POST UTME EKSU 2017 Economics | Objective

Are you preparing for POST UTME EKSU exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2017 Economics (Objective) questions designed to simulate the real exam environment.

Practice these randomly selected questions to test your readiness.

Question 1
The Marshall-Lerner condition states that a country's balance of payments will improve if the sum of the percentage changes in its export and import prices exceeds a certain threshold. What is the name of this threshold?
A. The Marshall-Lerner condition
Correct B. The J-curve effect
C. The balance of payments equilibrium
D. The trade creation effect

Correct Answer: B

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Question 2
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, what is the consumer's optimal bundle?
Correct A. (10,20)
B. (20,10)
C. (15,15)
D. (25,5)

Correct Answer: A

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Question 3
A firm's demand function is given by Q = 100 - 2P. If the firm's marginal \cost is ₦10, what is the firm's optimal price?
A. ₦40
Correct B. ₦50
C. ₦60
D. ₦70

Correct Answer: B

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Question 4
A country's balance of payments is given by the equation BOP = X - M. If the country's exports are ₦1000 and its imports are ₦800, what is the country's balance of payments?
Correct A. ₦200
B. ₦300
C. ₦400
D. ₦500

Correct Answer: A

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Question 5
A firm's production function is given by Q = 2L + 3K. If the firm's labor and capital are ₦100 and ₦150 respectively, what is the firm's output?
A. ₦250
B. ₦300
Correct C. ₦350
D. ₦400

Correct Answer: C

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Question 6
Consider a firm operating in a perfectly competitive market with a production function Q = 2L^0.5K^0.5. If the firm's current input prices are w = ₦100 and r = ₦200, calculate the optimal input combination that minimizes \costs, given a market price of ₦500 per unit of output.
A. L = 100, K = 100
B. L = 200, K = 50
C. L = 50, K = 200
Correct D. L = 150, K = 150

Correct Answer: D

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Question 7
A firm faces a demand curve given by Q = 100 - 2P. If the firm's marginal \cost is MC = ₦20, determine the profit-maximizing price and quantity, assuming the firm is a price-taker.
A. P = ₦40, Q = 60
Correct B. P = ₦30, Q = 70
C. P = ₦20, Q = 80
D. P = ₦10, Q = 90

Correct Answer: B

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Question 8
Suppose a country experiences a 10% increase in the money supply. Assuming the demand for money is given by M = 1000 + 0.5Y, where Y is the national income, and the initial money supply is ₦500 billion, calculate the new equilibrium national income.
A. ₦500 billion
B. ₦550 billion
Correct C. ₦600 billion
D. ₦650 billion

Correct Answer: C

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Question 9
A farmer in Nigeria decides to allocate 100 hectares of land between two crops: maize and yams. The marginal product of maize is 20 tons per hectare, while the marginal product of yams is 15 tons per hectare. If the farmer's opportunity \cost of time is ₦500 per hour, and it takes 10 hours to plant and harvest one hectare of maize, determine the optimal allocation of land between maize and yams.
A. 50 hectares maize, 50 hectares yams
Correct B. 60 hectares maize, 40 hectares yams
C. 70 hectares maize, 30 hectares yams
D. 80 hectares maize, 20 hectares yams

Correct Answer: B

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Question 10
Consider a firm operating in a monopolistically competitive market with a production function Q = 2L^0.5K^0.5. If the firm's current input prices are w = ₦100 and r = ₦200, calculate the optimal input combination that minimizes \costs, given a market price of ₦500 per unit of output.
A. L = 100, K = 100
B. L = 200, K = 50
C. L = 50, K = 200
Correct D. L = 150, K = 150

Correct Answer: D

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Question 11
The demand for a commodity is said to be elastic if the percentage change in the quantity demanded is greater than the percentage change in the price. What is the condition for the demand to be inelastic?
A. The percentage change in the quantity demanded is less than the percentage change in the price.
B. The percentage change in the quantity demanded is equal to the percentage change in the price.
C. The percentage change in the quantity demanded is greater than the percentage change in the price.
Correct D. The percentage change in the quantity demanded is less than or equal to the percentage change in the price.

