Practice post utme elizade university economics 2019 Past Questions

Question 1

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 increases labor from 4 to 9 units, and capital from 9 to 16 units, what is the percentage change in output?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 2

A country's balance of payments is given by the following equation: BOP = \( X - M \) + \( F - I \), where BOP is the balance of payments, X is exports, M is imports, F is foreign investment and I is domestic investment. If the country's exports increase by 10%, imports decrease by 5%, foreign investment increases by 15% and domestic investment decreases by 10%, what is the percentage change in the balance of payments?

A. 2%

B. 5%

Correct C. 8%

D. 12%

Correct Answer: C

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Question 3

A monopolist faces a demand curve given by P = 100 - 2Q, where P is price and Q is quantity. The firm's marginal \cost is given by MC = 10 + 2Q. What is the profit-maximizing quantity and price?

Correct A. Q = 20, P = 80

B. Q = 30, P = 70

C. Q = 40, P = 60

D. Q = 50, P = 50

Correct Answer: A

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Question 4

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 increases labor from 4 to 9 units, and capital from 9 to 16 units, what is the percentage change in output?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 5

A country's balance of payments is given by the following equation: BOP = \( X - M \) + \( F - I \), where BOP is the balance of payments, X is exports, M is imports, F is foreign investment and I is domestic investment. If the country's exports increase by 10%, imports decrease by 5%, foreign investment increases by 15% and domestic investment decreases by 10%, what is the percentage change in the balance of payments?

A. 2%

B. 5%

Correct C. 8%

D. 12%

Correct Answer: C

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Question 6

Consider a country with a fixed exchange rate of ₦5 per US dollar. If the country's GDP is ₦10 trillion and its imports are ₦2 trillion, what is the balance of payments surplus or deficit?

Correct A. ₦8 trillion surplus

B. ₦8 trillion deficit

C. ₦4 trillion surplus

D. ₦4 trillion deficit

Correct Answer: A

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Question 7

A firm's demand for labor is given by the equation Q = 100L^\( -1/2 \), where Q is the quantity of labor demanded and L is the wage rate. If the wage rate is ₦100,000, how many units of labor will the firm demand?

Correct A. 100

B. 50

C. 200

D. 250

Correct Answer: A

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Question 8

A government imposes a tax of ₦10,000 on a good that is currently priced at ₦50,000. If the demand for the good is given by the equation Q = 100 - 2P, where Q is the quantity demanded and P is the price, what will be the new equilibrium price and quantity?

Correct A. ₦40,000, 30 units

B. ₦45,000, 25 units

C. ₦50,000, 20 units

D. ₦55,000, 15 units

Correct Answer: A

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Question 9

Consider a country with a GDP of ₦10 trillion and a GNP of ₦12 trillion. What is the net factor income from abroad?

Correct A. ₦2 trillion

B. ₦1 trillion

C. ₦0.5 trillion

D. ₦0.2 trillion

Correct Answer: A

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Question 10

A firm's supply curve is given by the equation Q = 2P + 100, where Q is the quantity supplied and P is the price. If the price is ₦20,000, how many units will the firm supply?

Correct A. 200

B. 300

C. 400

D. 500

Correct Answer: A

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Question 11

The production function is given by Q = 2L^0.5K^0.5. If the price of labor \( P_L \) is ₦100 and the price of capital \( P_K \) is ₦200, what is the value of the marginal product of labor (MPL) when L = 4 and K = 9?

A. ₦50

B. ₦100

Correct C. ₦200

D. ₦300

Correct Answer: C

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Question 12

The demand for a product is given by Q = 100 - 2P. If the price elasticity of demand is -2, what is the value of the price elasticity of demand when the price is ₦50?

A. ₦25

Correct B. ₦50

C. ₦75

D. ₦100

Correct Answer: B

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Question 13

A firm is producing a good u\sing a production function Q = 2L^0.5K^0.5. If the price of labor \( P_L \) is ₦100 and the price of capital \( P_K \) is ₦200, what is the value of the marginal product of capital (MPC) when L = 4 and K = 9?

