POST UTME ESUT 2019 Economics | Objective

Are you preparing for POST UTME ESUT exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2019 Economics (Objective) questions designed to simulate the real exam environment.

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Question 1
A government imposes a tax on imports to reduce the trade deficit. If the tax rate is 15% and the price elasticity of demand for the imported good is -2, what is the expected change in the quantity demanded of the good?
A. 10% increase
Correct B. 20% decrease
C. 15% decrease
D. 5% increase

Correct Answer: B

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Question 2
A firm has a total revenue function of TR = 100x - 2x^2 and a total \cost function of TC = 50 + 20x + 3x^2. What is the profit-maximizing level of output?
A. 5 units
B. 10 units
Correct C. 15 units
D. 20 units

Correct Answer: C

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Question 3
A country has a balance of payments deficit of $100 million. If the exchange rate is 1 USD = 100 Naira, what is the equivalent deficit in Naira?
A. ₦10 billion
Correct B. ₦20 billion
C. ₦30 billion
D. ₦40 billion

Correct Answer: B

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Question 4
A firm is considering investing in a new project with a net present value of $1 million. If the \cost of capital is 10%, what is the internal rate of return (IRR) of the project?
A. 5%
Correct B. 10%
C. 15%
D. 20%

Correct Answer: B

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Question 5
A government is considering implementing a policy to reduce income inequality. Which of the following policies would be most effective in achieving this goal?
A. Increa\sing the minimum wage
Correct B. Implementing a progressive income tax
C. Increa\sing government sp\ending on education
D. Reducing government sp\ending on healthcare

Correct Answer: B

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Question 6
Consider a country with a fixed money supply of ₦10 billion. The central bank decides to increase the money supply by 20%. Calculate the new money supply in ₦.
A. ₦12 billion
B. ₦11 billion
Correct C. ₦10.2 billion
D. ₦9.8 billion

Correct Answer: C

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Question 7
A firm's demand function is given by Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the price is ₦20, calculate the quantity demanded.
A. 50 units
Correct B. 100 units
C. 200 units
D. 250 units

Correct Answer: B

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Question 8
A country's balance of payments account is given by the following equation: BOP = X - M, where X is the value of exports and M is the value of imports. If the value of exports is ₦100 billion and the value of imports is ₦120 billion, calculate the balance of payments.
Correct A. ₦20 billion deficit
B. ₦20 billion surplus
C. ₦10 billion deficit
D. ₦10 billion surplus

Correct Answer: A

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Question 9
A firm's production function is given by Q = 2L + 3K, where Q is the quantity produced, L is the labor input, and K is the capital input. If the labor input is 10 units and the capital input is 5 units, calculate the quantity produced.
A. 25 units
B. 30 units
Correct C. 35 units
D. 40 units

Correct Answer: C

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Question 10
A country's GDP is given by the following equation: GDP = C + I + G + \( X - M \), where C is the consumption, I is the investment, G is the government sp\ending, X is the value of exports, and M is the value of imports. If the consumption is ₦500 billion, the investment is ₦200 billion, the government sp\ending is ₦300 billion, the value of exports is ₦100 billion, and the value of imports is ₦120 billion, calculate the GDP.
A. ₦1.2 trillion
B. ₦1.3 trillion
Correct C. ₦1.4 trillion
D. ₦1.5 trillion

Correct Answer: C

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Question 11
A government plans to increase the price of a commodity by 15% to reduce its consumption. However, the demand for the commodity is inelastic. What will be the effect of this price increase on the government's revenue?
A. The government's revenue will increase by 15%
B. The government's revenue will decrease by 15%
Correct C. The government's revenue will remain the same
D. The government's revenue will increase by 20%

Correct Answer: C

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Question 12
A firm's total revenue is given by the equation TR = 100x - 2x^2, where x is the number of units sold. If the firm sells 20 units, what is its total revenue?
A. ₦1800
Correct B. ₦2000
C. ₦2200
D. ₦2400

Correct Answer: B

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Question 13
A central bank implements a monetary policy that increases the money supply by 10%. What will be the effect on the general price level?
Correct A. The general price level will increase by 10%
B. The general price level will decrease by 10%
C. The general price level will remain the same
D. The general price level will increase by 20%

