Practice post utme nile university economics 2017 Past Questions

Question 1

A firm is operating in a perfectly competitive market with a given supply curve. If the demand for the firm's product increases, what will happen to the firm's supply curve?

A. The supply curve will shift to the left.

B. The supply curve will shift to the right.

Correct C. The supply curve will remain unchanged.

D. The supply curve will shift downwards.

Correct Answer: C

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Question 2

A monopolist faces a demand curve given by Q = 100 - 2P. The monopolist's marginal \cost curve is MC = 10. What is the monopolist's optimal price?

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 3

A firm's total revenue is given by TR = 10Q - 0.5Q^2. If the firm's output is 20 units, what is its total revenue?

A. ₦150

Correct B. ₦200

C. ₦250

D. ₦300

Correct Answer: B

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Question 4

A firm's marginal revenue is given by MR = 10 - Q. If the firm's output is 10 units, what is its marginal revenue?

A. ₦10

Correct B. ₦20

C. ₦30

D. ₦40

Correct Answer: B

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Question 5

A firm's demand curve is given by Q = 100 - 2P. If the firm's output is 20 units, what is its price?

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 6

A farmer in Nigeria has 100 hectares of land. He can grow either maize or sorghum. The price of maize is ₦150,000 per ton, and the price of sorghum is ₦120,000 per ton. The yield of maize is 2 tons per hectare, and the yield of sorghum is 1.5 tons per hectare. What is the opportunity \cost of growing maize instead of sorghum?

A. ₦30,000 per hectare

B. ₦20,000 per hectare

Correct C. ₦10,000 per hectare

D. ₦5,000 per hectare

Correct Answer: C

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Question 7

A country's GDP is ₦10 trillion, and its GNP is ₦12 trillion. What is the net factor income from abroad?

Correct A. ₦2 trillion

B. ₦1.5 trillion

C. ₦1 trillion

D. ₦500 billion

Correct Answer: A

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Question 8

A central bank increases the reserve requirement for commercial banks. What is the likely effect on the money supply?

A. Increase in money supply

Correct B. Decrease in money supply

C. No change in money supply

D. Uncertain effect on money supply

Correct Answer: B

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Question 9

A firm is producing a good u\sing two inputs, labor and capital. The production function is given by Q = 2L^0.5K^0.5. If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, what is the optimal combination of labor and capital?

A. L = 4, K = 2

Correct B. L = 2, K = 4

C. L = 1, K = 1

D. L = 8, K = 1

Correct Answer: B

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Question 10

A country is experiencing a recession. The government increases government sp\ending by ₦1 trillion. What is the likely effect on the aggregate demand curve?

Correct A. Shift to the right

B. Shift to the left

C. No change

D. Uncertain effect

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. 40%

C. 60%

D. 80%

Correct Answer: A

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Question 12

A country's GDP is given by the equation Y = C + I + G + $ X - M $, where Y is the GDP, C is the consumption, I is the investment, G is the government sp\ending, X is the exports, and M is the imports. If the country's GDP is $100 billion, consumption is $50 billion, investment is $20 billion, government sp\ending is $30 billion, exports are $40 billion, and imports are $20 billion, what is the value of the country's GDP?

Correct A. $100 billion

B. $120 billion

C. $140 billion

D. $160 billion

Correct Answer: A

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Question 13

A firm's production function is given by the equation Q = 2L^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%, what percentage increase in labor and capital is required?

A. 10% increase in labor and 10% increase in capital

Correct B. 20% increase in labor and 20% increase in capital

C. 30% increase in labor and 30% increase in capital

D. 40% increase in labor and 40% increase in capital

Correct Answer: B

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Question 14

A country's balance of payments is given by the equation BOP = X - M, where BOP is the balance of payments, X is the exports, and M is the imports. If the country's exports are $100 billion and imports are $80 billion, what is the value of the country's balance of payments?

Correct A. $10 billion

B. $20 billion

C. $30 billion

D. $40 billion

Correct Answer: A

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Question 15

A firm's \cost function is given by the equation C = 2L + 3K, where C is the \cost, L is the labor, and K is the capital. If the firm wants to minimize its \cost, what is the optimal level of labor and capital?

