POST UTME MOUNTAIN TOP UNIVERSITY 2020 Economics | Objective

Are you preparing for POST UTME MOUNTAIN TOP UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2020 Economics (Objective) questions designed to simulate the real exam environment.

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Question 1
A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \), where Q is output, L is labor, and K is capital. If the firm wants to increase output by 20% and labor by 10%, what is the required percentage increase in capital?
A. 5%
B. 10%
Correct C. 15%
D. 20%

Correct Answer: C

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Question 2
A monopolist faces a demand curve given by P = 100 - 2Q. The firm's marginal \cost is MC = 10 + 2Q. What is the monopolist's profit-maximizing output?
A. 20
B. 30
Correct C. 40
D. 50

Correct Answer: C

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Question 3
A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \). If the firm wants to increase output by 20% and labor by 10%, what is the required percentage increase in capital?
A. 5%
B. 10%
Correct C. 15%
D. 20%

Correct Answer: C

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Question 4
A monopolist faces a demand curve given by P = 100 - 2Q. The firm's marginal \cost is MC = 10 + 2Q. What is the monopolist's profit-maximizing output?
A. 20
B. 30
Correct C. 40
D. 50

Correct Answer: C

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Question 5
A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \). If the firm wants to increase output by 20% and labor by 10%, what is the required percentage increase in capital?
A. 5%
B. 10%
Correct C. 15%
D. 20%

Correct Answer: C

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Question 6
A monopolist faces a demand curve given by Q = 100 - 2P and a \cost function C(Q) = 2Q^2 + 10Q. What is the profit-maximizing quantity of output?
A. 50
B. 75
Correct C. 100
D. 125

Correct Answer: C

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Question 7
A firm is considering two production techno\logies: one that requires an initial investment of ₦100,000 and produces 100 units of output per day, and another that requires an initial investment of ₦200,000 and produces 200 units of output per day. If the firm expects to sell each unit of output for ₦500, which techno\logy should it choose?
Correct A. Techno\logy 1
B. Techno\logy 2
C. Both techno\logies are equally profitable
D. Neither techno\logy is profitable

Correct Answer: A

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Question 8
A government imposes a tax of ₦10 per unit of output on a firm that produces 100 units of output per day. If the firm's marginal \cost of production is ₦20 per unit and its selling price is ₦500 per unit, what is the deadweight loss of the tax?
A. ₦500
Correct B. ₦1,000
C. ₦1,500
D. ₦2,000

Correct Answer: B

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Question 9
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's labor and capital inputs are 4 and 9, respectively, what is the firm's output?
A. 12
B. 16
Correct C. 20
D. 24

Correct Answer: C

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Question 10
A government budget constraint is given by G = 0.2Y + 100. If the government's tax revenue is ₦1,000,000 and its exp\enditure is ₦1,500,000, what is the government's budget deficit?
A. ₦500,000
B. ₦750,000
Correct C. ₦1,000,000
D. ₦1,250,000

Correct Answer: C

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Question 11
Consider a firm operating in a perfectly competitive market with a downward-sloping demand curve. If the firm's marginal revenue (MR) curve intersects the marginal \cost (MC) curve at point E, and the firm's average total \cost (ATC) curve is U-shaped, what is the likely outcome for the firm's profit?
A. The firm will experience a loss.
B. The firm will break even.
Correct C. The firm will experience a profit.
D. The firm's profit will be maximized.

Correct Answer: C

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Question 12
A country's GDP can be calculated u\sing the following formula: GDP = C + I + G + \( X - M \). If the country's consumption (C) is ₦500 billion, investment (I) is ₦200 billion, government sp\ending (G) is ₦300 billion, exports (X) are ₦400 billion, and imports (M) are ₦200 billion, what is the country's GDP?
A. ₦1.1 trillion
Correct B. ₦1.2 trillion
C. ₦1.3 trillion
D. ₦1.4 trillion

Correct Answer: B

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Question 13
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's labor (L) increases from 4 to 6 units, and the firm's capital (K) remains cons\tant at 9 units, what is the percentage change in output (Q)?
A. -10%
B. -5%
C. 0%
Correct D. 5%

