Practice post utme ims u economics 2022 Past Questions

Question 1

Determine the value of the marginal product of labor (MPL) for a firm that produces a homogeneous good u\sing the production function Q = 2L^$ 1/2 $K^$ 1/2 $, where Q is the quantity produced, L is the number of labor units, and K is the number of capital units.

A. $ MPL = \frac{dQ}{dL} = L^{-1/2}K^{1/2} $

Correct B. $ MPL = \frac{dQ}{dL} = 2L^{-1/2}K^{1/2} $

C. $ MPL = \frac{dQ}{dL} = 2L^{1/2}K^{-1/2} $

D. $ MPL = \frac{dQ}{dL} = L^{1/2}K^{-1/2} $

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 2

A firm's production function is given by Q = 3L^(2)K^$ 1/2 $. If the price of labor is ₦50 per unit and the price of capital is ₦100 per unit, calculate the total revenue (TR) and the marginal revenue product of labor (MRPL) when L = 4 and K = 2.

A. $ TR = 3\( 4 \ $^2(2)^{1/2}(50) + 3(4)^2(2)^{1/2}(100) )

B. $ TR = 3\( 4 \ $^2(2)^{1/2}(50) - 3(4)^2(2)^{1/2}(100) )

Correct C. $ MRPL = \frac{dTR}{dL} = 6\( 4 \ $^2(2)^{1/2}(50) + 6(4)^2(2)^{1/2}(100) )

D. $ MRPL = \frac{dTR}{dL} = 6\( 4 \ $^2(2)^{1/2}(50) - 6(4)^2(2)^{1/2}(100) )

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 3

A country's GDP is ₦1,500 billion, and its GNP is ₦1,600 billion. Calculate the net factor income from abroad (NFIA) and the net foreign investment (NFI).

Correct A. $ NFIA = GNP - GDP = 1,600 - 1,500 = 100 $

B. $ NFIA = GNP - GDP = 1,500 - 1,600 = -100 $

C. $ NFI = NFIA + \( GDP - GNP \ $ = 100 + $ 1,500 - 1,600 $ = -100 )

D. $ NFI = NFIA + \( GDP - GNP \ $ = 100 + $ 1,600 - 1,500 $ = 100 )

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 4

A firm's \cost function is given by C = 2L + 3K. If the price of labor is ₦50 per unit and the price of capital is ₦100 per unit, calculate the total \cost (TC) and the marginal \cost (MC) when L = 4 and K = 2.

Correct A. $ TC = 2\( 4 \ $(50) + 3(2)(100) = 400 + 600 = 1,000 )

B. $ TC = 2\( 4 \ $(50) - 3(2)(100) = 400 - 600 = -200 )

C. $ MC = \frac{dC}{dL} = 2\( 50 \ $ + 3(0) = 100 )

D. $ MC = \frac{dC}{dL} = 2\( 0 \ $ + 3(100) = 300 )

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 5

A country's inflation rate is 5% per annum, and its money supply is ₦1,000 billion. Calculate the velocity of money (V) u\sing the quantity equation of money MV = PT.

Correct A. $ V = \frac{PT}{MV} = \frac{1,000\( 1.05 \ $}{1,000(1)} = 1.05 )

B. $ V = \frac{PT}{MV} = \frac{1,000\( 1 \ $}{1,000(1.05)} = 0.952 )

C. $ V = \frac{PT}{MV} = \frac{1,000\( 1.05 \ $}{1,000(1.05)} = 1 )

D. $ V = \frac{PT}{MV} = \frac{1,000\( 1 \ $}{1,000(1.05)} = 1.05 )

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 6

A firm operating in a perfectly competitive market is faced with a downward-sloping demand curve. If the firm increases its output from 100 units to 120 units, its total revenue increases by ₦120,000. However, its total \cost increases by ₦80,000. What is the firm's profit-maximizing output?

A. 100 units

Correct B. 120 units

C. 150 units

D. 180 units

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 7

A monopolist faces a demand curve given by Q = 100 - 2P. The firm's marginal revenue (MR) is given by MR = 200 - 2Q. What is the firm's profit-maximizing price?

A. ₦50

Correct B. ₦60

C. ₦70

D. ₦80

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 8

A consumer has a utility function given by U = 2x + 3y, where x and y are the quantities of two goods consumed. The consumer's budget constraint is given by 2x + 3y = ₦100. What is the consumer's optimal bundle of goods?

Correct A. x = 20, y = 10

B. x = 15, y = 20

C. x = 10, y = 30

D. x = 5, y = 40

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 9

A firm is considering investing in a new project that has a net present value (NPV) of ₦100,000. The firm's \cost of capital is 10%. What is the firm's expected rate of return on the project?

A. 10%

Correct B. 12%

C. 15%

D. 18%

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 10

A government is considering implementing a tax on a particular good. The tax will increase the price of the good by 20%. The demand for the good is given by Q = 100 - 2P. What is the government's revenue from the tax?

A. ₦20,000

Correct B. ₦40,000

C. ₦60,000

D. ₦80,000

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 11

A government imposes a tax on imported goods to raise revenue. However, the tax also leads to a decrease in the quantity of imports. U\sing the concept of opportunity \cost, explain why the government's decision to impose the tax may not be the most efficient way to raise revenue.

A. The tax leads to a decrease in the quantity of imports, resulting in a loss of revenue.

Correct B. The tax increases the opportunity \cost of importing goods, leading to a decrease in the quantity of imports.

C. The tax increases the price of imported goods, making them less competitive in the domestic market.

D. The tax leads to a decrease in the quantity of imports, resulting in a decrease in the opportunity \cost of importing goods.

