POST UTME COAL CITY UNIVERSITY 2024 Economics | Objective

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Question 1
A firm's production function is given by Q = 2L^0.5 * K^0.5, where Q is output, L is labor, and K is capital. If the firm's labor and capital are increased by 20% and 15% respectively, what is the percentage change in output?
A. 10%
B. 12%
Correct C. 15%
D. 18%

Correct Answer: C

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Question 2
A country's balance of payments is given by the following equation: BOP = \( X - M \) + \( F - I \), where X is exports, M is imports, F is foreign investment, and I is domestic investment. If the country's exports increase by 10%, imports decrease by 5%, foreign investment increases by 20%, and domestic investment decreases by 15%, what is the percentage change in the balance of payments?
A. 12%
B. 15%
Correct C. 18%
D. 20%

Correct Answer: C

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Question 3
A firm's demand function is given by Q = 100 - 2P, where Q is quantity demanded and P is price. If the firm's price increases by 20%, what is the percentage change in quantity demanded?
Correct A. -20%
B. -15%
C. -10%
D. -5%

Correct Answer: A

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Question 4
A country's GDP is given by the following 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 consumption increases by 10%, investment decreases by 5%, government sp\ending increases by 20%, exports increase by 15%, and imports decrease by 10%, what is the percentage change in GDP?
A. 12%
B. 15%
Correct C. 18%
D. 20%

Correct Answer: C

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Question 5
A firm's production function is given by Q = 2L^0.5 * K^0.5, where Q is output, L is labor, and K is capital. If the firm's labor and capital are increased by 20% and 15% respectively, what is the percentage change in output?
A. 10%
B. 12%
Correct C. 15%
D. 18%

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.
Correct A. P = 50, Q = 25
B. P = 75, Q = 12
C. P = 25, Q = 50
D. P = 12, Q = 75

Correct Answer: A

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Question 7
A firm's production function is given by Q = 2L^2 + 5L. If the wage rate is ₦100 per hour, find the profit-maximizing level of labor.
A. L = 2 hours
B. L = 5 hours
Correct C. L = 10 hours
D. L = 15 hours

Correct Answer: C

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Question 8
A consumer's utility function is given by U = 2X + 3Y. If the prices of X and Y are ₦50 and ₦75 respectively, find the consumer's optimal bundle.
Correct A. X = 2 units, Y = 1 unit
B. X = 1 unit, Y = 2 units
C. X = 3 units, Y = 0 units
D. X = 0 units, Y = 3 units

Correct Answer: A

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Question 9
A firm's demand curve is given by Q = 100 - 2P. If the firm's marginal \cost is ₦50, find the profit-maximizing price and quantity.
Correct A. P = 50, Q = 25
B. P = 75, Q = 12
C. P = 25, Q = 50
D. P = 12, Q = 75

Correct Answer: A

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Question 10
A consumer's budget constraint is given by 2X + 3Y = ₦150. If the prices of X and Y are ₦50 and ₦75 respectively, find the consumer's optimal bundle.
Correct A. X = 2 units, Y = 1 unit
B. X = 1 unit, Y = 2 units
C. X = 3 units, Y = 0 units
D. X = 0 units, Y = 3 units

Correct Answer: A

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Question 11
Consider a firm operating in a perfectly competitive market with a production function given by Q = 2L^0.5K^0.5. If the firm's current input prices are w = 10 and r = 20, and the firm's current output price is p = 30, calculate the firm's maximum profit.
Correct A. ₦1000
B. ₦1200
C. ₦1500
D. ₦1800

Correct Answer: A

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Question 12
A country's GDP is given by the equation Y = C + I + G + \( X - M \). If the country's current GDP is ₦100 trillion, and the current values of C, I, G, X, and M are ₦20 trillion, ₦15 trillion, ₦10 trillion, ₦25 trillion, and ₦15 trillion respectively, calculate the country's current trade balance.
A. ₦5 trillion
Correct B. ₦10 trillion
C. ₦15 trillion
D. ₦20 trillion

Correct Answer: B

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Question 13
A firm's production function is given by Q = 3L^0.7K^0.3. If the firm's current input prices are w = 15 and r = 25, and the firm's current output price is p = 40, calculate the firm's maximum profit.
A. ₦1200
B. ₦1500
Correct C. ₦1800
D. ₦2000

Correct Answer: C

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Question 14
A country's current account balance is given by the equation CA = X - M. If the country's current X is ₦30 trillion and the current M is ₦20 trillion, calculate the country's current account balance.
A. ₦5 trillion
B. ₦10 trillion
Correct C. ₦15 trillion
D. ₦20 trillion

Correct Answer: C

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Question 15
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current input prices are w = 10 and r = 20, and the firm's current output price is p = 30, calculate the firm's maximum profit.
Correct A. ₦1000
B. ₦1200
C. ₦1500
D. ₦1800

Correct Answer: A

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Question 16
A firm's \cost function is given by C(q) = 2q^2 + 5q + 10. If the firm produces 20 units, what is the total \cost?
A. 200
B. 250
Correct C. 300
D. 350

Correct Answer: C

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Question 17
The Central Bank of Nigeria (CBN) has set an inflation target of 6% for the next year. If the current inflation rate is 8%, what is the required reduction in the money supply?
A. 10%
Correct B. 12%
C. 15%
D. 18%

Correct Answer: B

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Question 18
A country's balance of payments (BOP) is given by the following 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 million and the value of imports is $120 million, what is the balance of payments?
Correct A. -20 million
B. -10 million
C. 10 million
D. 20 million

Correct Answer: A

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Question 19
A firm's revenue function is given by R(q) = 50q - 0.5q^2. If the firm produces 20 units, what is the total revenue?
A. 900
B. 1000
Correct C. 1100
D. 1200

Correct Answer: C

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Question 20
A country's GDP is given by the following 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 consumption is $500 billion, investment is $200 billion, government sp\ending is $300 billion, exports are $100 billion, and imports are $120 billion, what is the country's GDP?
A. 1.38 trillion
B. 1.42 trillion
Correct C. 1.46 trillion
D. 1.50 trillion

Correct Answer: C

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Question 21
A perfectly competitive firm's supply curve is upward-sloping because of the law of increa\sing \costs. What is the primary reason for this upward-sloping supply curve?
Correct A. The firm's marginal \cost increases as output increases.
B. The firm's average \cost decreases as output increases.
C. The firm's marginal revenue increases as output increases.
D. The firm's fixed \cost decreases as output increases.

Correct Answer: A

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Question 22
A monopolist faces a demand curve with the following equation: Q = 100 - 2P. What is the monopolist's marginal revenue (MR) function?
Correct A. MR = 100 - 2Q
B. MR = 100 - Q
C. MR = 100 - 2P
D. MR = 100 + 2Q

Correct Answer: A

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Question 23
A consumer's indifference curve is represented by the equation: U = 2x + 3y. What is the marginal rate of substitution (MRS) of good x for good y?
Correct A. MRS = 2/3
B. MRS = 3/2
C. MRS = 2
D. MRS = 3

Correct Answer: A

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Question 24
A country's balance of payments (BOP) accounts are presented below. What is the value of the current account surplus (CAS) in the given period?
A. ₦100 million
Correct B. ₦200 million
C. ₦300 million
D. ₦400 million

Correct Answer: B

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Question 25
A government imposes a tax on a firm's output. What is the effect of this tax on the firm's supply curve?
Correct A. The supply curve shifts to the left.
B. The supply curve shifts to the right.
C. The supply curve becomes upward-sloping.
D. The supply curve becomes downward-sloping.

Correct Answer: A

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