Correct Answer: D

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Question 14
A consumer's budget constraint is given by P1Q1 + P2Q2 = 100. If the price of good 1 (P1) increases from ₦10 to ₦15, and the price of good 2 (P2) remains cons\tant at ₦5, what is the new budget constraint?
A. P1Q1 + P2Q2 = 120
Correct B. P1Q1 + P2Q2 = 150
C. P1Q1 + P2Q2 = 180
D. P1Q1 + P2Q2 = 200

Correct Answer: B

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Question 15
A firm's demand curve is given by Q = 100 - 2P. If the firm's marginal revenue (MR) curve is given by MR = -2, and the firm's marginal \cost (MC) curve is given by MC = 5, what is the firm's optimal price?
A. ₦20
B. ₦25
Correct C. ₦30
D. ₦35

Correct Answer: C

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Question 16
The National Bureau of Statistics (NBS) reported that Nigeria's GDP grew by 2.27% in the first quarter of 2020. However, the growth rate was lower than the 3.02% recorded in the same quarter of 2019. What could be the possible reason for this decline in growth rate?
A. Decline in oil prices
Correct B. Drought in the agricultural sector
C. Increase in interest rates
D. Decrease in government sp\ending

Correct Answer: B

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Question 17
A farmer in Nigeria produces 100 bags of maize per season. The price of maize is ₦2,500 per bag. If the farmer sells all the maize, what is the total revenue generated?
Correct A. ₦250,000
B. ₦250,500
C. ₦251,000
D. ₦252,000

Correct Answer: A

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Question 18
The Central Bank of Nigeria (CBN) increased the monetary policy rate (MPR) from 13.5% to 14.8% in 2020. What is the likely effect of this increase on the economy?
Correct A. Increased inflation
B. Decreased inflation
C. Increased economic growth
D. Decreased economic growth

Correct Answer: A

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Question 19
A company in Nigeria produces 500 units of a product per day. The \cost of production is ₦1,000 per unit. If the selling price is ₦1,200 per unit, what is the profit per unit?
A. ₦100
B. ₦200
Correct C. ₦300
D. ₦400

Correct Answer: C

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Question 20
The Nigerian government implemented a policy to increase the production of rice in the country. What is the likely effect of this policy on the price of rice?
A. Increased price
Correct B. Decreased price
C. No change in price
D. Uncertain effect on price

Correct Answer: B

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Question 21
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 -2, what is the percentage change in quantity demanded when the price increases by 10%?
Correct A. 20%
B. 30%
C. 40%
D. 50%

Correct Answer: A

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Question 22
A firm produces two goods, A and B, u\sing two inputs, labor (L) and capital (K). The production functions are given by Q_A = 2L + 3K and Q_B = 4L + 2K. If the firm has 10 units of labor and 8 units of capital, what is the total output of the firm?
A. 40
B. 50
Correct C. 60
D. 70

Correct Answer: C

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Question 23
A consumer has the following budget constraint: 2x + 3y = 20, where x and y are the quantities of two goods. If the consumer's utility function is given by U(x, y) = 2x + 3y, what is the consumer's optimal bundle of goods?
A. x = 4, y = 2
B. x = 2, y = 4
Correct C. x = 3, y = 3
D. x = 5, y = 1

Correct Answer: C

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Question 24
A firm is considering two alternative production processes: process A and process B. Process A requires 2 units of labor and 3 units of capital to produce 10 units of output, while process B requires 4 units of labor and 2 units of capital to produce 12 units of output. If the firm has 10 units of labor and 8 units of capital, which process should the firm choose?
Correct A. Process A
B. Process B
C. Both processes are equally efficient
D. Neither process is efficient

Correct Answer: A

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Question 25
A consumer has the following budget constraint: 2x + 3y = 20, where x and y are the quantities of two goods. If the consumer's utility function is given by U(x, y) = 2x + 3y, what is the consumer's optimal bundle of goods?
A. x = 4, y = 2
B. x = 2, y = 4
Correct C. x = 3, y = 3
D. x = 5, y = 1

Correct Answer: C

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