POST UTME MADONNA UNIVERSITY 2018 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A firm is a pure monopolist with a demand curve \( P = 100 - 2Q \) and a marginal \cost curve \( MC = 20 \). Find the firm's profit-maximizing quantity and price.
A. Q = 20, P = ₦80
B. Q = 30, P = ₦70
C. Q = 40, P = ₦60
D. Q = 50, P = ₦50
Question 2
A firm has a production function \( Q = 2L^{0.5}K^{0.5} \). If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, and if the firm is currently producing 100 units of output, what is the value of the marginal product of labor?
A. ₦50
B. ₦100
C. ₦150
D. ₦200
Question 3
A monopolistically competitive firm is producing a good with a demand curve that is downward sloping. The firm's marginal revenue (MR) curve intersects its marginal \cost (MC) curve at point E. What is the likely effect of an increase in the price of the good on the firm's profit-maximizing output?
A. The firm will increase its profit-maximizing output.
B. The firm will decrease its profit-maximizing output.
C. The firm will not change its profit-maximizing output.
D. The firm will increase its profit-maximizing output, but only temporarily.
Question 4
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 0.5, what is the percentage change in quantity demanded when the price increases by 10%?
A. 5%
B. 10%
C. 15%
D. 20%
Question 5
A firm is producing at a point on its production function where the marginal product of labor is zero. What is the implication of this for the firm's production?
A. The firm is producing at its maximum level of output.
B. The firm is producing at its minimum level of output.
C. The firm is producing at a point where the law of diminishing returns is operating.
D. The firm is producing at a point where the law of increa\sing returns is operating.
Question 6
The following table shows the production \costs of a firm for a particular product:\n\n| Quantity | Total Cost | Average Cost |\n| --- | --- | --- |\n| 100 | ₦50,000 | ₦500 |\n| 200 | ₦100,000 | ₦500 |\n| 300 | ₦150,000 | ₦500 |\n\nWhat is the marginal \cost of producing the 301st unit?
A. ₦0
B. ₦500
C. ₦1000
D. ₦1500
Question 7
A firm produces 100 units of a product at a \cost of ₦500 per unit. If the selling price is ₦600 per unit, what is the profit per unit?
A. ₦50
B. ₦100
C. ₦150
D. ₦200
Question 8
A firm produces a good u\sing two inputs, labor (L) and capital (K). The production function is given by Q = 2L + 3K. If the firm has 10 units of labor and 8 units of capital, what is the total output?
A. 40
B. 50
C. 60
D. 70
Question 9
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 0.5, what is the percentage change in quantity demanded when the price increases by 10%?
A. 5%
B. 10%
C. 15%
D. 20%
Question 10
A firm's production function is given by Q = 2K^\( 1/2 \)L^\( 1/2 \), where Q is output, K is capital, and L is labor. If the firm increases its capital from 400 to 900, and labor from 400 to 900, what is the percentage change in output?
A. 25%
B. 50%
C. 75%
D. 100%
Question 11
The Nigerian government has implemented a new tax policy to increase revenue. The policy includes a 10% increase in the value-added tax (VAT) rate. What is the likely effect of this policy on the price level?
A. The price level will increase by 10%.
B. The price level will decrease by 10%.
C. The price level will remain unchanged.
D. The price level will increase by more than 10%.
Question 12
The Nigerian government has implemented a new policy to increase economic growth. The policy includes a 20% increase in government sp\ending. What is the likely effect of this policy on the aggregate demand curve?
A. The aggregate demand curve will shift to the right.
B. The aggregate demand curve will shift to the left.
C. The aggregate demand curve will remain unchanged.
D. The aggregate demand curve will shift upwards.
Question 13
A central bank can decrease the money supply by selling government securities in the open market. What is the effect of this action on the interest rate?
A. The interest rate will decrease.
B. The interest rate will increase.
C. The interest rate will remain unchanged.
D. The interest rate will fluctuate.
Question 14
A farmer produces 500 units of a crop at a \cost of ₦200 per unit. If the selling price is ₦300 per unit, what is the profit per unit?
A. ₦50
B. ₦100
C. ₦150
D. ₦200
Question 15
A monopolist's demand function is given by Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the monopolist's marginal revenue function is given by MR = 200 - 2Q, what is the monopolist's optimal price and quantity?
A. P = ₦50, Q = 150 units
B. P = ₦75, Q = 100 units
C. P = ₦100, Q = 50 units
D. P = ₦150, Q = 25 units

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