Practice post utme rhema university economics 2025 Past Questions

Question 1

A firm's production function is given by Q = 100L^0.5K^0.5, where Q is output, L is labor, and K is capital. If the firm wants to increase output by 10% while keeping labor cons\tant at 100 units, how much should it increase capital?

A. $ \frac{dK}{dQ} = \frac{0.5K^{-0.5}}{0.5L^{-0.5}} $

B. $ \frac{dK}{dQ} = \frac{0.5K^{-0.5}}{0.5L^{-0.5}} \times 10% $

Correct C. $ \frac{dK}{dQ} = \frac{0.5K^{-0.5}}{0.5L^{-0.5}} \times 10% \times 100 $

D. $ \frac{dK}{dQ} = \frac{0.5K^{-0.5}}{0.5L^{-0.5}} \times 10% \times 100 \times 100 $

Correct Answer: C

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Question 2

A country's balance of payments is given by the following equation: BOP = X - M, where X is exports and M is imports. If the country's exports increase by 15% and imports decrease by 10%, what is the new balance of payments?

Correct A. $ \text{New BOP} = 0.15X - 0.10M $

B. $ \text{New BOP} = 0.15X + 0.10M $

C. $ \text{New BOP} = 0.15X - 0.10M \times 100 $

D. $ \text{New BOP} = 0.15X + 0.10M \times 100 $

Correct Answer: A

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Question 3

A firm's demand for labor is given by the following equation: L = 100 - 2P, where L is labor and P is price. If the price increases by 10%, how much will labor decrease?

A. $ \frac{dL}{dP} = -2 $

B. $ \frac{dL}{dP} = -2 \times 10% $

Correct C. $ \frac{dL}{dP} = -2 \times 10% \times 100 $

D. $ \frac{dL}{dP} = -2 \times 10% \times 100 \times 100 $

Correct Answer: C

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Question 4

A country's GDP is given by the following equation: 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 consumption increases by 5%, investment decreases by 10%, government sp\ending remains cons\tant, exports increase by 15%, and imports decrease by 10%, what is the new GDP?

Correct A. $ \text{New GDP} = 0.05C - 0.10I + 0.15X - 0.10M $

B. $ \text{New GDP} = 0.05C + 0.10I + 0.15X - 0.10M $

C. $ \text{New GDP} = 0.05C - 0.10I + 0.15X - 0.10M \times 100 $

D. $ \text{New GDP} = 0.05C + 0.10I + 0.15X - 0.10M \times 100 $

Correct Answer: A

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Question 5

A firm's production function is given by Q = 100L^0.5K^0.5, where Q is output, L is labor, and K is capital. If the firm wants to increase output by 10% while keeping labor cons\tant at 100 units, how much should it increase capital?

A. $ \frac{dK}{dQ} = \frac{0.5K^{-0.5}}{0.5L^{-0.5}} $

B. $ \frac{dK}{dQ} = \frac{0.5K^{-0.5}}{0.5L^{-0.5}} \times 10% $

Correct C. $ \frac{dK}{dQ} = \frac{0.5K^{-0.5}}{0.5L^{-0.5}} \times 10% \times 100 $

D. $ \frac{dK}{dQ} = \frac{0.5K^{-0.5}}{0.5L^{-0.5}} \times 10% \times 100 \times 100 $

Correct Answer: C

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Question 6

A firm's demand curve is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the firm's supply curve is given by the equation Qs = 2P - 50, where Qs is the quantity supplied, what is the equilibrium price and quantity?

Correct A. P = 25, Q = 50

B. P = 50, Q = 25

C. P = 75, Q = 100

D. P = 100, Q = 75

Correct Answer: A

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Question 7

A country's GDP is given by the equation 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 net exports?

A. $10 billion

Correct B. $20 billion

C. $30 billion

D. $40 billion

Correct Answer: B

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Question 8

A firm's demand curve is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the firm's supply curve is given by the equation Qs = 2P - 50, where Qs is the quantity supplied, what is the price elasticity of demand at a price of $20?

A. 0.5

Correct B. 1

C. 2

D. 5

Correct Answer: B

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Question 9

A consumer's utility function is given by the equation U = 2x + 3y, where x and y are the quantities of two goods consumed. If the consumer's budget constraint is given by the equation 2x + 3y = $100, what is the consumer's optimal bundle of goods?

