POST UTME MOUNTAIN TOP UNIVERSITY 2019 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A consumer's budget constraint is given by P1Q1 + P2Q2 = I, where P1 and P2 are prices, Q1 and Q2 are quantities and I is income. If the consumer's income increases by 10% and the prices of the two goods remain cons\tant, what is the new budget constraint equation?
A. P1Q1 + P2Q2 = 1.1I
B. P1Q1 + P2Q2 = 1.2I
C. P1Q1 + P2Q2 = 1.3I
D. P1Q1 + P2Q2 = 1.4I
Question 2
A perfectly competitive market has a demand curve with the equation \( Q_d = 100 - 2P \) and a supply curve with the equation \( Q_s = 2P - 20 \). If the market is in equilibrium, what is the price of the good?
A. ₦10
B. ₦20
C. ₦30
D. ₦40
Question 3
The government of a country wants to reduce inflation by 5% in a year. If the current inflation rate is 10%, what is the required reduction in money supply?
A. 5%
B. 10%
C. 15%
D. 20%
Question 4
A firm is producing a good with a production function Q = 2K^\( 1/2 \) L^\( 1/2 \), where K is capital and L is labor. If the firm's current input levels are K = 4 and L = 9, what is the marginal product of labor?
A. 1/3
B. 1/2
C. 2/3
D. 1
Question 5
A consumer has a budget of ₦1000 and wants to buy two goods, X and Y. The price of good X is ₦200 and the price of good Y is ₦300. If the consumer sp\ends 60% of the budget on good X, how much is spent on good Y?
A. ₦300
B. ₦400
C. ₦500
D. ₦600
Question 6
A firm is considering two production techno\logies: a traditional techno\logy with a production function Q = 100K^\( 1/2 \)L^\( 1/2 \) and a modern techno\logy with a production function Q = 200K^\( 1/2 \)L^\( 1/2 \). The price of capital is ₦100 per unit and the price of labor is ₦50 per unit. If the firm's objective is to maximize profits, which techno\logy should it choose?
A. Traditional techno\logy
B. Modern techno\logy
C. Both techno\logies are equally profitable
D. Neither techno\logy is profitable
Question 7
Consider a country with a GDP of ₦10 trillion and a population of 200 million. If the country's GDP per capita is ₦50,000, what is the implied value of the country's GNP?
A. ₦10 trillion
B. ₦20 trillion
C. ₦30 trillion
D. ₦40 trillion
Question 8
A firm operating in a monopoly market faces a demand curve given by Q = 100 - 2P. If the firm's marginal \cost is cons\tant at ₦20, what is the optimal price and quantity to produce?
A. P = ₦40, Q = 30
B. P = ₦30, Q = 40
C. P = ₦20, Q = 50
D. P = ₦10, Q = 60
Question 9
The opportunity \cost of producing one more unit of a good is measured by the
A. marginal product of labor
B. marginal revenue product of labor
C. marginal \cost of production
D. marginal utility of consumption
Question 10
A monopolist faces a demand curve with the equation \( Q_d = 100 - 2P \) and a marginal revenue curve with the equation \( MR = 2P - 20 \). If the monopolist produces 20 units of the good, what is the price of the good?
A. ₦20
B. ₦30
C. ₦40
D. ₦50
Question 11
Consider a firm operating in a perfectly competitive market. If the firm's marginal revenue (MR) curve is downward-sloping, what is the relationship between the firm's marginal \cost (MC) curve and its average total \cost (ATC) curve?
A. MC curve intersects ATC curve at the minimum point of the ATC curve
B. MC curve lies above the ATC curve
C. MC curve lies below the ATC curve
D. MC curve intersects ATC curve at the maximum point of the ATC curve
Question 12
A firm's production function is given by Q = 10L^0.5K^0.5, where Q is the output, L is the labor and K is the capital. If the firm wants to increase its output by 20% and the labor increases by 10%, what is the percentage change in capital required?
A. 5%
B. 10%
C. 15%
D. 20%
Question 13
The government can use a tax on a good to
A. increase the supply of the good
B. decrease the demand for the good
C. increase the price of the good
D. decrease the quantity of the good produced
Question 14
A country's GNP is ₦2,000 billion, its GDP is ₦1,800 billion, and its net factor income from abroad is ₦100 billion. What is the country's net foreign income?
A. ₦100 billion
B. ₦200 billion
C. ₦300 billion
D. ₦400 billion
Question 15
A government imposes a tax on a firm's output. If the firm's supply curve shifts to the left, what is the effect on the equilibrium price and quantity?
A. Equilibrium price increases and quantity decreases
B. Equilibrium price decreases and quantity increases
C. Equilibrium price remains the same and quantity decreases
D. Equilibrium price remains the same and quantity increases

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