POST UTME LAUTECH 2021 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A monopolistically competitive firm faces a downward-sloping demand curve. If the firm increases its price, what will happen to its revenue?
A. Revenue will decrease.
B. Revenue will increase.
C. Revenue will remain the same.
D. Revenue will increase, but at a decrea\sing rate.
Question 2
A perfectly competitive firm's supply curve is given by the equation Q = 100 + 2P, where Q is the quantity supplied and P is the price. If the price is 20, what is the quantity supplied?
A. 120
B. 140
C. 160
D. 180
Question 3
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 of x and y?
A. (20, 10)
B. (15, 15)
C. (10, 20)
D. (5, 25)
Question 4
A country's GDP is ₦100 billion and its GNP is ₦120 billion. What is the country's net factor income from abroad?
A. ₦20 billion
B. ₦30 billion
C. ₦40 billion
D. ₦50 billion
Question 5
The formula for calculating the Gross Domestic Product (GDP) is given by: \( GDP = C + I + G + \( X - M \ \) ). What does the term 'X' represent in this formula?
A. Exports
B. Imports
C. Government Sp\ending
D. Investment
Question 6
A government imposes a tax of ₦10 on every unit of a commodity. If the supply function is given by Q = 100 + 2P, determine the new supply function after the tax is imposed.
A. Q = 100 + 2P
B. Q = 90 + 2P
C. Q = 100 + 4P
D. Q = 90 + 4P
Question 7
An indifference curve is a graphical representation of the various combinations of two goods that a consumer is equally willing to give up in order to have more of one good. Which of the following statements about indifference curves is correct?
A. An indifference curve is a graphical representation of the various combinations of two goods that a consumer is equally willing to give up in order to have more of one good.
B. An indifference curve is a graphical representation of the various combinations of two goods that a consumer is equally willing to give up in order to have more of both goods.
C. An indifference curve is a graphical representation of the various combinations of two goods that a consumer is equally willing to give up in order to have more of neither good.
D. An indifference curve is a graphical representation of the various combinations of two goods that a consumer is equally willing to give up in order to have more of one good, but not the other.
Question 8
A firm is considering two different pricing strategies. Strategy A is a price discrimination strategy, where the firm charges a higher price to a segment of the market. Strategy B is a penetration pricing strategy, where the firm charges a lower price to enter the market. Which strategy is more likely to increase the firm's revenue?
A. Strategy A
B. Strategy B
C. Both strategies are equally likely to increase revenue.
D. Neither strategy is likely to increase revenue.
Question 9
A firm's production function is given by \( Q = 2L^{1/2}K^{1/2} \). If the firm's output is 16 units and the price of labor is ₦10 per unit, what is the minimum \cost of production?
A. ₦160
B. ₦320
C. ₦640
D. ₦1280
Question 10
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 = ₦200, and the firm's current output price is p = ₦500, calculate the firm's current profit-maximizing level of output.
A. 100 units
B. 200 units
C. 300 units
D. 400 units
Question 11
An economy is said to be in a state of stagflation if it experiences both high inflation and high unemployment. U\sing the Phillips Curve model, explain why this phenomenon occurs.
A. The Phillips Curve shows a negative relationship between inflation and unemployment.
B. The Phillips Curve shows a positive relationship between inflation and unemployment.
C. The Phillips Curve shows a negative relationship between inflation and unemployment, but the curve shifts to the right due to stagflation.
D. The Phillips Curve shows a positive relationship between inflation and unemployment, but the curve shifts to the left due to stagflation.
Question 12
The Marshall-Lerner condition states that a country's balance of payments will improve if the sum of the percentage changes in its export and import prices exceeds the percentage change in its exchange rate. If the percentage change in the exchange rate is 10% and the percentage change in the export price is 15%, what is the minimum percentage change in the import price required for the Marshall-Lerner condition to hold?
A. 5%
B. 10%
C. 15%
D. 20%
Question 13
A firm is producing a good with a production function Q = 2L^0.5K^0.5, where L is labor and K is capital. If the firm is currently producing 100 units of output and the price of labor is ₦100 per unit, what is the marginal product of labor?
A. 0.5
B. 1
C. 2
D. 3
Question 14
A firm is considering two different production processes. Process A has a fixed \cost of ₦500,000 and a variable \cost of ₦200 per unit. Process B has a fixed \cost of ₦300,000 and a variable \cost of ₦300 per unit. If the firm produces 10,000 units, what is the total \cost of each process?
A. Process A: ₦2,500,000; Process B: ₦2,300,000
B. Process A: ₦2,300,000; Process B: ₦2,500,000
C. Process A: ₦2,000,000; Process B: ₦2,400,000
D. Process A: ₦2,400,000; Process B: ₦2,000,000
Question 15
A firm is operating in a monopoly market. If the firm's demand curve is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price, and the firm's marginal \cost is $8, what is the firm's profit-maximizing output?
A. 50
B. 70
C. 80
D. 90

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