POST UTME ELIZADE UNIVERSITY 2021 Economics | Objective

Are you preparing for POST UTME ELIZADE UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2021 Economics (Objective) questions designed to simulate the real exam environment.

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Question 1
In a perfectly competitive market, the supply curve is upward-sloping because of the law of increa\sing \costs. What is the primary reason for this upward-sloping supply curve?
A. The law of diminishing marginal returns
Correct B. The law of increa\sing \costs
C. The law of supply
D. The law of demand

Correct Answer: B

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Question 2
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current input levels are L = 4 and K = 9, what is the marginal product of labor?
A. 1
Correct B. 2
C. 3
D. 4

Correct Answer: B

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Question 3
A country's GDP is ₦100 billion, its imports are ₦20 billion, and its exports are ₦30 billion. What is the country's balance of trade?
Correct A. ₦10 billion surplus
B. ₦10 billion deficit
C. ₦20 billion surplus
D. ₦20 billion deficit

Correct Answer: A

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Question 4
A firm's revenue function is given by R(L,K) = 2L^2K. If the firm's current input levels are L = 3 and K = 2, what is the marginal revenue product of labor?
A. 12
Correct B. 24
C. 36
D. 48

Correct Answer: B

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Question 5
A country's GNP is ₦120 billion, its GDP is ₦100 billion, and its net factor income from abroad is ₦10 billion. What is the country's national income?
Correct A. ₦130 billion
B. ₦120 billion
C. ₦110 billion
D. ₦100 billion

Correct Answer: A

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Question 6
A firm operating under perfect competition has a \cost function given by C(q) = 2q^2 + 10q. If the market price is P = 20, what is the profit-maximizing quantity?
Correct A. 10
B. 20
C. 30
D. 40

Correct Answer: A

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Question 7
A consumer's utility function is given by U(x, y) = 2x + 3y. If the consumer's income is ₦1000 and the prices of x and y are ₦5 and ₦3 respectively, what is the consumer's optimal bundle?
Correct A. \left\( 10, 10 \right \)
B. \left\( 20, 20 \right \)
C. \left\( 30, 30 \right \)
D. \left\( 40, 40 \right \)

Correct Answer: A

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Question 8
A country's GDP is ₦100 billion and its GNP is ₦120 billion. What is the country's net factor income from abroad?
Correct A. ₦20 billion
B. ₦30 billion
C. ₦40 billion
D. ₦50 billion

Correct Answer: A

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Question 9
A firm has a \cost function given by C(q) = 3q^2 + 20q. If the market price is P = 30, what is the firm's profit-maximizing quantity?
A. 10
B. 20
Correct C. 30
D. 40

Correct Answer: C

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Question 10
A country's balance of payments is given by the following table:\n| Category | Amount |\n| --- | --- |\n| Exports | ₦100 billion |\n| Imports | ₦120 billion |\n| Net factor income from abroad | ₦20 billion |\n| Net transfer | ₦30 billion |\nWhat is the country's balance of payments deficit?
A. ₦20 billion
Correct B. ₦30 billion
C. ₦40 billion
D. ₦50 billion

Correct Answer: B

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Question 11
A government imposes a tax on imports to reduce the trade deficit. However, the tax also increases the \cost of production for domestic firms. U\sing the concept of supply and demand, explain how the tax affects the equilibrium price and quantity of the good in the domestic market.
A. The tax increases the equilibrium price and quantity of the good in the domestic market.
Correct B. The tax decreases the equilibrium price and quantity of the good in the domestic market.
C. The tax has no effect on the equilibrium price and quantity of the good in the domestic market.
D. The tax increases the equilibrium price but decreases the equilibrium quantity of the good in the domestic market.

Correct Answer: B

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Question 12
A firm is considering two different production processes for a new product. Process A has a fixed \cost of ₦100,000 and a variable \cost of ₦50 per unit. Process B has a fixed \cost of ₦150,000 and a variable \cost of ₦30 per unit. U\sing the concept of \cost minimization, determine which process the firm should use if it produces 10,000 units of the product.
Correct A. Process A
B. Process B
C. Both processes are equally \cost-effective
D. Neither process is \cost-effective

Correct Answer: A

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Question 13
A country's balance of payments is in deficit due to a large trade deficit. The government decides to implement a policy to reduce the trade deficit. U\sing the concept of the balance of payments, explain how the policy affects the country's exchange rate.
A. The policy increases the exchange rate
Correct B. The policy decreases the exchange rate
C. The policy has no effect on the exchange rate
D. The policy increases the exchange rate in the short run but decreases it in the long run

