Practice post utme lasu economics 2021 Past Questions

Question 1

A firm is operating under cons\tant returns to scale. If it increases its inputs by 10%, what will happen to its output?

A. Output will increase by 10%

B. Output will increase by 20%

Correct C. Output will remain the same

D. Output will decrease by 10%

Correct Answer: C

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Question 2

A monopolist faces a demand curve given by Q = 100 - 2P. If the firm's marginal \cost is MC = 10, what is the optimal price?

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 3

A country is experiencing a recession. The government decides to implement a fiscal policy to stimulate the economy. Which of the following is a characteristic of a fiscal policy?

Correct A. Increase in government sp\ending

B. Decrease in government sp\ending

C. Increase in taxes

D. Decrease in taxes

Correct Answer: A

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Question 4

A firm is considering two 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 is more profitable?

Correct A. Process A

B. Process B

C. Both processes are equally profitable

D. Neither process is profitable

Correct Answer: A

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Question 5

A consumer has a budget of ₦1,000 and faces a price of ₦100 per unit of a good. If the consumer's demand curve is given by Q = 10 - 0.1P, what is the optimal quantity?

A. 10 units

Correct B. 20 units

C. 30 units

D. 40 units

Correct Answer: B

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Question 6

A monopolistically competitive firm faces a downward-sloping demand curve. If the firm increases its price, what will happen to its total revenue?

Correct A. Total revenue will decrease

B. Total revenue will increase

C. Total revenue will remain unchanged

D. Total revenue will be unaffected

Correct Answer: A

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Question 7

A consumer's indifference curve is represented by the equation ( u(x,y) = 2x + 3y ). If the consumer's income is ₦1000 and the prices of x and y are ₦5 and ₦10 respectively, what is the consumer's optimal bundle?

Correct A. (100, 50)

B. (50, 100)

C. (200, 0)

D. (0, 200)

Correct Answer: A

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Question 8

A country's balance of payments account is in equilibrium. If the country's trade deficit increases, what will happen to its 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 be unaffected

Correct Answer: B

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Question 9

A firm's marginal revenue product (MRP) is represented by the equation $ MRP = 2x + 3y $. If the firm's marginal \cost (MC) is ₦10 and the prices of x and y are ₦5 and ₦10 respectively, what is the firm's optimal output?

Correct A. (100, 50)

B. (50, 100)

C. (200, 0)

D. (0, 200)

Correct Answer: A

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Question 10

A country's inflation rate is 5% and its nominal interest rate is 10%. If the country's real interest rate is 5%, what is the expected rate of return on investment?

A. 10%

Correct B. 5%

C. 15%

D. 20%

Correct Answer: B

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Question 11

A firm operating under perfect competition has a \cost function given by C(q) = 2q^2 + 10q. If the market price is $15, what is the firm's profit-maximizing quantity?

A. 10

Correct B. 20

C. 30

D. 40

Correct Answer: B

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Question 12

A country's GDP is $100 billion, and its GNP is $120 billion. What is the country's net factor income from abroad?

Correct A. $10 billion

B. $20 billion

C. $30 billion

D. $40 billion

Correct Answer: A

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Question 13

A firm's total revenue is given by TR(q) = 20q - 0.5q^2. If the firm's marginal revenue is $10, what is its total revenue?

A. $500

Correct B. $600

C. $700

D. $800

Correct Answer: B

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Question 14

A firm's demand function is given by Q = 100 - 2P. If the firm's supply function is Q = 2P - 10, what is the equilibrium price?

A. $20

Correct B. $30

C. $40

D. $50

Correct Answer: B

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Question 15

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's input prices are L = $10 and K = $20, what is the firm's \cost-minimizing input bundle?

Correct A. L = 10, K = 20

B. L = 20, K = 10

C. L = 30, K = 15

D. L = 15, K = 30

Correct Answer: A

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Question 16

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 -2, what is the percentage change in quantity demanded when the price increases by 10%?

Correct A. 20%

B. 30%

C. 40%

D. 50%

Correct Answer: A

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Question 17

A monopolistically competitive firm faces a demand curve given by Qd = 100 - 2P. If the firm's marginal revenue is 50, what is the price at which the firm will produce 60 units?

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 18

A firm is producing at a point where its marginal \cost is equal to its marginal revenue. If the firm's marginal \cost is 10 and its marginal revenue is 20, what is the price at which the firm will produce 40 units?

A. ₦20

B. ₦30

Correct C. ₦40

D. ₦50

Correct Answer: C

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Question 19

A firm is producing at a point where its marginal \cost is equal to its marginal revenue. If the firm's marginal \cost is 10 and its marginal revenue is 20, what is the price at which the firm will produce 40 units?

A. ₦20

B. ₦30

Correct C. ₦40

D. ₦50

Correct Answer: C

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Question 20

A firm is producing at a point where its marginal \cost is equal to its marginal revenue. If the firm's marginal \cost is 10 and its marginal revenue is 20, what is the price at which the firm will produce 40 units?

A. ₦20

B. ₦30

Correct C. ₦40

D. ₦50

Correct Answer: C

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Question 21

The government of Nigeria has introduced a new policy to increase agricultural production. The policy includes providing subsidies to farmers, improving irrigation systems, and increa\sing the use of fertilizers. However, some critics argue that the policy will lead to an increase in inflation. Which of the following is a possible reason for this increase in inflation?

A. The increased demand for fertilizers will lead to a shortage of fertilizers, cau\sing prices to rise.

Correct B. The subsidies provided to farmers will lead to an increase in the money supply, cau\sing inflation.

C. The improved irrigation systems will lead to an increase in crop yields, cau\sing prices to fall.

D. The increased use of fertilizers will lead to an increase in the \cost of production, cau\sing prices to rise.

Correct Answer: B

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Question 22

A monopolistically competitive firm is facing a decrease in demand for its product. The firm's marginal revenue (MR) and marginal \cost (MC) curves are given by the following equations:

A. The firm will increase its price and reduce its output.

Correct B. The firm will decrease its price and increase its output.

C. The firm will keep its price and output unchanged.

D. The firm will increase its price and increase its output.

Correct Answer: B

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Question 23

A country's GDP is given by the following equation:

A. The country's GDP is equal to its national income.

Correct B. The country's GDP is equal to its national income plus the value of net exports.

C. The country's GDP is equal to its national income minus the value of net imports.

D. The country's GDP is equal to its national income plus the value of net imports.

Correct Answer: B

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Question 24

A firm is producing a good with a cons\tant elasticity of demand (ED) of 2. The firm's marginal revenue (MR) and marginal \cost (MC) curves are given by the following equations:

Correct A. The firm will produce at a level where MR = MC.

B. The firm will produce at a level where MR > MC.

C. The firm will produce at a level where MR < MC.

D. The firm will not produce at all.

Correct Answer: A

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Question 25

A country's inflation rate is given by the following equation:

Correct A. The country's inflation rate is equal to the percentage change in the price level.

B. The country's inflation rate is equal to the percentage change in the price level minus the percentage change in the quantity of goods and services.

C. The country's inflation rate is equal to the percentage change in the quantity of goods and services minus the percentage change in the price level.

D. The country's inflation rate is equal to the percentage change in the price level plus the percentage change in the quantity of goods and services.

Correct Answer: A

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POST UTME LASU 2021 Economics | Objective

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