POST UTME MOUNTAIN TOP UNIVERSITY 2024 Economics | Objective

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Question 1
A firm is operating on the long-run average \cost curve. If the firm experiences a 20% increase in output, what will happen to its average \cost?
A. Decrease
B. Increase
Correct C. No change
D. Uncertain

Correct Answer: C

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Question 2
A monopolist faces a demand curve given by Q = 100 - 2P. If the firm's marginal revenue is MR = 50 - 2Q, what is the firm's optimal price?
A. ₦25
Correct B. ₦30
C. ₦35
D. ₦40

Correct Answer: B

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Question 3
A farmer in Nigeria decides to cultivate maize on a 10-hectare farm. If the production function is given by Q = 1000x^0.5, where Q is the quantity of maize produced and x is the area of land cultivated, what is the farmer's output?
A. 1000
B. 1200
Correct C. 1500
D. 1800

Correct Answer: C

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Question 4
A central bank in Nigeria uses the money market to implement monetary policy. If the central bank buys government securities on the open market, what happens to the money supply?
Correct A. Increases
B. Decreases
C. No change
D. Uncertain

Correct Answer: A

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Question 5
A firm is operating on the supply curve. If the firm experiences a 10% increase in input prices, what will happen to its supply?
A. Decrease
Correct B. Increase
C. No change
D. Uncertain

Correct Answer: B

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Question 6
A firm's production function is given by Q = 2L^0.5H^0.5, where Q is output, L is labor, and H is capital. If the firm wants to increase output by 20% while keeping labor cons\tant, what percentage increase in capital is required?
A. 10%
Correct B. 20%
C. 30%
D. 40%

Correct Answer: B

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Question 7
A country's GDP is 100 billion naira, and its GNP is 120 billion naira. What is the value of net factor income from abroad?
Correct A. 20 billion naira
B. 30 billion naira
C. 40 billion naira
D. 50 billion naira

Correct Answer: A

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Question 8
A firm's demand function for a product is given by Q = 100 - 2P, where Q is quantity demanded and P is price. If the firm wants to increase revenue by 20%, what percentage increase in price is required?
A. 10%
Correct B. 20%
C. 30%
D. 40%

Correct Answer: B

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Question 9
A country's balance of payments account is given by Current Account = 100 billion naira, Capital Account = 50 billion naira, and Financial Account = -20 billion naira. What is the value of the country's net foreign exchange earnings?
A. 130 billion naira
B. 140 billion naira
Correct C. 150 billion naira
D. 160 billion naira

Correct Answer: C

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Question 10
A firm's production function is given by Q = 2L^0.5H^0.5, where Q is output, L is labor, and H is capital. If the firm wants to increase output by 20% while keeping capital cons\tant, what percentage increase in labor is required?
A. 10%
Correct B. 20%
C. 30%
D. 40%

Correct Answer: B

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Question 11
A firm's \cost function is given by C(q) = 2q^2 + 5q + 10. If the firm produces 5 units of output, what is the total \cost?
A. ₦125
B. ₦150
Correct C. ₦175
D. ₦200

Correct Answer: C

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Question 12
A consumer's utility function is given by U(x, y) = 2x^0.5y^0.5. If the consumer has a budget of ₦100 and the prices of x and y are ₦5 and ₦10 respectively, what is the optimal bundle of x and y?
Correct A. x = 2, y = 5
B. x = 5, y = 2
C. x = 10, y = 1
D. x = 1, y = 10

Correct Answer: A

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Question 13
A country's money supply is given by M = 1000 + 0.5Y. If the country's GDP is ₦500 billion, what is the money supply?
A. ₦250 billion
B. ₦500 billion
Correct C. ₦750 billion
D. ₦1 trillion

Correct Answer: C

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Question 14
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm has 10 units of labor and 20 units of capital, what is the output?
A. 20 units
B. 30 units
Correct C. 40 units
D. 50 units

Correct Answer: C

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Question 15
A country's balance of payments is given by BOP = X - M. If the country's exports are ₦500 billion and imports are ₦300 billion, what is the balance of payments?
Correct A. ₦200 billion
B. ₦300 billion
C. ₦400 billion
D. ₦500 billion

Correct Answer: A

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Question 16
An increase in the price of a commodity leads to a decrease in its demand. If the demand for the commodity is inelastic, what will happen to the total revenue of the producer?
A. Total revenue will increase
Correct B. Total revenue will decrease
C. Total revenue will remain cons\tant
D. Total revenue will increase at a decrea\sing rate

Correct Answer: B

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Question 17
A farmer produces 100 units of wheat at a \cost of ₦100 per unit. If the selling price of wheat is ₦120 per unit, what is the profit per unit?
A. ₦10
Correct B. ₦20
C. ₦30
D. ₦40

Correct Answer: B

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Question 18
A consumer has a budget of ₦1000 to sp\end on 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 all the budget on the two goods, what is the opportunity \cost of buying one more unit of good X?
A. ₦100
Correct B. ₦200
C. ₦300
D. ₦400

Correct Answer: B

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Question 19
A firm produces two goods, A and B. The production of good A requires 2 units of labor and 3 units of capital, while the production of good B requires 3 units of labor and 2 units of capital. If the firm has 10 units of labor and 15 units of capital, what is the opportunity \cost of producing one more unit of good A?
A. 1 unit of labor
B. 1 unit of capital
Correct C. 2 units of labor
D. 2 units of capital

Correct Answer: C

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Question 20
A country's GDP is ₦100 billion. If the country's population is 20 million, what is the per capita income?
A. ₦5,000
Correct B. ₦10,000
C. ₦15,000
D. ₦20,000

Correct Answer: B

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Question 21
Consider a firm operating in a perfectly competitive market with a downward-sloping demand curve. If the firm's marginal revenue (MR) is greater than its marginal \cost (MC), what will be the effect on the firm's output?
Correct A. The firm will increase its output.
B. The firm will decrease its output.
C. The firm's output will remain unchanged.
D. The firm will exit the market.

Correct Answer: A

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Question 22
A country's GDP is calculated as the sum of consumption, investment, government sp\ending, and net exports. If the country's GDP is ₦10 trillion, and the government sp\ending is ₦2 trillion, what is the sum of consumption and investment?
A. ₦8 trillion
Correct B. ₦6 trillion
C. ₦4 trillion
D. ₦12 trillion

Correct Answer: B

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Question 23
A firm's production function is given by Q = 2L^0.5K^0.5, where Q is the output, L is the labor, and K is the capital. If the firm increases its labor from 4 units to 6 units, and keeps the capital cons\tant at 9 units, what is the percentage change in output?
A. 10%
Correct B. 20%
C. 30%
D. 40%

Correct Answer: B

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Question 24
A country's inflation rate is 5% per annum. If the country's central bank increases the money supply by 10% in a \single year, what will be the effect on the inflation rate?
A. The inflation rate will decrease by 5%.
B. The inflation rate will increase by 5%.
C. The inflation rate will remain unchanged.
Correct D. The inflation rate will increase by 10%.

Correct Answer: D

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Question 25
A firm's \cost function is given by C = 2L + 3K, where C is the \cost, L is the labor, and K is the capital. If the firm increases its labor from 4 units to 6 units, and keeps the capital cons\tant at 9 units, what is the change in \cost?
A. ₦10
Correct B. ₦20
C. ₦30
D. ₦40

Correct Answer: B

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