Correct Answer: B

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Question 14
A firm is considering two different market structures: perfect competition and monopoly. U\sing the concept of market structures, explain how the firm's behavior and outcomes differ between the two structures.
Correct A. The firm produces at a lower price and higher quantity under perfect competition than under monopoly
B. The firm produces at a higher price and lower quantity under perfect competition than under monopoly
C. The firm produces at the same price and quantity under both perfect competition and monopoly
D. The firm produces at a higher price and higher quantity under perfect competition than under monopoly

Correct Answer: A

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Question 15
A government is considering a policy to reduce poverty in a developing country. U\sing the concept of economic planning and development, explain how the policy affects the country's economic growth and poverty reduction.
Correct A. The policy increases economic growth and reduces poverty
B. The policy decreases economic growth and increases poverty
C. The policy has no effect on economic growth and poverty reduction
D. The policy increases economic growth but has no effect on poverty reduction

Correct Answer: A

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Question 16
A monopolist faces a demand curve given by Q = 100 - 2P and a \cost function C(Q) = 2Q^2 + 10Q. Find the profit-maximizing price and quantity.
A. ₦200
Correct B. ₦250
C. ₦300
D. ₦350

Correct Answer: B

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Question 17
A consumer has the following utility function: U(x,y) = 2x + 3y. The prices of x and y are ₦5 and ₦10 respectively. Find the consumer's budget constraint.
A. 2x + 3y = 50
Correct B. 2x + 3y = 100
C. 2x + 3y = 150
D. 2x + 3y = 200

Correct Answer: B

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Question 18
A firm has the following \cost function: C(Q) = 2Q^2 + 10Q. Find the firm's marginal \cost function.
Correct A. MC(Q) = 4Q + 10
B. MC(Q) = 2Q + 10
C. MC(Q) = 4Q - 10
D. MC(Q) = 2Q - 10

Correct Answer: A

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Question 19
A government imposes a tax of ₦10 on a firm's output. The firm's supply curve is given by Q = 100 - 2P. Find the new supply curve.
A. Q = 100 - 2P
Correct B. Q = 90 - 2P
C. Q = 80 - 2P
D. Q = 70 - 2P

Correct Answer: B

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Question 20
A consumer has the following indifference curve: U(x,y) = 2x + 3y. The prices of x and y are ₦5 and ₦10 respectively. Find the consumer's optimal bundle.
Correct A. x = 10, y = 20
B. x = 20, y = 10
C. x = 30, y = 5
D. x = 5, y = 30

Correct Answer: A

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Question 21
The government of a country decides to implement a policy to reduce the budget deficit by increa\sing taxes on luxury goods. However, this policy may have an adverse effect on the economy as it may lead to a decrease in consumer sp\ending and subsequently a decrease in aggregate demand. Which of the following is a potential consequence of this policy?
A. Increase in government revenue
Correct B. Decrease in consumer sp\ending
C. Increase in aggregate demand
D. Decrease in budget deficit

Correct Answer: B

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Question 22
A firm is operating in a perfectly competitive market. The firm's marginal revenue (MR) and marginal \cost (MC) curves are given by MR = 100 - 2q and MC = 20 + 3q. What is the profit-maximizing level of output?
A. 10 units
B. 20 units
Correct C. 30 units
D. 40 units

Correct Answer: C

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Question 23
A country's GDP is calculated as follows: GDP = C + I + G + \( X - M \). If the country's consumption (C) is ₦100 billion, investment (I) is ₦50 billion, government sp\ending (G) is ₦20 billion, exports (X) are ₦80 billion, and imports (M) are ₦30 billion, what is the country's GDP?
A. ₦180 billion
B. ₦200 billion
Correct C. ₦220 billion
D. ₦240 billion

Correct Answer: C

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Question 24
A firm is operating in a monopoly market. The firm's demand curve is given by Q = 100 - 2P. If the firm's marginal revenue (MR) is given by MR = 50 - P, what is the profit-maximizing price?
A. ₦20
B. ₦30
Correct C. ₦40
D. ₦50

Correct Answer: C

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Question 25
A country's balance of payments (BOP) is given by BOP = X - M + \( F - I \). If the country's exports (X) are ₦80 billion, imports (M) are ₦30 billion, foreign investment (F) is ₦20 billion, and foreign investment outflows (I) are ₦10 billion, what is the country's BOP?
A. ₦60 billion
B. ₦70 billion
Correct C. ₦80 billion
D. ₦90 billion

Correct Answer: C

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