Practice post utme redeemers university economics 2023 Past Questions

Question 1

Consider a perfectly competitive market with a downward-sloping demand curve and a horizontal supply curve. If the market price is initially at P1 and the quantity demanded is Q1, and then a shift in the demand curve causes the new market price to be P2, which of the following is true?

A. The quantity demanded increases from Q1 to Q2.

Correct B. The quantity demanded decreases from Q1 to Q2.

C. The quantity supplied increases from Q1 to Q2.

D. The quantity supplied decreases from Q1 to Q2.

Correct Answer: B

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Question 2

A monopolist faces a market demand curve given by Qd = 100 - 2P and a marginal revenue function MR = 50 - 2Q. What is the profit-maximizing quantity?

A. 20

B. 30

Correct C. 40

D. 50

Correct Answer: C

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Question 3

A firm's production function is given by Q = 2L^2 + 3K, where Q is output, L is labor, and K is capital. If the firm's current input levels are L = 5 and K = 10, what is the marginal product of labor?

A. 10

Correct B. 20

C. 30

D. 40

Correct Answer: B

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Question 4

A country's balance of payments accounts show a trade deficit of $100 million and a capital account surplus of $50 million. What is the overall balance of payments position?

Correct A. $50 million surplus

B. $100 million deficit

C. $150 million surplus

D. $200 million deficit

Correct Answer: A

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Question 5

A government imposes a tax of $10 per unit on a good that is currently priced at $20 per unit. What is the new price of the good after the tax is imposed?

A. $15

B. $20

Correct C. $25

D. $30

Correct Answer: C

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Question 6

A firm is operating in a perfectly competitive market with a cons\tant marginal \cost (MC) of ₦10 and a downward-sloping demand curve. If the firm's marginal revenue (MR) is ₦20, what is the optimal quantity of output to produce?

A. 10 units

Correct B. 20 units

C. 30 units

D. 40 units

Correct Answer: B

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Question 7

A country's balance of payments (BOP) is in equilibrium when the current account (CA) is equal to the capital account (KA). If the CA is ₦100 billion and the KA is ₦50 billion, what is the value of the BOP?

Correct A. ₦50 billion

B. ₦100 billion

C. ₦150 billion

D. ₦200 billion

Correct Answer: A

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Question 8

A monopolist faces a demand curve with a price elasticity of demand (PED) of -2. If the firm increases its price by 10%, what is the percentage change in quantity demanded?

Correct A. -20%

B. -15%

C. -10%

D. -5%

Correct Answer: A

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Question 9

A firm is considering investing in a new project with a net present value (NPV) of ₦100 million. If the firm's \cost of capital is 10%, what is the internal rate of return (IRR) of the project?

A. 10%

Correct B. 12%

C. 15%

D. 18%

Correct Answer: B

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Question 10

A country's money supply (M) is ₦500 billion, and the velocity of money (V) is 2. If the country's GDP is ₦1 trillion, what is the price level?

A. 2

Correct B. 3

C. 4

D. 5

Correct Answer: B

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Question 11

The scarcity of a good in Nigeria can be attributed to the following factors EXCEPT:

A. High demand

B. Low supply

C. High production \costs

Correct D. Government policies

Correct Answer: D

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Question 12

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?

Correct A. (10, 20)

B. (20, 10)

C. (15, 15)

D. (5, 5)

Correct Answer: A

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Question 13

A firm is producing a good u\sing a production function given by Q = 2L^0.5K^0.5. If the firm's techno\logy is such that it can increase labor by 10% and decrease capital by 10%, what is the new level of output?

Correct A. 1.1Q

B. 0.9Q

C. 1.01Q

D. 0.99Q

Correct Answer: A

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Question 14

A central bank is considering a monetary policy to reduce inflation. If the current inflation rate is 10% and the central bank wants to reduce it to 5% within a year, what is the required rate of interest?

A. 5%

B. 10%

Correct C. 15%

D. 20%

Correct Answer: C

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Question 15

A firm is producing a good u\sing a production function given by Q = 2L^0.5K^0.5. If the firm's techno\logy is such that it can increase labor by 10% and decrease capital by 10%, what is the new level of output?

Correct A. 1.1Q

B. 0.9Q

C. 1.01Q

D. 0.99Q

Correct Answer: A

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Question 16

A government imposes a tax on luxury goods to reduce income inequality. However, the tax is not levied on essential goods. What type of tax is this?

A. Progressive Tax

B. Regressive Tax

C. Proportional Tax

Correct D. Selective Tax

Correct Answer: D

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Question 17

A firm's revenue is given by the equation R(x) = 2x^2 + 5x + 1. If the firm's \cost function is C(x) = x^2 + 2x + 1, what is the profit function?

A. 3x^2 + 3x

B. x^2 + 3x + 1

Correct C. 2x^2 + 3x + 1

D. x^2 + 3x - 1

Correct Answer: C

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Question 18

A country's GDP is $100 billion, and its GNP is $120 billion. What is the value of net factor income from abroad?

A. $10 billion

Correct B. $20 billion

C. $30 billion

D. $40 billion

Correct Answer: B

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Question 19

A firm's demand function is given by the equation Q = 100 - 2P. If the firm's supply function is Q = 2P - 10, what is the equilibrium price?

A. $40

Correct B. $50

C. $60

D. $70

Correct Answer: B

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Question 20

A government's budget is given by the equation B = T + G. If the government's tax revenue is $50 billion and its government exp\enditure is $60 billion, what is the budget deficit?

A. $10 billion

B. $20 billion

Correct C. $30 billion

D. $40 billion

Correct Answer: C

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Question 21

The government of Nigeria has introduced a new policy to increase agricultural production. The policy includes providing subsidies to farmers, improving irrigation systems, and increa\sing access to credit. However, the policy also includes a provision to increase the price of fertilizers by 20%. What is the likely effect of this policy on the overall \cost of production for farmers?

A. The overall \cost of production will decrease

Correct B. The overall \cost of production will increase

C. The overall \cost of production will remain the same

D. The effect on the overall \cost of production is uncertain

Correct Answer: B

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Question 22

A monopolistically competitive firm is producing a good with a demand curve that is downward sloping. If the firm increases its price, what will happen to its total revenue?

A. Total revenue will increase

Correct B. Total revenue will decrease

C. Total revenue will remain the same

D. The effect on total revenue is uncertain

Correct Answer: B

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Question 23

A country is experiencing a trade deficit due to an increase in imports. What is the likely effect of this trade deficit on the country's exchange rate?

A. The exchange rate will appreciate

Correct B. The exchange rate will depreciate

C. The exchange rate will remain the same

D. The effect on the exchange rate is uncertain

Correct Answer: B

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Question 24

A firm is producing a good with a production function of Q = 2L^0.5K^0.5. If the firm increases its labor input from 4 to 6, and holds its capital input cons\tant at 9, what is the likely effect on its output?

Correct A. Output will increase

B. Output will decrease

C. Output will remain the same

D. The effect on output is uncertain

Correct Answer: A

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Question 25

A country is experiencing a recession due to a decrease in aggregate demand. What is the likely effect of this recession on the country's unemployment rate?

Correct A. Unemployment rate will increase

B. Unemployment rate will decrease

C. Unemployment rate will remain the same

D. The effect on unemployment rate is uncertain

Correct Answer: A

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