Practice post utme eksu economics 2022 Past Questions

Question 1

The concept of scarcity in economics implies that the production of one good is limited by the availability of resources, which can be allocated to the production of another good. This is an example of the law of?

A. Opportunity Cost

B. Diminishing Marginal Utility

Correct C. Law of Increa\sing Opportunity Cost

D. Law of Diminishing Returns

Correct Answer: C

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Question 2

Agricultural industrialization in Nigeria has been hindered by the lack of infrastructure, including roads, storage facilities, and proces\sing equipment. Which of the following is a consequence of this lack of infrastructure?

A. Increased production \costs

B. Decreased agricultural productivity

C. Reduced food availability

Correct D. Increased food prices

Correct Answer: D

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Question 3

The demand for a product is elastic if a small change in price leads to a large change in the quantity demanded. Which of the following is a characteristic of an elastic demand?

A. A small change in price leads to a small change in quantity demanded

Correct B. A small change in price leads to a large change in quantity demanded

C. A large change in price leads to a small change in quantity demanded

D. A large change in price leads to a large change in quantity demanded

Correct Answer: B

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Question 4

The money supply in an economy is the total amount of money available for circulation. Which of the following is a factor that affects the money supply?

A. The level of economic activity

B. The level of inflation

Correct C. The level of interest rates

D. The level of government sp\ending

Correct Answer: C

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Question 5

The concept of opportunity \cost is related to the idea that the production of one good is limited by the availability of resources, which can be allocated to the production of another good. Which of the following is an example of an opportunity \cost?

A. The \cost of producing a good

B. The \cost of not producing a good

Correct C. The \cost of producing one good instead of another

D. The \cost of producing a good and not producing another

Correct Answer: C

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Question 6

The concept of opportunity \cost is closely related to the law of diminishing marginal utility. Explain how the law of diminishing marginal utility leads to opportunity \cost.

Correct A. The law of diminishing marginal utility leads to opportunity \cost because as the quantity of a good consumed increases, the marginal utility derived from each additional unit decreases, making it necessary to sacrifice one good to obtain another.

B. The law of diminishing marginal utility leads to opportunity \cost because as the quantity of a good consumed increases, the marginal utility derived from each additional unit increases, making it necessary to sacrifice one good to obtain another.

C. The law of diminishing marginal utility has no relation to opportunity \cost.

D. The law of diminishing marginal utility leads to opportunity \cost because as the quantity of a good consumed increases, the marginal utility derived from each additional unit remains cons\tant, making it necessary to sacrifice one good to obtain another.

Correct Answer: A

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Question 7

A country's GDP is calculated as the sum of all final goods and services produced within its borders. However, this calculation excludes the value of intermediate goods used in the production process. Explain why this exclusion is necessary.

Correct A. The exclusion of intermediate goods is necessary because they are not final goods and services, and therefore do not contribute to the country's GDP.

B. The exclusion of intermediate goods is necessary because they are not produced within the country's borders, and therefore do not contribute to the country's GDP.

C. The exclusion of intermediate goods is necessary because they are not sold to consumers, and therefore do not contribute to the country's GDP.

D. The exclusion of intermediate goods is necessary because they are not included in the national income accounts, and therefore do not contribute to the country's GDP.

Correct Answer: A

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Question 8

A firm's production function is given by Q = 2L^0.5K^0.5, where Q is the quantity produced, L is the labor input, and K is the capital input. If the firm's labor input is increased from 100 to 200, and the capital input remains cons\tant at 100, what is the new quantity produced?

A. 50

B. 100

C. 200

Correct D. 250

Correct Answer: D

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Question 9

A country's balance of payments is in equilibrium when its current account is equal to its capital account. Explain why this is the case.

Correct A. The current account and capital account are equal because the country's imports and exports are balanced, and the country's foreign investment and foreign borrowing are also balanced.

B. The current account and capital account are equal because the country's GDP is equal to its national income, and the country's savings are equal to its investment.

C. The current account and capital account are equal because the country's trade deficit is equal to its trade surplus, and the country's foreign investment is equal to its foreign borrowing.

D. The current account and capital account are equal because the country's imports are equal to its exports, and the country's foreign investment is equal to its foreign borrowing.