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 12

A country's balance of payments is in surplus, indicating that it is exporting more goods and services than it is importing. U\sing the concept of the balance of payments, explain why this may lead to an appreciation of the country's currency.

Correct A. The surplus in the balance of payments leads to an increase in the demand for the country's currency, cau\sing its value to appreciate.

B. The surplus in the balance of payments leads to a decrease in the supply of the country's currency, cau\sing its value to appreciate.

C. The surplus in the balance of payments leads to an increase in the country's foreign exchange reserves, cau\sing its currency to appreciate.

D. The surplus in the balance of payments leads to a decrease in the country's foreign exchange reserves, cau\sing its currency to depreciate.

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 13

A consumer is faced with a choice between two different brands of smartphones. Brand A \costs ₦150,000 and has a screen size of 6 inches, while Brand B \costs ₦120,000 and has a screen size of 5 inches. U\sing the concept of utility, explain why the consumer may prefer Brand A over Brand B.

Correct A. The consumer prefers Brand A because it has a larger screen size, which provides more utility.

B. The consumer prefers Brand A because it is more expensive, which means it has a higher quality.

C. The consumer prefers Brand A because it has a higher price-to-screen-size ratio, which means it is more efficient.

D. The consumer prefers Brand A because it has a lower price-to-screen-size ratio, which means it is less efficient.

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 14

A government is considering a policy to reduce the country's carbon footprint. U\sing the concept of scarcity, explain why the government may face a trade-off between reducing carbon emissions and maintaining economic growth.

Correct A. The government may face a trade-off between reducing carbon emissions and maintaining economic growth because reducing carbon emissions requires a reduction in the use of fossil fuels, which are a key input in many industries.

B. The government may face a trade-off between reducing carbon emissions and maintaining economic growth because reducing carbon emissions requires a reduction in the production of goods and services, which would lead to a decrease in economic output.

C. The government may face a trade-off between reducing carbon emissions and maintaining economic growth because reducing carbon emissions requires a reduction in the use of energy, which would lead to a decrease in economic output.

D. The government may face a trade-off between reducing carbon emissions and maintaining economic growth because reducing carbon emissions requires a reduction in the use of resources, which would lead to a decrease in economic output.

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 15

A country's economy is experiencing a recession. U\sing the concept of opportunity \cost, explain why the government may choose to implement expansionary fiscal policy to stimulate economic growth.

Correct A. The government may choose to implement expansionary fiscal policy because it would lead to an increase in aggregate demand, which would stimulate economic growth.

B. The government may choose to implement contractionary fiscal policy because it would lead to a decrease in aggregate demand, which would reduce the opportunity \cost of stimulating economic growth.

C. The government may choose to implement expansionary monetary policy because it would lead to an increase in aggregate demand, which would stimulate economic growth.

D. The government may choose to implement contractionary monetary policy because it would lead to a decrease in aggregate demand, which would reduce the opportunity \cost of stimulating economic growth.

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 16

Consider a firm operating in a perfectly competitive market with a downward-sloping demand curve and an upward-sloping supply curve. If the firm's marginal revenue (MR) curve intersects the marginal \cost (MC) curve at point E, and the firm is currently producing at point D, what is the likely effect on the firm's profit-maximizing output level if the market demand curve shifts to the left?

A. The firm will increase its output level.

Correct B. The firm will decrease its output level.

C. The firm's output level will remain unchanged.

D. The firm will increase its output level in the short run but decrease it in the long run.

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 17

A country's GDP is calculated as the sum of all final goods and services produced within its borders. If a multinational corporation (MNC) produces $100 million worth of goods in a foreign country and sells them in the same country, how will this affect the host country's GDP?

A. The host country's GDP will increase by $100 million.

B. The host country's GDP will decrease by $100 million.

Correct C. The host country's GDP will remain unchanged.

D. The host country's GDP will increase by $100 million, but the MNC's profit will decrease by $100 million.

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 18

A firm's production function is given by Q = 2L^0.5K^0.5, where Q is the output, L is the labor, and K is the capital. If the firm increases its labor from 100 units to 121 units and its capital from 100 units to 121 units, what is the percentage change in output?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 19

A country's balance of payments (BOP) accounts are in equilibrium when its current account (CA) equals its capital account (KA). If the country's CA is $100 million and its KA is $150 million, what is the likely effect on the country's exchange rate?

A. The exchange rate will appreciate.

Correct B. The exchange rate will depreciate.

C. The exchange rate will remain unchanged.

D. The exchange rate will fluctuate.

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 20

A firm's \cost function is given by C = 2L + 3K, where C is the \cost, L is the labor, and K is the capital. If the firm increases its labor from 100 units to 121 units and its capital from 100 units to 121 units, what is the percentage change in \cost?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 21

A monopolistically competitive firm faces a demand curve with a cons\tant elasticity of -2. If the firm's marginal revenue (MR) is 100, and its average revenue (AR) is 120, what is the firm's marginal \cost (MC)?

Correct A. 80

B. 100

C. 120

D. 150

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 22

A consumer has the following utility function: 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

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 23

A firm has a production function: Q = 2L^0.5K^0.5. If the firm's labor and capital inputs are 4 and 9 respectively, what is the firm's output?

A. 8

B. 12

Correct C. 16

D. 20

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 24

A central bank has a monetary policy rule: i = 2 + 0.5$ P - 2 $. If the inflation rate is 3, what is the nominal interest rate?

A. 4

Correct B. 5

C. 6

D. 7

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 25

A firm has a \cost function: C(L, K) = 2L + 3K. If the firm's labor and capital inputs are 6 and 8 respectively, what is the firm's total \cost?

A. 20

B. 30

Correct C. 40

D. 50

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

POST UTME IMS U 2022 Economics | Objective

Master the Exam!

Help others prepare! Share this practice hub: