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POST UTME MOUNTAIN TOP UNIVERSITY 2023 Economics | Objective

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Question 1

A firm is operating in a perfectly competitive market with a demand curve given by Q = 100 - 2P and a supply curve given by Q = 2P - 10. What is the equilibrium price and quantity?

Correct A. \( P = 15, Q = 35 \)

B. \( P = 20, Q = 30 \)

C. \( P = 25, Q = 25 \)

D. \( P = 30, Q = 20 \)

Correct Answer: A

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Question 2

A country's balance of payments is given by the following equation: BOP = \( X - M \) + \( F - I \). If the country's exports (X) are ₦100 billion, imports (M) are ₦80 billion, foreign investment (F) is ₦20 billion, and domestic investment (I) is ₦15 billion, what is the balance of payments?

Correct A. ₦25 billion

B. ₦30 billion

C. ₦35 billion

D. ₦40 billion

Correct Answer: A

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Question 3

A monopolist faces a demand curve given by Q = 100 - 2P and a marginal revenue curve given by MR = 2P - 10. What is the monopolist's profit-maximizing price and quantity?

Correct A. \( P = 20, Q = 30 \)

B. \( P = 25, Q = 25 \)

C. \( P = 30, Q = 20 \)

D. \( P = 35, Q = 15 \)

Correct Answer: A

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Question 4

A firm is operating in a perfectly competitive market with a production function given by Q = 2L^0.5K^0.5. If the firm's labor (L) is 100 units and capital (K) is 400 units, what is the firm's output?

A. \( Q = 200 \)

Correct B. \( Q = 250 \)

C. \( Q = 300 \)

D. \( Q = 350 \)

Correct Answer: B

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Question 5

A consumer has a budget of ₦1000 and faces a price of ₦200 for a good. If the consumer's income elasticity of demand is 0.5, what is the consumer's demand for the good?

A. \( Q = 2 \)

Correct B. \( Q = 3 \)

C. \( Q = 4 \)

D. \( Q = 5 \)

Correct Answer: B

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Question 6

A monopolistically competitive firm faces a demand curve with a cons\tant elasticity of -2. If the firm increases its price by 10%, what is the percentage change in quantity demanded?

A. 20%

Correct B. 15%

C. 10%

D. 5%

Correct Answer: B

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Question 7

A country's GDP is ₦1,500 billion, and its GNP is ₦1,600 billion. What is the net factor income from abroad?

Correct A. ₦100 billion

B. ₦50 billion

C. ₦200 billion

D. ₦300 billion

Correct Answer: A

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Question 8

A firm is producing 100 units of a good at a \cost of ₦500 per unit. The marginal \cost is ₦50 per unit, and the fixed \cost is ₦10,000. What is the total \cost of producing 150 units?

A. ₦82,500

B. ₦92,500

Correct C. ₦102,500

D. ₦112,500

Correct Answer: C

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Question 9

A perfectly competitive market has a supply curve given by the equation \( Q_s = 100 - 2P \). If the demand curve is \( Q_d = 200 - P \), what is the equilibrium price?

A. ₦20

B. ₦30

C. ₦40

Correct D. ₦50

Correct Answer: D

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Question 10

A firm is producing a good with a production function \( Q = 2L^2 + 3K \). If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, what is the marginal product of labor?

Correct A. ₦400L

B. ₦200L

C. ₦100L

D. ₦50L

Correct Answer: A

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Question 11

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 12

A firm produces two goods, X and Y, u\sing two inputs, labor (L) and capital (K). The production functions are given by X = 2L + 3K and Y = 3L + 2K. If the firm has 10 units of labor and 8 units of capital, what is the total output?

A. 34

Correct B. 36

C. 38

D. 40

Correct Answer: B

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Question 13

The government of Nigeria has implemented a policy to increase the production of rice. The policy involves providing subsidies to farmers and increa\sing the import duty on rice. What is the likely effect of this policy on the price of rice?

Correct A. Increase

B. Decrease

C. No change

D. Uncertain

Correct Answer: A

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Question 14

A firm has a production function given by Q = 2L^0.5 + 3K^0.5. If the firm has 4 units of labor and 9 units of capital, what is the total output?

A. 10.2

Correct B. 10.5

C. 10.8

D. 11.1

Correct Answer: B

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Question 15

The government of Nigeria has implemented a policy to increase the production of textiles. The policy involves providing subsidies to textile manufacturers and increa\sing the import duty on textiles. What is the likely effect of this policy on the price of textiles?

Correct A. Increase

B. Decrease

C. No change

D. Uncertain

Correct Answer: A

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Question 16

A country's GDP is increa\sing at a rate of 5% per annum, while its population is growing at a rate of 2% per annum. If the current GDP per capita is ₦250,000, what is the expected GDP per capita after 5 years?

Correct A. ₦312,500

B. ₦312,000

C. ₦311,250

D. ₦310,000

Correct Answer: A

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Question 17

A firm's production function is given by Q = 2L^0.5K^0.5, where Q is output, L is labor, and K is capital. If the firm is currently u\sing 100 units of labor and 100 units of capital, what is the marginal product of labor?

Correct A. 0.5

B. 1

C. 2

D. 4

Correct Answer: A

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Question 18

A consumer's utility function is given by U = 2x + 3y, where x and y are the quantities of two goods consumed. If the consumer's budget is ₦1,000 and the prices of the two goods are ₦100 and ₦200 respectively, what is the consumer's optimal consumption bundle?

Correct A. x = 10, y = 5

B. x = 5, y = 10

C. x = 15, y = 3

D. x = 3, y = 15

Correct Answer: A

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Question 19

A country's GNP is ₦1,500,000,000,000, and its GDP is ₦1,400,000,000,000. What is the country's net factor income from abroad?

Correct A. ₦100,000,000,000

B. ₦150,000,000,000

C. ₦200,000,000,000

D. ₦250,000,000,000

Correct Answer: A

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Question 20

A firm's production function is given by Q = 3L^0.7K^0.3, where Q is output, L is labor, and K is capital. If the firm is currently u\sing 150 units of labor and 50 units of capital, what is the marginal product of capital?

Correct A. 0.3

B. 0.5

C. 0.7

D. 1

Correct Answer: A

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Question 21

A firm operating in a perfectly competitive market is characterized by which of the following?

A. A \single price maker

Correct B. Many buyers and sellers

C. A price setter

D. A monopolist

Correct Answer: B

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Question 22

The balance of payments (BOP) accounts record all transactions between a country and the rest of the world. Which of the following is NOT a component of the BOP?

A. Current account

B. Capital account

C. Financial account

Correct D. Government account

Correct Answer: D

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Question 23

The money supply in an economy is influenced by the following factors, EXCEPT:

A. Reserve requirements

B. Open market operations

Correct C. Government sp\ending

D. Monetary policy

Correct Answer: C

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Question 24

The National Income Accounting (NIA) framework is used to measure the economic activity of a country. Which of the following is a component of the NIA?

Correct A. Gross Domestic Product (GDP)

B. Gross National Product (GNP)

C. Net Domestic Product (NDP)

D. Net National Product (NNP)

Correct Answer: A

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Question 25

Agricultural development in Nigeria has been hindered by several factors, including:

A. Lack of irrigation facilities

B. Inadequate funding

C. Poor infrastructure

Correct D. All of the above

Correct Answer: D

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