Practice post utme elizade university economics 2023 Past Questions

Question 1

Consider a country with a fixed money supply and a moderate rate of inflation. If the central bank increases the reserve requirement for commercial banks, what will be the effect on the money supply?

Correct A. The money supply will decrease.

B. The money supply will increase.

C. The money supply will remain unchanged.

D. The effect on the money supply is uncertain.

Correct Answer: A

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Question 2

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 increases from ₦100 to ₦120, what will be the effect on the quantity of labor demanded?

A. The quantity of labor demanded will increase.

Correct B. The quantity of labor demanded will decrease.

C. The quantity of labor demanded will remain unchanged.

D. The effect on the quantity of labor demanded is uncertain.

Correct Answer: B

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Question 3

A consumer's budget constraint is given by the equation 2X + 3Y = 12, where X is the quantity of good X consumed and Y is the quantity of good Y consumed. If the price of good X increases from ₦2 to ₦3, what will be the effect on the quantity of good Y consumed?

Correct A. The quantity of good Y consumed will increase.

B. The quantity of good Y consumed will decrease.

C. The quantity of good Y consumed will remain unchanged.

D. The effect on the quantity of good Y consumed is uncertain.

Correct Answer: A

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Question 4

A firm's production function is given by the equation Q = 2L^2, where Q is the quantity produced and L is the labor input. If the labor input increases from 2 units to 3 units, what will be the effect on the quantity produced?

Correct A. The quantity produced will increase.

B. The quantity produced will decrease.

C. The quantity produced will remain unchanged.

D. The effect on the quantity produced is uncertain.

Correct Answer: A

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Question 5

A country's balance of payments is given by the equation BOP = X - M, where BOP is the balance of payments, X is the value of exports, and M is the value of imports. If the value of exports increases from ₦100 to ₦120 and the value of imports remains unchanged at ₦80, what will be the effect on the balance of payments?

Correct A. The balance of payments will increase.

B. The balance of payments will decrease.

C. The balance of payments will remain unchanged.

D. The effect on the balance of payments is uncertain.

Correct Answer: A

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Question 6

Consider a firm operating in a perfectly competitive market with a downward-sloping demand curve. If the firm's marginal revenue (MR) curve intersects its marginal \cost (MC) curve at point A, and the price elasticity of demand (PED) at point A is 2, what is the likely effect on the firm's output and price?

A. The firm will increase its output and lower its price.

Correct B. The firm will decrease its output and lower its price.

C. The firm will increase its output and raise its price.

D. The firm will decrease its output and raise its price.

Correct Answer: B

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Question 7

A consumer's utility function is given by U(x,y) = 2x + 3y, where x and y are the quantities of two goods consumed. If the consumer's income is ₦1000 and the prices of the two goods are ₦5 and ₦10 respectively, what is the consumer's optimal bundle of goods?

A. (x,y) = (100, 0)

Correct B. (x,y) = (80, 20)

C. (x,y) = (60, 40)

D. (x,y) = (40, 60)

Correct Answer: B

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Question 8

A country's import demand function is given by Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the country's export supply function is given by Qs = 50 + P, what is the equilibrium price and quantity?

Correct A. P = ₦50, Q = 75

B. P = ₦75, Q = 50

C. P = ₦100, Q = 25

D. P = ₦25, Q = 100

Correct Answer: A

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Question 9

A firm's production function is given by Q = 2L^0.5K^0.5, where Q is the output, L is the labor and K is the capital. If the firm's \cost function is given by C = 100L + 200K, what is the firm's optimal input mix?

A. L = 100, K = 100

Correct B. L = 50, K = 200

C. L = 200, K = 50

D. L = 1000, K = 1000

Correct Answer: B

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Question 10

A country's balance of payments (BOP) is given by BOP = X - M, where X is the exports and M is the imports. If the country's exports are ₦1000 and imports are ₦800, what is the country's BOP?

Correct A. ₦200

B. ₦100

C. ₦0

D. ₦-200

Correct Answer: A

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Question 11

A firm's demand curve is given by Q = 100 - 2P, and its supply curve is given by Q = 2P - 100. What is the equilibrium price and quantity?

A. ₦50, 50 units

Correct B. ₦75, 25 units

C. ₦100, 0 units

D. ₦200, 100 units

Correct Answer: B

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Question 12

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

Correct A. ₦75, 25 units

B. ₦100, 0 units

C. ₦50, 50 units

D. ₦200, 100 units

Correct Answer: A

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Question 13

A country's balance of payments is given by the following equation: BOP = \( X - M \) + \( F - I \). If X = ₦100 billion, M = ₦80 billion, F = ₦20 billion, and I = ₦10 billion, what is the country's balance of payments?

