POST UTME OSUSTECH 2021 Economics | Objective

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Question 1
The Nigerian government has implemented a monetary policy to reduce inflation. Which of the following is a likely consequence of this policy?
A. Increased interest rates
B. Reduced money supply
C. Increased inflation
D. Decreased economic growth
Question 2
A farmer in Nigeria is considering two different irrigation systems for her farm. System A \costs ₦100,000 upfront but saves ₦20,000 per year in water \costs. System B \costs ₦50,000 upfront but saves ₦15,000 per year in water \costs. If the farmer expects to use the irrigation system for 5 years, which system should she choose?
A. System A
B. System B
C. Both systems are equally profitable
D. Neither system is profitable
Question 3
A firm's production function is given by Q = 100K^\( 1/2 \)L^\( 1/2 \), where Q is output, K is capital, and L is labor. If the firm's capital stock increases by 25% and labor remains cons\tant, what is the percentage change in output?
A. 12.5%
B. 25%
C. 50%
D. 100%
Question 4
A country's budget constraint is given by C + I + G = 100, where C is consumption, I is investment, and G is government sp\ending. If the country's consumption function is C = 20 + 0.5Y and investment function is I = 10 + 0.2Y, where Y is income, what is the country's optimal level of government sp\ending?
A. 20
B. 30
C. 40
D. 50
Question 5
A firm's demand function is given by Q = 100 - 2P, where Q is quantity demanded and P is price. If the firm's marginal revenue function is MR = 200 - 4Q, what is the firm's optimal price?
A. 20
B. 30
C. 40
D. 50
Question 6
A firm is producing a good with a production function of Q = 100K^0.5L^0.5. What is the returns to scale of this production function?
A. Increa\sing returns to scale
B. Decrea\sing returns to scale
C. Cons\tant returns to scale
D. No returns to scale
Question 7
A consumer is faced with the following utility function: U(x,y) = 2x + 3y. If the consumer's income is ₦1000 and the prices of x and y are ₦2 and ₦3 respectively, what is the consumer's optimal consumption bundle?
A. x = 200, y = 150
B. x = 150, y = 200
C. x = 100, y = 300
D. x = 300, y = 100
Question 8
Consider a firm operating in a perfectly competitive market with a given demand curve. If the firm's marginal revenue (MR) curve intersects its average variable \cost (AVC) curve at a point where MR > AVC, what is the likely outcome for the firm's profit?
A. The firm will increase production to maximize profit.
B. The firm will decrease production to minimize losses.
C. The firm will remain at the current level of production.
D. The firm will exit the market.
Question 9
A firm's total revenue 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 the total revenue?
A. ₦1,600
B. ₦1,800
C. ₦2,000
D. ₦2,200
Question 10
A country is experiencing a trade deficit. Which of the following is a likely effect of this situation?
A. Increased imports
B. Decreased exports
C. Increased foreign investment
D. Increased domestic inflation
Question 11
A firm's demand function is given by the equation \( Q = 100 - 2P \), where ( P ) is the price. If the price is ₦50, what is the quantity demanded?
A. 20 units
B. 30 units
C. 40 units
D. 50 units
Question 12
A firm is considering two different production processes. Process A requires an initial investment of ₦1,000,000 and has a fixed \cost of ₦200,000 per unit produced. Process B requires an initial investment of ₦500,000 and has a fixed \cost of ₦150,000 per unit produced. If the firm produces 1,000 units, which process will result in lower total \costs?
A. Process A
B. Process B
C. Both processes have the same total \costs
D. Neither process has lower total \costs
Question 13
A monopolist faces a demand curve given by the equation \( Q = 100 - 2P \). If the firm's marginal \cost is ₦50, what is the optimal price and quantity to produce?
A. Price: ₦50, Quantity: 25 units
B. Price: ₦75, Quantity: 50 units
C. Price: ₦100, Quantity: 75 units
D. Price: ₦125, Quantity: 100 units
Question 14
A consumer has a budget of ₦10,000 to sp\end on two goods, X and Y. The price of good X is ₦5,000 and the price of good Y is ₦3,000. If the consumer sp\ends all of their budget, how many units of good X can they buy?
A. 1 unit
B. 2 units
C. 3 units
D. 4 units
Question 15
A firm is operating in a perfectly competitive market. If the firm's marginal revenue (MR) is greater than its marginal \cost (MC), what will happen to the firm's output?
A. The firm will increase its output
B. The firm will decrease its output
C. The firm's output will remain unchanged
D. The firm will exit the market

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