Practice post utme esut economics 2022 Past Questions

Question 1

Consider a firm operating in a perfectly competitive market with cons\tant returns to scale. If the firm's production function is given by Q = 2L^0.5K^0.5, where Q is output, L is labor, and K is capital, what is the marginal product of labor (MPL) when L = 4 and K = 9?

Correct A. 6

B. 12

C. 18

D. 24

Correct Answer: A

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Question 2

A central bank is considering a monetary policy to combat inflation. If the current inflation rate is 5% and the central bank wants to reduce it to 3% within the next 2 years, what is the required annual rate of decrease in the money supply?

A. 2%

Correct B. 4%

C. 6%

D. 8%

Correct Answer: B

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Question 3

A government is planning to implement a new economic development project that will create 1000 jobs and increase the national income by ₦10 billion. If the opportunity \cost of each job is ₦5 million, what is the total opportunity \cost of the project?

A. ₦5 billion

Correct B. ₦6 billion

C. ₦7 billion

D. ₦8 billion

Correct Answer: B

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Question 4

A consumer has a utility function given by U = 2x^0.5y^0.5, where x is the quantity of good X and y is the quantity of good Y. If the prices of good X and good Y are ₦5 and ₦3 respectively, and the consumer's income is ₦100, what is the optimal bundle of goods?

A. (10, 20)

Correct B. (15, 15)

C. (20, 10)

D. (25, 5)

Correct Answer: B

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Question 5

A firm is considering two different production techno\logies: a traditional techno\logy that requires 2 units of labor and 1 unit of capital to produce 1 unit of output, and a modern techno\logy that requires 1 unit of labor and 2 units of capital to produce 1 unit of output. If the firm has 10 units of labor and 20 units of capital, which techno\logy should it choose?

A. Traditional techno\logy

Correct B. Modern techno\logy

C. Both techno\logies are equally efficient

D. Neither techno\logy is efficient

Correct Answer: B

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Question 6

Determine the equilibrium price and quantity of a perfectly competitive market, given the following supply and demand equations: Qd = 100 - 2P and Qs = 50 + 3P.

A. $P = 20, Q = 60$

Correct B. $P = 30, Q = 70$

C. $P = 40, Q = 80$

D. $P = 50, Q = 90$

Correct Answer: B

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Question 7

A country's balance of payments account shows a trade deficit of $100 million and a current account deficit of $50 million. What is the value of the capital account surplus?

A. $-50 million

B. $0 million

Correct C. $50 million

D. $100 million

Correct Answer: C

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Question 8

A firm has a production function Q = 2L^0.5K^0.5. If the price of labor is $10 per unit and the price of capital is $20 per unit, what is the optimal level of labor and capital?

Correct A. L = 100, K = 50

B. L = 50, K = 100

C. L = 200, K = 100

D. L = 100, K = 200

Correct Answer: A

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Question 9

A monopolist faces a demand curve Q = 100 - 2P and a marginal revenue curve MR = 20 - 2Q. What is the optimal price and quantity?

A. $P = 20, Q = 40$

Correct B. $P = 30, Q = 50$

C. $P = 40, Q = 60$

D. $P = 50, Q = 70$

Correct Answer: B

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Question 10

A country's GDP is $100 billion and its GNP is $120 billion. What is the value of the net factor income from abroad?

A. $10 billion

B. $20 billion

Correct C. $30 billion

D. $40 billion

Correct Answer: C

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Question 11

A firm's production function is given by Q = 2L^$ 1/2 $K^$ 1/2 $, where Q is output, L is labor, and K is capital. If the firm's current labor and capital inputs are 16 and 25 respectively, what is the marginal product of labor?

Correct A. 1.25

B. 2.5

C. 5

D. 10

Correct Answer: A

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Question 12

A country's GDP is ₦1,000,000,000,000. If the country's population is 200 million, what is the per capita income?

Correct A. ₦5,000

B. ₦10,000

C. ₦20,000

D. ₦50,000

Correct Answer: A

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Question 13

A firm's demand function is given by Q = 100 - 2P, where Q is quantity demanded and P is price. If the firm's current price is ₦50, what is the quantity demanded?

