Practice post utme redeemers university economics 2025 Past Questions

Question 1

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, what is the optimal combination of L and K that minimizes the \cost of production?

A. L = 4, K = 1

Correct B. L = 2, K = 2

C. L = 1, K = 4

D. L = 0, K = 0

Correct Answer: B

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Question 2

A consumer's utility function is given by U = 2x + 3y. If the prices of x and y are ₦5 and ₦10 respectively, and the consumer has a budget of ₦50, what is the optimal combination of x and y that maximizes utility?

Correct A. x = 5, y = 2

B. x = 10, y = 0

C. x = 0, y = 5

D. x = 2, y = 5

Correct Answer: A

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Question 3

A country's GDP is ₦100 billion, its GNP is ₦120 billion, and its net factor income from abroad is ₦10 billion. What is the country's national income?

Correct A. ₦110 billion

B. ₦120 billion

C. ₦130 billion

D. ₦140 billion

Correct Answer: A

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Question 4

A firm's demand function is given by Q = 100 - 2P. If the firm's supply function is given by Q = 2P - 50, what is the equilibrium price and quantity?

A. P = ₦20, Q = 50

Correct B. P = ₦30, Q = 70

C. P = ₦40, Q = 90

D. P = ₦50, Q = 100

Correct Answer: B

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Question 5

A government's budget is given by B = T + I. If the government's tax revenue is ₦50 billion and its exp\enditure on interest is ₦20 billion, what is the government's budget deficit?

A. ₦30 billion

Correct B. ₦40 billion

C. ₦50 billion

D. ₦60 billion

Correct Answer: B

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Question 6

A firm is operating at a point on its production function where the marginal product of labor (MPL) is equal to the wage rate. If the firm's production function is given by Q = 10L^0.5, where Q is output and L is labor, what is the optimal level of labor?

A. 20

B. 30

Correct C. 40

D. 50

Correct Answer: C

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Question 7

A government is considering a tax on a particular good to reduce its consumption. If the demand for the good is given by Q = 100 - 2P and the supply is given by Q = 2P - 10, what is the optimal tax rate?

A. ₦10

Correct B. ₦20

C. ₦30

D. ₦40

Correct Answer: B

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Question 8

A firm is operating in a perfectly competitive market and is facing a downward-sloping demand curve. If the firm's marginal revenue (MR) is given by MR = 100 - 2Q and the marginal \cost (MC) is given by MC = 20 + 2Q, what is the optimal level of output?

A. 20

Correct B. 30

C. 40

D. 50

Correct Answer: B

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Question 9

A government is considering a policy to reduce inequality in a country. If the Lorenz curve is given by L = 0.5Q^2 and the Gini coefficient is given by G = 0.2, what is the optimal level of income redistribution?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 10

A firm is operating in a monopoly market and is facing a downward-sloping demand curve. If the firm's marginal revenue (MR) is given by MR = 100 - 2Q and the marginal \cost (MC) is given by MC = 20 + 2Q, what is the optimal level of output?

A. 20

Correct B. 30

C. 40

D. 50

Correct Answer: B

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Question 11

A firm's production function is given by Q = 2L^0.5K^0.5, where Q is output, L is labor, and K is capital. If the firm's labor and capital inputs are increased by 20% and 15% respectively, what is the percentage change in output?

A. 10%

B. 12%

Correct C. 15%

D. 18%

Correct Answer: C

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Question 12

A government budget is given by B = T + I + G, where B is budget, T is tax revenue, I is interest payment, and G is government exp\enditure. If the government increases tax revenue by 10% and interest payment by 5%, and government exp\enditure by 8%, what is the percentage change in the budget?

A. 7%

Correct B. 8%

C. 9%

D. 10%

Correct Answer: B

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Question 13

A firm's demand function is given by Q = 100 - 2P, where Q is quantity demanded and P is price. If the firm's price is increased by 10%, what is the percentage change in quantity demanded?

