POST UTME ESUT 2020 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 2020 Economics (Objective) questions designed to simulate the real exam environment.

Practice these randomly selected questions to test your readiness.

Question 1
A perfectly competitive market has a downward-sloping demand curve and a perfectly elastic supply curve. If the market price is $10, and the marginal \cost is $8, what is the profit-maximizing quantity of the good?
A. 100 units
B. 200 units
Correct C. 500 units
D. 1000 units

Correct Answer: C

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Question 2
A firm is faced with a budget constraint of $100,000 and a production function of Q = 2L + 3K, where L is labor and K is capital. If the wage rate is $20 per hour and the rental rate of capital is $10 per hour, what is the optimal level of labor and capital?
Correct A. L = 1000, K = 5000
B. L = 2000, K = 2000
C. L = 5000, K = 1000
D. L = 10000, K = 500

Correct Answer: A

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Question 3
A country is experiencing a recession, and the government decides to implement a fiscal policy to stimulate the economy. If the government increases its sp\ending by $10 billion and the multiplier is 2, what is the total increase in aggregate demand?
A. $20 billion
Correct B. $30 billion
C. $40 billion
D. $50 billion

Correct Answer: B

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Question 4
A firm is producing a good with a production function of Q = 2L + 3K, where L is labor and K is capital. If the wage rate is $20 per hour and the rental rate of capital is $10 per hour, what is the marginal product of labor?
A. 1 unit
Correct B. 2 units
C. 3 units
D. 4 units

Correct Answer: B

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Question 5
A country is experiencing a trade deficit, and the government decides to implement a trade policy to reduce the deficit. If the country imports $100 billion worth of goods and services and the exchange rate is 1 USD = 1.5 NGN, what is the value of the trade deficit in NGN?
A. ₦150 billion
Correct B. ₦200 billion
C. ₦250 billion
D. ₦300 billion

Correct Answer: B

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Question 6
A firm's revenue function is given by R(x) = 2x^2 + 5x + 1, where x is the number of units produced. If the firm's marginal revenue function is MR(x) = 4x + 5, find the value of x that maximizes revenue.
A. 1
Correct B. 2
C. 3
D. 4

Correct Answer: B

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Question 7
A country's balance of payments is given by the following equation: BOP = \( X - M \) + \( F - I \), where X is exports, M is imports, F is foreign investment, and I is domestic investment. If X = 100, M = 80, F = 120, and I = 90, what is the balance of payments?
A. 10
B. 20
Correct C. 30
D. 40

Correct Answer: C

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Question 8
A firm's \cost function is given by C(x) = 3x^2 + 2x + 1, where x is the number of units produced. If the firm's marginal \cost function is MC(x) = 6x + 2, find the value of x that minimizes \cost.
Correct A. 1
B. 2
C. 3
D. 4

Correct Answer: A

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Question 9
A country's money supply is given by the equation: M = \( C + I \) + \( B - L \), where C is consumption, I is investment, B is bank reserves, and L is loans. If C = 100, I = 80, B = 120, and L = 90, what is the money supply?
A. 10
B. 20
Correct C. 30
D. 40

Correct Answer: C

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Question 10
A firm's demand function is given by D(p) = 100 - 2p, where p is the price of the good. If the firm's supply function is S(p) = 2p + 5, find the equilibrium price and quantity.
Correct A. (10, 50)
B. (15, 25)
C. (20, 10)
D. (25, 5)

Correct Answer: A

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Question 11
A consumer's indifference curve is given by the equation ( u(x,y) = 2x + 3y ). If the consumer's income is ₦1000 and the prices of x and y are ₦5 and ₦3 respectively, find the consumer's optimal bundle of x and y.
Correct A. x = 40, y = 20
B. x = 30, y = 30
C. x = 20, y = 40
D. x = 10, y = 50

Correct Answer: A

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Question 12
The GDP of a country is given by the equation \( GDP = C + I + G + \( X - M \ \) ). If the country's consumption is ₦500 billion, investment is ₦200 billion, government sp\ending is ₦300 billion, exports are ₦400 billion, and imports are ₦200 billion, find the country's GDP.
Correct A. ₦1.1 trillion
B. ₦1.2 trillion
C. ₦1.3 trillion
D. ₦1.4 trillion

