Practice post utme rhema university economics 2020 Past Questions

Question 1

Consider a firm operating in a perfectly competitive market with a production function Q = 2L^$ 1/2 $H^$ 1/2 $, where L and H are labor and capital inputs, respectively. If the firm's current input levels are L = 4 and H = 9, calculate the marginal product of labor (MPL) and the marginal product of capital (MPK).

Correct A. MPL = 0.5, MPK = 0.25

B. MPL = 0.25, MPK = 0.5

C. MPL = 0.5, MPK = 1

D. MPL = 1, MPK = 0.5

Correct Answer: A

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Question 2

A consumer's utility function is given by U = 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, calculate the consumer's optimal consumption bundle.

Correct A. x = 10, y = 5

B. x = 5, y = 10

C. x = 15, y = 3

D. x = 3, y = 15

Correct Answer: A

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Question 3

Consider a firm operating in a perfectly competitive market with a production function Q = 2L^$ 1/2 $H^$ 1/2 $, where L and H are labor and capital inputs, respectively. If the firm's current input levels are L = 4 and H = 9, calculate the returns to scale.

A. Increa\sing returns to scale

B. Decrea\sing returns to scale

Correct C. Cons\tant returns to scale

D. No returns to scale

Correct Answer: C

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Question 4

A consumer's demand function for a good is given by Q = 100 - 2P, where P is the price of the good. If the consumer's income is ₦100 and the price of the good is ₦10, calculate the consumer's elasticity of demand.

A. Elastic

Correct B. Inelastic

C. Unit elastic

D. No elasticity

Correct Answer: B

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Question 5

Consider a firm operating in a perfectly competitive market with a production function Q = 2L^$ 1/2 $H^$ 1/2 $, where L and H are labor and capital inputs, respectively. If the firm's current input levels are L = 4 and H = 9, calculate the firm's average product of labor (APL) and the firm's average product of capital (APK).

Correct A. APL = 0.5, APK = 0.25

B. APL = 0.25, APK = 0.5

C. APL = 0.5, APK = 1

D. APL = 1, APK = 0.5

Correct Answer: A

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Question 6

A firm's average total \cost curve intersects its average variable \cost curve at a point where the firm's marginal \cost curve is equal to its average total \cost curve. This point is known as the

Correct A. Minimum of Average Total Cost

B. Minimum of Average Variable Cost

C. Maximum of Average Total Cost

D. Minimum of Marginal Cost

Correct Answer: A

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Question 7

The government of Nigeria imposes a tax on imported goods to raise revenue. This tax is an example of a

A. Direct Tax

Correct B. Indirect Tax

C. Proportional Tax

D. Progressive Tax

Correct Answer: B

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Question 8

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's output is 16 units, and the number of workers (L) is 4, then the number of machines (K) required is

A. 2

Correct B. 4

C. 8

D. 16

Correct Answer: B

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Question 9

The government of Nigeria has set a budget of ₦10 billion for the agricultural sector. If the government allocates 20% of the budget to irrigation, then the amount allocated to irrigation is

A. ₦1.5 billion

Correct B. ₦2 billion

C. ₦2.5 billion

D. ₦3 billion

Correct Answer: B

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Question 10

A firm's demand function is given by Q = 100 - 2P. If the firm's output is 60 units, then the price at which the firm should sell the output is

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 11

A consumer's indifference curve is represented by the equation $ u = 2x + 3y $. If the consumer's income is ₦1200 and the prices of goods x and y are ₦4 and ₦6 respectively, what is the consumer's optimal bundle?

A. (20, 15)

B. (30, 10)

Correct C. (25, 12)

D. (35, 8)

Correct Answer: C

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Question 12

A government imposes a tax on a firm's output. If the firm's supply function is $ Q = 2P - 10 $ and the tax rate is ₦5 per unit, what is the firm's new supply function?

Correct A. $ Q = 2P - 15 $

B. $ Q = 2P - 20 $

C. $ Q = 2P - 25 $

D. $ Q = 2P - 30 $

Correct Answer: A

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Question 13

A firm's production function is given by $ Q = 2L^2 + 3K $. If the firm's current inputs are L = 5 and K = 10, what is the firm's current output?

A. 50

Correct B. 60

C. 70

D. 80

Correct Answer: B

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Question 14

A government's budget constraint is given by $ B = T + G $, where B is the budget, T is the tax revenue, and G is the government exp\enditure. If the government's current tax revenue is ₦1000 and its current exp\enditure is ₦1500, what is the government's current budget?

Correct A. ₦2500

B. ₦2000

C. ₦1500

D. ₦1000

Correct Answer: A

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Question 15

A consumer's demand function for a good is given by $ Q = 2P - 10 $. If the price of the good is ₦5, what is the consumer's optimal quantity?

A. 0

Correct B. 5

C. 10

D. 15

Correct Answer: B

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Question 16

The Marshall-Lerner condition states that a country's balance of payments will improve if the sum of the percentage changes in its export and import prices exceeds the percentage change in its exchange rate. Which of the following scenarios would lead to an improvement in the balance of payments?

Correct A. A 10% increase in export prices and a 5% decrease in import prices

B. A 5% decrease in export prices and a 10% increase in import prices

C. A 10% increase in export prices and a 10% increase in import prices

D. A 5% decrease in export prices and a 5% decrease in import prices

Correct Answer: A

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Question 17

A monopolistically competitive firm faces a demand curve that is downward sloping but has a cons\tant elasticity of -2. If the firm's marginal revenue is 100, what is its marginal \cost?

A. 50

B. 75

Correct C. 100

D. 125

Correct Answer: C

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Question 18

A country's GDP can be calculated u\sing the following formula: GDP = C + I + G + $ X - M $. If the country's consumption is 100, investment is 50, government sp\ending is 75, exports are 150, and imports are 100, what is the country's GDP?

A. 175

Correct B. 225

C. 275

D. 325

Correct Answer: B

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Question 19

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's labor and capital inputs are 16 and 9, respectively, what is its output?

A. 8

B. 16

Correct C. 32

D. 64

Correct Answer: C

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Question 20

A country's balance of payments can be affected by changes in its exchange rate. If the country's exchange rate appreciates by 10%, what will happen to its trade balance?

A. It will improve

Correct B. It will worsen

C. It will remain unchanged

D. It will increase

Correct Answer: B

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Question 21

A firm's demand function is given by Qd = 100 - 2P + 3Y, where Qd is the quantity demanded, P is the price, and Y is the income. If the price is $10 and the income is $100, what is the quantity demanded?

A. 60

B. 70

Correct C. 80

D. 90

Correct Answer: C

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Question 22

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

A. $20 billion

Correct B. $30 billion

C. $40 billion

D. $50 billion

Correct Answer: B

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Question 23

A firm's \cost function is given by C = 100 + 2Q + 3Q^2, where C is the \cost and Q is the quantity produced. If the quantity produced is 10 units, what is the \cost?

A. $150

B. $200

Correct C. $250

D. $300

Correct Answer: C

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Question 24

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

A. $20 billion

B. $30 billion

C. $40 billion

Correct D. $50 billion

Correct Answer: D

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Question 25

A firm's revenue function is given by R = 100Q - 2Q^2, where R is the revenue and Q is the quantity sold. If the quantity sold is 10 units, what is the revenue?

A. $800

B. $900

Correct C. $1000

D. $1100

Correct Answer: C

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