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POST UTME LEAD CITY UNIVERSITY 2023 Economics | Objective

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Question 1

A firm's production function is given by Q = 100L^0.5K^0.5. If the firm's current input levels are L = 4 and K = 9, what is the marginal product of labor (MPL) at these input levels?

Correct A. \( MPL = \frac{50}{\sqrt{4}} \)

B. \( MPL = \frac{50}{\sqrt{9}} \)

C. \( MPL = \frac{50\sqrt{4}}{9} \)

D. \( MPL = \frac{50\sqrt{9}}{4} \)

Correct Answer: A

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Question 2

A country's import demand function is given by M = 100 - 2P + 3Y. If the price of the imported good is P = 20 and the country's income is Y = 100, what is the quantity of imports demanded?

Correct A. \( M = 100 - 2\( 20 \ \) + 3(100) )

B. \( M = 100 - 2\( 100 \ \) + 3(20) )

C. \( M = 100 - 3\( 20 \ \) + 2(100) )

D. \( M = 100 - 3\( 100 \ \) + 2(20) )

Correct Answer: A

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Question 3

A monopolist faces a demand curve given by Q = 100 - 2P. The firm's marginal \cost (MC) is given by MC = 10 + 2Q. What is the profit-maximizing price and quantity for the monopolist?

Correct A. \( P = 40, Q = 60 \)

B. \( P = 30, Q = 70 \)

C. \( P = 20, Q = 80 \)

D. \( P = 10, Q = 90 \)

Correct Answer: A

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Question 4

A firm's production function is given by Q = 100L^0.5K^0.5. If the firm's current input levels are L = 4 and K = 9, what is the total product (TP) at these input levels?

A. \( TP = 100 \)

Correct B. \( TP = 200 \)

C. \( TP = 300 \)

D. \( TP = 400 \)

Correct Answer: B

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Question 5

A country's export supply function is given by X = 100 + 2P - 3Y. If the price of the exported good is P = 20 and the country's income is Y = 100, what is the quantity of exports supplied?

Correct A. \( X = 100 + 2\( 20 \ \) - 3(100) )

B. \( X = 100 + 2\( 100 \ \) - 3(20) )

C. \( X = 100 + 3\( 20 \ \) - 2(100) )

D. \( X = 100 + 3\( 100 \ \) - 2(20) )

Correct Answer: A

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Question 6

A firm's average total \cost (ATC) curve is U-shaped, with ATC initially decrea\sing and then increa\sing. What is the primary reason for this U-shaped ATC curve?

Correct A. Increa\sing marginal product of labor

B. Decrea\sing marginal product of labor

C. Increa\sing marginal \cost

D. Decrea\sing marginal revenue

Correct Answer: A

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Question 7

A country's balance of payments (BOP) is in equilibrium when the current account and capital account are balanced. What is the primary factor that determines the equilibrium value of the exchange rate?

Correct A. Supply and demand for foreign exchange

B. Interest rates and inflation rates

C. Government intervention and trade policies

D. Economic growth and development

Correct Answer: A

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Question 8

A firm's revenue function is given by R(x) = 100x - 2x^2. What is the marginal revenue (MR) function?

Correct A. ( MR(x) = 100 - 4x )

B. ( MR(x) = 100 + 4x )

C. ( MR(x) = 100 - 2x )

D. ( MR(x) = 100 + 2x )

Correct Answer: A

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Question 9

A country's agricultural sector is characterized by a high degree of economies of scale. What is the primary implication of this for the country's agricultural production?

Correct A. Increased productivity and efficiency

B. Decreased productivity and efficiency

C. Increased prices and reduced output

D. Decreased prices and increased output

Correct Answer: A

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Question 10

A firm's demand function is given by Qd = 100 - 2P. What is the price elasticity of demand (PED) at a price of P = 20?

A. -0.5

Correct B. -1

C. -2

D. -5

Correct Answer: B

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Question 11

A consumer's utility function is given by ( U(x,y) = 10x + 5y - x^2 - y^2 ). If the consumer's income is ₦1000 and the prices of x and y are ₦5 and ₦3 respectively, find the optimal bundle of x and y u\sing Lagrange multipliers.