Correct Answer: D

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Question 12
A firm is producing a good with the following production function: Q = 2L^0.5K^0.5. If the price of the good is $10 and the price of labor is $5, what is the optimal level of labor to be employed?
A. 10 units
Correct B. 20 units
C. 30 units
D. 40 units

Correct Answer: B

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Question 13
A central bank is considering a monetary policy to reduce inflation. Which of the following instruments would be most effective in achieving this goal?
Correct A. Open market operations
B. Reserve requirements
C. Discount rate
D. Fiscal policy

Correct Answer: A

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Question 14
A firm is producing a good with the following production function: Q = 2L^0.5K^0.5. If the price of the good is $10 and the price of labor is $5, what is the optimal level of capital to be employed?
Correct A. 10 units
B. 20 units
C. 30 units
D. 40 units

Correct Answer: A

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Question 15
A country is experiencing a trade deficit. Which of the following policies would be most effective in reducing the trade deficit?
Correct A. Devaluation of the currency
B. Increase in tariffs
C. Increase in government sp\ending
D. Decrease in taxes

Correct Answer: A

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Question 16
A monopolistically competitive firm faces a demand curve that can be expressed as Q = 100 - 2P. The firm's marginal revenue (MR) function is given by MR = 50 - 2Q. If the firm's marginal \cost (MC) is cons\tant at ₦10, what is the profit-maximizing level of output?
A. 20 units
B. 30 units
Correct C. 40 units
D. 50 units

Correct Answer: C

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Question 17
A firm is considering two different production processes to produce a certain good. Process A requires an initial investment of ₦100,000 and has a fixed \cost of ₦20,000 per unit produced. Process B requires an initial investment of ₦150,000 and has a fixed \cost of ₦15,000 per unit produced. If the firm expects to produce 10,000 units of the good, which production process should it choose?
Correct A. Process A
B. Process B
C. Both processes are equally profitable
D. Neither process is profitable

Correct Answer: A

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Question 18
A country's GDP can be calculated u\sing the following formula: GDP = C + I + G + \( X - M \). If the country's consumption (C) is ₦500 billion, investment (I) is ₦200 billion, government sp\ending (G) is ₦300 billion, exports (X) are ₦400 billion, and imports (M) are ₦200 billion, what is the country's GDP?
A. ₦1.3 trillion
Correct B. ₦1.5 trillion
C. ₦1.7 trillion
D. ₦2.0 trillion

Correct Answer: B

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Question 19
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. If the firm wants to produce 100 units of output, and it has 10 units of labor available, how much capital should it hire?
A. 5 units
B. 10 units
Correct C. 15 units
D. 20 units

Correct Answer: C

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Question 20
A country's inflation rate is given by the formula: inflation rate = \( P_t - P_{t-1} \) / P_{t-1} * 100, where P_t is the current price level and P_{t-1} is the previous price level. If the current price level is ₦100 and the previous price level was ₦90, what is the inflation rate?
Correct A. 11.11%
B. 12.22%
C. 13.33%
D. 14.44%

Correct Answer: A

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Question 21
Determine the returns to scale for a firm that experiences a 20% increase in all inputs and a 25% increase in output.
A. Increa\sing Returns to Scale
B. Decrea\sing Returns to Scale
Correct C. Cons\tant Returns to Scale
D. No Returns to Scale

Correct Answer: C

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Question 22
A consumer has a budget of ₦500 and faces the following prices: Good A = ₦100, Good B = ₦150. If the consumer's indifference curve is given by the equation \( U = 2x + 3y \), where x and y are the quantities of Good A and Good B respectively, what is the consumer's optimal bundle?
Correct A. (2, 3)
B. (3, 2)
C. (1, 4)
D. (4, 1)

Correct Answer: A

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Question 23
A firm faces the following demand curve: \( Q = 100 - 2P \). If the firm's marginal \cost is given by the equation \( MC = 10 + 2Q \), what is the firm's profit-maximizing price?
A. ₦50
Correct B. ₦60
C. ₦70
D. ₦80

Correct Answer: B

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Question 24
A government imposes a tax of ₦10 on a good that is sold at a price of ₦100. If the demand for the good is given by the equation \( Q = 100 - 2P \), what is the new equilibrium price?
A. ₦90
Correct B. ₦95
C. ₦100
D. ₦105

Correct Answer: B

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Question 25
A firm has a \cost function given by the equation \( C = 100 + 2Q \). If the firm's revenue function is given by the equation \( R = 200 - 2Q \), what is the firm's profit-maximizing quantity?
A. 10
Correct B. 20
C. 30
D. 40

Correct Answer: B

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