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POST UTME JOSEPH AYO BABALOLA UNIVERSITY 2022 Economics | Objective

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Question 1

Determine the equilibrium price and quantity of wheat in the market, given the demand equation Qd = 100 - 2P and the supply equation Qs = 2P - 10, where Qd and Qs are the quantities demanded and supplied, respectively, and P is the price of wheat.

Correct A. $ P = 15, Q = 25 $

B. $ P = 10, Q = 20 $

C. $ P = 20, Q = 30 $

D. $ P = 5, Q = 15 $

Correct Answer: A

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Question 2

A country's balance of payments is in equilibrium when the current account and capital account are balanced. If the current account is in deficit by $100 million and the capital account is in surplus by $150 million, what is the overall balance of payments?

Correct A. $ \text{Surplus of } $50 \text{ million} $

B. $ \text{Deficit of } $50 \text{ million} $

C. $ \text{Surplus of } $100 \text{ million} $

D. $ \text{Deficit of } $150 \text{ million} $

Correct Answer: A

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Question 3

A firm's total revenue is given by the equation TR = 100P - 0.5P^2, where P is the price of the product. If the firm's total \cost is TC = 50 + 20P, what is the profit-maximizing price?

A. $ P = 10 $

Correct B. $ P = 15 $

C. $ P = 20 $

D. $ P = 25 $

Correct Answer: B

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Question 4

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 supply of the product is given by the equation Qs = 2P - 10, what is the price elasticity of demand at a price of $15?

A. $ \text{Unit elastic} $

Correct B. $ \text{Inelastic} $

C. $ \text{Perfectly elastic} $

D. $ \text{Perfectly inelastic} $

Correct Answer: B

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Question 5

Agricultural development in Nigeria has been hindered by the lack of access to credit facilities for farmers. What is the most likely cause of this problem?

A. $ \text{High interest rates} $

Correct B. $ \text{Lack of collateral} $

C. $ \text{Limited financial literacy} $

D. $ \text{Inadequate government support} $

Correct Answer: B

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Question 6

The concept of scarcity in economics implies that the production of one good is limited by the availability of resources that could be used to produce another good. Which of the following is an example of an opportunity \cost?

A. The \cost of producing a good

B. The benefit of consuming a good

Correct C. The opportunity \cost of producing a good

D. The \cost of not producing a good

Correct Answer: C

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Question 7

A firm's revenue function is given by R(x) = 2x^2 + 5x + 1. If the firm produces 10 units of the good, what is its total revenue?

A. $51

Correct B. $52

C. $53

D. $54

Correct Answer: B

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Question 8

A consumer's demand for a good is given by the demand function Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the price of the good is $10, how many units will the consumer demand?

A. 20

Correct B. 30

C. 40

D. 50

Correct Answer: B

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Question 9

A firm's \cost function is given by C(x) = 3x^2 + 2x + 1. If the firm produces 5 units of the good, what is its total \cost?

A. $16

B. $17

Correct C. $18

D. $19

Correct Answer: C

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Question 10

A consumer's budget constraint is given by the equation 2Q + 3P = 30, where Q is the quantity consumed and P is the price. If the price of the good is $5, how many units will the consumer consume?

A. 5

Correct B. 6

C. 7

D. 8

Correct Answer: B

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Question 11

A country's GDP is ₦1.5 trillion, while its GNP is ₦1.7 trillion. What is the net factor income from abroad?

A. ₦200 billion

B. ₦300 billion

Correct C. ₦400 billion

D. ₦500 billion

Correct Answer: C

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Question 12

A firm's total revenue is ₦1.2 million, and its total \cost is ₦900,000. What is its profit?

A. ₦300,000

B. ₦400,000

C. ₦500,000

Correct D. ₦600,000

Correct Answer: D

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Question 13

A government imposes a tax of 10% on all goods and services. If a consumer buys a product worth ₦1,000, how much tax will they pay?

Correct A. ₦100

B. ₦200

C. ₦300

D. ₦400

Correct Answer: A

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Question 14

A country's budget is ₦5 trillion, with 60% allocated to education and 20% to healthcare. What is the total allocation to these two sectors?

A. ₦2.4 trillion

Correct B. ₦2.6 trillion

C. ₦2.8 trillion

D. ₦3 trillion

Correct Answer: B

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Question 15

A firm's production function is given by Q = 2L^0.5K^0.5. If L = 4 and K = 9, what is the level of output?

A. 12

B. 15

Correct C. 18

D. 20

Correct Answer: C

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Question 16

A firm operating under perfect competition faces a market demand curve that is downward-sloping. If the firm's marginal revenue (MR) curve intersects its average revenue (AR) curve at a point where MR > AR, what will be the effect on the firm's output?

A. The firm will increase its output.

Correct B. The firm will decrease its output.

C. The firm's output will remain unchanged.

D. The firm will experience a decrease in its average revenue.

Correct Answer: B

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Question 17

A country's balance of payments (BOP) account is in equilibrium when the current account is equal to the capital account. If the country's current account is in deficit, what will be the effect on its capital account?

A. The capital account will increase.

Correct B. The capital account will decrease.

C. The capital account will remain unchanged.

D. The capital account will experience a surplus.

Correct Answer: B

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Question 18

A monopolist faces a demand curve that is downward-sloping. If the firm's marginal revenue (MR) curve intersects its average revenue (AR) curve at a point where MR < AR, what will be the effect on the firm's output?

A. The firm will increase its output.

Correct B. The firm will decrease its output.

C. The firm's output will remain unchanged.

D. The firm will experience a decrease in its average revenue.

Correct Answer: B

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Question 19

A firm is considering investing in a new project that has a net present value (NPV) of ₦1,000,000. If the firm's \cost of capital is 10%, what will be the effect on the firm's wealth?

Correct A. The firm's wealth will increase by ₦1,000,000.

B. The firm's wealth will decrease by ₦1,000,000.

C. The firm's wealth will remain unchanged.

D. The firm will experience a decrease in its \cost of capital.

Correct Answer: A

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Question 20

A country's money supply is determined by the central bank's monetary policy. If the central bank increases the money supply by 10%, what will be the effect on the general price level?

Correct A. The general price level will increase by 10%.

B. The general price level will decrease by 10%.

C. The general price level will remain unchanged.

D. The general price level will experience a decrease in inflation.

Correct Answer: A

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Question 21

A firm's production function is given by Q = 100L^0.5K^0.5. If the price of labor increases by 20% and the price of capital increases by 15%, what is the new elasticity of labor with respect to output?

Correct A. 0.5

B. 0.6

C. 0.7

D. 0.8

Correct Answer: A

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Question 22

A central bank increases the reserve requirement for commercial banks. What is the effect on the money supply?

A. Increase

Correct B. Decrease

C. No change

D. Uncertain

Correct Answer: B

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Question 23

A government imposes a tax on a firm's output. What is the effect on the firm's supply curve?

A. Shifts to the left

Correct B. Shifts to the right

C. Remains unchanged

D. Rotates upward

Correct Answer: B

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Question 24

A consumer's utility function is given by U = 2x + 3y. If the prices of x and y are 4 and 5 respectively, what is the consumer's budget constraint?

A. 4x + 5y = 20

Correct B. 4x + 5y = 25

C. 4x + 5y = 30

D. 4x + 5y = 35

Correct Answer: B

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Question 25

A firm's production function is given by Q = 100L^0.5K^0.5. If the price of labor increases by 20% and the price of capital increases by 15%, what is the new elasticity of capital with respect to output?

A. 0.5

B. 0.6

C. 0.7

Correct D. 0.8

Correct Answer: D

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