Correct A. x = 20, y = 30

B. x = 30, y = 20

C. x = 40, y = 10

D. x = 50, y = 0

Correct Answer: A

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Question 10

A government's budget is given by the equation B = T + I, where B is the budget, T is taxation, and I is interest on debt. If the government's budget is $100 billion, taxation is $50 billion, and interest on debt is $20 billion, what is the government's fiscal policy?

A. Expansionary

Correct B. Contractionary

C. Neutral

D. Uncertain

Correct Answer: B

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Question 11

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 12

A monopolist faces a demand curve given by Qd = 100 - 2P and a marginal revenue function given by MR = 20 - 2P. What is the price at which the monopolist maximizes profit?

A. ₦50

Correct B. ₦60

C. ₦70

D. ₦80

Correct Answer: B

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Question 13

A firm is considering two projects, A and B. Project A has a \cost of ₦100,000 and a return of ₦120,000, while project B has a \cost of ₦150,000 and a return of ₦180,000. Which project should the firm choose?

Correct A. Project A

B. Project B

C. Both projects

D. Neither project

Correct Answer: A

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Question 14

A country's GDP is given by the equation Y = C + I + G, where Y is the GDP, C is the consumption, I is the investment, and G is the government sp\ending. If the consumption is ₦500 billion, the investment is ₦200 billion, and the government sp\ending is ₦300 billion, what is the GDP?

A. ₦1 trillion

Correct B. ₦1.1 trillion

C. ₦1.2 trillion

D. ₦1.3 trillion

Correct Answer: B

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Question 15

A firm's supply curve is given by the equation Qs = 2P + 10. If the price is ₦50, what is the quantity supplied?

A. 20 units

Correct B. 30 units

C. 40 units

D. 50 units

Correct Answer: B

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Question 16

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.

Correct A. P = 50, Q = 25

B. P = 75, Q = 12

C. P = 25, Q = 50

D. P = 12, Q = 75

Correct Answer: A

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Question 17

A consumer has a utility function U(x, y) = 2x + 3y. The prices of x and y are $2 and $3 respectively. Find the consumer's budget constraint.

A. 2x + 3y = 6

Correct B. 2x + 3y = 12

C. 2x + 3y = 18

D. 2x + 3y = 24

Correct Answer: B

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Question 18

A firm has a production function F(K, L) = 2K^0.5 L^0.5. The prices of capital and labor are $10 and $5 respectively. Find the firm's \cost-minimizing input combination.

Correct A. K = 4, L = 2

B. K = 2, L = 4

C. K = 1, L = 1

D. K = 2, L = 2

Correct Answer: A

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Question 19

A country's GDP is $100 billion. The government sp\ends $20 billion on defense and $15 billion on education. Find the country's government exp\enditure.

Correct A. $35 billion

B. $40 billion

C. $45 billion

D. $50 billion

Correct Answer: A

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Question 20

A central bank increases the money supply by 10%. Find the effect on the price level.

Correct A. 10% increase

B. 5% increase

C. 0% change

D. 5% decrease

Correct Answer: A

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Question 21

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 current labor and capital inputs are 4 and 9 units respectively, what is the marginal product of labor?

Correct A. 1/2

B. 1/4

C. 1/8

D. 1/16

Correct Answer: A

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Question 22

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 budget constraint is 10x + 5y = 50, what is the optimal bundle of goods that maximizes utility?

A. x = 2, y = 4

Correct B. x = 3, y = 3

C. x = 4, y = 2

D. x = 5, y = 1

Correct Answer: B

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Question 23

A firm's demand function for a good is given by Q = 100 - 2P, where Q is quantity demanded and P is price. If the firm's current price is 20, what is the price elasticity of demand?

A. 0.5

Correct B. 1

C. 2

D. 4

Correct Answer: B

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Question 24

A country's balance of payments account is given by: Current Account = 100 + 50 - 20, Capital Account = 30 + 40 - 10. What is the country's overall balance of payments surplus?

A. 110

B. 120

Correct C. 130

D. 140

Correct Answer: C

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Question 25

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 current labor and capital inputs are 4 and 9 units respectively, what is the marginal product of capital?

Correct A. 1/2

B. 1/4

C. 1/8

D. 1/16

Correct Answer: A

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