Practice post utme redeemers university economics 2017 Past Questions

Question 1

Determine the value of the elasticity of demand for a product whose price elasticity of demand is 0.8 and the quantity demanded is 120 units when the price is ₦150.

A. 0.6

Correct B. 0.8

C. 1.2

D. 1.5

Correct Answer: B

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Question 2

A firm is operating in a perfectly competitive market. If the market price of its product is ₦200 and the marginal revenue is ₦180, what is the marginal \cost?

A. ₦120

B. ₦150

Correct C. ₦180

D. ₦200

Correct Answer: C

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Question 3

A diagram of a simple production function is shown below. If the firm is currently producing at point A, what is the marginal product of labor?

A. 5 units

Correct B. 10 units

C. 15 units

D. 20 units

Correct Answer: B

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Question 4

A firm is considering investing in a new project. The project has a net present value of ₦100,000 and a required rate of return of 10%. What is the present value of the project?

A. ₦90,000

Correct B. ₦100,000

C. ₦110,000

D. ₦120,000

Correct Answer: B

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Question 5

A diagram of a simple supply and demand curve is shown below. If the equilibrium price is ₦150 and the quantity demanded is 120 units, what is the price elasticity of demand?

Correct A. 0.8

B. 1.2

C. 1.5

D. 2.0

Correct Answer: A

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Question 6

The production function for a firm is given by Q = 2L^0.5K^0.5, where Q is output, L is labor and K is capital. If the firm increases labor from 100 to 121 units and capital from 100 to 121 units, calculate the percentage change in output.

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 7

A consumer has a budget of ₦1000 and faces the following prices: Q1 = ₦5, Q2 = ₦10, Q3 = ₦15. If the consumer's utility function is U = 2Q1 + Q2 + 3Q3, and the consumer's income is ₦1000, what is the consumer's optimal bundle of goods?

A. Q1 = 200, Q2 = 100, Q3 = 0

B. Q1 = 150, Q2 = 75, Q3 = 25

Correct C. Q1 = 100, Q2 = 50, Q3 = 50

D. Q1 = 0, Q2 = 100, Q3 = 100

Correct Answer: C

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Question 8

The demand function for a product is given by Q = 100 - 2P, where Q is quantity demanded and P is price. If the supply function is given by Q = 2P + 50, what is the equilibrium price and quantity?

Correct A. P = 25, Q = 75

B. P = 30, Q = 70

C. P = 35, Q = 65

D. P = 40, Q = 60

Correct Answer: A

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Question 9

A firm is producing a good u\sing a production function Q = 3L^0.5K^0.5, where Q is output, L is labor and K is capital. If the firm increases labor from 100 to 121 units and capital from 100 to 121 units, calculate the percentage change in output.

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 10

A consumer has a budget of ₦1000 and faces the following prices: Q1 = ₦5, Q2 = ₦10, Q3 = ₦15. If the consumer's utility function is U = 2Q1 + Q2 + 3Q3, and the consumer's income is ₦1000, what is the consumer's optimal bundle of goods?

A. Q1 = 200, Q2 = 100, Q3 = 0

B. Q1 = 150, Q2 = 75, Q3 = 25

Correct C. Q1 = 100, Q2 = 50, Q3 = 50

D. Q1 = 0, Q2 = 100, Q3 = 100

Correct Answer: C

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Question 11

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current inputs are L = 16 and K = 9, what is the marginal product of labor (MPL) when the firm is producing at the current level of inputs?

A. 1

Correct B. 2

C. 3

D. 4

Correct Answer: B

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Question 12

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

Correct A. x = 3, y = 4

B. x = 4, y = 3

C. x = 6, y = 2

D. x = 2, y = 6

Correct Answer: A

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Question 13

A firm is producing a good u\sing two inputs, labor (L) and capital (K). The production function is given by Q = 2L^0.5K^0.5. If the firm's current inputs are L = 16 and K = 9, what is the firm's total product?

A. 8

B. 16

Correct C. 32

D. 64

Correct Answer: C

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Question 14

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

Correct A. x = 3, y = 4

B. x = 4, y = 3

C. x = 6, y = 2

D. x = 2, y = 6

Correct Answer: A

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Question 15

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current inputs are L = 16 and K = 9, what is the firm's marginal product of capital (MPC) when the firm is producing at the current level of inputs?

A. 1

Correct B. 2

C. 3

D. 4

Correct Answer: B

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Question 16

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 ₦10 respectively, what is the consumer's optimal bundle of x and y?

A. x = 80, y = 20

Correct B. x = 60, y = 40

C. x = 40, y = 60

D. x = 20, y = 80

Correct Answer: B

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Question 17

A firm is producing a good with a total revenue of ₦1000 and a total \cost of ₦800. If the firm's average revenue is ₦50, what is the firm's average \cost?

A. ₦40

Correct B. ₦50

C. ₦60

D. ₦70

Correct Answer: B

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Question 18

A monopolist is producing a good with a demand curve given by Q = 100 - 2P. If the firm's marginal \cost is ₦20, what is the firm's optimal price?

A. ₦40

B. ₦50

Correct C. ₦60

D. ₦70

Correct Answer: C

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Question 19

A consumer's indifference curve 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 ₦10 respectively, what is the consumer's optimal bundle of x and y?

A. x = 80, y = 20

Correct B. x = 60, y = 40

C. x = 40, y = 60

D. x = 20, y = 80

Correct Answer: B

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Question 20

A firm is producing a good with a total revenue of ₦1000 and a total \cost of ₦800. If the firm's average revenue is ₦50, what is the firm's average \cost?

A. ₦40

Correct B. ₦50

C. ₦60

D. ₦70

Correct Answer: B

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Question 21

Suppose the demand for a product is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the price elasticity of demand is cons\tant and equal to -2, what is the percentage change in quantity demanded when the price increases by 10%?

Correct A. 20%

B. 30%

C. 40%

D. 50%

Correct Answer: A

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Question 22

A firm produces two goods, X and Y, u\sing two inputs, labor and capital. The production functions are given by Qx = 2L^0.5K^0.5 and Qy = 3L^0.25K^0.75. If the firm has 100 units of labor and 200 units of capital, what is the total output of the firm?

A. 100

B. 120

Correct C. 150

D. 180

Correct Answer: C

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Question 23

A country's GDP is given by the equation GDP = C + I + G + $ X - M $, where C is consumption, I is investment, G is government sp\ending, X is exports, and M is imports. If the country's GDP is $100 billion, consumption is $50 billion, investment is $20 billion, government sp\ending is $30 billion, exports are $40 billion, and imports are $20 billion, what is the value of X?

A. 60

B. 70

C. 80

Correct D. 90

Correct Answer: D

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Question 24

A firm's \cost function is given by the equation C = 100 + 2Q + 0.5Q^2, where C is the total \cost and Q is the quantity produced. If the firm produces 100 units of output, what is the total \cost?

A. 150

B. 200

C. 250

Correct D. 300

Correct Answer: D

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Question 25

A country's inflation rate is given by the equation π = $ P - P^\( -1 \ $)/$ P^\( -1 \ $), where π is the inflation rate, P is the current price level, and P^$ -1 $ is the previous price level. If the current price level is 100 and the previous price level is 90, what is the inflation rate?

A. 5%

Correct B. 10%

C. 15%

D. 20%

Correct Answer: B

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