Practice post utme bsu economics 2020 Past Questions

Question 1

A firm's production function is given by Q = 2L^0.5H^0.5, where L and H are labor and capital inputs respectively. If the firm's current labor and capital inputs are L = 4 and H = 9, what is the marginal product of labor?

Correct A. 1.5

B. 2.5

C. 3.5

D. 4.5

Correct Answer: A

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Question 2

A monopolist faces a demand curve given by P = 100 - 2Q. The firm's marginal \cost is MC = 20. What is the monopolist's profit-maximizing output?

A. 20

B. 30

Correct C. 40

D. 50

Correct Answer: C

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Question 3

A consumer's budget constraint is given by 2Y + 3X = 100. The consumer's utility function is U = 2Y + X. What is the consumer's optimal bundle of Y and X?

Correct A. Y = 20, X = 10

B. Y = 30, X = 5

C. Y = 40, X = 0

D. Y = 0, X = 50

Correct Answer: A

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Question 4

A firm's production function is given by Q = 2L^0.5H^0.5. If the firm's current labor and capital inputs are L = 4 and H = 9, what is the firm's total product?

A. 12

B. 18

Correct C. 24

D. 30

Correct Answer: C

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Question 5

A monopolist faces a demand curve given by P = 100 - 2Q. The firm's marginal \cost is MC = 20. What is the monopolist's profit?

A. 1000

B. 1200

Correct C. 1500

D. 1800

Correct Answer: C

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Question 6

The opportunity \cost of producing one more unit of a good is measured by the

Correct A. marginal \cost

B. marginal revenue

C. marginal benefit

D. marginal utility

Correct Answer: A

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Question 7

A country's balance of payments is in equilibrium when its

A. current account is in surplus

B. capital account is in surplus

Correct C. trade balance is in equilibrium

D. exchange rate is stable

Correct Answer: C

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Question 8

The elasticity of demand for a good is measured by the percentage change in the quantity demanded in response to a 1% change in the price of the good. If the price elasticity of demand is greater than 1, the demand curve is

A. inelastic

Correct B. elastic

C. unit elastic

D. perfectly inelastic

Correct Answer: B

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Question 9

The opportunity \cost of producing one more unit of a good is measured by the

Correct A. marginal \cost

B. marginal revenue

C. marginal benefit

D. marginal utility

Correct Answer: A

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Question 10

A country's balance of payments is in equilibrium when its

A. current account is in surplus

B. capital account is in surplus

Correct C. trade balance is in equilibrium

D. exchange rate is stable

Correct Answer: C

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Question 11

Consider a country with a fixed budget for public exp\enditure. The government must allocate this budget among various sectors such as education, healthcare, infrastructure, and defense. Assuming that the government wants to maximize the overall welfare of its citizens, which of the following allocation methods would be most appropriate?

A. Laffer Curve

Correct B. Marginal Benefit

C. Marginal Cost

D. Marginal Utility

Correct Answer: B

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Question 12

A firm is considering two production methods: Method A, which requires an initial investment of ₦10 million and generates a profit of ₦5 million per year, and Method B, which requires an initial investment of ₦20 million and generates a profit of ₦10 million per year. Assuming that the firm wants to maximize its profits, which method should it choose?

Correct A. Method A

B. Method B

C. Both methods are equally profitable

D. Neither method is profitable

Correct Answer: A

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Question 13

A consumer is faced with the following budget constraint: 2x + 3y = 12, where x is the number of units of good X and y is the number of units of good Y. The consumer's utility function is given by U(x,y) = 2x + 3y. Assuming that the consumer wants to maximize their utility, what is the optimal combination of goods X and Y?

Correct A. (3,2)

B. (4,1)

C. (5,0)

D. (0,4)

Correct Answer: A

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Question 14

Consider a country with a fixed supply of labor. The government wants to implement a policy to increase the country's economic growth. Which of the following policies would be most effective in achieving this goal?

A. Increase the minimum wage

B. Increase the tax rate

C. Increase government sp\ending

Correct D. Decrease the interest rate

Correct Answer: D

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Question 15

A firm is considering two production methods: Method A, which requires an initial investment of ₦10 million and generates a profit of ₦5 million per year, and Method B, which requires an initial investment of ₦20 million and generates a profit of ₦10 million per year. Assuming that the firm wants to maximize its profits, which method should it choose?

Correct A. Method A

B. Method B

C. Both methods are equally profitable

D. Neither method is profitable

Correct Answer: A

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Question 16

A firm's demand curve for a product is given by Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the firm's supply curve is given by Q = 2P - 50, find the equilibrium price and quantity.

A. P = 25, Q = 75

Correct B. P = 50, Q = 100

C. P = 75, Q = 125

D. P = 100, Q = 150

Correct Answer: B

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Question 17

A country's balance of payments account is given by the following equation: BOP = X - M, where BOP is the balance of payments, 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 $120 million, what is the balance of payments?

Correct A. -20 million

B. 0 million

C. 20 million

D. 40 million

Correct Answer: A

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Question 18

A government imposes a tax of $10 on a product, which causes the supply curve to shift from Q = 2P - 50 to Q = 2P - 60. If the demand curve is given by Q = 100 - 2P, find the new equilibrium price and quantity.

A. P = 20, Q = 80

B. P = 30, Q = 70

Correct C. P = 40, Q = 60

D. P = 50, Q = 50

Correct Answer: C

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Question 19

A firm's demand curve for a product is given by Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the firm's supply curve is given by Q = 2P - 50, find the elasticity of demand at a price of $20.

Correct A. 0.5

B. 1

C. 2

D. 5

Correct Answer: A

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Question 20

A country's money supply is given by the equation M = 1000 + 0.5Y, where M is the money supply and Y is the income. If the income is $100,000, what is the money supply?

A. ₦50,000

Correct B. ₦100,000

C. ₦150,000

D. ₦200,000

Correct Answer: B

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Question 21

A monopolist faces a demand curve given by Q = 100 - 2P and a \cost function C(Q) = 2Q^2 + 10Q. U\sing the first-order condition for profit maximization, find the price at which the monopolist will produce 20 units.

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 22

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current labor and capital inputs are 4 and 9 respectively, what is the marginal product of labor?

A. 1

Correct B. 2

C. 3

D. 4

Correct Answer: B

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Question 23

A consumer's utility function is given by U = 2x + 3y. The consumer's budget constraint is given by 2x + 3y = 12. Find the consumer's optimal bundle of x and y.

Correct A. (2, 4)

B. (3, 3)

C. (4, 2)

D. (6, 0)

Correct Answer: A

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Question 24

A firm's demand curve is given by Q = 100 - 2P. If the firm's current price is ₦20, what is the price elasticity of demand?

Correct A. 0.5

B. 1

C. 2

D. 3

Correct Answer: A

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Question 25

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current labor and capital inputs are 4 and 9 respectively, what is the total product of labor?

A. 8

Correct B. 16

C. 32

D. 64

Correct Answer: B

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