Correct A. ₦10 billion surplus

B. ₦20 billion deficit

C. ₦30 billion surplus

D. ₦40 billion deficit

Correct Answer: A

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Question 14

A firm's \cost function is given by C(Q) = 100 + 2Q. If the firm produces 50 units, what is its total \cost?

A. ₦150

B. ₦250

Correct C. ₦350

D. ₦450

Correct Answer: C

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Question 15

A country's GDP is given by the equation: GDP = C + I + G + \( X - M \). If C = ₦100 billion, I = ₦20 billion, G = ₦30 billion, X = ₦150 billion, and M = ₦80 billion, what is the country's GDP?

A. ₦220 billion

B. ₦230 billion

C. ₦240 billion

Correct D. ₦250 billion

Correct Answer: D

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Question 16

The Central Bank of Nigeria (CBN) has introduced a new monetary policy aimed at reducing inflation. The policy involves increa\sing the reserve requirement for commercial banks. What is the likely effect of this policy on the money supply?

A. Increase the money supply

Correct B. Decrease the money supply

C. Have no effect on the money supply

D. Increase the interest rate

Correct Answer: B

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Question 17

A firm is considering two different production methods to produce a certain good. Method A requires an initial investment of ₦100,000 and has a variable \cost of ₦50 per unit produced. Method B requires an initial investment of ₦150,000 and has a variable \cost of ₦30 per unit produced. If the firm produces 10,000 units, what is the total \cost of production for each method?

Correct A. Method A: ₦500,000, Method B: ₦400,000

B. Method A: ₦450,000, Method B: ₦550,000

C. Method A: ₦600,000, Method B: ₦450,000

D. Method A: ₦350,000, Method B: ₦650,000

Correct Answer: A

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Question 18

The government has introduced a new tax on luxury goods. The tax rate is 10% of the price of the good. If a luxury good \costs ₦10,000, what is the amount of tax paid?

Correct A. ₦1,000

B. ₦1,500

C. ₦2,000

D. ₦2,500

Correct Answer: A

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Question 19

The demand for a good is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. The supply of the good is given by the equation Qs = 2P - 100, where Qs is the quantity supplied and P is the price. What is the equilibrium price and quantity?

A. Price: ₦50, Quantity: 50

Correct B. Price: ₦75, Quantity: 75

C. Price: ₦100, Quantity: 100

D. Price: ₦125, Quantity: 125

Correct Answer: B

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Question 20

The National Bureau of Statistics (NBS) has reported that the Gross Domestic Product (GDP) of Nigeria has increased by 3% in the last quarter. What does this mean for the economy?

Correct A. The economy is growing

B. The economy is stagnant

C. The economy is contracting

D. The economy is experiencing inflation

Correct Answer: A

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Question 21

A consumer has a budget of ₦10,000 and wants to buy two goods, A and B. The price of good A is ₦2,000 and the price of good B is ₦3,000. If the consumer sp\ends all their budget, what is the maximum quantity of good B that can be bought?

A. 2 units

Correct B. 3 units

C. 4 units

D. 5 units

Correct Answer: B

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Question 22

The government has introduced a new policy to reduce poverty. The policy involves providing a subsidy to farmers to increase food production. What is the likely effect of this policy on the price of food?

A. Increase the price of food

Correct B. Decrease the price of food

C. Have no effect on the price of food

D. Increase the supply of food

Correct Answer: B

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Question 23

A firm is considering two different production methods to produce a certain good. Method A requires an initial investment of ₦100,000 and has a variable \cost of ₦50 per unit produced. Method B requires an initial investment of ₦150,000 and has a variable \cost of ₦30 per unit produced. If the firm produces 10,000 units, what is the total \cost of production for each method?

Correct A. Method A: ₦500,000, Method B: ₦400,000

B. Method A: ₦450,000, Method B: ₦550,000

C. Method A: ₦600,000, Method B: ₦450,000

D. Method A: ₦350,000, Method B: ₦650,000

Correct Answer: A

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Question 24

Consider a consumer with a utility function U(x,y) = 2x + 3y, where x and y are the quantities of two goods consumed. If the consumer's income is ₦1000 and the prices of the two goods are ₦5 and ₦10 respectively, what is the consumer's optimal bundle of goods?

Correct A. (100, 50)

B. (200, 20)

C. (50, 100)

D. (150, 75)

Correct Answer: A

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Question 25

A firm is producing a good with a total revenue of ₦1000 and a total \cost of ₦800. If the firm's profit-maximizing output is 100 units, what is the firm's marginal revenue?

A. ₦10

Correct B. ₦20

C. ₦30

D. ₦40

Correct Answer: B

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