Correct Answer: A

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Question 13
A firm's total revenue is given by the equation \( TR = 2x^2 + 5x \). If the firm's marginal revenue is ₦10, find the firm's optimal output.
A. x = 5
Correct B. x = 10
C. x = 15
D. x = 20

Correct Answer: B

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Question 14
A country's balance of payments is given by the equation \( BOP = X - M + F - C \). If the country's exports are ₦500 billion, imports are ₦300 billion, foreign aid is ₦200 billion, and capital outflows are ₦100 billion, find the country's balance of payments.
Correct A. ₦200 billion
B. ₦300 billion
C. ₦400 billion
D. ₦500 billion

Correct Answer: A

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Question 15
A central bank's money supply is given by the equation \( MS = C + D + \( B - R \ \) ). If the central bank's currency in circulation is ₦500 billion, deposits are ₦200 billion, and reserve requirements are ₦100 billion, find the central bank's money supply.
Correct A. ₦600 billion
B. ₦700 billion
C. ₦800 billion
D. ₦900 billion

Correct Answer: A

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Question 16
The demand for a product 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 price at which the quantity demanded is 60?
A. ₦20
Correct B. ₦30
C. ₦40
D. ₦50

Correct Answer: B

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Question 17
A firm's production function is given by Q = 100K^0.5L^0.5, where Q is the output, K is the capital and L is the labor. If the firm wants to increase its output by 10% and the capital is fixed at 100 units, what is the required increase in labor?
A. 10 units
B. 20 units
Correct C. 30 units
D. 40 units

Correct Answer: C

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Question 18
The government of Nigeria wants to increase its revenue by 10% through taxation. If the current tax revenue is ₦100 billion, what is the required increase in tax revenue?
A. ₦5 billion
Correct B. ₦10 billion
C. ₦15 billion
D. ₦20 billion

Correct Answer: B

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Question 19
A country's GDP is given by the 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 exports and M is the imports. If the country's GDP is ₦500 billion, consumption is ₦150 billion, investment is ₦50 billion, government sp\ending is ₦100 billion, exports are ₦200 billion and imports are ₦150 billion, what is the value of X?
A. ₦250 billion
B. ₦300 billion
C. ₦350 billion
Correct D. ₦400 billion

Correct Answer: D

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Question 20
A firm's production function is given by Q = 100K^0.5L^0.5, where Q is the output, K is the capital and L is the labor. If the firm wants to increase its output by 10% and the labor is fixed at 100 units, what is the required increase in capital?
A. 10 units
B. 20 units
Correct C. 30 units
D. 40 units

Correct Answer: C

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Question 21
The government of a country decides to impose a tax on imported goods to raise revenue. The tax is levied at a rate of 10% of the value of the goods. If the value of the goods is ₦100,000, what is the amount of tax paid by the importer?
Correct A. ₦10,000
B. ₦9,000
C. ₦11,000
D. ₦12,000

Correct Answer: A

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Question 22
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.
Correct A. P = 40, Q = 30
B. P = 50, Q = 25
C. P = 60, Q = 20
D. P = 70, Q = 15

Correct Answer: A

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Question 23
The balance of payments (BOP) accounts for a country are given below. U\sing the BOP identity, calculate the current account balance.
A. ₦100 million
Correct B. ₦200 million
C. ₦300 million
D. ₦400 million

Correct Answer: B

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Question 24
A firm is considering two investment projects. Project A has a net present value (NPV) of ₦100,000 and a payback period of 5 years. Project B has an NPV of ₦120,000 and a payback period of 4 years. Which project should the firm choose?
A. Project A
Correct B. Project B
C. Both projects are equally attractive
D. Neither project is attractive

Correct Answer: B

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Question 25
A country's GDP at market price is ₦500 billion. The implicit deflator is 120. Calculate the GDP at cons\tant price.
Correct A. ₦400 billion
B. ₦450 billion
C. ₦500 billion
D. ₦550 billion

Correct Answer: A

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