POST UTME CALEB UNIVERSITY 2023 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A firm is producing at a point where its marginal revenue (MR) curve intersects its marginal \cost (MC) curve. If the firm's demand curve is perfectly elastic, what is the implication for the firm's price?
A. The price will increase.
B. The price will decrease.
C. The price will remain cons\tant.
D. The price will become perfectly inelastic.
Question 2
A government imposes a tax on a firm's output. If the firm's supply curve shifts to the left, what is the effect on the firm's supply curve?
A. The supply curve shifts to the right.
B. The supply curve shifts to the left.
C. The supply curve becomes perfectly inelastic.
D. The supply curve becomes perfectly elastic.
Question 3
A firm is producing at a point where its marginal revenue (MR) curve intersects its marginal \cost (MC) curve. If the firm's demand curve is perfectly inelastic, what is the implication for the firm's price?
A. The price will increase.
B. The price will decrease.
C. The price will remain cons\tant.
D. The price will become perfectly elastic.
Question 4
A country's GDP is ₦100 billion. If the country's government decides to increase the money supply by 10%, what will be the effect on the country's price level?
A. Increase by 5%
B. Decrease by 5%
C. Increase by 10%
D. Decrease by 10%
Question 5
A country has a budget of ₦1 trillion for the next fiscal year. If the government plans to allocate 30% of the budget to education, how much will be allocated to education?
A. ₦300 billion
B. ₦400 billion
C. ₦500 billion
D. ₦600 billion
Question 6
A consumer's 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 consumer's income increases by 20%, determine the new demand equation.
A. Qd = 120 - 2P
B. Qd = 100 - 1.2P
C. Qd = 80 - 2P
D. Qd = 120 - 1.2P
Question 7
A firm is considering investing in a new project that has a net present value (NPV) of ₦500,000. If the firm's \cost of capital is 10%, determine the internal rate of return (IRR) of the project.
A. 15%
B. 12%
C. 18%
D. 20%
Question 8
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 supply curve is given by Qs = 10 + 3P, derive the equilibrium price and quantity u\sing the supply and demand curves. Assume that the market is in equilibrium.
A. \( P = 20, Q = 60 \)
B. \( P = 30, Q = 40 \)
C. \( P = 40, Q = 20 \)
D. \( P = 50, Q = 10 \)
Question 9
Consider a country with a large trade deficit. If the country's exchange rate is fixed, what would be the effect on the balance of payments?
A. The trade deficit would increase due to a decrease in exports.
B. The trade deficit would decrease due to an increase in imports.
C. The trade deficit would remain unchanged due to a balance in exports and imports.
D. The trade deficit would increase due to a decrease in imports.
Question 10
A firm is considering investing in a new project that has a net present value (NPV) of ₦50,000. The firm's \cost of capital is 10%. What is the internal rate of return (IRR) of the project?
A. 5%
B. 10%
C. 15%
D. 20%
Question 11
A firm's demand function is given by the equation Q = 100 - 2P. If the firm's supply function is Q = 50 + 3P, what is the equilibrium price and quantity?
A. P^* = 16.67, Q^* = 25
B. P^* = 20, Q^* = 30
C. P^* = 15, Q^* = 20
D. P^* = 18.33, Q^* = 22.67
Question 12
A firm's demand function is given by Q = 100 - 2P. If the price elasticity of demand is -2, what is the price at which the firm will sell 50 units?
A. ₦20
B. ₦30
C. ₦40
D. ₦50
Question 13
A firm's total revenue function is given by TR(q) = 100q - 2q^2. If the firm's marginal revenue function is MR(q) = 100 - 4q, what is the firm's optimal output level?
A. q^* = 20
B. q^* = 25
C. q^* = 10
D. q^* = 15
Question 14
A firm's production function is given by \( Q = 2L^{0.5}K^{0.5} \). If the firm's output is 100 units and the price of labor is ₦20 per unit and the price of capital is ₦30 per unit, what is the optimal combination of labor and capital that the firm will choose?
A. (20, 10)
B. (15, 12)
C. (25, 8)
D. (18, 11)
Question 15
A country is experiencing a recession and the government decides to implement a fiscal policy to stimulate the economy. If the government increases its sp\ending by 10% and the multiplier effect is 2, what would be the effect on the GDP?
A. The GDP would increase by 20%.
B. The GDP would decrease by 10%.
C. The GDP would remain unchanged.
D. The GDP would increase by 5%.

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