Practice post utme summit university economics 2017 Past Questions

Question 1

A perfectly competitive market structure is characterized by the presence of many firms producing a homogeneous product, and each firm has complete knowledge of market conditions. Which of the following is a consequence of this market structure?

A. Firms are price makers.

Correct B. Firms are price takers.

C. Firms have complete control over the market.

D. Firms produce differentiated products.

Correct Answer: B

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Question 2

The production function for a firm is given by Q = 2L^0.5K^0.5. If the firm's current inputs are L = 16 and K = 9, what is the marginal product of labor?

Correct A. 1.5

B. 2

C. 3

D. 4

Correct Answer: A

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Question 3

A country's balance of payments is in equilibrium when the current account and capital account are balanced. Which of the following is a consequence of this equilibrium?

A. The exchange rate is fixed.

Correct B. The exchange rate is flexible.

C. The country has a trade surplus.

D. The country has a trade deficit.

Correct Answer: B

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Question 4

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current inputs are L = 16 and K = 9, what is the total product of labor?

A. 32

Correct B. 64

C. 128

D. 256

Correct Answer: B

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Question 5

A country's trade balance is given by TB = X - M, where X is the value of exports and M is the value of imports. If the country's current account is in deficit, which of the following is a consequence?

A. The country has a trade surplus.

Correct B. The country has a trade deficit.

C. The exchange rate is fixed.

D. The exchange rate is flexible.

Correct Answer: B

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Question 6

The Central Bank of Nigeria (CBN) uses monetary policy tools to control inflation. Which of the following tools is most effective in reducing inflation in the short run?

A. Open Market Operations (OMO)

Correct B. Reserve Requirements

C. Discount Rate

D. Quantitative Ea\sing

Correct Answer: B

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Question 7

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 wants to produce 100 units of output, and the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, what is the minimum \cost of production?

A. ₦10,000

B. ₦12,000

Correct C. ₦15,000

D. ₦20,000

Correct Answer: C

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Question 8

The government of Nigeria is considering a tax reform to reduce the tax burden on low-income households. Which of the following tax reforms is most likely to achieve this goal?

Correct A. Reducing the tax rate on low-income households

B. Increa\sing the tax rate on high-income households

C. Implementing a progressive tax system

D. Introducing a value-added tax (VAT)

Correct Answer: A

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Question 9

A consumer's indifference curve 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 = 12, what is the consumer's optimal consumption bundle?

Correct A. (2, 4)

B. (4, 2)

C. (6, 0)

D. (0, 6)

Correct Answer: A

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Question 10

The Nigerian economy is experiencing a recession. Which of the following economic indicators is most likely to be affected by the recession?

Correct A. GDP growth rate

B. Inflation rate

C. Unemployment rate

D. Interest rate

Correct Answer: A

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Question 11

The Marshall-Lerner condition states that if the sum of the elasticities of demand for imports and exports is greater than 1, then a devaluation of the currency will lead to an improvement in the balance of payments. What is the name of the economist who first proposed this condition?

A. Alfred Marshall

B. Charles Lerner

C. John Maynard Keynes

Correct D. Ragnar Frisch

Correct Answer: D

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Question 12

A perfectly competitive firm's supply curve is upward-sloping because it is a reaction to changes in the market price. What is the name of the economic concept that explains why firms supply more of a good as its price increases?

A. Law of Diminishing Marginal Utility

B. Law of Increa\sing Opportunity Cost

Correct C. Law of Supply

D. Law of Diminishing Returns

Correct Answer: C

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Question 13

The government of a country imposes a tax on a good that is perfectly inelastic in demand. What will be the effect on the equilibrium price and quantity of the good?

Correct A. The equilibrium price will increase, and the equilibrium quantity will decrease

B. The equilibrium price will decrease, and the equilibrium quantity will increase

C. The equilibrium price will remain the same, and the equilibrium quantity will remain the same

D. The equilibrium price will increase, and the equilibrium quantity will increase

Correct Answer: A

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Question 14

A country's GDP is $100 billion, and its GNP is $120 billion. What is the value of 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 15

A monopolistically competitive firm faces a downward-sloping demand curve due to the presence of close substitutes. What is the name of the economic concept that explains why firms in this market produce a product that is different from the product of other firms?

Correct A. Product Differentiation

B. Adverti\sing

C. Research and Development

D. Barriers to Entry

Correct Answer: A

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Question 16

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current inputs are L = 16 and K = 9, what is the marginal product of labor (MPL) when K = 9?

A. 1

Correct B. 2

C. 3

D. 4

Correct Answer: B

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Question 17

A country's GDP is given by the equation Y = C + I + G + $ X - M $. If the country's current GDP is ₦1,500 billion, and the values of C, I, and G are ₦300 billion, ₦400 billion, and ₦200 billion respectively, what is the value of the trade balance $ X - M $?

Correct A. ₦100 billion

B. ₦200 billion

C. ₦300 billion

D. ₦400 billion

Correct Answer: A

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Question 18

A firm's demand function is given by Q = 100 - 2P. If the firm's current price is ₦20, what is the elasticity of demand?

Correct A. 0.5

B. 1

C. 2

D. 3

Correct Answer: A

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Question 19

A country's supply function is given by Q = 2P + 10. If the country's current price is ₦15, what is the quantity supplied?

A. 10

Correct B. 20

C. 30

D. 40

Correct Answer: B

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Question 20

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current inputs are L = 16 and K = 9, what is the marginal product of capital (MPK) when L = 16?

A. 1

B. 2

Correct C. 3

D. 4

Correct Answer: C

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Question 21

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, find the percentage change in quantity demanded when the price increases by 10%.

A. 5%

Correct B. 10%

C. 15%

D. 20%

Correct Answer: B

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Question 22

A firm produces two goods, X and Y, u\sing two inputs, labor and capital. The production functions are given by X = 2L + 3K and Y = 3L + 2K, where L is labor and K is capital. If the firm has 10 units of labor and 5 units of capital, find the maximum value of the objective function Z = 2X + 3Y.

A. 50

B. 60

Correct C. 70

D. 80

Correct Answer: C

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Question 23

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, find the percentage change in price when the quantity demanded increases by 10%.

Correct A. 5%

B. 10%

C. 15%

D. 20%

Correct Answer: A

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Question 24

A firm produces two goods, X and Y, u\sing two inputs, labor and capital. The production functions are given by X = 2L + 3K and Y = 3L + 2K, where L is labor and K is capital. If the firm has 10 units of labor and 5 units of capital, find the minimum value of the objective function Z = 2X + 3Y.

A. 50

B. 60

C. 70

Correct D. 80

Correct Answer: D

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Question 25

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, find the percentage change in quantity demanded when the price increases by 10%.

A. 5%

Correct B. 10%

C. 15%

D. 20%

Correct Answer: B

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