Practice post utme rhema university economics 2021 Past Questions

Question 1

Consider a firm operating in a perfectly competitive market with a production function given by Q = 2L^$ 1/2 $K^$ 1/2 $. If the price of the good is $10 and the firm's \cost function is C = 5L + 3K, what is the optimal level of labor (L) and capital (K) that the firm should employ?

Correct A. $ L = 100, K = 100 $

B. $ L = 50, K = 50 $

C. $ L = 200, K = 200 $

D. $ L = 25, K = 25 $

Correct Answer: A

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Question 2

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

Correct A. $20 billion

B. $10 billion

C. $30 billion

D. $40 billion

Correct Answer: A

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Question 3

A firm is considering two different production techno\logies: a traditional techno\logy that produces 100 units of output per hour of labor and a modern techno\logy that produces 200 units of output per hour of labor. If the firm's current labor force is 100 workers and the wage rate is $10 per hour, what is the optimal choice of techno\logy?

A. Traditional techno\logy

Correct B. Modern techno\logy

C. Both techno\logies are equally profitable

D. Neither techno\logy is profitable

Correct Answer: B

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Question 4

A government imposes a tax of $10 per unit on a firm that produces a good with a price elasticity of demand of -2. If the firm's initial output is 100 units, what is the new output level after the tax is imposed?

Correct A. 80 units

B. 90 units

C. 100 units

D. 110 units

Correct Answer: A

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Question 5

A firm's demand function is given by Q = 100 - 2P, and its supply function is given by Q = 2P - 10. What is the equilibrium price and quantity?

Correct A. P = $20, Q = 40

B. P = $30, Q = 50

C. P = $40, Q = 60

D. P = $50, Q = 70

Correct Answer: A

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Question 6

A consumer's indifference curve is steeper than another consumer's indifference curve. What can be concluded about the two consumers?

A. The first consumer has a higher marginal rate of substitution than the second consumer.

Correct B. The first consumer has a lower marginal rate of substitution 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 7

A firm's total revenue is given by the equation TR = 100q - 2q^2. What is the firm's marginal revenue?

Correct A. 100 - 4q

B. 100 - 2q

C. 100 + 2q

D. 100 - q

Correct Answer: A

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Question 8

A country's balance of payments is given by the equation BOP = X - M. If the country's exports (X) are 100 and imports (M) are 80, what is the country's balance of payments?

Correct A. 20

B. 30

C. 40

D. 50

Correct Answer: A

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Question 9

A firm's \cost function is given by the equation C(q) = 100 + 2q. What is the firm's average \cost?

A. 100 + 2

Correct B. 100 + 2q

C. 100 - 2q

D. 100 - 2

Correct Answer: B

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Question 10

A consumer's budget constraint is given by the equation 2x + 3y = 12. What is the consumer's opportunity \cost of x?

Correct A. -2

B. -3

C. 2

D. 3

Correct Answer: A

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Question 11

The production possibilities curve (PPC) for a country is given by the equation $ y = 10x - 5x^2 $, where ( y ) is the quantity of goods produced and ( x ) is the quantity of labor used. If the country wants to produce 25 units of goods, how many units of labor will it need to use?

A. 5

B. 10

Correct C. 15

D. 20

Correct Answer: C

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Question 12

A monopolistically competitive firm faces a demand curve given by $ p = 100 - 2q $. If the firm produces 20 units of output, what is the price it will charge?

A. 80

Correct B. 90

C. 100

D. 110

Correct Answer: B

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Question 13

The following diagram shows the supply and demand curves for a particular good. If the price of the good is currently at ( )₦50, what is the equilibrium quantity?

A. 10

Correct B. 20

C. 30

D. 40

Correct Answer: B

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Question 14

A country's GDP is ( )₦100 billion, and its GNP is ( )₦120 billion. What is the country's 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 15

A firm's production function is given by $ Q = 10L^2 $, where ( Q ) is the quantity produced and ( L ) is the quantity of labor used. If the firm wants to produce 100 units of output, how many units of labor will it need to use?

A. 5

B. 10

C. 15

Correct D. 20

Correct Answer: D

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Question 16

The elasticity of demand for a commodity is given by the formula $ eta = \frac{p}{x} \frac{dx}{dp} $. If the demand for a commodity is elastic, what can be concluded about the relationship between the price and quantity demanded?

A. The price and quantity demanded are positively related.

Correct B. The price and quantity demanded are negatively related.

C. The price and quantity demanded are unrelated.

D. The price and quantity demanded are inversely related.

Correct Answer: B

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Question 17

A firm's total revenue is given by the formula $ TR = pq $, where ( p ) is the price and ( q ) is the quantity sold. If the price is $10 and the quantity sold is 100 units, what is the total revenue?

A. $1000

Correct B. $10000

C. $100000

D. $1000000

Correct Answer: B

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Question 18

A country's GDP is given by the formula $ 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 - M $?

A. $10 billion

B. $20 billion

C. $30 billion

Correct D. $40 billion

Correct Answer: D

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Question 19

A firm's \cost function is given by the formula ( C(q) = 2q^2 + 5q + 10 ), where ( q ) is the quantity produced. If the firm produces 10 units, what is the total \cost?

A. $150

B. $250

Correct C. $350

D. $450

Correct Answer: C

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Question 20

A consumer's budget constraint is given by the formula $ p_1 x_1 + p_2 x_2 = I $, where $ p_1 $ and $ p_2 $ are the prices of goods 1 and 2, $ x_1 $ and $ x_2 $ are the quantities of goods 1 and 2, and ( I ) is the consumer's income. If the prices of goods 1 and 2 are $10 and $20, respectively, and the consumer's income is $100, what is the maximum quantity of good 1 that the consumer can buy?

A. 10 units

Correct B. 20 units

C. 30 units

D. 40 units

Correct Answer: B

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Question 21

A firm's revenue function is given by the formula ( R(q) = 2q^2 + 5q + 10 ), where ( q ) is the quantity sold. If the firm sells 10 units, what is the total revenue?

A. $150

B. $250

Correct C. $350

D. $450

Correct Answer: C

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Question 22

A country's GDP is given by the formula $ 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 - M $?

A. $10 billion

B. $20 billion

C. $30 billion

Correct D. $40 billion

Correct Answer: D

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Question 23

A firm's \cost function is given by the formula ( C(q) = 2q^2 + 5q + 10 ), where ( q ) is the quantity produced. If the firm produces 10 units, what is the total \cost?

A. $150

B. $250

Correct C. $350

D. $450

Correct Answer: C

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Question 24

Determine the equilibrium price and quantity of a commodity in a market where the demand function is Qd = 100 - 2P and the supply function is Qs = 2P - 10.

A. ₦50, 50 units

B. ₦75, 75 units

Correct C. ₦100, 100 units

D. ₦125, 125 units

Correct Answer: C

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Question 25

A firm's total revenue is given by the equation TR = 100x - 2x^2, where x is the number of units sold. If the firm sells 20 units, what is its total revenue?

A. ₦1,600

Correct B. ₦1,800

C. ₦2,000

D. ₦2,200

Correct Answer: B

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