POST UTME LASU 2025 Economics | Objective

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Question 1
A consumer's indifference curve is given by the equation ( U(x,y) = 2x + 3y ). If the consumer's initial \endowment is \( x_0, y_0 \ \) = (10, 20) ), and the price of good x is \( P_x = 2 \), find the consumer's optimal bundle.
Correct A. Bundle (15, 30)
B. Bundle (20, 40)
C. Bundle (25, 50)
D. Bundle (30, 60)

Correct Answer: A

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Question 2
A government imposes a tax on a firm's output. The firm's \cost function is given by ( C(q) = 10q + 20 ), and the tax rate is \( t = 0.2 \). Find the firm's new \cost function after the tax is imposed.
A. C(q) = 12q + 20
Correct B. C(q) = 10q + 22
C. C(q) = 12q + 22
D. C(q) = 10q + 24

Correct Answer: B

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Question 3
A country's GDP is given by \( GDP = 1000 + 0.2Y \), where Y is the country's GNP. If the country's GNP is $5000, find the country's GDP.
A. $1200
B. $1300
Correct C. $1400
D. $1500

Correct Answer: C

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Question 4
A firm's revenue function is given by ( R(p) = 100p - 2p^2 ). Find the firm's maximum revenue.
A. $200
Correct B. $250
C. $300
D. $350

Correct Answer: B

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Question 5
A government's budget constraint is given by \( B = 1000 + 0.2G \), where G is the government's exp\enditure. If the government's exp\enditure is $5000, find the government's budget.
A. $1200
B. $1300
Correct C. $1400
D. $1500

Correct Answer: C

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Question 6
The concept of returns to scale in production theory refers to the change in the output of a firm as all its inputs are increased proportionally. Which of the following best describes the relationship between the output and the inputs in the case of increa\sing returns to scale?
A. Output increases at a decrea\sing rate compared to the inputs.
Correct B. Output increases at an increa\sing rate compared to the inputs.
C. Output increases at a cons\tant rate compared to the inputs.
D. Output decreases at an increa\sing rate compared to the inputs.

Correct Answer: B

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Question 7
A monopolistically competitive firm faces a downward-sloping demand curve due to the presence of close substitutes. Which of the following is a characteristic of the demand curve faced by this firm?
A. The demand curve is perfectly inelastic.
Correct B. The demand curve is downward-sloping.
C. The demand curve is upward-sloping.
D. The demand curve is perfectly elastic.

Correct Answer: B

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Question 8
The Nigerian government has implemented a policy to increase agricultural production in the country. Which of the following is a potential consequence of this policy?
A. The policy will lead to an increase in the price of agricultural products.
Correct B. The policy will lead to an increase in the production of agricultural products.
C. The policy will lead to a decrease in the production of agricultural products.
D. The policy will have no effect on the production of agricultural products.

Correct Answer: B

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Question 9
A firm is considering investing in a new project that has a net present value (NPV) of ₦1,000,000. The firm's \cost of capital is 10%. Which of the following is the correct interpretation of the NPV?
A. The project will generate a return of ₦1,000,000.
Correct B. The project will generate a return of ₦100,000.
C. The project will generate a return of ₦10,000.
D. The project will generate a return of ₦1,000.

Correct Answer: B

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Question 10
A monopolist faces a demand curve given by the equation Q = 100 - 2P. The firm's marginal revenue (MR) is given by the equation MR = 2P. Which of the following is the correct interpretation of the MR curve?
A. The MR curve is upward-sloping.
Correct B. The MR curve is downward-sloping.
C. The MR curve is horizontal.
D. The MR curve is vertical.

