POST UTME COVENANT UNIVERSITY 2017 Economics | Objective

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Question 1
Consider a country with a fixed money supply of ₦10 billion. If the central bank decides to increase the money supply by 20%, what will be the new money supply?
A. ₦12 billion
B. ₦11 billion
Correct C. ₦10.2 billion
D. ₦9.8 billion

Correct Answer: C

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Question 2
A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \), where Q is output, L is labor, and K is capital. If the firm increases labor from 4 to 9 units, and capital from 9 to 16 units, what is the percentage change in output?
A. 25%
Correct B. 30%
C. 35%
D. 40%

Correct Answer: B

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Question 3
A country's balance of payments is given by the following equation: BOP = X - M, where BOP is the balance of payments, X is exports, and M is imports. If exports increase by 15% and imports decrease by 10%, what is the percentage change in the balance of payments?
A. 5%
Correct B. 10%
C. 15%
D. 20%

Correct Answer: B

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Question 4
A firm's revenue function is given by R = 100Q - 2Q^2, where R is revenue and Q is output. If the firm produces 10 units of output, what is the marginal revenue?
A. ₦800
B. ₦900
Correct C. ₦1000
D. ₦1100

Correct Answer: C

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Question 5
A country's government budget is given by the following equation: G = T + I, where G is government exp\enditure, T is taxation, and I is investment. If taxation increases by 20% and investment decreases by 15%, what is the percentage change in government exp\enditure?
A. 5%
Correct B. 10%
C. 15%
D. 20%

Correct Answer: B

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Question 6
A firm's total revenue is given by the equation TR = 100x - 2x^2, where x is the number of units sold. If the firm sells 20 units, what is its total revenue?
A. ₦1200
Correct B. ₦1800
C. ₦2000
D. ₦2200

Correct Answer: B

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Question 7
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 ₦100 billion, and C = ₦30 billion, I = ₦20 billion, G = ₦15 billion, X = ₦25 billion, and M = ₦10 billion, what is the value of X?
A. ₦20 billion
Correct B. ₦25 billion
C. ₦30 billion
D. ₦35 billion

Correct Answer: B

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Question 8
A firm's marginal revenue is given by the equation MR = 100 - 4x, where x is the number of units sold. If the firm sells 15 units, what is its marginal revenue?
Correct A. ₦40
B. ₦60
C. ₦80
D. ₦100

Correct Answer: A

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Question 9
A country's balance of payments is given by the equation BOP = X - M + \( F - I \), where X is exports, M is imports, F is foreign aid, and I is investment. If the country's BOP is ₦10 billion, X = ₦20 billion, M = ₦15 billion, F = ₦5 billion, and I = ₦10 billion, what is the value of F?
A. ₦5 billion
Correct B. ₦10 billion
C. ₦15 billion
D. ₦20 billion

Correct Answer: B

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Question 10
A firm's average revenue is given by the equation AR = 100x - 2x^2, where x is the number of units sold. If the firm sells 20 units, what is its average revenue?
A. ₦50
Correct B. ₦60
C. ₦70
D. ₦80

Correct Answer: B

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Question 11
A firm's total revenue (TR) is given by the equation TR = 100x - 2x^2, where x is the number of units sold. If the firm's marginal revenue (MR) is 80, find the value of x.
A. 20
B. 30
Correct C. 40
D. 50

Correct Answer: C

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Question 12
A perfectly competitive market has a supply curve given by Qs = 100 - 2P and a demand curve given by Qd = 200 - P. Find the equilibrium price and quantity.
A. P = 50, Q = 100
B. P = 75, Q = 125
Correct C. P = 100, Q = 150
D. P = 125, Q = 175

Correct Answer: C

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Question 13
A country's balance of payments (BOP) is given by the equation BOP = X - M, where X is the value of exports and M is the value of imports. If the country's exports are ₦100 billion and imports are ₦120 billion, find the BOP.
Correct A. ₦20 billion
B. ₦40 billion
C. ₦60 billion
D. ₦80 billion

Correct Answer: A

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Question 14
A monopolist's demand curve is given by Qd = 100 - 2P and the marginal revenue (MR) is 80. Find the value of P.
A. ₦20
B. ₦30
Correct C. ₦40
D. ₦50

Correct Answer: C

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Question 15
A firm's total \cost (TC) is given by the equation TC = 100 + 2x + 0.01x^2, where x is the number of units produced. If the firm produces 100 units, find the value of TC.
A. ₦1200
B. ₦1300
Correct C. ₦1400
D. ₦1500

Correct Answer: C

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Question 16
At a price of ₦200, the quantity demanded of a commodity is 100 units. At a price of ₦300, the quantity demanded is 50 units. U\sing the midpoint formula, calculate the equilibrium price and quantity. Assume the market is in equilibrium.
A. ₦250, 75 units
Correct B. ₦275, 62.5 units
C. ₦225, 87.5 units
D. ₦275, 75 units

Correct Answer: B

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Question 17
A firm's total revenue is given by the equation TR = 20x + 30x^2, where x is the number of units sold. If the firm sells 10 units, what is the total revenue?
A. ₦500
B. ₦550
Correct C. ₦600
D. ₦650

Correct Answer: C

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Question 18
A consumer has the following utility function: U(x,y) = 2x + 3y. If the prices of x and y are ₦5 and ₦3 respectively, and the consumer has a budget of ₦20, what is the optimal bundle of x and y?
A. x = 2, y = 4
B. x = 4, y = 2
Correct C. x = 3, y = 3
D. x = 1, y = 5

Correct Answer: C

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Question 19
A firm's \cost function is given by the equation C(x) = 10x + 20x^2. If the firm produces 10 units, what is the total \cost?
A. ₦200
B. ₦250
Correct C. ₦300
D. ₦350

Correct Answer: C

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Question 20
A government imposes a tax of ₦5 on a commodity. If the price of the commodity is ₦20, and the quantity demanded is 10 units, what is the tax revenue?
A. ₦50
Correct B. ₦60
C. ₦70
D. ₦80

Correct Answer: B

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Question 21
A firm's production function is given by Q = 2L^0.5H^0.5, where Q is output, L is labor and H is capital. If the firm hires 16 units of labor and 9 units of capital, what is the opportunity \cost of hiring one more unit of labor?
A. 1 unit of capital
B. 0.5 units of capital
C. 0.25 units of capital
Correct D. 0.125 units of capital

Correct Answer: D

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Question 22
A country's GDP is $100 billion, its imports are $20 billion, and its exports are $30 billion. What is its GDP at market price?
A. $120 billion
B. $130 billion
Correct C. $140 billion
D. $150 billion

Correct Answer: C

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Question 23
A firm's total revenue is given by TR = 100Q - 2Q^2, where Q is the quantity sold. If the firm sells 10 units, what is its marginal revenue?
A. $80
B. $90
Correct C. $100
D. $110

Correct Answer: C

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Question 24
A country's GNP is $120 billion, its net factor income from abroad is $10 billion, and its GDP is $110 billion. What is its national income?
A. $130 billion
B. $140 billion
C. $150 billion
Correct D. $160 billion

Correct Answer: D

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Question 25
A firm's production function is given by Q = 3L^0.5H^0.5, where Q is output, L is labor and H is capital. If the firm hires 25 units of labor and 16 units of capital, what is the marginal product of labor?
A. 0.5 units of output
B. 1 unit of output
Correct C. 1.5 units of output
D. 2 units of output

Correct Answer: C

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