POST UTME SUMMIT UNIVERSITY 2018 Economics | Objective

Are you preparing for POST UTME SUMMIT UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2018 Economics (Objective) questions designed to simulate the real exam environment.

Practice these randomly selected questions to test your readiness.

Question 1
A monopolist faces a demand curve given by Q = 100 - 2P and a \cost function C(Q) = 2Q^2 + 10Q. What is the profit-maximizing price?
A. ₦50
B. ₦75
Correct C. ₦100
D. ₦125

Correct Answer: C

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Question 2
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?
A. 1
Correct B. 2
C. 3
D. 4

Correct Answer: B

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Question 3
A consumer's utility function is given by U = 2x + 3y. If the consumer's budget constraint is given by 2x + 3y = 12, what is the consumer's optimal bundle?
Correct A. (2, 4)
B. (4, 2)
C. (6, 0)
D. (0, 6)

Correct Answer: A

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Question 4
A firm's demand curve is given by Q = 100 - 2P. If the firm's marginal \cost is given by MC = 2Q, what is the profit-maximizing quantity?
A. 20
Correct B. 30
C. 40
D. 50

Correct Answer: B

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Question 5
A consumer's indifference curve is given by U = 2x + 3y. If the consumer's budget constraint is given by 2x + 3y = 12, what is the consumer's optimal bundle?
Correct A. (2, 4)
B. (4, 2)
C. (6, 0)
D. (0, 6)

Correct Answer: A

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Question 6
The elasticity of demand for a commodity is measured by the percentage change in the quantity demanded in response to a given percentage change in the price of the commodity. If the demand for a commodity is elastic, what will happen to the total revenue of the firm if the price of the commodity increases by 10%?
A. Total revenue will increase by 10%
Correct B. Total revenue will decrease by 10%
C. Total revenue will increase by 20%
D. Total revenue will decrease by 20%

Correct Answer: B

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Question 7
A firm produces two goods, A and B, u\sing two inputs, labour and capital. The production function for good A is given by Q_A = 2L^0.5K^0.5, where Q_A is the quantity of good A produced, L is the amount of labour used, and K is the amount of capital used. The production function for good B is given by Q_B = 3L^0.8K^0.2. If the firm uses 100 units of labour and 200 units of capital, what is the opportunity \cost of producing one more unit of good A?
A. ₦100
Correct B. ₦200
C. ₦300
D. ₦400

Correct Answer: B

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Question 8
The government of a country imposes a tax on a particular commodity. The supply curve of the commodity is given by Q = 100 + 2P, where Q is the quantity supplied and P is the price of the commodity. The demand curve of the commodity is given by Q = 200 - 3P. If the government imposes a tax of ₦10 per unit of the commodity, what will be the new equilibrium price of the commodity?
A. ₦20
B. ₦30
Correct C. ₦40
D. ₦50

Correct Answer: C

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Question 9
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 ₦10 trillion, consumption is ₦3 trillion, investment is ₦2 trillion, government sp\ending is ₦1 trillion, exports are ₦2 trillion, and imports are ₦1 trillion, what is the value of the country's net exports?
A. ₦1 trillion
Correct B. ₦2 trillion
C. ₦3 trillion
D. ₦4 trillion

Correct Answer: B

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Question 10
A firm produces a good u\sing two inputs, labour and capital. The production function for the good is given by Q = 2L^0.5K^0.5, where Q is the quantity produced, L is the amount of labour used, and K is the amount of capital used. If the firm uses 100 units of labour and 200 units of capital, what is the marginal product of labour?
A. 0.5
Correct B. 1
C. 1.5
D. 2

Correct Answer: B

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Question 11
Consider a firm operating in a perfectly competitive market. If the firm's supply curve is given by Q = 100 + 2P, and the market price is P = 50, what is the firm's profit-maximizing output?
A. 50
Correct B. 100
C. 150
D. 200

Correct Answer: B

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Question 12
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 given by 2x + 3y = 100, and the price of good x is P_x = 5, what is the consumer's optimal bundle of goods?
A. x = 10, y = 20
Correct B. x = 15, y = 15
C. x = 20, y = 10
D. x = 25, y = 5

