POST UTME PAN-ATLANTIC UNIVERSITY 2018 Economics | Objective

Practice these randomly selected questions to test your readiness.

Question 1
The elasticity of demand for a commodity is given by the formula \( eta = \frac{p}{x} \frac{dx}{dp} \). If the demand for a commodity is elastic, what can be concluded about the relationship between the price and quantity demanded?
A. The price and quantity demanded are inversely related.
B. The price and quantity demanded are directly related.
C. The price and quantity demanded are unrelated.
D. The price and quantity demanded are negatively related.
Question 2
A firm is considering the production of two goods, X and Y. The production of good X requires 3 units of labor and 2 units of capital, while the production of good Y requires 2 units of labor and 3 units of capital. If the firm has 12 units of labor and 10 units of capital, what is the opportunity \cost of producing 4 units of good X?
A. 2 units of good Y
B. 3 units of good Y
C. 4 units of good Y
D. 5 units of good Y
Question 3
A firm's production function is given by Q = 3L^0.5K^0.5. If the price of labor (L) is ₦150 per unit and the price of capital (K) is ₦300 per unit, calculate the returns to scale.
A. Increa\sing
B. Decrea\sing
C. Cons\tant
D. Variable
Question 4
U\sing the Marshall-Lerner condition, derive the condition for the balance of payments to improve in the short run.
A. The Marshall-Lerner condition states that the balance of payments will improve if the sum of the price and income elasticities of demand is greater than 1.
B. The Marshall-Lerner condition states that the balance of payments will improve if the sum of the price and income elasticities of demand is less than 1.
C. The Marshall-Lerner condition states that the balance of payments will improve if the sum of the price and income elasticities of demand is equal to 1.
D. The Marshall-Lerner condition states that the balance of payments will improve if the sum of the price and income elasticities of demand is greater than or equal to 1.
Question 5
The government of Nigeria has implemented a policy to increase the production of rice. The policy includes providing subsidies to farmers and increa\sing the import duty on rice. What is the likely effect of this policy on the domestic price of rice?
A. The domestic price of rice will decrease.
B. The domestic price of rice will increase.
C. The domestic price of rice will remain the same.
D. The domestic price of rice will fluctuate.
Question 6
A country's balance of payments is given by the equation BOP = X - M, where BOP is the balance of payments, X is the value of exports, and M is the value of imports. If the value of exports is ₦100 billion and the value of imports is ₦120 billion, what is the balance of payments?
A. ₦20 billion
B. ₦30 billion
C. ₦40 billion
D. ₦50 billion
Question 7
A consumer's utility function is given by U(x, y) = 2x + 3y. If the consumer's income is ₦1000 and the prices of x and y are ₦5 and ₦3 respectively, what is the consumer's optimal bundle?
A. x = 40, y = 20
B. x = 30, y = 30
C. x = 20, y = 40
D. x = 10, y = 50
Question 8
The Nigerian government has implemented a policy to increase the production of agricultural products. The policy involves providing subsidies to farmers. If the subsidy is ₦100 per unit of agricultural product, and the price of the product is ₦200 per unit, what is the effect on the supply of agricultural products?
A. The supply of agricultural products will decrease
B. The supply of agricultural products will increase
C. The supply of agricultural products will remain unchanged
D. The effect on the supply of agricultural products is uncertain
Question 9
A firm is producing a product at a level where its marginal revenue (MR) is equal to its marginal \cost (MC). If the price elasticity of demand is 0.5, what is the firm's profit-maximizing output?
A. ₦20
B. ₦30
C. ₦40
D. ₦50
Question 10
A government is considering a tax on a particular good. The supply curve of the good is given by Q = 2P + 10, and the demand curve is given by Q = 100 - 2P. If the government imposes a tax of ₦10 on the good, what is the new equilibrium price?
A. ₦20
B. ₦30
C. ₦40
D. ₦50
Question 11
The Nigerian government has implemented a policy to increase the production of industrial goods. The policy involves providing incentives to manufacturers. If the incentive is ₦500 per unit of industrial product, and the price of the product is ₦1000 per unit, what is the effect on the demand for industrial products?
A. The demand for industrial products will decrease
B. The demand for industrial products will increase
C. The demand for industrial products will remain unchanged
D. The effect on the demand for industrial products is uncertain
Question 12
A firm's production function is given by Q = 3L^0.5K^0.5. If the firm's output is 9 units when labor (L) is 1 unit and capital (K) is 1 unit, what is the marginal product of capital?
A. 3
B. 6
C. 9
D. 12
Question 13
A firm's production function is given by Q = 2L^0.5K^0.5. If the price of labor (L) is ₦100 per unit and the price of capital (K) is ₦200 per unit, calculate the elasticity of labor with respect to output.
A. 0.5
B. 1
C. 2
D. 3
Question 14
A firm is producing a product at a level where its marginal revenue (MR) is equal to its marginal \cost (MC). If the price elasticity of demand is 0.5, what is the firm's profit-maximizing output?
A. ₦20
B. ₦30
C. ₦40
D. ₦50
Question 15
A firm is considering the production of two goods, A and B. The production of good A requires 2 units of labor and 1 unit of capital, while the production of good B requires 1 unit of labor and 2 units of capital. If the firm has 10 units of labor and 8 units of capital, what is the opportunity \cost of producing 5 units of good A?
A. 2 units of good B
B. 3 units of good B
C. 4 units of good B
D. 5 units of good B

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