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POST UTME NILE UNIVERSITY 2020 Economics | Objective

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Question 1

The elasticity of demand for a commodity is given by the formula $ eta = \frac{p}{x} \frac{dx}{dp} $. If the price elasticity of demand for a commodity is 0.5 and the price of the commodity increases by 10%, what is the percentage change in the quantity demanded?

Correct A. 5%

B. 10%

C. 15%

D. 20%

Correct Answer: A

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Question 2

A country's GDP at market price is ₦1,500 billion. The implicit deflator is 120. What is the GDP at cons\tant prices?

Correct A. ₦1,200 billion

B. ₦1,500 billion

C. ₦1,800 billion

D. ₦2,000 billion

Correct Answer: A

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Question 3

The government of a country has decided to implement a tax on a particular commodity. The tax is ₦5 per unit of the commodity. If the supply curve of the commodity is given by the equation $ p = 2x + 10 $, what is the new supply curve after the tax is implemented?

Correct A. p = 2x + 15

B. p = 2x + 10

C. p = 2x + 20

D. p = 2x + 25

Correct Answer: A

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Question 4

A firm's demand function is given by the equation $ x = 100 - 2p $. If the firm's revenue function is given by the equation $ R = px $, what is the firm's marginal revenue function?

Correct A. R' = 100 - 4p

B. R' = 100 - 2p

C. R' = 100 + 2p

D. R' = 100 + 4p

Correct Answer: A

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Question 5

A country's government has decided to implement a policy to reduce the poverty rate in the country. The poverty rate is currently 30%. If the government implements a policy that increases the GDP per capita by 10%, what is the new poverty rate?

A. 20%

Correct B. 25%

C. 30%

D. 35%

Correct Answer: B

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Question 6

The demand for a commodity is inversely related to its price. If the price of the commodity increases by 20%, what is the percentage change in the quantity demanded?

Correct A. 10%

B. 20%

C. 30%

D. 40%

Correct Answer: A

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Question 7

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

A. P = 40, Q = 30

Correct B. P = 50, Q = 25

C. P = 60, Q = 20

D. P = 70, Q = 15

Correct Answer: B

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Question 8

A government imposes a tax on a commodity, cau\sing the supply curve to shift to the left. If the demand curve is inelastic and the tax is not passed on to consumers, what happens to the equilibrium price and quantity?

Correct A. Price increases, quantity decreases

B. Price decreases, quantity increases

C. Price remains the same, quantity decreases

D. Price increases, quantity increases

Correct Answer: A

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Question 9

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's output is 100 units, and the price of labor is $10 per unit, and the price of capital is $20 per unit, what is the optimal combination of labor and capital?

A. L = 10, K = 20

B. L = 20, K = 10

Correct C. L = 15, K = 15

D. L = 25, K = 5

Correct Answer: C

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Question 10

A country's GDP is given by the equation Y = C + I + G + $ X - M $. If the country's consumption is 500, investment is 200, government sp\ending is 300, exports are 400, and imports are 200, what is the country's GDP?

A. 1000

B. 1200

Correct C. 1500

D. 1800

Correct Answer: C

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Question 11

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

A. -20%

Correct B. -10%

C. 0%

D. 10%

Correct Answer: B

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Question 12

A country's GDP is ₦1,000,000,000,000. If the population is 200 million, what is the per capita income?

A. ₦5,000

B. ₦10,000

Correct C. ₦20,000

D. ₦50,000

Correct Answer: C

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Question 13

A firm is considering investing in a new project with a net present value (NPV) of ₦100,000,000. If the \cost of capital is 10%, what is the internal rate of return (IRR)?

A. 5%

Correct B. 10%

C. 15%

D. 20%

Correct Answer: B

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Question 14

A monopolist faces a demand curve with a price elasticity of -3. If the firm increases its price by 15%, what is the percentage change in quantity demanded?

A. -45%

Correct B. -30%

C. -20%

D. -15%

Correct Answer: B

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Question 15

A country's GNP is ₦1,500,000,000,000. If the country has a trade deficit of ₦200,000,000,000, what is the GDP?

A. ₦1,300,000,000,000

B. ₦1,400,000,000,000

Correct C. ₦1,500,000,000,000

D. ₦1,600,000,000,000

Correct Answer: C

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Question 16

A firm's total revenue (TR) and total \cost (TC) are given by the following equations: TR = 100q - 2q^2 and TC = 50q + 5q^2. What is the profit-maximizing level of output $ q* $ if the firm's price (P) is $10?

A. 20

Correct B. 30

C. 40

D. 50

Correct Answer: B

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Question 17

A central bank implements an expansionary monetary policy by increa\sing the money supply (M) by 10%. If the initial money supply is $100 billion, what is the new money supply?

Correct A. $110 billion

B. $105 billion

C. $100.5 billion

D. $99.5 billion

Correct Answer: A

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Question 18

A consumer has a budget constraint of $100 and faces the following prices: good A = $20, good B = $30, and good C = $40. If the consumer's indifference curve is \tangent to the budget constraint at point (x, y), what is the value of x?

Correct A. 2

B. 3

C. 4

D. 5

Correct Answer: A

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Question 19

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's labor and capital are 100 and 400, respectively, what is the output?

A. 40

B. 60

Correct C. 80

D. 100

Correct Answer: C

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Question 20

A government imposes a tax on a firm's output, which increases the firm's \cost by 20%. If the firm's initial \cost is $100, what is the new \cost?

Correct A. $120

B. $110

C. $100

D. $90

Correct Answer: A

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Question 21

A consumer's indifference curve is given by the equation u(x,y) = 2x + 3y. If the consumer's income is ₦1000 and the prices of x and y are ₦5 and ₦3 respectively, what is the consumer's optimal bundle?

Correct A. x = 40, y = 20

B. x = 30, y = 30

C. x = 20, y = 40

D. x = 10, y = 50

Correct Answer: A

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Question 22

The demand function for a product is given by q = 100 - 2p. If the supply function is given by q = 2p - 10, what is the equilibrium price and quantity?

Correct A. p = 20, q = 30

B. p = 30, q = 20

C. p = 40, q = 10

D. p = 50, q = 0

Correct Answer: A

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Question 23

A firm has a total revenue function given by TR = 100p^2 - 200p + 500. If the firm's total \cost function is given by TC = 50p^2 + 100p + 200, what is the firm's profit function?

Correct A. π = 50p^2 - 100p + 300

B. π = 100p^2 - 200p + 500

C. π = 150p^2 - 300p + 700

D. π = 200p^2 - 400p + 900

Correct Answer: A

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Question 24

A government imposes a tax of ₦10 on a product. If the supply function for the product is given by q = 2p - 10, what is the new supply function?

Correct A. q = 2p - 20

B. q = 2p - 10

C. q = 2p + 10

D. q = 2p + 20

Correct Answer: A

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Question 25

A government imposes a tax of ₦10 on a product. If the demand function for the product is given by q = 100 - 2p, what is the new demand function?

A. q = 100 - 2p

Correct B. q = 100 - 4p

C. q = 100 + 2p

D. q = 100 + 4p

Correct Answer: B

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