POST UTME CRAWFORD UNIVERSITY 2019 Economics | Objective

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Question 1
A consumer's indifference curve is given by the equation ( u(x,y) = 2x + 3y ). If the consumer's income is ₦1000 and the prices of x and y are ₦2 and ₦3 respectively, find the consumer's optimal bundle of x and y.
Correct A. (100, 150)
B. (200, 100)
C. (150, 200)
D. (250, 50)

Correct Answer: A

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Question 2
A country's balance of payments 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 ₦500 billion and the value of imports is ₦600 billion, what is the country's balance of payments?
Correct A. ₦100 billion deficit
B. ₦100 billion surplus
C. ₦500 billion deficit
D. ₦500 billion surplus

Correct Answer: A

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Question 3
A firm's production function is given by the equation \( Q = 2L^2 + 3K^2 \), where Q is the quantity produced, L is the number of labor units, and K is the number of capital units. If the firm has 10 labor units and 5 capital units, what is the quantity produced?
A. 100
B. 200
Correct C. 300
D. 400

Correct Answer: C

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Question 4
A country's demand for a product is given by the equation \( Q_d = 100 - 2P \), where Q_d is the quantity demanded and P is the price. If the price is ₦10, what is the quantity demanded?
A. 50
Correct B. 60
C. 70
D. 80

Correct Answer: B

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Question 5
A firm's supply function is given by the equation \( Q_s = 2P + 10 \), where Q_s is the quantity supplied and P is the price. If the price is ₦5, what is the quantity supplied?
A. 10
Correct B. 15
C. 20
D. 25

Correct Answer: B

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Question 6
Determine the price elasticity of demand for a product whose price elasticity of demand is -2 and the percentage change in quantity demanded is 5%.
Correct A. -10%
B. -5%
C. 0%
D. 10%

Correct Answer: A

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Question 7
A firm's production function is given by Q = 100L^0.5K^0.5. If the price of labor increases by 20% and the price of capital increases by 15%, what is the new production level if the initial production level is 100 units?
A. 80
B. 90
C. 100
Correct D. 110

Correct Answer: D

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Question 8
A country's GDP is given by the equation Y = C + I + G + \( X - M \). If the country's consumption is 100, investment is 50, government sp\ending is 200, exports are 150, and imports are 100, what is the country's GDP?
A. 400
B. 500
C. 600
Correct D. 700

Correct Answer: D

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Question 9
A firm's demand function is given by Q = 100 - 2P. If the price of the product is 20, what is the quantity demanded?
A. 40
Correct B. 50
C. 60
D. 70

Correct Answer: B

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Question 10
A country's inflation rate is given by the equation π = \( P - P^\( -1 \ \)) / P^\( -1 \) * 100. If the current price level is 100 and the previous price level is 80, what is the inflation rate?
Correct A. 12.5
B. 15
C. 20
D. 25

Correct Answer: A

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Question 11
A firm is operating under perfect competition. If the market price of its product falls from ₦100 to ₦80, and its \cost function is given by C(q) = 2q^2 + 10q + 50, what is the new profit-maximizing quantity of output?
A. 20 units
Correct B. 30 units
C. 40 units
D. 50 units

Correct Answer: B

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Question 12
A consumer's utility function is given by U(x, y) = 2x^0.5y^0.5. If the consumer's income is ₦1000 and the prices of x and y are ₦20 and ₦30 respectively, what is the consumer's optimal bundle of x and y?
A. x = 10, y = 20
Correct B. x = 15, y = 15
C. x = 20, y = 10
D. x = 25, y = 5

Correct Answer: B

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Question 13
A firm is operating under a monopoly. If its \cost function is given by C(q) = 2q^2 + 10q + 50 and its inverse demand function is given by p = 100 - 2q, what is the firm's profit-maximizing quantity of output?
A. 10 units
B. 15 units
Correct C. 20 units
D. 25 units

Correct Answer: C

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Question 14
A country's production function is given by Q = 2K^0.5L^0.5. If the country's capital stock is 100 units and its labor force is 200 units, what is the country's output?
A. 20 units
B. 40 units
Correct C. 60 units
D. 80 units

Correct Answer: C

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Question 15
A consumer's budget constraint is given by 2x + 3y = 100. If the consumer's utility function is given by U(x, y) = 2x^0.5y^0.5, what is the consumer's optimal bundle of x and y?
A. x = 20, y = 20
Correct B. x = 25, y = 15
C. x = 30, y = 10
D. x = 35, y = 5

Correct Answer: B

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Question 16
Suppose the government of Nigeria decides to implement a policy of agricultural industrialization. Which of the following would be a likely consequence of this policy?
Correct A. Increased production of agricultural products
B. Decreased production of industrial goods
C. Increased employment in the agricultural sector
D. Decreased inflation rate

Correct Answer: A

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Question 17
A firm is facing a downward-sloping demand curve. If the firm increases its price, what will happen to its revenue?
A. Increase in revenue
Correct B. Decrease in revenue
C. No change in revenue
D. Increase in quantity demanded

Correct Answer: B

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Question 18
Suppose the money supply in Nigeria increases by 10%. What will happen to the general price level?
Correct A. Increase in general price level
B. Decrease in general price level
C. No change in general price level
D. Increase in interest rate

Correct Answer: A

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Question 19
A country is experiencing a trade deficit. What does this mean?
A. The country is exporting more goods than it is importing
Correct B. The country is importing more goods than it is exporting
C. The country is experiencing economic growth
D. The country is experiencing economic decline

Correct Answer: B

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Question 20
Suppose the government of Nigeria decides to implement a policy of economic planning. Which of the following would be a likely goal of this policy?
Correct A. To increase the production of industrial goods
B. To decrease the production of agricultural products
C. To increase employment in the agricultural sector
D. To decrease the inflation rate

Correct Answer: A

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Question 21
A firm's total revenue is given by the equation TR = 100q - 2q^2, where q is the quantity sold. If the firm's marginal revenue is 80 at q = 10, what is the value of the firm's total revenue at q = 15?
A. ₦1250
B. ₦1500
Correct C. ₦1750
D. ₦2000

Correct Answer: C

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Question 22
The 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 supply of the product is given by the equation Qs = 2P - 10, what is the equilibrium price and quantity?
A. ₦50, Q = 20
Correct B. ₦60, Q = 25
C. ₦70, Q = 30
D. ₦80, Q = 35

Correct Answer: B

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Question 23
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 billion, and the values of C, I, G, X, and M are ₦300 billion, ₦200 billion, ₦100 billion, ₦400 billion, and ₦200 billion respectively, what is the value of the country's net exports?
Correct A. ₦100 billion
B. ₦200 billion
C. ₦300 billion
D. ₦400 billion

Correct Answer: A

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Question 24
A firm's production function is given by the equation Q = 2L^0.5K^0.5, where Q is the quantity produced, L is labor, and K is capital. If the firm's labor and capital are 10 units and 20 units respectively, what is the value of the firm's output?
A. 20 units
B. 30 units
Correct C. 40 units
D. 50 units

Correct Answer: C

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Question 25
A country's inflation rate is given by the equation π = \( P - P^* \) / P^*, where π is the inflation rate, P is the current price level, and P^* is the base price level. If the current price level is ₦100 and the base price level is ₦90, what is the value of the country's inflation rate?
A. 10%
Correct B. 20%
C. 30%
D. 40%

Correct Answer: B

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