A. -10%

Correct B. -12%

C. -15%

D. -18%

Correct Answer: B

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Question 14

A country's GDP is given by GDP = C + I + G + $ X - M $, where GDP is gross domestic product, C is consumption, I is investment, G is government exp\enditure, X is exports, and M is imports. If the country's consumption increases by 5%, investment by 10%, government exp\enditure by 8%, exports by 12%, and imports by 15%, what is the percentage change in GDP?

A. 7%

B. 8%

Correct C. 9%

D. 10%

Correct Answer: C

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Question 15

A firm's production function is given by Q = 2L^0.5K^0.5, where Q is output, L is labor, and K is capital. If the firm's labor and capital inputs are increased by 20% and 15% respectively, what is the percentage change in output?

A. 10%

B. 12%

Correct C. 15%

D. 18%

Correct Answer: C

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Question 16

A monopolistically competitive firm faces a demand curve with a cons\tant elasticity of -2. If the firm's marginal revenue (MR) is given by MR = 100 - 2q, where q is the quantity sold, find the firm's optimal quantity and price.

A. q = 25, p = 75

B. q = 50, p = 50

Correct C. q = 75, p = 37.5

D. q = 100, p = 25

Correct Answer: C

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Question 17

A country's balance of payments (BOP) is given by the following equation: BOP = X - M, where X is the value of exports and M is the value of imports. If the country's exports are $100 million and its imports are $120 million, what is the BOP?

A. $20 million surplus

Correct B. $20 million deficit

C. $40 million surplus

D. $40 million deficit

Correct Answer: B

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Question 18

A consumer's utility function is given by U(x, y) = 2x + 3y, where x and y are the quantities of two goods consumed. If the consumer's income is $100 and the prices of the two goods are $5 and $10 respectively, find the consumer's optimal quantities of the two goods.

A. x = 10, y = 20

B. x = 20, y = 10

Correct C. x = 15, y = 15

D. x = 5, y = 25

Correct Answer: C

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Question 19

A government's budget constraint is given by the equation: G = T + I, where G is government sp\ending, T is taxation, and I is investment. If the government's sp\ending is $100 million, its taxation is $80 million, and its investment is $20 million, what is the government's budget deficit?

Correct A. $20 million deficit

B. $20 million surplus

C. $40 million deficit

D. $40 million surplus

Correct Answer: A

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Question 20

A firm's production function is given by Q = 2L^0.5, where Q is output and L is labor. If the firm's labor is 4 units, what is its output?

A. Q = 4

B. Q = 8

Correct C. Q = 16

D. Q = 32

Correct Answer: C

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Question 21

A consumer's utility function is given by ( U(x,y) = 10x + 20y - x^2 - 2y^2 ). If the consumer's income is ₦1000 and the prices of x and y are ₦5 and ₦10 respectively, what is the optimal bundle of x and y?

A. x=20, y=10

Correct B. x=15, y=5

C. x=10, y=0

D. x=0, y=10

Correct Answer: B

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Question 22

The demand function for a product is given by $ Q = 100 - 2P $. If the price elasticity of demand is 0.5, what is the price at which the quantity demanded is 50?

Correct A. ₦25

B. ₦30

C. ₦35

D. ₦40

Correct Answer: A

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Question 23

A firm has a \cost function given by ( C(x) = 100 + 2x + 0.01x^2 ). If the firm produces 100 units of output, what is the total \cost?

A. ₦1200

B. ₦1300

Correct C. ₦1400

D. ₦1500

Correct Answer: C

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Question 24

A monopolist has a demand function given by $ Q = 100 - 2P $ and a \cost function given by ( C(x) = 100 + 2x + 0.01x^2 ). If the firm produces 100 units of output, what is the price at which the quantity demanded is 50?

Correct A. ₦25

B. ₦30

C. ₦35

D. ₦40

Correct Answer: A

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Question 25

A firm has a production function given by $ Q = 2L^2 + 3K^2 $. If the firm uses 10 units of labor and 5 units of capital, what is the output?

A. 20

B. 30

Correct C. 40

D. 50

Correct Answer: C

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