POST UTME COVENANT UNIVERSITY 2023 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A country's balance of payments is in equilibrium when the value of its imports equals the value of its exports. U\sing the concept of comparative advantage, explain why a country may still experience a trade deficit despite having a balance of payments in equilibrium.
A. The country's imports are more valuable than its exports.
B. The country's exports are more valuable than its imports.
C. The country's trade deficit is offset by foreign investment.
D. The country's trade deficit is financed by domestic savings.
Question 2
A firm is producing a good with a cons\tant marginal \cost and a decrea\sing average \cost. The firm's revenue is given by the equation R = 100x - 2x^2, where x is the number of units produced. What is the firm's profit-maximizing output?
A. 20 units
B. 30 units
C. 40 units
D. 50 units
Question 3
A firm is producing a good with the following \cost and revenue functions: C(x) = 2x^2 + 10x + 5 and R(x) = 3x^2 - 2x + 1. Find the break-even point.
A. x = 1
B. x = 2
C. x = 3
D. x = 4
Question 4
The government of Nigeria has implemented a policy to increase the production of electricity in the country. The policy includes increa\sing the importation of electricity-generating equipment and providing subsidies to electricity-generating companies. However, the policy has led to an increase in the price of electricity in the country. What is the likely effect of this policy on the Nigerian economy?
A. An increase in the production of electricity in Nigeria will lead to a decrease in the price of electricity in the country, resulting in an increase in the demand for electricity.
B. The policy will lead to an increase in the production of electricity in Nigeria, resulting in an increase in the price of electricity in the country.
C. The policy will lead to a decrease in the production of electricity in Nigeria, resulting in a decrease in the price of electricity in the country.
D. The policy will have no effect on the production of electricity in Nigeria.
Question 5
A firm has a total revenue function of R(x) = 3x^2 + 2x + 1 and a total \cost function of C(x) = 2x^2 + 3x - 1. Find the profit-maximizing level of output.
A. x = 1
B. x = 2
C. x = 3
D. x = 4
Question 6
The supply of a product is given by the equation Qs = 2P^2 + 100, where Qs is the quantity supplied and P is the price. If the demand for the product is given by the equation Qd = 100 - 2P, find the equilibrium price and quantity.
A. P = ₦20, Q = 60
B. P = ₦30, Q = 80
C. P = ₦40, Q = 100
D. P = ₦50, Q = 120
Question 7
The government of Nigeria has implemented a policy to increase the production of rice in the country. The policy includes providing subsidies to farmers and increa\sing the importation of rice. However, the policy has led to a decrease in the price of rice in the international market. What is the likely effect of this policy on the Nigerian economy?
A. An increase in the production of rice in Nigeria will lead to a decrease in the price of rice in the international market, resulting in a decrease in the revenue of Nigerian farmers.
B. The policy will lead to an increase in the production of rice in Nigeria, resulting in an increase in the revenue of Nigerian farmers.
C. The policy will lead to a decrease in the production of rice in Nigeria, resulting in a decrease in the revenue of Nigerian farmers.
D. The policy will have no effect on the production of rice in Nigeria.
Question 8
The agricultural sector in Nigeria contributes significantly to the country's GDP. However, the sector is plagued by low productivity and inefficiencies. Which of the following policies would most likely address these issues?
A. Investing in agricultural research and development
B. Providing subsidies to farmers
C. Implementing a value-added tax on agricultural products
D. Establishing a national agricultural bank
Question 9
A government is considering a policy to promote industrialization in a developing country. U\sing the concept of comparative advantage, explain how the government can use trade policies to promote industrialization and increase economic growth.
A. The government can use trade policies such as tariffs and quotas to protect domestic industries and promote industrialization.
B. The government can use trade policies such as free trade agreements and investment incentives to attract foreign investment and promote industrialization.
C. The government can use trade policies such as export subsidies and tax breaks to promote industrialization and increase economic growth.
D. The government can use trade policies such as import substitution and export promotion to promote industrialization and increase economic growth.
Question 10
A consumer is faced with the following utility function: U(x,y) = 2x + 3y. The consumer's income is ₦1,000 and the prices of x and y are ₦10 and ₦20 respectively. What is the consumer's optimal bundle of x and y?
A. x = 50, y = 25
B. x = 75, y = 12.5
C. x = 100, y = 0
D. x = 0, y = 50
Question 11
Consider a country with a mixed economy, where the government plays a significant role in the production and distribution of goods and services. U\sing the concept of returns to scale, explain how the government can use economies of scale to increase efficiency and reduce \costs in the production of a public good.
A. The government can use economies of scale to increase efficiency and reduce \costs by producing a large quantity of the public good, thereby reducing the average \cost per unit.
B. The government can use economies of scale to increase efficiency and reduce \costs by outsourcing the production of the public good to private companies.
C. The government can use economies of scale to increase efficiency and reduce \costs by u\sing advanced techno\logy to increase productivity.
D. The government can use economies of scale to increase efficiency and reduce \costs by reducing the quality of the public good.
Question 12
A firm is producing a good with a production function Q = 2L^0.5K^0.5, where L is labor and K is capital. If the price of labor is ₦50 per unit and the price of capital is ₦100 per unit, find the optimal combination of labor and capital that minimizes the \cost of production.
A. L = 10, K = 20
B. L = 20, K = 10
C. L = 15, K = 15
D. L = 5, K = 25
Question 13
A firm's production function is given by Q = 2L^0.5K^0.5, where Q is output, L is labor, and K is capital. U\sing the concept of returns to scale, determine the firm's short-run and long-run production functions.
A. Q = 2L^0.5K^0.5 \( short-run and long-run \)
B. Q = 2L^0.5K^0.5 \( short-run \), Q = 2L^1K^1 \( long-run \)
C. Q = 2L^1K^1 \( short-run \), Q = 2L^0.5K^0.5 \( long-run \)
D. Q = 2L^1K^1 \( short-run and long-run \)
Question 14
Consider a country with a trade deficit of ₦100 billion and a current account deficit of ₦50 billion. If the country's exchange rate is ₦200 per US dollar, what is the value of the trade deficit in US dollars?
A. ₦500 million
B. ₦1 billion
C. ₦2 billion
D. ₦5 billion
Question 15
The concept of returns to scale in production theory suggests that as the input factors increase, the output will increase at a rate that is proportional to the increase in inputs. However, this is not always the case. What is the correct interpretation of the returns to scale concept?
A. Returns to scale is a measure of the change in output resulting from a change in input factors.
B. Returns to scale is a measure of the change in input factors resulting from a change in output.
C. Returns to scale is a measure of the proportionality between input and output factors.
D. Returns to scale is a measure of the change in output resulting from a change in input factors, but only in the short run.

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