Practice post utme rhema university economics 2017 Past Questions

Question 1

A consumer's indifference curve is given by the equation ( u(x,y) = 2x + 3y ). If the consumer's income is ₦1000 and the prices of x and y are ₦5 and ₦3 respectively, find the consumer's optimal bundle of x and y.

A. (100, 100)

B. (200, 50)

Correct C. (150, 75)

D. (250, 25)

Correct Answer: C

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Question 2

A country's GDP is given by the equation \( GDP = C + I + G + \( X - M \ \) ). If the country's consumption is ₦500 billion, investment is ₦200 billion, government sp\ending is ₦300 billion, exports are ₦600 billion, and imports are ₦400 billion, find the country's GDP.

A. ₦1.5 trillion

Correct B. ₦1.8 trillion

C. ₦2.2 trillion

D. ₦2.5 trillion

Correct Answer: B

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Question 3

A firm's \cost function is given by the equation ( C(q) = 2q^2 + 10q + 5 ). If the firm produces 20 units of the good, find the firm's total \cost.

A. ₦155

B. ₦175

Correct C. ₦195

D. ₦215

Correct Answer: C

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Question 4

A country's balance of payments is given by the equation \( BOP = X - M + F - \( I - S \ \) ). If the country's exports are ₦600 billion, imports are ₦400 billion, foreign aid is ₦200 billion, and the country's investment is ₦300 billion and savings is ₦400 billion, find the country's balance of payments.

A. ₦100 billion

B. ₦200 billion

Correct C. ₦300 billion

D. ₦400 billion

Correct Answer: C

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Question 5

A consumer's budget constraint is given by the equation \( 2x + 3y = 12 \). If the consumer's income is ₦12 and the prices of x and y are ₦2 and ₦3 respectively, find the consumer's optimal bundle of x and y.

Correct A. (3, 2)

B. (2, 3)

C. (1, 4)

D. (4, 1)

Correct Answer: A

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Question 6

A monopolist faces a demand curve given by Q = 100 - 2P and a \cost function C(Q) = 2Q^2 + 10Q. Find the profit-maximizing price and quantity.

A. ₦50, 50 units

Correct B. ₦40, 60 units

C. ₦30, 70 units

D. ₦20, 80 units

Correct Answer: B

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Question 7

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's output is 100 units, and the price of labor is ₦10 per unit, and the price of capital is ₦20 per unit, find the optimal input mix.

Correct A. L = 100 units, K = 50 units

B. L = 50 units, K = 100 units

C. L = 200 units, K = 25 units

D. L = 25 units, K = 200 units

Correct Answer: A

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Question 8

A consumer has a budget of ₦1000 and faces the following prices: Q1 = ₦10, Q2 = ₦20, Q3 = ₦30. Find the consumer's optimal bundle.

A. Q1 = 100 units, Q2 = 50 units, Q3 = 0 units

Correct B. Q1 = 50 units, Q2 = 75 units, Q3 = 25 units

C. Q1 = 0 units, Q2 = 50 units, Q3 = 100 units

D. Q1 = 75 units, Q2 = 25 units, Q3 = 50 units

Correct Answer: B

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Question 9

A firm's demand curve is given by Q = 100 - 2P. If the firm's marginal \cost is ₦20, find the profit-maximizing price and quantity.

Correct A. ₦40, 60 units

B. ₦30, 70 units

C. ₦20, 80 units

D. ₦10, 90 units

Correct Answer: A

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Question 10

A consumer has a utility function U = 2Q1 + 3Q2. If the prices are Q1 = ₦10, Q2 = ₦20, and the consumer's income is ₦1000, find the consumer's optimal bundle.

Correct A. Q1 = 100 units, Q2 = 50 units

B. Q1 = 50 units, Q2 = 75 units

C. Q1 = 0 units, Q2 = 100 units

D. Q1 = 75 units, Q2 = 25 units

Correct Answer: A

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Question 11

A government imposes a tax on luxury goods to reduce consumption. What type of tax is this?