Correct Answer: B

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Question 11
A country's GDP is calculated as the sum of all final goods and services produced within its borders. However, if a multinational corporation operating in the country imports all its raw materials and exports all its finished goods, what would be the impact on the country's GDP?
A. The country's GDP would increase
B. The country's GDP would decrease
Correct C. The country's GDP would remain unchanged
D. The country's GDP would be unaffected

Correct Answer: C

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Question 12
A consumer's budget constraint is given by the equation \( 2x + 3y = 12 \). If the consumer's income is ₦60 and the price of good x is ₦2, what is the maximum amount the consumer can sp\end on good y?
A. ₦10
Correct B. ₦12
C. ₦15
D. ₦18

Correct Answer: B

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Question 13
A government imposes a tax on a particular good. The demand for the good is given by the equation \( Q_d = 100 - 2P \) and the supply of the good is given by the equation \( Q_s = 2P - 10 \). If the government imposes a tax of ₦5 per unit, what will be the new equilibrium price and quantity?
A. P = ₦10, Q = 20
Correct B. P = ₦15, Q = 25
C. P = ₦20, Q = 30
D. P = ₦25, Q = 35

Correct Answer: B

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Question 14
A country's national income is calculated as the sum of all wages, rents, and profits earned by its citizens. If a country's GDP is ₦100 billion and its net foreign income is ₦10 billion, what is its national income?
A. ₦110 billion
Correct B. ₦120 billion
C. ₦130 billion
D. ₦140 billion

Correct Answer: B

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Question 15
A consumer's indifference curve is given by the equation \( U = 2x + 3y \). If the consumer's income is ₦60 and the price of good x is ₦2, what is the maximum amount the consumer can sp\end on good y?
A. ₦10
Correct B. ₦12
C. ₦15
D. ₦18

Correct Answer: B

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Question 16
Determine the value of the marginal propensity to consume (MPC) in a closed economy with a GDP of ₦1.2 trillion, a government exp\enditure of ₦250 billion, and a tax rate of 20%.
A. 0.25
Correct B. 0.30
C. 0.35
D. 0.40

Correct Answer: B

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Question 17
A firm's production function is given by Q = 2L^0.5K^0.5. If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, determine the optimal level of labor and capital to minimize the \cost of production.
Correct A. L = 100, K = 50
B. L = 50, K = 100
C. L = 200, K = 100
D. L = 100, K = 200

Correct Answer: A

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Question 18
A country's money supply is given by M = ₦100 billion. If the velocity of money is 5, determine the nominal GDP.
A. ₦500 billion
Correct B. ₦600 billion
C. ₦700 billion
D. ₦800 billion

Correct Answer: B

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Question 19
A firm's demand function is given by Q = 100 - 2P. If the price elasticity of demand is 0.5, determine the optimal price to maximize revenue.
A. ₦20
Correct B. ₦30
C. ₦40
D. ₦50

Correct Answer: B

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Question 20
A country's production possibilities frontier (PPF) is given by the equation Y = 100 - 2X. If the country is currently producing at a point on the PPF where X = 20, determine the opportunity \cost of producing one more unit of X.
A. ₦20
Correct B. ₦30
C. ₦40
D. ₦50

Correct Answer: B

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Question 21
Consider a perfectly competitive market with an inverse demand function of the form \( p = 100 - 2q \). If the market equilibrium price is $80, what is the quantity demanded at that price?
A. 20
Correct B. 30
C. 40
D. 50

Correct Answer: B

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Question 22
A monopolist faces a demand curve of the form \( p = 100 - 2q \). If the monopolist's marginal \cost is $20, what is the optimal quantity to produce?
A. 20
Correct B. 30
C. 40
D. 50

Correct Answer: B

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Question 23
Consider a firm with a production function of the form \( q = 2K^0.5L^0.5 \). If the firm's capital and labor inputs are $100 and $50 respectively, what is the firm's output?
A. 10
Correct B. 20
C. 30
D. 40

Correct Answer: B

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Question 24
A central bank increases the money supply by 10%. What is the expected effect on the price level?
Correct A. Increase
B. Decrease
C. No effect
D. Uncertain

Correct Answer: A

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Question 25
Consider a firm with a production function of the form \( q = 2K^0.5L^0.5 \). If the firm's capital and labor inputs are $100 and $50 respectively, what is the firm's output?
A. 10
Correct B. 20
C. 30
D. 40

Correct Answer: B

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