Correct Answer: A

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Question 10

A firm's demand for labor is given by L = 100 - 2P, where L is the labor input and P is the wage rate. If the wage rate increases from ₦100 to ₦150, what is the new labor input?

A. 50

B. 75

C. 100

Correct D. 125

Correct Answer: D

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Question 11

The demand for a commodity is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the price elasticity of demand is 0.5, what is the percentage change in quantity demanded when the price increases by 10%?

Correct A. 5%

B. 10%

C. 15%

D. 20%

Correct Answer: A

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Question 12

A country's GDP at market price is ₦1,500 billion, while its GDP at factor \cost is ₦1,400 billion. What is the value of net indirect taxes?

Correct A. ₦100 billion

B. ₦200 billion

C. ₦300 billion

D. ₦400 billion

Correct Answer: A

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Question 13

A firm's total revenue is given by the equation TR = 100P^2, where TR is the total revenue and P is the price. If the price elasticity of demand is 2, what is the percentage change in price that will lead to a 10% increase in total revenue?

A. 5%

Correct B. 10%

C. 15%

D. 20%

Correct Answer: B

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Question 14

A government budget is given by the equation B = T + I, where B is the budget, T is the tax revenue, and I is the government exp\enditure. If the tax revenue is ₦500 billion and the government exp\enditure is ₦700 billion, what is the budget deficit?

A. ₦200 billion

Correct B. ₦300 billion

C. ₦400 billion

D. ₦500 billion

Correct Answer: B

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Question 15

A firm's demand curve is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the price elasticity of demand is 0.5, what is the percentage change in quantity demanded when the price increases by 10%?

Correct A. 5%

B. 10%

C. 15%

D. 20%

Correct Answer: A

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Question 16

Suppose a monopolist faces a demand curve given by Q = 100 - 2P and a \cost function C(Q) = 2Q^2 + 10Q. If the monopolist produces 20 units, what is the profit-maximizing price?

A. ₦80

Correct B. ₦90

C. ₦100

D. ₦110

Correct Answer: B

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Question 17

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm uses 16 units of labor and 25 units of capital, what is the marginal product of labor?

A. 0.5

B. 1

Correct C. 1.5

D. 2

Correct Answer: C

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Question 18

A consumer's utility function is given by U = 2x + 3y. If the consumer's income is ₦100 and the prices of x and y are ₦5 and ₦10 respectively, what is the consumer's optimal bundle?

Correct A. (10, 5)

B. (15, 3)

C. (20, 2)

D. (25, 1)

Correct Answer: A

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Question 19

A firm's revenue function is given by R(Q) = 100Q - 2Q^2. If the firm produces 20 units, what is the marginal revenue?

A. ₦80

Correct B. ₦90

C. ₦100

D. ₦110

Correct Answer: B

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Question 20

A consumer's budget constraint is given by 2x + 3y = 100. If the consumer's utility function is U = 2x + 3y, what is the consumer's optimal bundle?

Correct A. (10, 5)

B. (15, 3)

C. (20, 2)

D. (25, 1)

Correct Answer: A

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Question 21

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current inputs are L = 4 and K = 9, what is the marginal product of labor (MPL) at this point?

Correct A. 1.5

B. 2.5

C. 3.5

D. 4.5

Correct Answer: A

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Question 22

A country's GDP is given by the equation Y = C + I + G + \( X - M \). If the country's current values are C = 100, I = 200, G = 300, X = 400, and M = 200, what is the country's GDP?

A. 1000

Correct B. 1200

C. 1400

D. 1600

Correct Answer: B

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Question 23

A firm's demand function is given by Q = 100 - 2P. If the firm's current price is P = 20, what is the firm's quantity demanded?

A. 40

B. 60

C. 80

Correct D. 100

Correct Answer: D

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Question 24

A country's inflation rate is given by the equation π = \( P - P^* \) / P^*, where P is the current price level and P^* is the equilibrium price level. If the country's current price level is P = 100 and the equilibrium price level is P^* = 90, what is the country's inflation rate?

A. 0.11

Correct B. 0.22

C. 0.33

D. 0.44

Correct Answer: B

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Question 25

A firm's \cost function is given by C = 100 + 2L + 3K. If the firm's current inputs are L = 5 and K = 10, what is the firm's total \cost?

A. 250

B. 300

Correct C. 350

D. 400

Correct Answer: C

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