Correct A. \( x = 10, y = 10 \ \)

B. \( x = 15, y = 5 \ \)

C. \( x = 20, y = 0 \ \)

D. \( x = 0, y = 20 \ \)

Correct Answer: A

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Question 12

The demand for a commodity is given by \( Q_d = 100 - 2P \) and the supply is given by \( Q_s = 2P - 10 \). Find the equilibrium price and quantity.

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

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

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

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

Correct Answer: B

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Question 13

A monopolist faces a demand curve given by \( P = 100 - Q \) and a \cost function given by ( C(Q) = 20Q + 100 ). Find the profit-maximizing quantity and price.

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

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

Correct C. \( Q = 60, P = 80 \ \)

D. \( Q = 70, P = 90 \ \)

Correct Answer: C

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Question 14

A firm has a production function given by \( Q = 2L^{0.5}K^{0.5} \) and a \cost function given by ( C(L,K) = 10L + 20K ). Find the profit-maximizing values of L and K.

A. \( L = 10, K = 20 \ \)

B. \( L = 20, K = 10 \ \)

Correct C. \( L = 30, K = 30 \ \)

D. \( L = 40, K = 40 \ \)

Correct Answer: C

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Question 15

A central bank uses the money supply to control inflation. If the money supply is given by \( M = 1000 + 0.1Y \) and the price level is given by \( P = 10 + 0.01Y \), find the rate of inflation.

A. \( 2% \ \)

Correct B. \( 5% \ \)

C. \( 10% \ \)

D. \( 15% \ \)

Correct Answer: B

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Question 16

A country's GDP is calculated as the sum of the value of all final goods and services produced within its borders. However, this measure does not account for income earned by its citizens from abroad. Which of the following best describes the difference between GDP and GNP?

A. GDP includes income earned from abroad, while GNP does not.

Correct B. GDP excludes income earned from abroad, while GNP includes it.

C. GDP and GNP are equivalent measures.

D. GDP is a measure of a country's income, while GNP is a measure of its exp\enditure.

Correct Answer: B

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Question 17

A firm's \cost function is given by C(q) = 2q^2 + 10q + 5. If the firm produces 20 units, what is its total \cost?

A. ₦150

B. ₦200

Correct C. ₦250

D. ₦300

Correct Answer: C

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Question 18

A firm's revenue function is given by R(q) = 3q^2 - 2q + 1. If the firm produces 10 units, what is its total revenue?

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 19

A firm's production function is given by Q = 2L^0.5 * K^0.5. If the firm increases its labor input from 4 units to 6 units, and keeps its capital input cons\tant at 9 units, what is the percentage change in output?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 20

A firm's demand function is given by Q = 100 - 2P. If the price increases from ₦50 to ₦60, what is the percentage change in quantity demanded?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 21

Suppose 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 - 100, where Qs is the quantity supplied, find the equilibrium price and quantity.

A. ₦50

B. ₦75

Correct C. ₦100

D. ₦125

Correct Answer: C

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Question 22

A firm's total revenue (TR) is given by the equation TR = 100x - 2x^2, where x is the number of units sold. If the firm's fixed \cost is ₦500 and its variable \cost is ₦20 per unit, find the profit-maximizing level of output.

A. 20 units

B. 30 units

Correct C. 40 units

D. 50 units

Correct Answer: C

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Question 23

Suppose a country's GDP is ₦10 trillion and its imports are ₦2 trillion. If the country's exports are ₦3 trillion, find the balance of trade.

Correct A. ₦1 trillion surplus

B. ₦1 trillion deficit

C. ₦2 trillion surplus

D. ₦2 trillion deficit

Correct Answer: A

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Question 24

A firm's demand for labor is given by the equation L = 100 - 2P, where L is the quantity of labor demanded and P is the wage rate. If the supply of labor is given by the equation L = 2P - 100, find the equilibrium wage rate and quantity of labor.

A. ₦20

B. ₦30

Correct C. ₦40

D. ₦50

Correct Answer: C

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Question 25

Suppose a country's GDP is ₦10 trillion and its GNP is ₦12 trillion. If the country's net factor income from abroad is ₦2 trillion, find the country's national income.

A. ₦14 trillion

B. ₦15 trillion

Correct C. ₦16 trillion

D. ₦17 trillion

Correct Answer: C

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