POST UTME MADONNA UNIVERSITY 2025 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's output increases by 20% due to a 10% increase in labor and a 15% increase in capital, what is the return to scale?
A. Increa\sing
B. Decrea\sing
C. Cons\tant
D. Indeterminate
Question 2
A country's GDP at market price is ₦1,200 billion, while its GNP at market price is ₦1,250 billion. What is the net factor income from abroad?
A. ₦50 billion
B. ₦100 billion
C. ₦150 billion
D. ₦200 billion
Question 3
A country's inflation rate is 5% per annum, and its nominal interest rate is 10% per annum. What is the real interest rate?
A. 5%
B. 6%
C. 7%
D. 8%
Question 4
A firm is producing a good with the following production function: Q = 2L^0.5K^0.5. If the firm increases its labor input from 100 units to 120 units, and the capital input remains cons\tant at 100 units, what is the percentage change in output?
A. 10%
B. 20%
C. 30%
D. 40%
Question 5
A firm is facing a downward-sloping demand curve for its product. If the firm increases the price of the product by 10%, what would be the effect on the quantity demanded of the product?
A. The quantity demanded would increase by 10%
B. The quantity demanded would decrease by 10%
C. The quantity demanded would remain unchanged
D. The quantity demanded would increase by 20%
Question 6
A firm's demand function is given by Q = 100 - 2P. If the price elasticity of demand is -2, what is the price at which the firm sells 80 units?
A. ₦20
B. ₦30
C. ₦40
D. ₦50
Question 7
A firm is considering two different production processes for its product. Process A requires an initial investment of ₦100,000 and generates a profit of ₦20,000 per unit sold. Process B requires an initial investment of ₦150,000 and generates a profit of ₦30,000 per unit sold. If the firm expects to sell 10,000 units of the product, which process would result in higher total profits?
A. Process A
B. Process B
C. Both processes would result in the same total profits
D. Neither process would result in higher total profits
Question 8
A country's inflation rate is 5% per annum. If the country's nominal GDP is ₦1,000,000, what is the value of its real GDP?
A. ₦950,000
B. ₦1,000,000
C. ₦1,050,000
D. ₦1,100,000
Question 9
A consumer's utility function is given by the equation U = 2x + 3y, where x and y are the quantities of two goods consumed. If the consumer sp\ends ₦1,000 on the two goods, and the price of good x is ₦20 and the price of good y is ₦30, what is the utility?
A. 10
B. 20
C. 30
D. 40
Question 10
A firm's \cost function is given by C = 2L + 3K. If the firm's labor and capital inputs are increased by 20% and 15% respectively, what is the percentage change in the firm's total \cost?
A. 5%
B. 10%
C. 15%
D. 20%
Question 11
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's labor and capital inputs are increased by 20% and 15% respectively, what is the percentage change in output?
A. 5%
B. 10%
C. 15%
D. 20%
Question 12
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current input levels are L = 16 and K = 9, what is the firm's current level of output?
A. 24
B. 36
C. 48
D. 60
Question 13
A government imposes a tax of ₦10 per liter on a commodity. If the price elasticity of demand for the commodity is -2, what is the revenue generated from the tax?
A. ₦20 million
B. ₦30 million
C. ₦40 million
D. ₦50 million
Question 14
Suppose the economy is in a state of stagflation, characterized by high inflation and stagnant economic growth. The government decides to implement a monetary policy to combat inflation. Which of the following tools would be most effective in reducing inflation in this scenario?
A. Increase the money supply
B. Decrease the money supply
C. Increase interest rates
D. Decrease interest rates
Question 15
A firm operating in a monopoly market has a demand curve given by Qd = 100 - 2P and a marginal revenue function of MR = 20 - 2Q. Find the profit-maximizing price and quantity.
A. \( P = 40, Q = 60 \)
B. \( P = 50, Q = 70 \)
C. \( P = 60, Q = 80 \)
D. \( P = 70, Q = 90 \)

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