POST UTME IMS U 2019 Economics | Objective

Are you preparing for POST UTME IMS U 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
The demand for a commodity is said to be perfectly inelastic if a change in the price of the commodity does not affect the quantity demanded. Which of the following best describes the demand curve for a perfectly inelastic commodity?
A. A horizontal line
Correct B. A vertical line
C. An upward-sloping line
D. A downward-sloping line

Correct Answer: B

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Question 2
A firm's \cost function is given by C(q) = 2q^2 + 10q + 5. What is the marginal \cost function?
Correct A. 4q + 10
B. 2q^2 + 10q + 5
C. q^2 + 5q
D. q^2 + 10q

Correct Answer: A

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Question 3
A country's balance of payments is in equilibrium when the current account is equal to the capital account. Which of the following is a correct statement about the balance of payments?
Correct A. The current account is always equal to the capital account
B. The current account is always greater than the capital account
C. The capital account is always greater than the current account
D. The balance of payments is always in equilibrium

Correct Answer: A

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Question 4
A firm is considering two different production processes. Process A has a fixed \cost of ₦100,000 and a variable \cost of ₦50 per unit. Process B has a fixed \cost of ₦150,000 and a variable \cost of ₦30 per unit. If the firm produces 10,000 units, which process will result in lower \costs?
Correct A. Process A
B. Process B
C. Both processes will result in the same \costs
D. Neither process will result in lower \costs

Correct Answer: A

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Question 5
A consumer's indifference curve is given by the equation u(x,y) = 2x + 3y. If the consumer's income is ₦1,000 and the prices of x and y are ₦50 and ₦30 respectively, what is the consumer's optimal bundle?
Correct A. (20,10)
B. (15,15)
C. (10,20)
D. (5,25)

Correct Answer: A

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Question 6
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 percentage change in quantity demanded if the price increases by 10%?
Correct A. 5%
B. 10%
C. 15%
D. 20%

Correct Answer: A

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Question 7
A firm produces two goods, X and Y, u\sing two inputs, labor and capital. The production functions are given by X = 2L^0.5K^0.5 and Y = 3L^0.5K^0.5. If the firm has 100 units of labor and 200 units of capital, what is the total output?
A. 1000
B. 1200
Correct C. 1500
D. 1800

Correct Answer: C

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Question 8
The government of a country imposes a tariff of 20% on imported goods. If the price of the imported good is $100, what is the new price after the tariff is imposed?
Correct A. $120
B. $120.00
C. $120.00
D. $120.00

Correct Answer: A

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Question 9
A country's GDP 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 $300 billion, what is the country's GDP?
Correct A. $1500
B. $1500.00
C. $1500.00
D. $1500.00

Correct Answer: A

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Question 10
A firm is considering two projects, A and B. Project A has a net present value (NPV) of $100,000 and a payback period of 5 years. Project B has an NPV of $150,000 and a payback period of 3 years. Which project should the firm choose?
A. Project A
Correct B. Project B
C. Both projects are equally good
D. Neither project is good

Correct Answer: B

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Question 11
Consider a country with a GDP of ₦10 trillion and a GNP of ₦12 trillion. If the country's population is 200 million, calculate the per capita GDP and GNP.
A. ₦50,000
Correct B. ₦60,000
C. ₦70,000
D. ₦80,000

Correct Answer: B

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Question 12
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's labor and capital inputs are 100 and 400 respectively, calculate the firm's output.
A. 20
Correct B. 40
C. 60
D. 80

Correct Answer: B

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Question 13
A consumer's utility function is given by U = 2x + 3y. If the consumer's income is ₦100 and the prices of x and y are ₦5 and ₦10 respectively, calculate the consumer's optimal consumption bundle.
Correct A. x = 10, y = 5
B. x = 5, y = 10
C. x = 15, y = 3
D. x = 20, y = 2

Correct Answer: A

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Question 14
Consider a country with a money supply of ₦500 billion and a velocity of circulation of 2. If the country's GDP is ₦10 trillion, calculate the country's inflation rate.
A. 2%
Correct B. 4%
C. 6%
D. 8%

Correct Answer: B

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Question 15
A country's balance of payments is given by the following table:\n\n| Item | Value |\n| --- | --- |\n| Exports | ₦500 billion |\n| Imports | ₦600 billion |\n| Net Factor Income | ₦100 billion |\n| Net Transfer | ₦50 billion |\n\nCalculate the country's balance of payments deficit.
A. ₦50 billion
Correct B. ₦100 billion
C. ₦150 billion
D. ₦200 billion

Correct Answer: B

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Question 16
A firm's production function is given by Q = 100K^0.5L^0.5, where Q is output, K is capital, and L is labor. If the firm's capital increases by 25% and labor remains cons\tant, what is the percentage change in output?
Correct A. 12.5%
B. 25%
C. 50%
D. 100%

Correct Answer: A

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Question 17
A government increases the tax rate on a particular good from 10% to 20%. If the demand for the good is given by Q = 100 - 2P and the supply is given by Q = 2P - 10, what is the new equilibrium price?
A. ₦15
Correct B. ₦20
C. ₦25
D. ₦30

Correct Answer: B

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Question 18
A central bank increases the reserve requirement for commercial banks from 10% to 20%. If the money multiplier is 4, what is the new money supply?
A. ₦100,000
B. ₦200,000
Correct C. ₦400,000
D. ₦800,000

Correct Answer: C

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Question 19
A firm's elasticity of demand is given by E = -2. If the price of the good increases by 10%, what is the percentage change in quantity demanded?
Correct A. -20%
B. -10%
C. 10%
D. 20%

Correct Answer: A

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Question 20
A country's balance of payments is given by BOP = X - M, where X is exports and M is imports. If the country's exports increase by 15% and imports remain cons\tant, what is the percentage change in the balance of payments?
Correct A. 15%
B. 10%
C. 5%
D. 0%

Correct Answer: A

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Question 21
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 22
A monopolistically competitive firm faces a demand curve given by Q = 100 - 2P. If the firm's marginal revenue is 50, what is the price at which the firm will produce 80 units?
A. ₦20
Correct B. ₦30
C. ₦40
D. ₦50

Correct Answer: B

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Question 23
A country's balance of payments is given by the 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 ₦80 billion, what is the balance of payments?
Correct A. ₦10 billion
B. ₦20 billion
C. ₦30 billion
D. ₦40 billion

Correct Answer: A

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Question 24
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 income is ₦100 and the prices of the two goods are ₦20 and ₦30 respectively, what is the consumer's optimal bundle?
A. x = 2, y = 3
Correct B. x = 3, y = 2
C. x = 4, y = 1
D. x = 1, y = 4

Correct Answer: B

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Question 25
A firm's \cost function is given by C = 2Q^2 + 3Q, where Q is the quantity produced. If the firm produces 10 units, what is the total \cost?
A. ₦50
B. ₦60
Correct C. ₦70
D. ₦80

Correct Answer: C

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