POST UTME JOSEPH AYO BABALOLA UNIVERSITY 2018 Economics | Objective

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Question 1
Consider a perfectly competitive market with a downward-sloping demand curve and a horizontal supply curve. If the market price is $10 and the quantity demanded is 100 units, what is the consumer surplus?
Correct A. ( 1000 )
B. ( 500 )
C. ( 2000 )
D. ( 3000 )

Correct Answer: A

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Question 2
A firm's marginal revenue (MR) and marginal \cost (MC) curves are given by the equations \( MR = 10 - 2q \) and \( MC = 5 + q \), respectively. If the firm is currently producing 5 units, what is the profit-maximizing quantity?
A. ( 10 )
Correct B. ( 5 )
C. ( 15 )
D. ( 20 )

Correct Answer: B

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Question 3
A country's balance of payments (BOP) accounts are given by the following equations: \( CA = 100 + 0.5Y \) and \( SA = 50 + 0.2Y \), where ( CA ) is the current account balance and ( SA ) is the capital account balance. If the country's GDP is $1000, what is the BOP deficit?
A. ( 150 )
B. ( 200 )
Correct C. ( 250 )
D. ( 300 )

Correct Answer: C

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Question 4
A firm's production function is given by the equation \( Q = 10L^0.5K^0.5 \), where ( Q ) is the output, ( L ) is the labor, and ( K ) is the capital. If the firm is currently producing 100 units with 10 units of labor and 10 units of capital, what is the marginal product of labor?
A. ( 5 )
Correct B. ( 10 )
C. ( 15 )
D. ( 20 )

Correct Answer: B

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Question 5
A country's national income accounting identity is given by the equation \( Y = C + I + G + \( X - M \ \) ), where ( Y ) is the national income, ( 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 national income is $1000, consumption is $300, investment is $200, government sp\ending is $100, exports are $200, and imports are $100, what is the trade balance?
A. ( 100 )
Correct B. ( 200 )
C. ( 300 )
D. ( 400 )

Correct Answer: B

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Question 6
A monopolist faces a demand curve given by Q = 100 - 2P and a \cost function C(Q) = 2Q^2 + 10Q. If the monopolist produces 20 units, what is the consumer surplus?
A. ₦1000
B. ₦1200
Correct C. ₦1500
D. ₦1800

Correct Answer: C

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Question 7
A consumer has a utility function U(x, y) = 2x + 3y. If the consumer's income is ₦1000 and the prices of x and y are ₦2 and ₦3 respectively, what is the consumer's optimal bundle?
A. x = 100, y = 100
Correct B. x = 150, y = 50
C. x = 200, y = 0
D. x = 0, y = 333

Correct Answer: B

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Question 8
A firm is considering two projects: Project A has a probability of success of 0.6 and a payoff of ₦1000, while Project B has a probability of success of 0.4 and a payoff of ₦500. What is the expected value of the firm's payoff?
Correct A. ₦600
B. ₦400
C. ₦500
D. ₦700

Correct Answer: A

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Question 9
A country's GDP is ₦100 billion, its consumption is ₦80 billion, and its investment is ₦15 billion. What is the country's savings rate?
A. 0.15
Correct B. 0.20
C. 0.25
D. 0.30

Correct Answer: B

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Question 10
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, what is the firm's output?
A. 100
B. 200
Correct C. 400
D. 800

Correct Answer: C

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Question 11
The Central Bank of Nigeria (CBN) uses the monetary policy instrument of Open Market Operations (OMO) to increase the money supply in the economy. If the CBN buys government securities from commercial banks, what is the effect on the money supply?
Correct A. Increase in money supply
B. Decrease in money supply
C. No effect on money supply
D. Increase in interest rates

Correct Answer: A

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Question 12
The National Bureau of Statistics (NBS) releases the Gross Domestic Product (GDP) data for the fourth quarter of 2022. The GDP growth rate is 3.5% compared to 2.8% in the previous quarter. What is the implication of this data on the economy?
A. The economy is experiencing a recession
B. The economy is experiencing a boom
Correct C. The economy is experiencing a steady growth
D. The economy is experiencing a decline

Correct Answer: C

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Question 13
A firm is producing a good with a total revenue of ₦1,500 and a total \cost of ₦1,200. What is the profit of the firm?
Correct A. ₦300
B. ₦400
C. ₦500
D. ₦600

Correct Answer: A

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Question 14
The government of Nigeria is planning to implement a new economic policy to stimulate economic growth. The policy includes increa\sing the minimum wage, reducing taxes, and investing in infrastructure. What is the expected outcome of this policy?
A. Increased inflation
B. Decreased unemployment
Correct C. Increased economic growth
D. Decreased economic growth

Correct Answer: C

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Question 15
A farmer is producing a crop with a yield of 100 kg/ha. The price of the crop is ₦500/kg. What is the total revenue of the farmer from 10 hectares of land?
A. ₦5,000,000
Correct B. ₦5,500,000
C. ₦6,000,000
D. ₦6,500,000

Correct Answer: B

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Question 16
A firm operating in a perfectly competitive market has a total revenue function given by TR = 100q - 2q^2. If the market price is $10, find the firm's total revenue when it produces 20 units.
Correct A. ₦2000
B. ₦2500
C. ₦3000
D. ₦3500

Correct Answer: A

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Question 17
A monopolist faces a demand curve given by Qd = 100 - 2P. The firm's marginal \cost is MC = 10 + 2Q. Find the monopolist's profit-maximizing quantity and price.
Correct A. Q = 40, P = $60
B. Q = 30, P = $70
C. Q = 20, P = $80
D. Q = 50, P = $50

Correct Answer: A

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Question 18
A firm's \cost function is given by C(q) = 100 + 20q. If the market price is $20, find the firm's profit-maximizing quantity.
A. q = 5
Correct B. q = 10
C. q = 15
D. q = 20

Correct Answer: B

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Question 19
A firm's revenue function is given by TR = 100q - 2q^2. If the market price is $10, find the firm's marginal revenue.
Correct A. MR = $10
B. MR = $20
C. MR = $30
D. MR = $40

Correct Answer: A

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Question 20
A firm's \cost function is given by C(q) = 100 + 20q. If the market price is $20, find the firm's profit.
A. Profit = ₦100
Correct B. Profit = ₦200
C. Profit = ₦300
D. Profit = ₦400

Correct Answer: B

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Question 21
A firm's revenue function is given by TR = 100q - 2q^2. If the market price is $10, find the firm's total \cost.
A. TC = ₦1000
B. TC = ₦1500
Correct C. TC = ₦2000
D. TC = ₦2500

Correct Answer: C

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Question 22
A firm's \cost function is given by C(q) = 100 + 20q. If the market price is $20, find the firm's marginal \cost.
A. MC = $10
Correct B. MC = $20
C. MC = $30
D. MC = $40

Correct Answer: B

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Question 23
A firm's revenue function is given by TR = 100q - 2q^2. If the market price is $10, find the firm's average revenue.
Correct A. AR = $10
B. AR = $20
C. AR = $30
D. AR = $40

Correct Answer: A

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Question 24
A firm's \cost function is given by C(q) = 100 + 20q. If the market price is $20, find the firm's average \cost.
A. AC = $10
Correct B. AC = $20
C. AC = $30
D. AC = $40

Correct Answer: B

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Question 25
The concept of returns to scale in production theory implies that as the input factors increase, the output will increase at a rate of:
A. cons\tant
Correct B. increa\sing
C. decrea\sing
D. neutral

Correct Answer: B

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