Practice post utme futo economics 2018 Past Questions

Question 1

In a perfectly competitive market, if the demand for a commodity increases, what will happen to the equilibrium price?

A. The equilibrium price will increase.

B. The equilibrium price will decrease.

Correct C. The equilibrium price will remain unchanged.

D. The equilibrium price will fluctuate.

Correct Answer: C

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Question 2

A monopolist faces a demand curve given by Q = 100 - 2P. If the monopolist's marginal revenue (MR) is given by MR = 200 - 4Q, what is the monopolist's optimal price?

A. ₦50

Correct B. ₦75

C. ₦100

D. ₦125

Correct Answer: B

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Question 3

A firm's total revenue (TR) is given by TR = 100Q - 2Q^2. If the firm's marginal \cost (MC) is given by MC = 10 + 2Q, what is the firm's optimal output?

A. 10 units

B. 20 units

Correct C. 30 units

D. 40 units

Correct Answer: C

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Question 4

A country's GDP is given by GDP = C + I + G + \( X - M \). If the country's consumption (C) is ₦500 billion, investment (I) is ₦200 billion, government sp\ending (G) is ₦300 billion, exports (X) are ₦400 billion, and imports (M) are ₦200 billion, what is the country's GDP?

A. ₦1.5 trillion

B. ₦1.8 trillion

Correct C. ₦2.1 trillion

D. ₦2.4 trillion

Correct Answer: C

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Question 5

A central bank uses the money multiplier formula to calculate the money supply (M). If the money multiplier is 10, the reserve requirement is 0.2, and the excess reserves are ₦100 million, what is the money supply?

A. ₦1 billion

B. ₦1.2 billion

Correct C. ₦1.5 billion

D. ₦2 billion

Correct Answer: C

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Question 6

In a perfectly competitive market, what is the relationship between the marginal revenue (MR) and the marginal \cost (MC) of a firm?

A. MR > MC

Correct B. MR = MC

C. MR < MC

D. MR = 0

Correct Answer: B

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Question 7

A firm's total revenue (TR) is given by the equation TR = 100x - 2x^2, where x is the number of units sold. What is the marginal revenue (MR) of the firm?

Correct A. 98

B. 100

C. 102

D. 104

Correct Answer: A

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Question 8

A country's GDP is ₦1,000,000,000. If the country's net factor income from abroad is ₦200,000,000, what is the country's GNP?

Correct A. ₦1,200,000,000

B. ₦1,100,000,000

C. ₦1,000,000,000

D. ₦900,000,000

Correct Answer: A

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Question 9

A firm's \cost function is given by the equation C(x) = 100 + 2x + 0.5x^2. What is the marginal \cost (MC) of the firm?

Correct A. 2 + x

B. 3 + 0.5x

C. 4 + x

D. 5 + 0.5x

Correct Answer: A

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Question 10

A monopolist faces a demand curve given by the equation P = 100 - 2x. What is the price elasticity of demand (PED) at a quantity of 20 units?

A. -1

Correct B. -2

C. -3

D. -4

Correct Answer: B

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Question 11

A firm's demand curve is given by Qd = 100 - 2P, and the supply curve is given by Qs = 2P - 10. Find the equilibrium price and quantity.

A. ₦50, 50 units

Correct B. ₦25, 75 units

C. ₦75, 25 units

D. ₦100, 0 units

Correct Answer: B

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Question 12

A country's balance of payments is given by the following equation: BOP = \( X - M \) + \( F - I \). If the country's exports are ₦100 billion, imports are ₦80 billion, foreign investment is ₦20 billion, and domestic investment is ₦30 billion, what is the 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 13

A consumer's utility function is given by U(x, y) = 2x + 3y. If the consumer's income is ₦100 and the prices of x and y are ₦5 and ₦10 respectively, what is the consumer's optimal bundle?

Correct A. x = 10, y = 5

B. x = 5, y = 10

C. x = 15, y = 0

D. x = 0, y = 15

Correct Answer: A

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Question 14

A firm is a pure monopolist with a demand curve given by Qd = 100 - 2P. If the firm's marginal \cost is ₦10, what is the firm's optimal price and quantity?

