POST UTME CHRISTOPHER UNIVERSITY 2019 Economics | Objective

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Question 1
The production function for a firm is given by Q = 2L^0.5K^0.5, where Q is output, L is labor and K is capital. If the firm increases labor from 4 units to 9 units and capital from 9 units to 16 units, what is the percentage change in output?
A. 10%
Correct B. 20%
C. 30%
D. 40%

Correct Answer: B

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Question 2
A country's balance of payments account shows a trade deficit of $100 million and a capital account surplus of $150 million. What is the overall balance of payments position?
Correct A. $50 million surplus
B. $100 million deficit
C. $150 million surplus
D. $200 million deficit

Correct Answer: A

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Question 3
A firm is considering two alternative production processes. Process A requires an initial investment of $100,000 and has a variable \cost of $20 per unit. Process B requires an initial investment of $150,000 and has a variable \cost of $15 per unit. If the firm produces 10,000 units, which process has the lower total \cost?
A. Process A
Correct B. Process B
C. Both processes have the same total \cost
D. Neither process has the lower total \cost

Correct Answer: B

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Question 4
A country's agricultural sector is characterized by a high degree of seasonality. What is the likely effect of this seasonality on the country's overall economic growth?
A. Increased economic growth
Correct B. Decreased economic growth
C. No effect on economic growth
D. Increased inflation

Correct Answer: B

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Question 5
A firm's demand function is given by Q = 100 - 2P, where Q is quantity demanded and P is price. If the firm increases price from $20 to $30, what is the percentage change in quantity demanded?
A. 10%
Correct B. 20%
C. 30%
D. 40%

Correct Answer: B

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Question 6
Suppose a country is experiencing a recession. The government decides to implement a fiscal policy to stimulate the economy. Which of the following is a likely consequence of this policy?
Correct A. Increased government sp\ending
B. Reduced government sp\ending
C. Increased taxes
D. Reduced taxes

Correct Answer: A

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Question 7
A firm is operating in a perfectly competitive market. If the firm's marginal revenue (MR) is greater than its marginal \cost (MC), what will happen to the firm's output?
A. Output will decrease
Correct B. Output will increase
C. Output will remain the same
D. Output will fluctuate

Correct Answer: B

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Question 8
A consumer has a budget of ₦1000 to sp\end on two goods: X and Y. The price of good X is ₦200 and the price of good Y is ₦300. If the consumer sp\ends all their budget on good X, what is the opportunity \cost of buying good Y?
A. ₦100
B. ₦200
C. ₦300
Correct D. ₦400

Correct Answer: D

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Question 9
A firm is facing a downward-sloping demand curve. If the firm increases its price, what will happen to its revenue?
A. Revenue will increase
Correct B. Revenue will decrease
C. Revenue will remain the same
D. Revenue will fluctuate

Correct Answer: B

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Question 10
A country is experiencing a trade deficit. Which of the following is a likely cause of this situation?
Correct A. Importing more goods than exporting
B. Exporting more goods than importing
C. Trade balance is zero
D. Trade balance is positive

Correct Answer: A

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Question 11
A firm's average \cost curve is U-shaped, and its marginal \cost curve is initially downward sloping and then upward sloping. What is the likely cause of this shape?
A. Increa\sing returns to scale
B. Decrea\sing returns to scale
C. Cons\tant returns to scale
Correct D. Diminishing returns

Correct Answer: D

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Question 12
A monopolist faces a demand curve with a price elasticity of -2. If the firm's marginal revenue is ₦100, what is the likely price elasticity of the demand curve?
A. -1
Correct B. -2
C. -3
D. -4

Correct Answer: B

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Question 13
A firm's total revenue is given by the equation TR = 100x - 2x^2, where x is the number of units sold. What is the firm's marginal revenue?
Correct A. 100 - 4x
B. 100 - 2x
C. 100 + 2x
D. 100 + 4x

