14
A firm's production function is given by Q = 2L^0.5K^0.5, where Q is the quantity produced, L is the labor and K is the capital. If the firm uses 100 units of labor and 200 units of capital, what is the quantity produced?
A. 100
B. 200
Correct C. 300
D. 400

Correct Answer: C

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Question 15
A consumer has the following budget constraint: 2x + 3y = ₦100. The prices of x and y are ₦5 and ₦10 respectively. Find the consumer's optimal bundle of x and y.
A. x = 10, y = 20
Correct B. x = 20, y = 10
C. x = 15, y = 15
D. x = 25, y = 5

Correct Answer: B

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