Correct Answer: B

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Question 13
Consider a country that exports 100 units of a good and imports 50 units of another good. The price of the exported good is P_x = 10, and the price of the imported good is P_m = 20. What is the country's balance of trade?
Correct A. ₦1000
B. ₦500
C. ₦0
D. ₦-1000

Correct Answer: A

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Question 14
A firm's production function is given by Q = 2L^2 + 3K, where L is labor and K is capital. If the firm's \cost function is given by C = 10L + 20K, what is the firm's profit-maximizing level of labor?
A. 5
Correct B. 10
C. 15
D. 20

Correct Answer: B

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Question 15
Consider a country that has a GDP of ₦100 billion and a GNP of ₦120 billion. What is the country's 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 16
Agricultural development in Nigeria has been hindered by the lack of access to credit facilities for farmers. Which of the following government policies would most likely address this issue?
Correct A. Establishment of a state-owned bank to provide credit facilities to farmers
B. Introduction of a cash crop subsidy program to encourage farmers to grow high-value crops
C. Implementation of a crop insurance program to mitigate the risks associated with farming
D. Creation of a farmers' cooperative to pool resources and negotiate better prices for their produce

Correct Answer: A

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Question 17
A monopolistically competitive firm faces a demand curve given by Q = 100 - 2P. If the firm's marginal revenue (MR) is given by MR = 50 - 2Q, what is the firm's optimal price?
A. ₦20
B. ₦30
Correct C. ₦40
D. ₦50

Correct Answer: C

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Question 18
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 given by 2x + 3y = 12, what is the consumer's optimal bundle of goods?
A. x = 2, y = 2
Correct B. x = 3, y = 1
C. x = 4, y = 0
D. x = 0, y = 4

Correct Answer: B

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Question 19
A country's balance of payments (BOP) accounts are given by the following equations: BOP = X - M, where X is the value of exports and M is the value of imports. If the country's exports are valued at ₦100 billion and its imports are valued at ₦120 billion, what is the country's balance of payments?
A. ₦20 billion surplus
Correct B. ₦20 billion deficit
C. ₦40 billion surplus
D. ₦40 billion deficit

Correct Answer: B

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Question 20
A firm's \cost function is given by C = 2Q^2 + 3Q, where Q is the quantity of output produced. If the firm's revenue function is given by R = 4Q^2, what is the firm's profit function?
A. P = 2Q^2 - 3Q
Correct B. P = 4Q^2 - 2Q
C. P = 2Q^2 + 4Q
D. P = 4Q^2 + 2Q

Correct Answer: B

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Question 21
A monopolist faces a demand curve given by Q = 100 - 2P. The inverse demand function is Q = 2P + 50. What is the price elasticity of demand at a price of ₦100?
Correct A. 0.5
B. 1.0
C. 2.0
D. -1.0

Correct Answer: A

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Question 22
A firm is producing a good with a total revenue of ₦100,000 and a total \cost of ₦80,000. If the firm's marginal revenue is ₦5,000 and its marginal \cost is ₦3,000, should the firm produce more or less of the good?
Correct A. Increase production
B. Decrease production
C. Keep production cons\tant
D. Insufficient information

Correct Answer: A

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Question 23
A central bank increases the reserve requirement for commercial banks. What is the likely effect on the money supply?
A. Increase
Correct B. Decrease
C. No effect
D. Uncertain

Correct Answer: B

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Question 24
A firm is producing a good with a production function Q = 2L^0.5K^0.5. If the firm's output is 100 units and the price of labor is ₦10 per unit, what is the minimum \cost of production?
A. ₦500
Correct B. ₦1000
C. ₦2000
D. ₦5000

Correct Answer: B

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Question 25
A firm is producing a good with a demand curve given by Q = 100 - 2P. The firm's marginal \cost is ₦5 per unit. What is the profit-maximizing price?
A. ₦50
B. ₦75
Correct C. ₦100
D. ₦125

Correct Answer: C

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