A. Proportional Tax

B. Progressive Tax

Correct C. Regressive Tax

D. Lump Sum Tax

Correct Answer: C

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Question 12

A consumer's indifference curve is represented by the equation ( u(x,y) = 2x + 3y ). If the consumer's income is ₦1000, and the price of good x is ₦5, what is the optimal quantity of good y?

A. 100

Correct B. 120

C. 150

D. 180

Correct Answer: B

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Question 13

A country's GDP is ₦10 trillion. If the government imposes a 10% tax on the GDP, what is the amount of tax collected?

A. ₦1 trillion

Correct B. ₦1.5 trillion

C. ₦2 trillion

D. ₦2.5 trillion

Correct Answer: B

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Question 14

A firm's production function is given by \( Q = 2L^2 + 3K^2 \). If the firm's labor and capital are ₦100 and ₦200 respectively, what is the optimal quantity of output?

A. 100

B. 150

Correct C. 200

D. 250

Correct Answer: C

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Question 15

A country's inflation rate is 10%. If the price of a commodity is ₦100, what is the new price after one year?

A. ₦110

Correct B. ₦120

C. ₦130

D. ₦140

Correct Answer: B

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Question 16

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 0.5, what is the percentage change in quantity demanded when the price increases by 10%?

Correct A. 5%

B. 10%

C. 15%

D. 20%

Correct Answer: A

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Question 17

A firm's production function is given by Q = 100K^0.5L^0.5, where Q is the output, K is the capital and L is the labor. If the firm wants to increase its output by 20% and the price of labor increases by 15%, what is the percentage change in the capital required?

Correct A. -10%

B. -5%

C. 5%

D. 10%

Correct Answer: A

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Question 18

The national income of a country is given by the equation Y = C + I + G, where Y is the national income, C is the consumption, I is the investment and G is the government exp\enditure. If the consumption is 60% of the national income, the investment is 20% of the national income and the government exp\enditure is 10% of the national income, what is the value of the national income?

A. ₦1000

B. ₦2000

Correct C. ₦3000

D. ₦4000

Correct Answer: C

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Question 19

A firm's demand function 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 0.5, what is the percentage change in quantity demanded when the price increases by 10%?

Correct A. 5%

B. 10%

C. 15%

D. 20%

Correct Answer: A

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Question 20

A firm's production function is given by Q = 100K^0.5L^0.5, where Q is the output, K is the capital and L is the labor. If the firm wants to increase its output by 20% and the price of labor increases by 15%, what is the percentage change in the capital required?

Correct A. -10%

B. -5%

C. 5%

D. 10%

Correct Answer: A

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Question 21

A firm's average total \cost curve is U-shaped. What does this imply about the firm's production techno\logy?

A. The firm's production techno\logy exhibits increa\sing returns to scale.

B. The firm's production techno\logy exhibits decrea\sing returns to scale.

Correct C. The firm's production techno\logy exhibits cons\tant returns to scale.

D. The firm's production techno\logy exhibits no returns to scale.

Correct Answer: C

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Question 22

A consumer's indifference curve is steeper than another consumer's indifference curve. What does this imply about the two consumers?

A. The first consumer is more risk-averse than the second consumer.

Correct B. The first consumer is more risk-loving than the second consumer.

C. The first consumer has a higher income than the second consumer.

D. The first consumer has a lower income than the second consumer.

Correct Answer: B

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Question 23

A country's GDP is ₦100 billion. Its GNP is ₦120 billion. What is the country's net factor income from abroad?

Correct A. ₦20 billion

B. ₦10 billion

C. ₦5 billion

D. ₦15 billion

Correct Answer: A

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Question 24

A firm's production function is given by Q = 2L^\( 1/2 \)K^\( 1/2 \). What is the firm's marginal product of labor?

A. L^\( -1/2 \)K^\( 1/2 \)

Correct B. 2L^\( -1/2 \)K^\( 1/2 \)

C. L^\( 1/2 \)K^\( -1/2 \)

D. L^\( -1/2 \)K^\( -1/2 \)

Correct Answer: B

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Question 25

A consumer's budget constraint is given by 2X + 3Y = 60. What is the consumer's marginal rate of substitution of X for Y?

Correct A. -2/3

B. -1/2

C. -3/2

D. -1/3

Correct Answer: A

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