A. ₦50, 50 units

Correct B. ₦25, 75 units

C. ₦75, 25 units

D. ₦100, 0 units

Correct Answer: B

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Question 15

A country's GDP is given by the equation: GDP = C + I + G + \( X - M \). If the country's consumption is ₦50 billion, investment is ₦20 billion, government sp\ending is ₦30 billion, exports are ₦100 billion, and imports are ₦80 billion, what is the country's GDP?

A. ₦120 billion

Correct B. ₦150 billion

C. ₦180 billion

D. ₦200 billion

Correct Answer: B

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Question 16

Consider a country that imports 80% of its coffee and exports 70% of its coffee beans. If the country's GDP is ₦10 trillion and the price of coffee is ₦500 per ki\logram, what is the opportunity \cost of importing coffee beans?

Correct A. ₦1.5 trillion

B. ₦2 trillion

C. ₦3 trillion

D. ₦4 trillion

Correct Answer: A

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Question 17

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's output is 100 units and the price of labor is ₦500 per unit, what is the opportunity \cost of one unit of labor?

A. ₦250

Correct B. ₦500

C. ₦750

D. ₦1000

Correct Answer: B

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Question 18

A country's demand for a good is given by Qd = 100 - 2P and supply is given by Qs = 2P. If the price of the good is ₦50, what is the equilibrium quantity?

A. 50 units

Correct B. 100 units

C. 150 units

D. 200 units

Correct Answer: B

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Question 19

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's output is 100 units and the price of labor is ₦500 per unit, what is the opportunity \cost of one unit of labor?

A. ₦250

Correct B. ₦500

C. ₦750

D. ₦1000

Correct Answer: B

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Question 20

A country's demand for a good is given by Qd = 100 - 2P and supply is given by Qs = 2P. If the price of the good is ₦50, what is the equilibrium quantity?

A. 50 units

Correct B. 100 units

C. 150 units

D. 200 units

Correct Answer: B

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Question 21

Consider a production function given by \( Q = 100K^{\frac{1}{3}}L^{\frac{2}{3}} \). If the price of capital is ₦100 per unit and the price of labor is ₦50 per unit, and the firm's budget constraint is ₦10,000, what is the optimal combination of capital and labor that the firm should employ?

A. \( K = 10, L = 20 \)

B. \( K = 20, L = 10 \)

Correct C. \( K = 15, L = 15 \)

D. \( K = 25, L = 5 \)

Correct Answer: C

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Question 22

A firm's production function is given by \( Q = 2L^2 + 3K \), where ( L ) is labor and ( K ) is capital. If the price of labor is ₦50 per unit and the price of capital is ₦100 per unit, and the firm's budget constraint is ₦10,000, what is the optimal combination of labor and capital that the firm should employ?

A. \( L = 10, K = 20 \)

B. \( L = 20, K = 10 \)

Correct C. \( L = 15, K = 15 \)

D. \( L = 25, K = 5 \)

Correct Answer: C

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Question 23

Consider a firm with a production function given by \( Q = 100K^{\frac{1}{3}}L^{\frac{2}{3}} \). If the price of capital is ₦100 per unit and the price of labor is ₦50 per unit, and the firm's budget constraint is ₦10,000, what is the optimal combination of capital and labor that the firm should employ?

A. \( K = 10, L = 20 \)

B. \( K = 20, L = 10 \)

Correct C. \( K = 15, L = 15 \)

D. \( K = 25, L = 5 \)

Correct Answer: C

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Question 24

A firm's production function is given by \( Q = 2L^2 + 3K \), where ( L ) is labor and ( K ) is capital. If the price of labor is ₦50 per unit and the price of capital is ₦100 per unit, and the firm's budget constraint is ₦10,000, what is the optimal combination of labor and capital that the firm should employ?

A. \( L = 10, K = 20 \)

B. \( L = 20, K = 10 \)

Correct C. \( L = 15, K = 15 \)

D. \( L = 25, K = 5 \)

Correct Answer: C

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Question 25

Consider a production function given by \( Q = 100K^{\frac{1}{3}}L^{\frac{2}{3}} \). If the price of capital is ₦100 per unit and the price of labor is ₦50 per unit, and the firm's budget constraint is ₦10,000, what is the optimal combination of capital and labor that the firm should employ?

A. \( K = 10, L = 20 \)

B. \( K = 20, L = 10 \)

Correct C. \( K = 15, L = 15 \)

D. \( K = 25, L = 5 \)

Correct Answer: C

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