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POST UTME BSU 2021 Economics | Objective

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Question 1

Consider a country that imports 100 units of a commodity and exports 80 units. The price of the commodity in the domestic market is ₦100 per unit, while the price in the foreign market is ₦80 per unit. U\sing the Balance of Payments framework, calculate the trade balance.

Correct A. ₦20,000

B. ₦10,000

C. ₦30,000

D. ₦40,000

Correct Answer: A

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Question 2

A firm produces two goods, A and B, u\sing two inputs, Labour (L) and Capital (K). The production functions are given by: Q_A = 2L^0.5K^0.5 and Q_B = 3L^0.7K^0.3. If the firm has 100 units of Labour and 50 units of Capital, calculate the marginal rate of technical substitution (MRTS) between Labour and Capital for good A.

Correct A. 0.5

B. 1.5

C. 2.5

D. 3.5

Correct Answer: A

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Question 3

A consumer has a budget of ₦1000 and faces the following prices: Q_A = ₦200, Q_B = ₦300, and Q_C = ₦400. U\sing the indifference curve framework, determine the optimal consumption bundle.

Correct A. (2, 1)

B. (1, 2)

C. (3, 0)

D. (0, 3)

Correct Answer: A

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Question 4

A firm faces the following demand and supply functions: Q_D = 100 - 2P and Q_S = 20 + 3P. U\sing the supply and demand framework, determine the equilibrium price and quantity.

Correct A. (₦20, 80)

B. (₦30, 70)

C. (₦40, 60)

D. (₦50, 50)

Correct Answer: A

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Question 5

A firm produces a good u\sing a production function Q = 2L^0.5K^0.5. The firm has 100 units of Labour and 50 units of Capital. U\sing the production theory framework, determine the returns to scale.

A. Increa\sing Returns to Scale

B. Decrea\sing Returns to Scale

Correct C. Cons\tant Returns to Scale

D. No Returns to Scale

Correct Answer: C

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Question 6

A monopolist faces a demand curve given by Q = 100 - 2P and a \cost function C(Q) = 2Q^2 + 10Q. Find the profit-maximizing price and quantity.

A. P = 50, Q = 25

Correct B. P = 75, Q = 25

C. P = 50, Q = 50

D. P = 75, Q = 50

Correct Answer: B

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Question 7

A firm's production function is given by Q = 2L^0.5K^0.5. If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, find the optimal combination of labor and capital.

A. L = 100, K = 100

B. L = 50, K = 200

C. L = 200, K = 50

Correct D. L = 100, K = 50

Correct Answer: D

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Question 8

A consumer's budget constraint is given by 2X + 3Y = 12. If the price of X is ₦2 and the price of Y is ₦3, find the optimal combination of X and Y.

A. X = 2, Y = 2

B. X = 4, Y = 0

C. X = 0, Y = 4

Correct D. X = 2, Y = 4

Correct Answer: D

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Question 9

A firm's revenue function is given by R(Q) = 2Q^2 - 10Q + 20. Find the profit-maximizing quantity.

A. Q = 5

Correct B. Q = 10

C. Q = 15

D. Q = 20

Correct Answer: B

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Question 10

A consumer's indifference curve is given by U = 2X + 3Y. If the price of X is ₦2 and the price of Y is ₦3, find the optimal combination of X and Y.

A. X = 2, Y = 2

B. X = 4, Y = 0

C. X = 0, Y = 4

Correct D. X = 2, Y = 4

Correct Answer: D

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Question 11

A country's balance of payments is in equilibrium when the value of its imports equals the value of its exports. However, if the country's imports exceed its exports, it will experience a trade deficit. What is the effect of a trade deficit on the country's exchange rate?

A. The exchange rate will appreciate.

Correct B. The exchange rate will depreciate.

C. The exchange rate will remain unchanged.

D. The exchange rate will fluctuate.

Correct Answer: B

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Question 12

A firm's \cost function is given by C(q) = 2q^2 + 10q + 5. If the firm produces 10 units of output, what is the total \cost of production?

A. ₦150

B. ₦200

Correct C. ₦250

D. ₦300

Correct Answer: C

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Question 13

A consumer's budget constraint is given by the equation 2x + 3y = 12. If the consumer sp\ends ₦4 on x, how much will they sp\end on y?

A. ₦2

B. ₦4

Correct C. ₦6

D. ₦8

Correct Answer: C

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Question 14

A firm's revenue function is given by R(q) = 10q - 2q^2. If the firm produces 5 units of output, what is the total revenue?

A. ₦20

B. ₦30

Correct C. ₦40

D. ₦50

Correct Answer: C

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Question 15

A country's GDP is given by the equation GDP = C + I + G + \( X - M \). If the country's consumption is ₦100, investment is ₦50, government sp\ending is ₦20, exports are ₦30, and imports are ₦10, what is the country's GDP?

A. ₦200

B. ₦250

Correct C. ₦300

D. ₦350

Correct Answer: C

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Question 16

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 0.5, what is the price elasticity of supply?

A. 2

B. 0.5

C. 1

Correct D. 0.25

Correct Answer: D

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Question 17

A country's GDP is 100 billion naira, and its GNP is 120 billion naira. What is the net factor income from abroad?

Correct A. 20 billion naira

B. 10 billion naira

C. 5 billion naira

D. 15 billion naira

Correct Answer: A

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Question 18

A firm's \cost function is given by C(Q) = 100 + 2Q + 0.5Q^2. If the firm produces 50 units, what is the marginal \cost?

A. 50

B. 55

Correct C. 60

D. 65

Correct Answer: C

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Question 19

A country's balance of payments is given by the 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 billion naira and the value of imports is 80 billion naira, what is the balance of payments?

A. 10 billion naira

Correct B. 20 billion naira

C. 30 billion naira

D. 40 billion naira

Correct Answer: B

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Question 20

A firm's revenue function is given by R(Q) = 100Q - 0.5Q^2. If the firm produces 50 units, what is the marginal revenue?

A. 50

Correct B. 55

C. 60

D. 65

Correct Answer: B

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Question 21

Consider a perfectly competitive market with a downward-sloping demand curve and an upward-sloping supply curve. If the market price is initially at P1 and the quantity demanded is Q1, and then the demand curve shifts to the left, what will happen to the market equilibrium price and quantity?

A. The market equilibrium price will decrease, and the quantity demanded will increase.

Correct B. The market equilibrium price will increase, and the quantity demanded will decrease.

C. The market equilibrium price will remain the same, and the quantity demanded will increase.

D. The market equilibrium price will decrease, and the quantity demanded will decrease.

Correct Answer: B

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Question 22

A firm's marginal revenue (MR) is given by the equation MR = 10 - 2Q, where Q is the quantity sold. If the firm's marginal \cost (MC) is 5, what is the profit-maximizing quantity?

A. 5

Correct B. 10

C. 15

D. 20

Correct Answer: B

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Question 23

A country's GDP is 100 billion naira, and its GNP is 120 billion naira. What is the net factor income from abroad?

A. 10

Correct B. 20

C. 30

D. 40

Correct Answer: B

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Question 24

A firm's production function is given by Q = 2L^0.5, where Q is the quantity produced and L is the labor input. If the wage rate is 10 naira per hour, what is the profit-maximizing level of labor input?

A. 10

Correct B. 20

C. 30

D. 40

Correct Answer: B

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Question 25

A country's inflation rate is 10% per annum, and its nominal interest rate is 12% per annum. What is the real interest rate?

A. 2

Correct B. 4

C. 6

D. 8

Correct Answer: B

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