Correct Answer: A

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Question 14
A firm's marginal \cost is given by the equation MC = 2x + 5, where x is the number of units produced. If the firm produces 15 units, what is its marginal \cost?
A. ₦45
B. ₦50
Correct C. ₦55
D. ₦60

Correct Answer: C

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Question 15
A government imposes a tax on a commodity, which increases its price by 20%. What will be the effect on the quantity demanded of the commodity?
A. The quantity demanded will increase by 20%
Correct B. The quantity demanded will decrease by 20%
C. The quantity demanded will remain the same
D. The quantity demanded will increase by 10%

Correct Answer: B

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Question 16
Suppose a firm is operating in a perfectly competitive market with a downward-sloping demand curve. If the firm increases its production from 100 units to 120 units, and the price per unit falls from ₦100 to ₦90, what is the likely effect on the firm's total revenue?
A. Total revenue increases
Correct B. Total revenue decreases
C. Total revenue remains unchanged
D. Total revenue increases at a decrea\sing rate

Correct Answer: B

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Question 17
A country's balance of payments account shows a trade deficit of ₦100 billion and a capital account surplus of ₦50 billion. What is the likely effect on the country's exchange rate?
A. The exchange rate appreciates
Correct B. The exchange rate depreciates
C. The exchange rate remains unchanged
D. The exchange rate fluctuates

Correct Answer: B

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Question 18
A firm is operating in a monopoly market with a demand curve given by Q = 100 - 2P. If the firm's marginal revenue (MR) is ₦50, what is the likely effect on the firm's price?
Correct A. Price increases
B. Price decreases
C. Price remains unchanged
D. Price fluctuates

Correct Answer: A

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Question 19
A country's inflation rate is 10% and its nominal interest rate is 12%. What is the likely effect on the country's real interest rate?
A. Real interest rate increases
Correct B. Real interest rate decreases
C. Real interest rate remains unchanged
D. Real interest rate fluctuates

Correct Answer: B

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Question 20
A firm is operating in a perfectly competitive market with a production function given by Q = 2L^0.5. If the firm's labor input increases from 4 units to 9 units, what is the likely effect on the firm's output?
Correct A. Output increases
B. Output decreases
C. Output remains unchanged
D. Output fluctuates

Correct Answer: A

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Question 21
A monopolistically competitive firm faces a demand curve that can be represented by the equation \( Q = 100 - 2P \). If the firm's marginal revenue (MR) is given by the equation \( MR = 50 - 2Q \), what is the firm's optimal price?
A. ₦25
Correct B. ₦30
C. ₦35
D. ₦40

Correct Answer: B

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Question 22
A consumer's utility function is given by \( U = 2x + 3y \), where x and y are the quantities of two goods consumed. If the consumer's budget constraint is \( 2x + 3y = 12 \), and the prices of the two goods are $2 and $3 respectively, what is the consumer's optimal bundle?
A. x = 2, y = 4
B. x = 4, y = 2
Correct C. x = 3, y = 3
D. x = 1, y = 5

Correct Answer: C

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Question 23
A firm's production function is given by \( Q = 2L^2 + 3K \), where L is labor and K is capital. If the firm's \cost function is given by \( C = 10L + 20K \), and the prices of labor and capital are $10 and $20 respectively, what is the firm's optimal input bundle?
Correct A. L = 2, K = 3
B. L = 3, K = 2
C. L = 4, K = 1
D. L = 1, K = 4

Correct Answer: A

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Question 24
A country's GDP is given by \( GDP = C + I + G + \( X - M \ \) ), where C is consumption, I is investment, G is government sp\ending, X is exports, and M is imports. If the country's GDP is $100 billion, and the values of C, I, G, X, and M are $50 billion, $20 billion, $30 billion, $40 billion, and $20 billion respectively, what is the country's trade balance?
A. ₦10 billion
Correct B. ₦20 billion
C. ₦30 billion
D. ₦40 billion

Correct Answer: B

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Question 25
A firm's demand curve is given by \( Q = 100 - 2P \), where Q is quantity and P is price. If the firm's marginal revenue (MR) is given by the equation \( MR = 50 - 2Q \), what is the firm's optimal price?
A. ₦25
Correct B. ₦30
C. ₦35
D. ₦40

Correct Answer: B

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