A. ₦50

B. ₦100

Correct C. ₦200

D. ₦300

Correct Answer: C

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Question 14

The supply of a product is given by Q = 2P + 100. If the price elasticity of supply is 2, what is the value of the price elasticity of supply when the price is ₦50?

A. ₦25

Correct B. ₦50

C. ₦75

D. ₦100

Correct Answer: B

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Question 15

A firm is producing a good u\sing a production function Q = 2L^0.5K^0.5. If the price of labor \( P_L \) is ₦100 and the price of capital \( P_K \) is ₦200, what is the value of the total product of labor (TPL) when L = 4 and K = 9?

A. ₦400

B. ₦600

Correct C. ₦800

D. ₦1000

Correct Answer: C

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Question 16

The demand for a product is given by Q = 100 - 2P. If the price elasticity of demand is -2, what is the value of the price elasticity of demand when the price is ₦50?

A. ₦25

Correct B. ₦50

C. ₦75

D. ₦100

Correct Answer: B

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Question 17

A firm is producing a good u\sing a production function Q = 2L^0.5K^0.5. If the price of labor \( P_L \) is ₦100 and the price of capital \( P_K \) is ₦200, what is the value of the marginal product of labor (MPL) when L = 4 and K = 9?

A. ₦50

B. ₦100

Correct C. ₦200

D. ₦300

Correct Answer: C

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Question 18

The supply of a product is given by Q = 2P + 100. If the price elasticity of supply is 2, what is the value of the price elasticity of supply when the price is ₦50?

A. ₦25

Correct B. ₦50

C. ₦75

D. ₦100

Correct Answer: B

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Question 19

Consider a perfectly competitive market with 5 firms producing a homogeneous product. If each firm increases its production by 10% in response to a 10% decrease in market price, what will be the new equilibrium price and quantity?

A. New equilibrium price: ₦100, New equilibrium quantity: 100 units

Correct B. New equilibrium price: ₦90, New equilibrium quantity: 110 units

C. New equilibrium price: ₦80, New equilibrium quantity: 120 units

D. New equilibrium price: ₦70, New equilibrium quantity: 130 units

Correct Answer: B

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Question 20

A monopolist faces a demand curve given by Q = 100 - 2P and a marginal revenue curve given by MR = 200 - 2Q. What is the profit-maximizing price and quantity?

Correct A. Price: ₦50, Quantity: 50 units

B. Price: ₦40, Quantity: 60 units

C. Price: ₦30, Quantity: 70 units

D. Price: ₦20, Quantity: 80 units

Correct Answer: A

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Question 21

A central bank increases the reserve requirement for commercial banks from 10% to 15%. What will be the effect on the money supply?

Correct A. Money supply decreases by 10%

B. Money supply increases by 10%

C. Money supply remains unchanged

D. Money supply decreases by 5%

Correct Answer: A

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Question 22

A country exports 100 units of a good at a price of ₦100 per unit and imports 50 units of another good at a price of ₦200 per unit. What is the balance of payments?

Correct A. ₦500 surplus

B. ₦500 deficit

C. ₦1000 surplus

D. ₦1000 deficit

Correct Answer: A

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Question 23

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm increases its labor input from 100 units to 120 units and keeps the capital input cons\tant at 100 units, what is the new output?

A. New output: 120 units

Correct B. New output: 140 units

C. New output: 160 units

D. New output: 180 units

Correct Answer: B

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Question 24

An increase in the price of a good leads to a decrease in the quantity demanded. If the demand curve is inelastic, what will happen to the total revenue of the firm?

A. Total revenue will increase

Correct B. Total revenue will decrease

C. Total revenue will remain the same

D. Total revenue will increase at a decrea\sing rate

Correct Answer: B

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Question 25

A firm is producing a good with a total revenue of ₦1,500 and a total \cost of ₦1,200. If the price elasticity of demand is 0.8, what is the price elasticity of supply?

A. 0.8

Correct B. 1.25

C. 0.5

D. 1.6

Correct Answer: B

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