POST UTME NOUN 2017 Economics | Objective

Are you preparing for POST UTME NOUN exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2017 Economics (Objective) questions designed to simulate the real exam environment.

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Question 1
Determine the returns to scale for a firm with a production function Q = 2x^0.5y^0.5.
A. Increa\sing Returns to Scale
B. Decrea\sing Returns to Scale
Correct C. Cons\tant Returns to Scale
D. No Returns to Scale

Correct Answer: C

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Question 2
A government imposes a tax on a firm's output. If the firm's supply curve shifts to the left, what happens to the equilibrium price and quantity?
Correct A. Price increases and quantity decreases
B. Price decreases and quantity increases
C. Price increases and quantity increases
D. Price decreases and quantity decreases

Correct Answer: A

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Question 3
A farmer in Nigeria produces maize and soybeans. If the price of maize increases by 20% and the price of soybeans remains cons\tant, what happens to the farmer's budget constraint?
A. The budget constraint shifts to the right
Correct B. The budget constraint shifts to the left
C. The budget constraint remains the same
D. The budget constraint becomes vertical

Correct Answer: B

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Question 4
A government in Nigeria wants to promote industrialization. Which of the following policies would be most effective in achieving this goal?
A. Increa\sing the minimum wage
B. Reducing the corporate tax rate
Correct C. Investing in infrastructure
D. Implementing a value-added tax

Correct Answer: C

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Question 5
A firm in Nigeria produces a good with a cons\tant elasticity of demand. If the price of the good increases by 10%, what happens to the quantity demanded?
A. Quantity demanded increases by 10%
Correct B. Quantity demanded decreases by 10%
C. Quantity demanded remains the same
D. Quantity demanded increases by 20%

Correct Answer: B

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Question 6
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%
B. 15%
Correct C. 10%
D. 5%

Correct Answer: C

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Question 7
A country's balance of payments account shows a trade deficit of $100 billion and a capital account surplus of $50 billion. What is the overall balance of payments position?
A. Trade deficit of $50 billion
B. Trade surplus of $50 billion
C. Capital account surplus of $50 billion
Correct D. Overall balance of payments deficit of $50 billion

Correct Answer: D

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Question 8
A firm's marginal revenue (MR) and marginal \cost (MC) curves are given by the equations MR = 100 - 2x and MC = 50 + x. At what level of output will the firm maximize its profit?
A. 10 units
Correct B. 20 units
C. 30 units
D. 40 units

Correct Answer: B

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Question 9
A consumer's utility function is given by U(x, y) = 2x + 3y. If the consumer's income is $100 and the prices of x and y are $5 and $10 respectively, what is the consumer's optimal bundle?
A. x = 10, y = 20
B. x = 20, y = 10
Correct C. x = 15, y = 15
D. x = 5, y = 5

Correct Answer: C

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Question 10
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. Uncertainty about the effect on money supply

Correct Answer: B

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Question 11
The Marshall-Lerner condition states that if the sum of the elasticities of demand for exports and supply of imports 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 correct interpretation of this condition?
Correct A. A devaluation will lead to a decrease in imports and an increase in exports.
B. A devaluation will lead to an increase in imports and a decrease in exports.
C. A devaluation will lead to an increase in imports and an increase in exports.
D. A devaluation will lead to a decrease in imports and a decrease in exports.

Correct Answer: A

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Question 12
A perfectly competitive firm produces a good with a cons\tant marginal \cost of ₦10 per unit. If the market price is ₦20 per unit, what is the profit-maximizing quantity of the good?
A. 10
Correct B. 20
C. 30
D. 40

Correct Answer: B

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Question 13
A monopolist faces a demand curve given by Q = 100 - 2P. If the marginal \cost is ₦10, what is the profit-maximizing price?
A. ₦20
B. ₦30
Correct C. ₦40
D. ₦50

Correct Answer: C

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Question 14
A firm is producing a good with a production function given by Q = 2L^0.5K^0.5. If the price of labor is ₦10 per unit and the price of capital is ₦20 per unit, what is the \cost-minimizing combination of labor and capital?
A. L = 10, K = 20
Correct B. L = 20, K = 10
C. L = 30, K = 15
D. L = 15, K = 30

Correct Answer: B

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Question 15
A country's GDP is given by the equation Y = C + I + G + \( X - M \). If the consumption function is C = 100 + 0.8Y, the investment function is I = 200 + 0.2Y, the government sp\ending function is G = 300, the export function is X = 400 + 0.5Y, and the import function is M = 200 + 0.2Y, what is the equilibrium level of GDP?
A. ₦1000
B. ₦1500
Correct C. ₦2000
D. ₦2500

Correct Answer: C

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Question 16
A monopolist faces a downward-sloping demand curve. If the demand curve shifts to the right, what will happen to the monopolist's equilibrium price and quantity?
A. The equilibrium price will increase, and the equilibrium quantity will decrease.
Correct B. The equilibrium price will decrease, and the equilibrium quantity will increase.
C. The equilibrium price will remain the same, and the equilibrium quantity will increase.
D. The equilibrium price will increase, and the equilibrium quantity will increase.

Correct Answer: B

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Question 17
A firm is producing a good with a production function Q = 2L^0.5K^0.5. If the price of the good is $10 and the wage rate is $5 per hour, what is the firm's optimal level of labor?
A. 10 units
Correct B. 20 units
C. 30 units
D. 40 units

Correct Answer: B

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Question 18
A country is experiencing a trade deficit due to a decrease in exports and an increase in imports. What will happen to the country's GDP?
Correct A. The country's GDP will decrease.
B. The country's GDP will increase.
C. The country's GDP will remain the same.
D. The country's GDP will increase, but the trade deficit will decrease.

Correct Answer: A

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Question 19
A firm is considering investing in a new project with a net present value (NPV) of $100,000. If the \cost of capital is 10%, what is the firm's expected rate of return?
Correct A. 10%
B. 12%
C. 15%
D. 18%

Correct Answer: A

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Question 20
A country is experiencing a recession due to a decrease in aggregate demand. What will happen to the country's unemployment rate?
Correct A. The unemployment rate will increase.
B. The unemployment rate will decrease.
C. The unemployment rate will remain the same.
D. The unemployment rate will increase, but the inflation rate will decrease.

Correct Answer: A

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Question 21
An economy is characterized by a high level of income inequality and a large informal sector. Which of the following is a likely consequence of this economic structure?
A. Increased economic growth
B. Higher savings rate
C. Reduced poverty
Correct D. Increased income inequality

Correct Answer: D

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Question 22
A monopolistically competitive firm faces a downward-sloping demand curve. If the firm increases its price, what will happen to its quantity demanded?
A. Increase
Correct B. Decrease
C. No change
D. Indeterminate

Correct Answer: B

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Question 23
A firm has a total revenue function of \( TR = 100x - 2x^2 \) and a total \cost function of \( TC = 50 + 10x + 2x^2 \). What is the profit-maximizing level of output?
A. 10
B. 20
Correct C. 30
D. 40

Correct Answer: C

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Question 24
A country has a trade deficit of $100 million and a current account deficit of $50 million. What is the likely effect on the exchange rate?
A. Appreciation
Correct B. Depreciation
C. No change
D. Indeterminate

Correct Answer: B

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Question 25
A central bank increases the reserve requirement for commercial banks. What is the likely effect on the money supply?
A. Increase
Correct B. Decrease
C. No change
D. Indeterminate

Correct Answer: B

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