Practice post utme lasu economics 2024 Past Questions

Question 1

A central bank uses monetary policy to control inflation by increa\sing the reserve requirement for commercial banks. This action will lead to a decrease in the money supply and a decrease in the price level. Which of the following statements is correct?

A. The money supply will decrease and the price level will increase.

B. The money supply will increase and the price level will decrease.

C. The money supply will decrease and the price level will decrease.

D. The money supply will increase and the price level will increase.

Question 2

Consider a firm operating in a perfectly competitive market with a given production function Q = 2L^0.5K^0.5. If the firm's current input prices are w = ₦100 and r = ₦50, and the current output price is p = ₦200, calculate the firm's optimal input bundle (L, K) u\sing the Hotelling's Lemma. Assume that the firm's objective is to maximize its profit.

A. \( L = 100, K = 50 \)

B. \( L = 50, K = 100 \)

C. \( L = 25, K = 100 \)

D. \( L = 100, K = 25 \)

Question 3

A firm is considering two investment projects, A and B. Project A has a higher initial \cost but generates a higher return on investment. Project B has a lower initial \cost but generates a lower return on investment. Which of the following statements is correct?

A. Project A is a better investment because it has a higher return on investment.

B. Project B is a better investment because it has a lower initial \cost.

C. Both projects are equally good investments.

D. Neither project is a good investment.

Question 4

A firm is considering a new investment project that requires an initial investment of ₦100 million. The project is expected to generate a return on investment of 15% per annum. Which of the following statements is correct?

A. The project is a good investment because it has a high return on investment.

B. The project is a bad investment because it has a low return on investment.

C. The project is a good investment because it has a high return on investment and a low initial \cost.

D. The project is a bad investment because it has a low return on investment and a high initial \cost.

Question 5

Suppose the demand for a commodity is given by the inverse demand function p = 100 - 2q, where p is the price and q is the quantity demanded. If the price elasticity of demand is defined as E_d = \( dq/dp \) * \( p/q \), find the value of E_d when q = 20.

A. -10

B. -5

C. 0

D. 5

Question 6

A farmer produces wheat and sells it to a miller. The supply curve of the farmer is given by the equation Q = 100 + 2P, where Q is the quantity supplied and P is the price. If the miller's demand curve is given by the equation Q = 100 - 2P, what is the equilibrium price and quantity?

A. P = ₦20, Q = 80

B. P = ₦30, Q = 70

C. P = ₦40, Q = 60

D. P = ₦50, Q = 50

Question 7

A country's balance of payments is given by the equation BOP = X - M, where BOP is the balance of payments, 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 ₦120 billion, what is the balance of payments?

A. ₦20 billion surplus

B. ₦20 billion deficit

C. ₦40 billion surplus

D. ₦40 billion deficit

Question 8

The following diagram shows the production possibilities frontier (PPF) for a country. What is the opportunity \cost of producing 100 units of good X?

A. 50 units of good Y

B. 75 units of good Y

C. 100 units of good Y

D. 125 units of good Y

Question 9

A firm's demand function is given by \( Q = 100 - 2P \), where Q is the quantity demanded and P is the price. If the firm's marginal revenue is \( MR = 20 \), find the profit-maximizing price and quantity.

A. \( P = 20, Q = 40 \)

B. \( P = 30, Q = 50 \)

C. \( P = 40, Q = 60 \)

D. \( P = 50, Q = 70 \)

Question 10

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current input prices are w = ₦100 and r = ₦50, and the current output price is p = ₦200, calculate the firm's optimal input bundle (L, K) u\sing the Hotelling's Lemma. Assume that the firm's objective is to maximize its profit.

A. \( L = 100, K = 50 \)

B. \( L = 50, K = 100 \)

C. \( L = 25, K = 100 \)

D. \( L = 100, K = 25 \)

Question 11

A country's money supply is given by the equation M = kY, where k is the money multiplier and Y is the national income. If the money multiplier is 0.5 and the national income is ₦100 billion, calculate the money supply.

A. ₦50 billion

B. ₦100 billion

C. ₦150 billion

D. ₦200 billion

Question 12

Consider a simple economy with two sectors: agriculture and manufacturing. The production function for agriculture is given by q_A = 100L^0.5K^0.5, where L is labor and K is capital. The production function for manufacturing is given by q_M = 200L^0.7K^0.3. If the economy has 100 units of labor and 50 units of capital, find the value of the output mix \( q_A/q_M \) when the economy produces both goods.

A. 0.25

B. 0.5

C. 1

D. 2

Question 13

The Central Bank of Nigeria has implemented a monetary policy aimed at reducing inflation. Which of the following tools would most likely achieve this goal?

A. Increa\sing the reserve requirement for commercial banks

B. Implementing a price ceiling on essential goods

C. Reducing the money supply by selling government securities

D. Increa\sing the discount rate to reduce borrowing \costs

Question 14

A firm produces a \single good u\sing two inputs, labor (L) and capital (K). The production function is given by q = 100L^0.5K^0.5. If the firm has 100 units of labor and 50 units of capital, find the value of the marginal product of labor (MPL) when the firm produces 20 units of the good.

A. 2

B. 5

C. 10

D. 20

Question 15

Agricultural development in Nigeria has been hindered by several factors, including lack of access to credit, inadequate infrastructure, and limited market access. Which of the following policies would most likely address these issues?

A. Providing subsidies to farmers to reduce the \cost of production

B. Establishing agricultural cooperatives to facilitate market access and credit access

C. Implementing price controls to stabilize prices and reduce market volatility

D. Investing in irrigation systems to increase crop yields

POST UTME LASU 2024 Economics | Objective

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