POST UTME OAU 2021 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A firm is considering two production processes: one that produces 100 units of output per hour with a fixed \cost of ₦5,000 and a variable \cost of ₦10 per unit, and another that produces 200 units of output per hour with a fixed \cost of ₦10,000 and a variable \cost of ₦5 per unit. Determine which process is more profitable if the firm sells its output at ₦20 per unit.
A. Process 1 is more profitable
B. Process 2 is more profitable
C. Both processes are equally profitable
D. Neither process is profitable
Question 2
Agricultural development in Nigeria has been hindered by the lack of access to credit by small-scale farmers. What is the likely impact of this on the agricultural sector?
A. Increased production and productivity.
B. Decreased production and productivity.
C. No impact on production and productivity.
D. Increased inequality among farmers.
Question 3
A monopolist faces a demand curve given by P = 100 - 2q. The marginal revenue function is given by MR = 100 - 4q. What is the profit-maximizing quantity?
A. 10
B. 20
C. 25
D. 30
Question 4
A monopolist faces a demand curve given by Q = 100 - 2P, where Q is the quantity demanded and P is the price. The monopolist's marginal \cost curve is given by MC = 5. What is the monopolist's optimal price?
A. ₦20
B. ₦25
C. ₦30
D. ₦35
Question 5
A firm's \cost function is given by C(q) = 2q^2 + 10q + 5. What is the marginal \cost function, and how does it relate to the average \cost function?
A. The marginal \cost function is MC(q) = 4q + 10, and it is equal to the average \cost function.
B. The marginal \cost function is MC(q) = 4q + 10, and it is greater than the average \cost function.
C. The marginal \cost function is MC(q) = 4q + 10, and it is less than the average \cost function.
D. The marginal \cost function is MC(q) = 4q + 10, and it is equal to the average variable \cost function.
Question 6
A country's balance of payments is in surplus. What is the likely impact on the exchange rate?
A. The exchange rate appreciates.
B. The exchange rate depreciates.
C. The exchange rate remains unchanged.
D. The exchange rate becomes volatile.
Question 7
A firm is considering a new investment project. The project has a initial \cost of 100, and it is expected to generate a cash flow of 20 per year for 5 years. If the firm's discount rate is 10%, what is the net present value (NPV) of the project?
A. 50
B. 75
C. 100
D. 125
Question 8
A firm operating in a perfectly competitive market produces a homogeneous product. The firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \), where Q is the quantity produced, L is the labor input, and K is the capital input. If the firm's current labor input is 16 units and capital input is 9 units, what is the opportunity \cost of increa\sing labor input by 1 unit?
A. 1 unit of capital
B. 2 units of capital
C. 3 units of capital
D. 4 units of capital
Question 9
A country's inflation rate is 5% per annum. If the current price level is $100, what will be the price level after 2 years?
A. $110
B. $120
C. $130
D. $140
Question 10
A firm's demand function is given by Q = 100 - 2P. If the firm's price is ₦20, what is the quantity demanded?
A. 20 units
B. 30 units
C. 40 units
D. 50 units
Question 11
A firm's revenue function is given by R(q) = 100q - 2q^2. What is the marginal revenue function, and how does it relate to the demand function?
A. The marginal revenue function is MR(q) = 100 - 4q, and it is equal to the demand function.
B. The marginal revenue function is MR(q) = 100 - 4q, and it is greater than the demand function.
C. The marginal revenue function is MR(q) = 100 - 4q, and it is less than the demand function.
D. The marginal revenue function is MR(q) = 100 - 4q, and it is equal to the average revenue function.
Question 12
Consider a production function given by \( Q = 100K^{\frac{1}{2}}L^{\frac{1}{2}} \), where Q is output, K is capital, and L is labor. If the price of capital is ₦100 per unit and the price of labor is ₦50 per unit, and if the firm's budget constraint is ₦10,000, determine the optimal values of K and L that maximize output.
A. K = 100, L = 20
B. K = 50, L = 40
C. K = 20, L = 50
D. K = 10, L = 100
Question 13
A firm is considering two different production processes for a particular good. Process A has a fixed \cost of 100 and a variable \cost of 20 per unit, while Process B has a fixed \cost of 150 and a variable \cost of 15 per unit. If the firm produces 100 units of the good, which process will result in the lowest total \cost?
A. Process A
B. Process B
C. Both processes will result in the same total \cost
D. Neither process will result in the lowest total \cost
Question 14
A firm's \cost function is given by C(q) = 2q^2 + 10q + 5. If the firm produces 20 units, what is the total \cost?
A. 200
B. 250
C. 300
D. 350
Question 15
The demand for money in an economy is influenced by the opportunity \cost of holding money. What is the opportunity \cost of holding money, and how does it affect the demand for money?
A. The opportunity \cost of holding money is the interest that could be earned by investing in alternative assets, and it affects the demand for money by increa\sing it.
B. The opportunity \cost of holding money is the risk of holding money, and it affects the demand for money by decrea\sing it.
C. The opportunity \cost of holding money is the liquidity of holding money, and it affects the demand for money by increa\sing it.
D. The opportunity \cost of holding money is the inflation rate, and it affects the demand for money by decrea\sing it.

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows
Help others prepare! Share this practice hub: