Practice post utme osustech economics 2020 Past Questions

Question 1

A consumer's utility function is given by ( U(x,y) = 10\sqrt{x} + 5\sqrt{y} ). If the consumer's income is ₦1000 and the prices of x and y are ₦5 and ₦10 respectively, find the optimal bundle of x and y u\sing the budget constraint.

Correct A. \( x = 80, y = 40 \)

B. \( x = 40, y = 80 \)

C. \( x = 60, y = 60 \)

D. \( x = 20, y = 20 \)

Correct Answer: A

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Question 2

A firm's \cost function is given by ( C(x) = 2x^2 + 10x + 5 ). If the firm produces 20 units of the good, find the total \cost of production.

A. ₦155

B. ₦160

Correct C. ₦165

D. ₦170

Correct Answer: C

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Question 3

A government imposes a tax of ₦5 per unit on a good. The supply function of the good is given by \( p = 2q + 10 \). Find the new supply function after the tax is imposed.

Correct A. \( p = 2q + 15 \)

B. \( p = 2q + 10 \)

C. \( p = 2q + 5 \)

D. \( p = 2q - 5 \)

Correct Answer: A

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Question 4

A firm's revenue function is given by ( R(x) = 20x - 0.5x^2 ). Find the maximum revenue u\sing the first derivative test.

A. ₦100

Correct B. ₦120

C. ₦140

D. ₦160

Correct Answer: B

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Question 5

A consumer's demand function for a good is given by \( q = 100 - 2p \). If the price of the good is ₦20, find the consumer's surplus.

Correct A. ₦100

B. ₦120

C. ₦140

D. ₦160

Correct Answer: A

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Question 6

A firm's total revenue (TR) is given by the equation TR = 100x - 2x^2, where x is the number of units sold. If the firm sells 20 units, what is its total revenue?

A. ₦1800

Correct B. ₦2000

C. ₦2200

D. ₦2400

Correct Answer: B

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Question 7

The following diagram shows the demand and supply curves for a particular good. If the price of the good is ₦100, what is the quantity demanded?

Correct A. 10

B. 20

C. 30

D. 40

Correct Answer: A

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Question 8

A country's GDP is ₦100 billion, its imports are ₦20 billion, and its exports are ₦15 billion. What is its balance of trade?

Correct A. ₦5 billion

B. ₦10 billion

C. ₦15 billion

D. ₦20 billion

Correct Answer: A

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Question 9

A firm's marginal revenue (MR) is given by the equation MR = 100 - 4x, where x is the number of units sold. If the firm sells 10 units, what is its marginal revenue?

A. ₦60

Correct B. ₦80

C. ₦100

D. ₦120

Correct Answer: B

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Question 10

The following diagram shows the supply curve for a particular good. If the price of the good is ₦50, what is the quantity supplied?

A. 20

B. 30

Correct C. 40

D. 50

Correct Answer: C

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Question 11

Consider a country with a GDP of ₦1,500 billion and a population of 200 million. If the average annual income per capita is ₦7,500, what is the implied GDP deflator?

Correct A. 100

B. 150

C. 200

D. 250

Correct Answer: A

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Question 12

A firm faces a demand curve given by Q = 100 - 2P. If the firm's marginal \cost is MC = 20, what is the optimal price to charge?

A. 30

Correct B. 40

C. 50

D. 60

Correct Answer: B

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Question 13

A country's balance of payments account shows a trade deficit of ₦500 billion and a current account deficit of ₦300 billion. What is the implied capital account surplus?

A. 100

B. 200

Correct C. 300

D. 400

Correct Answer: C

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Question 14

A consumer's utility function is given by U = 2x + 3y. If the consumer's budget constraint is 2x + 3y = 12, what is the optimal bundle of x and y?

A. x = 2, y = 4

Correct B. x = 3, y = 3

C. x = 4, y = 2

D. x = 5, y = 1

Correct Answer: B

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Question 15

A firm's production function is given by Q = 2L + 3K. If the firm's \cost function is C = 10L + 20K, what is the optimal input bundle of L and K?

Correct A. L = 2, K = 3

B. L = 3, K = 2

C. L = 4, K = 1

D. L = 5, K = 0

Correct Answer: A

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Question 16

The government of a country decides to impose a tariff on imported goods to protect the domestic industry. However, the tariff also leads to a decrease in the quantity of imports. U\sing the concept of elasticity of demand, explain the likely effect of the tariff on the price of the imported goods.

Correct A. The price of the imported goods will increase, but the quantity demanded will decrease.

B. The price of the imported goods will decrease, but the quantity demanded will increase.

C. The price of the imported goods will remain the same, but the quantity demanded will decrease.

D. The price of the imported goods will increase, and the quantity demanded will increase.

Correct Answer: A

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Question 17

A firm is producing a good with the following \cost and revenue functions: C(x) = 2x^2 + 10x + 5 and R(x) = 3x^2 - 2x + 1. Find the profit-maximizing level of production.

A. x = 1

Correct B. x = 2

C. x = 3

D. x = 4

Correct Answer: B

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Question 18

A country's balance of payments is in equilibrium when the current account is equal to the capital account. U\sing the concept of the balance of payments, explain the likely effect of an increase in foreign investment on the country's balance of payments.

A. The current account will increase, and the capital account will decrease.

B. The current account will decrease, and the capital account will increase.

C. The current account will remain the same, and the capital account will increase.

Correct D. The current account will increase, and the capital account will remain the same.

Correct Answer: D

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Question 19

A firm is facing a downward-sloping demand curve. U\sing the concept of elasticity of demand, explain the likely effect of a decrease in the price of the good on the quantity demanded.

Correct A. The quantity demanded will increase.

B. The quantity demanded will decrease.

C. The quantity demanded will remain the same.

D. The quantity demanded will increase, but at a decrea\sing rate.

Correct Answer: A

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Question 20

A country is experiencing a trade deficit. U\sing the concept of the balance of payments, explain the likely effect of an increase in exports on the country's balance of payments.

A. The trade deficit will increase.

Correct B. The trade deficit will decrease.

C. The trade deficit will remain the same.

D. The trade deficit will increase, but at a decrea\sing rate.

Correct Answer: B

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Question 21

A firm is producing a good with the following \cost and revenue functions: C(x) = 2x^2 + 10x + 5 and R(x) = 3x^2 - 2x + 1. Find the profit-maximizing level of production.

A. x = 1

Correct B. x = 2

C. x = 3

D. x = 4

Correct Answer: B

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Question 22

A country's balance of payments is in equilibrium when the current account is equal to the capital account. U\sing the concept of the balance of payments, explain the likely effect of an increase in foreign investment on the country's balance of payments.

A. The current account will increase, and the capital account will decrease.

B. The current account will decrease, and the capital account will increase.

C. The current account will remain the same, and the capital account will increase.

Correct D. The current account will increase, and the capital account will remain the same.

Correct Answer: D

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Question 23

A firm is facing a downward-sloping demand curve. U\sing the concept of elasticity of demand, explain the likely effect of a decrease in the price of the good on the quantity demanded.

Correct A. The quantity demanded will increase.

B. The quantity demanded will decrease.

C. The quantity demanded will remain the same.

D. The quantity demanded will increase, but at a decrea\sing rate.

Correct Answer: A

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Question 24

Determine the optimal price for a firm to maximize its profit, given the following total revenue and total \cost functions: TR = 100q - 2q^2 and TC = 50q + 10q^2, where q is the quantity produced.

A. ₦50

B. ₦75

Correct C. ₦100

D. ₦125

Correct Answer: C

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Question 25

A country's balance of payments is in equilibrium when the current account is equal to the capital account. If the current account is -₦100 billion and the capital account is ₦150 billion, what is the net capital outflow?

Correct A. ₦250 billion

B. ₦200 billion

C. ₦150 billion

D. ₦100 billion

Correct Answer: A

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