Practice post utme oau economics 2019 Past Questions

Question 1

The concept of scarcity in economics is best described as the inability to satisfy all wants and needs due to limited resources.

Correct A. True

B. False

C. Maybe

D. It dep\ends

Correct Answer: A

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Question 2

A farmer in Nigeria has 100 hectares of land to cultivate crops. If the opportunity \cost of cultivating maize is ₦200,000 per hectare and the opportunity \cost of cultivating rice is ₦250,000 per hectare, what is the opportunity \cost of cultivating both maize and rice on the 100 hectares of land?

A. ₦25,000,000

Correct B. ₦30,000,000

C. ₦35,000,000

D. ₦40,000,000

Correct Answer: B

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Question 3

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 supply of the product is given by the equation Qs = 2P - 100, where Qs is the quantity supplied and P is the price, what is the equilibrium price and quantity?

Correct A. P = 50, Q = 50

B. P = 75, Q = 25

C. P = 100, Q = 0

D. P = 0, Q = 100

Correct Answer: A

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Question 4

A monopolist faces a demand curve given by Qd = 100 - 2P and a \cost curve given by C = 100 + 2Q. What is the profit-maximizing price and quantity?

Correct A. P = 75, Q = 25

B. P = 50, Q = 50

C. P = 25, Q = 75

D. P = 0, Q = 100

Correct Answer: A

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Question 5

A government is considering a policy to increase agricultural production in Nigeria. The policy involves providing subsidies to farmers and investing in irrigation systems. What is the likely effect of this policy on the agricultural sector?

Correct A. Increase in agricultural production

B. Decrease in agricultural production

C. No change in agricultural production

D. Increase in agricultural production and employment

Correct Answer: A

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Question 6

The government of Nigeria has introduced a new policy to increase the production of rice in the country. The policy involves providing subsidies to rice farmers and increa\sing the import duty on rice. Assuming that the demand for rice is inelastic, what will be the effect of this policy on the domestic price of rice?

A. The domestic price of rice will decrease

Correct B. The domestic price of rice will increase

C. The domestic price of rice will remain the same

D. The effect on the domestic price of rice is uncertain

Correct Answer: B

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Question 7

A firm is producing a good with the following \cost function: C(q) = 10 + 2q + 0.5q^2. The firm's revenue function is given by R(q) = 20q. What is the profit-maximizing quantity of the good?

A. 10

B. 20

Correct C. 30

D. 40

Correct Answer: C

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Question 8

The balance of payments (BOP) of a country is a statistical statement that summarizes all economic transactions between residents and non-residents over a specific period of time. What is the main purpose of the BOP?

A. To measure the country's economic growth

B. To measure the country's trade deficit

C. To measure the country's foreign exchange reserves

Correct D. To measure the country's economic transactions with non-residents

Correct Answer: D

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Question 9

A consumer has the following utility function: U(x, y) = 2x + 3y. The prices of x and y are $2 and $3, respectively. What is the consumer's budget constraint?

A. 2x + 3y = 6

Correct B. 2x + 3y = 12

C. 2x + 3y = 18

D. 2x + 3y = 24

Correct Answer: B

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Question 10

A firm is producing a good with the following production function: Q = 2L^0.5K^0.5. The firm's \cost function is given by C(L, K) = 10L + 20K. What is the firm's profit-maximizing input combination?

A. L = 10, K = 20

B. L = 20, K = 10

Correct C. L = 30, K = 30

D. L = 40, K = 40

Correct Answer: C

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Question 11

The government of Nigeria has introduced a new policy to increase the production of rice in the country. The policy involves providing subsidies to rice farmers and increa\sing the import duty on rice. Assuming that the demand for rice is inelastic, what will be the effect of this policy on the domestic price of rice?

A. The domestic price of rice will decrease

Correct B. The domestic price of rice will increase

C. The domestic price of rice will remain the same

D. The effect on the domestic price of rice is uncertain

Correct Answer: B

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Question 12

A firm is producing a good with the following \cost function: C(q) = 10 + 2q + 0.5q^2. The firm's revenue function is given by R(q) = 20q. What is the profit-maximizing quantity of the good?