Correct A. L = 10, K = 20

B. L = 20, K = 10

C. L = 30, K = 30

D. L = 40, K = 40

Correct Answer: A

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Question 16

A country's GDP deflator is given by the equation GDPD = $ C + I + G + X - M $ / Y, where GDPD is the GDP deflator, C is the consumption, I is the investment, G is the government sp\ending, X is the exports, M is the imports, and Y is the GDP. If the country's GDP is $100 billion, consumption is $50 billion, investment is $20 billion, government sp\ending is $30 billion, exports are $40 billion, and imports are $20 billion, what is the value of the country's GDP deflator?

A. 0.5

Correct B. 1.0

C. 1.5

D. 2.0

Correct Answer: B

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Question 17

A firm's revenue function is given by the equation R = 2Q^2, where R is the revenue and Q is the quantity sold. If the firm wants to maximize its revenue, what is the optimal level of quantity sold?

A. Q = 10

Correct B. Q = 20

C. Q = 30

D. Q = 40

Correct Answer: B

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Question 18

A country's balance of payments is given by the equation BOP = X - M, where BOP is the balance of payments, X is the exports, and M is the imports. If the country's exports are $100 billion and imports are $80 billion, what is the value of the country's balance of payments?

A. $10 billion

B. $20 billion

C. $30 billion

D. $40 billion

Correct Answer: VIEW ANSWER

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Question 19

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's current labor and capital inputs are L = 4 and K = 9, respectively, what is the firm's current output?

A. 12

Correct B. 16

C. 20

D. 24

Correct Answer: B

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Question 20

A consumer's budget constraint is given by P1Q1 + P2Q2 = I, where P1 and P2 are the prices of two goods, Q1 and Q2 are the quantities consumed, and I is the consumer's income. If the consumer's income is I = 100, and the prices of the two goods are P1 = 2 and P2 = 3, respectively, what is the consumer's optimal bundle of goods?

A. Q1 = 20, Q2 = 10

Correct B. Q1 = 15, Q2 = 15

C. Q1 = 10, Q2 = 20

D. Q1 = 5, Q2 = 25

Correct Answer: B

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Question 21

A country's GDP is given by the equation GDP = C + I + G + $ X - M $, where C is consumption, I is investment, G is government sp\ending, X is exports, and M is imports. If the country's GDP is 100, and the values of C, I, G, X, and M are 20, 15, 10, 25, and 5, respectively, what is the value of the country's net exports?

A. 10

B. 15

C. 20

Correct D. 25

Correct Answer: D

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Question 22

A government's budget constraint is given by the equation B = T + $ I - S $, where B is the budget deficit, T is tax revenue, I is government sp\ending, and S is savings. If the government's tax revenue is 50, and the values of I and S are 30 and 20, respectively, what is the value of the government's budget deficit?

A. 10

B. 15

Correct C. 20

D. 25

Correct Answer: C

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Question 23

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's current labor and capital inputs are L = 4 and K = 9, respectively, what is the firm's current output?

A. 12

Correct B. 16

C. 20

D. 24

Correct Answer: B

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Question 24

A consumer's budget constraint is given by P1Q1 + P2Q2 = I, where P1 and P2 are the prices of two goods, Q1 and Q2 are the quantities consumed, and I is the consumer's income. If the consumer's income is I = 100, and the prices of the two goods are P1 = 2 and P2 = 3, respectively, what is the consumer's optimal bundle of goods?

A. Q1 = 20, Q2 = 10

Correct B. Q1 = 15, Q2 = 15

C. Q1 = 10, Q2 = 20

D. Q1 = 5, Q2 = 25

Correct Answer: B

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Question 25

A country's GDP is given by the equation GDP = C + I + G + $ X - M $, where C is consumption, I is investment, G is government sp\ending, X is exports, and M is imports. If the country's GDP is 100, and the values of C, I, G, X, and M are 20, 15, 10, 25, and 5, respectively, what is the value of the country's net exports?

A. 10

B. 15

C. 20

Correct D. 25

Correct Answer: D

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