A. 50

Correct B. 75

C. 100

D. 125

Correct Answer: B

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Question 14

A country's balance of payments is given by the following table:\n\n| Item | Value |\n| --- | --- |\n| Exports | ₦500,000,000 |\n| Imports | ₦700,000,000 |\n| Net Factor Income | ₦100,000,000 |\n| Net Transfer | ₦50,000,000 |\n\nWhat is the country's balance of payments deficit?

A. ₦150,000,000

B. ₦200,000,000

Correct C. ₦250,000,000

D. ₦300,000,000

Correct Answer: C

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Question 15

A firm's production function is given by Q = 2L^$ 1/2 $K^$ 1/2 $, where Q is output, L is labor, and K is capital. If the firm's current labor and capital inputs are 16 and 25 respectively, what is the marginal product of capital?

A. 0.0625

Correct B. 0.125

C. 0.25

D. 0.5

Correct Answer: B

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Question 16

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's labor and capital are increased by 20% and 15% respectively, what is the percentage change in output?

A. 5%

B. 10%

Correct C. 15%

D. 20%

Correct Answer: C

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Question 17

A country's GDP is ₦10 trillion, and its GNP is ₦12 trillion. What is the country's net factor income from abroad?

A. ₦1 trillion

Correct B. ₦2 trillion

C. ₦3 trillion

D. ₦4 trillion

Correct Answer: B

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Question 18

A firm's demand function is given by Q = 100 - 2P, where Q is quantity demanded and P is price. If the firm's revenue is ₦10,000, what is the price elasticity of demand?

Correct A. 0.5

B. 1

C. 2

D. 3

Correct Answer: A

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Question 19

A country's balance of payments is given by the following table:\n\n| Category | Debit | Credit |\n| --- | --- | --- |\n| Current Account | ₦5 trillion | ₦6 trillion |\n| Capital Account | ₦2 trillion | ₦1 trillion |\n| Financial Account | ₦3 trillion | ₦4 trillion |\n\nWhat is the country's net capital outflow?

A. ₦1 trillion

Correct B. ₦2 trillion

C. ₦3 trillion

D. ₦4 trillion

Correct Answer: B

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Question 20

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's labor and capital are increased by 20% and 15% respectively, what is the percentage change in output?

A. 5%

B. 10%

Correct C. 15%

D. 20%

Correct Answer: C

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Question 21

The concept of returns to scale in production theory implies that as the input of a variable factor increases, the output increases at a rate that is proportional to the increase in the input. Which of the following statements best describes the relationship between the input and output in the case of increa\sing returns to scale?

A. The output increases at a decrea\sing rate compared to the increase in the input.

Correct B. The output increases at an increa\sing rate compared to the increase in the input.

C. The output increases at a cons\tant rate compared to the increase in the input.

D. The output remains cons\tant despite the increase in the input.

Correct Answer: B

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Question 22

A firm is producing a good with a production function Q = 2L^$ 1/2 $K^$ 1/2 $, where L is labor and K is capital. If the firm increases its labor input from 4 units to 9 units, and holds capital cons\tant at 16 units, what is the percentage change in output?

Correct A. 25%

B. 50%

C. 75%

D. 100%

Correct Answer: A

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Question 23

The Nigerian government has introduced a new tax policy aimed at increa\sing revenue from the agricultural sector. The policy requires farmers to pay a tax of 10% on their total sales. If a farmer sells 100 units of a product at ₦500 each, what is the total tax liability?

A. ₦5,000

Correct B. ₦10,000

C. ₦15,000

D. ₦20,000

Correct Answer: B

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Question 24

A central bank is considering a monetary policy to reduce inflation. The bank has two options: Option A, which involves increa\sing the reserve requirement for commercial banks, or Option B, which involves increa\sing the discount rate. Which option is more likely to reduce inflation?

A. Option A

Correct B. Option B

C. Both options are equally effective

D. Neither option is effective

Correct Answer: B

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Question 25

A firm is producing a good with a production function Q = 2L^$ 1/2 $K^$ 1/2 $, where L is labor and K is capital. If the firm increases its capital input from 16 units to 25 units, and holds labor cons\tant at 4 units, what is the percentage change in output?

A. 25%

B. 50%

Correct C. 75%

D. 100%

Correct Answer: C

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