Correct Answer: A

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Question 14
A firm is considering two production techno\logies: one with a fixed \cost of ₦100,000 and a variable \cost of ₦50 per unit, and another with a fixed \cost of ₦150,000 and a variable \cost of ₦30 per unit. If the firm produces 10,000 units, which techno\logy should it choose?
Correct A. Techno\logy 1
B. Techno\logy 2
C. Both techno\logies are equally profitable
D. Neither techno\logy is profitable

Correct Answer: A

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Question 15
A firm's demand curve is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the firm's supply curve is given by the equation Qs = 2P, what is the equilibrium price?
A. ₦20
Correct B. ₦30
C. ₦40
D. ₦50

Correct Answer: B

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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. The supply of the product is given by the equation Qs = 2P - 100, where Qs is the quantity supplied. If the equilibrium price is 50, what is the equilibrium quantity?
A. 50
B. 100
Correct C. 150
D. 200

Correct Answer: C

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Question 17
A firm has a total revenue function given by TR = 100x - 2x^2, where x is the number of units sold. If the firm sells 20 units, what is the total revenue?
A. 1000
Correct B. 1200
C. 1400
D. 1600

Correct Answer: B

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Question 18
A country's GDP is given by the equation GDP = C + I + G + \( X - M \), where C is consumption, I is investment, G is government sp\ending, X is exports, and M is imports. If the country's GDP is 1000, consumption is 300, investment is 200, government sp\ending is 150, exports are 250, and imports are 100, what is the value of X?
A. 300
B. 350
C. 400
Correct D. 450

Correct Answer: D

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Question 19
A firm has a \cost function given by C(x) = 100 + 2x, where x is the number of units produced. If the firm produces 50 units, what is the total \cost?
A. 150
B. 200
Correct C. 250
D. 300

Correct Answer: C

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Question 20
A country's GNP is given by the equation GNP = GDP + (net factor income from abroad). If the country's GDP is 1000, net factor income from abroad is 50, what is the value of GNP?
A. 1050
B. 1100
C. 1150
Correct D. 1200

Correct Answer: D

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Question 21
The Marshall-Lerner condition states that if the sum of the elasticities of demand for exports and supply of imports is greater than 1, then a devaluation of the currency will lead to an improvement in the balance of payments. Which of the following statements is a correct interpretation of the Marshall-Lerner condition?
A. A devaluation of the currency will lead to a decrease in imports and an increase in exports.
B. A devaluation of the currency will lead to an increase in imports and a decrease in exports.
Correct C. A devaluation of the currency will lead to an improvement in the balance of payments if the sum of the elasticities of demand for exports and supply of imports is greater than 1.
D. A devaluation of the currency will lead to a decrease in exports and an increase in imports.

Correct Answer: C

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Question 22
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. ₦250
Correct B. ₦300
C. ₦350
D. ₦400

Correct Answer: B

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Question 23
A country's GDP can be calculated u\sing the following formula: GDP = C + I + G + \( X - M \). If the country's consumption is ₦100 billion, investment is ₦50 billion, government sp\ending is ₦75 billion, exports are ₦200 billion, and imports are ₦150 billion, what is the country's GDP?
A. ₦425 billion
Correct B. ₦450 billion
C. ₦475 billion
D. ₦500 billion

Correct Answer: B

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Question 24
A firm's revenue function is given by R(q) = 10q - 2q^2. If the firm produces 5 units of output, what is the marginal revenue?
A. ₦20
Correct B. ₦30
C. ₦40
D. ₦50

Correct Answer: B

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Question 25
A country's balance of payments can be calculated u\sing the following formula: BOP = X - M + \( F - I \). If the country's exports are ₦200 billion, imports are ₦150 billion, foreign investment is ₦50 billion, and domestic investment is ₦75 billion, what is the country's balance of payments?
A. ₦25 billion
Correct B. ₦50 billion
C. ₦75 billion
D. ₦100 billion

Correct Answer: B

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