POST UTME MOUNTAIN TOP UNIVERSITY 2022 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A monopolist faces a demand curve given by Q = 100 - 2P. If the marginal \cost is cons\tant at ₦20, what is the profit-maximizing price?
A. ₦40
B. ₦60
C. ₦80
D. ₦100
Question 2
A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \). If the firm increases its labor input from 4 units to 9 units, and holds capital input cons\tant at 16 units, what is the percentage change in output?
A. 25%
B. 50%
C. 75%
D. 100%
Question 3
The formula for calculating the Gross Domestic Product (GDP) is
A. C + I + G + \( X - M \)
B. C + I + G + X + M
C. C + I + G + X - M
D. C + I + G - X + M
Question 4
The government of a country imposes a tax on a product to reduce its consumption. Which of the following is a correct effect of this tax?
A. The tax revenue collected by the government increases.
B. The price of the product increases, leading to a decrease in demand.
C. The tax revenue collected by the government decreases.
D. The tax has no effect on the demand for the product.
Question 5
The formula for calculating the inflation rate is
A. \( CPI_t - CPI_\( t-1 \ \)) / CPI_\( t-1 \)
B. \( CPI_t - CPI_\( t-1 \ \)) / CPI_t
C. \( CPI_t + CPI_\( t-1 \ \)) / 2
D. CPI_t - CPI_\( t-1 \)
Question 6
The money supply in an economy is the total amount of money available for use in the economy. Which of the following is a correct factor that affects the money supply?
A. The government's monetary policy.
B. The level of economic activity.
C. The level of inflation.
D. The level of unemployment.
Question 7
A monopolist's marginal revenue curve lies below the demand curve because
A. the monopolist is a price taker
B. the monopolist is a price maker
C. the demand curve is downward sloping
D. the marginal revenue curve is upward sloping
Question 8
A monopolist's demand curve is downward-sloping because
A. the monopolist has a fixed supply of the product
B. the monopolist faces a downward-sloping demand curve
C. the monopolist has a downward-sloping marginal revenue curve
D. the monopolist has a fixed price for the product
Question 9
The government of a country imposes a tax on a product to reduce its consumption. Which of the following is a correct effect of this tax?
A. The tax revenue collected by the government increases.
B. The price of the product increases, leading to a decrease in demand.
C. The tax revenue collected by the government decreases.
D. The tax has no effect on the demand for the product.
Question 10
The Marshall-Lerner condition states that if the sum of the elasticities of demand for imports and exports is greater than 1, then a devaluation of the currency will lead to an improvement in the balance of payments. Which of the following is a necessary condition for the Marshall-Lerner condition to hold?
A. The elasticity of demand for imports is greater than the elasticity of demand for exports.
B. The sum of the elasticities of demand for imports and exports is greater than 1.
C. The elasticity of demand for exports is greater than the elasticity of demand for imports.
D. The sum of the elasticities of demand for imports and exports is less than 1.
Question 11
The demand for a product is said to be inelastic if a small change in price leads to a small change in quantity demanded. Which of the following is a correct example of an inelastic demand?
A. The demand for a luxury item such as a private jet.
B. The demand for a necessity such as bread.
C. The demand for a product with a high price elasticity such as a new smartphone.
D. The demand for a product with a low price elasticity such as a utility bill.
Question 12
A monopolist faces a demand curve given by P = 100 - 2Q. If the firm's marginal \cost (MC) is cons\tant at ₦20, what is the profit-maximizing output level?
A. 20 units
B. 30 units
C. 40 units
D. 50 units
Question 13
The inflation rate in an economy is the rate at which the general price level of goods and services is ri\sing. Which of the following is a correct effect of inflation?
A. The purcha\sing power of money decreases.
B. The value of money increases.
C. The level of economic activity increases.
D. The level of unemployment decreases.
Question 14
A firm's \cost function is given by C(q) = 2q^2 + 10q + 5. The firm's marginal \cost function is
A. MC(q) = 4q + 10
B. MC(q) = 2q + 10
C. MC(q) = 4q^2 + 10q
D. MC(q) = 2q^2 + 10q
Question 15
The demand for a commodity is inversely related to its price. If the price of the commodity increases from ₦100 to ₦120, and the quantity demanded decreases from 100 units to 80 units, what is the price elasticity of demand?
A. 0.5
B. 1.25
C. -0.5
D. -1.25

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