POST UTME OAU 2021 Economics | Objective

Are you preparing for POST UTME OAU exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2021 Economics (Objective) questions designed to simulate the real exam environment.

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Question 1
Consider a country with a GDP of ₦10 trillion and a population of 200 million. If the government decides to implement a value-added tax (VAT) of 10% on all goods and services, what will be the impact on the country's GDP?
A. The GDP will increase by 10%.
B. The GDP will decrease by 10%.
Correct C. The GDP will remain unchanged.
D. The GDP will increase by 20%.

Correct Answer: C

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Question 2
A firm is producing a good with a cons\tant elasticity of demand of -2. If the price of the good increases by 20%, what will be the percentage change in the quantity demanded?
Correct A. -40%
B. -20%
C. -10%
D. -5%

Correct Answer: A

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Question 3
A country's national income is calculated u\sing the formula: National Income = C + I + G + \( X - M \). If the country's consumption is ₦5 trillion, investment is ₦2 trillion, government sp\ending is ₦3 trillion, exports are ₦4 trillion, and imports are ₦2 trillion, what is the country's national income?
A. ₦12 trillion
B. ₦14 trillion
Correct C. ₦16 trillion
D. ₦18 trillion

Correct Answer: C

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Question 4
A firm is producing a good with a production function of Q = 2K^\( 1/2 \). If the firm's capital stock increases by 20%, what will be the percentage change in output?
A. 10%
Correct B. 20%
C. 30%
D. 40%

Correct Answer: B

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Question 5
A central bank is considering a monetary policy of increa\sing the money supply by 10%. If the initial money supply is ₦10 trillion, what will be the new money supply?
A. ₦9 trillion
B. ₦10 trillion
Correct C. ₦11 trillion
D. ₦12 trillion

Correct Answer: C

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Question 6
A consumer's indifference curve is downward sloping, convex to the origin, and has a negative slope. What is the implication of this shape on the consumer's utility function?
A. The consumer's utility function is linear.
Correct B. The consumer's utility function is concave.
C. The consumer's utility function is convex.
D. The consumer's utility function is homogeneous of degree one.

Correct Answer: B

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Question 7
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.
Correct B. Decreased production and productivity.
C. No impact on production and productivity.
D. Increased inequality among farmers.

Correct Answer: B

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Question 8
A monopolist faces a demand curve given by Q = 100 - 2P. The monopolist's marginal \cost 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 9
A country's balance of payments is in surplus. What is the likely impact on the exchange rate?
Correct A. The exchange rate appreciates.
B. The exchange rate depreciates.
C. The exchange rate remains unchanged.
D. The exchange rate becomes volatile.

Correct Answer: A

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Question 10
A government imposes a tax on a particular good. What is the likely impact on the supply curve?
Correct A. The supply curve shifts to the left.
B. The supply curve shifts to the right.
C. The supply curve remains unchanged.
D. The supply curve becomes more elastic.

Correct Answer: A

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Question 11
The government of a country imposes a tax on imports to raise revenue. If the tax rate is 10% and the quantity of imports is 100 units, what is the total tax revenue collected?
A. ₦1000
Correct B. ₦1100
C. ₦1200
D. ₦1300

Correct Answer: B

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Question 12
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. ₦250
B. ₦300
Correct C. ₦350
D. ₦400

Correct Answer: C

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Question 13
A consumer's utility function is given by U(x, y) = 2x + 3y. If the consumer has a budget of ₦100 and the prices of x and y are ₦5 and ₦10 respectively, what is the consumer's optimal bundle?
Correct A. x = 10, y = 5
B. x = 5, y = 10
C. x = 15, y = 0
D. x = 0, y = 15

Correct Answer: A

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Question 14
The GDP of a country is given by the equation GDP = C + I + G + \( X - M \). If the country's consumption is ₦500 billion, investment is ₦200 billion, government exp\enditure is ₦300 billion, exports are ₦400 billion, and imports are ₦200 billion, what is the country's GDP?
A. ₦1,500 billion
Correct B. ₦1,600 billion
C. ₦1,700 billion
D. ₦1,800 billion

Correct Answer: B

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Question 15
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
Correct B. 30 units
C. 40 units
D. 50 units

Correct Answer: B

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Question 16
A monopolistically competitive firm faces a demand curve with a cons\tant elasticity of -2. If the firm's marginal revenue (MR) is 100, and the price elasticity of demand (PED) is 2, what is the firm's marginal \cost (MC)?
A. 50
B. 75
Correct C. 100
D. 125

Correct Answer: C

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Question 17
A country's government is considering a tax on a particular good. The supply curve for the good is given by Q = 100 - 2P, and the demand curve is given by Q = 200 - 5P. If the government imposes a tax of 10 on the producer, what will be the new equilibrium price and quantity?
A. P = 20, Q = 80
B. P = 25, Q = 75
Correct C. P = 30, Q = 70
D. P = 35, Q = 65

Correct Answer: C

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Question 18
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?
Correct 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

Correct Answer: A

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Question 19
A country's government is considering a policy to reduce inflation. The current inflation rate is 5%, and the government wants to reduce it to 2%. If the country's central bank has a monetary policy tool that can increase the money supply by 10% per year, what will be the new inflation rate after one year?
A. 3%
Correct B. 4%
C. 5%
D. 6%

Correct Answer: B

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Question 20
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
Correct C. 100
D. 125

Correct Answer: C

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Question 21
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
Correct C. 300
D. 350

Correct Answer: C

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Question 22
A country's GDP is $100 billion, and its GNP is $120 billion. What is the net factor income from abroad?
Correct A. $10 billion
B. $20 billion
C. $30 billion
D. $40 billion

Correct Answer: A

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Question 23
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
Correct C. 25
D. 30

Correct Answer: C

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Question 24
A firm's revenue function is given by R(q) = 50q. If the firm produces 10 units, what is the total revenue?
A. 500
Correct B. 600
C. 700
D. 800

Correct Answer: B

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Question 25
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
Correct C. $130
D. $140

Correct Answer: C

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