A. 10

B. 20

Correct C. 30

D. 40

Correct Answer: C

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Question 13

The balance of payments (BOP) of a country is a statistical statement that summarizes all economic transactions between residents and non-residents over a specific period of time. What is the main purpose of the BOP?

A. To measure the country's economic growth

B. To measure the country's trade deficit

C. To measure the country's foreign exchange reserves

Correct D. To measure the country's economic transactions with non-residents

Correct Answer: D

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Question 14

A perfectly competitive market has a downward-sloping demand curve and a horizontal supply curve. If the market price is $10, and the firm's marginal revenue (MR) is $8, what is the firm's marginal \cost (MC)?

A. 2

B. 4

Correct C. 6

D. 8

Correct Answer: C

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Question 15

A country's balance of payments (BOP) accounts can be classified into three main categories: current account, capital account, and financial account. Which of the following is NOT a component of the current account?

A. Exports

B. Imports

Correct C. Foreign Direct Investment

D. Remit\tances

Correct Answer: C

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Question 16

A monopolistically competitive firm faces a downward-sloping demand curve and a downward-sloping marginal revenue (MR) curve. If the firm's MR is $12, and the market price is $15, what is the firm's marginal \cost (MC)?

A. 3

Correct B. 5

C. 7

D. 9

Correct Answer: B

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Question 17

A country's government is considering a tax on a particular good. The tax is expected to increase the price of the good by 20%. If the demand for the good is elastic, what will be the effect on government revenue?

A. Increase

Correct B. Decrease

C. No change

D. Uncertain

Correct Answer: B

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Question 18

A firm is considering a new investment project. The project has a net present value (NPV) of $100,000, and the firm's \cost of capital is 10%. What is the internal rate of return (IRR) of the project?

A. 5%

Correct B. 10%

C. 15%

D. 20%

Correct Answer: B

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Question 19

A consumer's indifference curve is downward sloping and convex to the origin. What does this imply about the consumer's preferences?

A. The consumer prefers more of good X to good Y.

B. The consumer prefers more of good Y to good X.

Correct C. The consumer is indifferent between good X and good Y.

D. The consumer prefers a combination of both goods X and Y.

Correct Answer: C

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Question 20

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current inputs are L = 4 and K = 9, what is the marginal product of labor?

A. 1

Correct B. 2

C. 3

D. 4

Correct Answer: B

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Question 21

A country's GDP is given by the equation GDP = C + I + G + $ X - M $. If the country's current GDP is ₦100 billion, and the values of C, I, and G are ₦20 billion, ₦15 billion, and ₦10 billion respectively, what is the value of net exports?

Correct A. ₦5 billion

B. ₦10 billion

C. ₦15 billion

D. ₦20 billion

Correct Answer: A

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Question 22

A firm's demand function is given by Q = 100 - 2P. If the firm's current price is ₦20, what is the quantity demanded?

A. 40

B. 60

C. 80

Correct D. 100

Correct Answer: D

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Question 23

A consumer's budget constraint is given by the equation 2X + 3Y = 12. If the consumer's current income is ₦12, and the price of good X is ₦2, what is the quantity of good Y consumed?

A. 2

Correct B. 3

C. 4

D. 5

Correct Answer: B

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Question 24

The concept of scarcity in economics implies that the wants of individuals are unlimited, while the resources available to satisfy these wants are limited. Which of the following is a consequence of this scarcity?

Correct A. Inefficient allocation of resources

B. Increased economic growth

C. Reduced poverty

D. Improved s\tandard of living

Correct Answer: A

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Question 25

A firm's production function is given by Q = 2L + 3K, where Q is the quantity produced, L is the number of labor units, and K is the number of capital units. If the firm wants to produce 10 units of output, how many labor units should it hire?

A. 2

Correct B. 4

C. 6

D. 8

Correct Answer: B

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