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POST UTME SUMMIT UNIVERSITY 2020 Economics | Objective

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Question 1

Suppose the demand for a product is given by the equation Qd = 100 - 2P and the supply is given by Qs = 2P - 10. Find the equilibrium price and quantity.

A. ₦50, 60

Correct B. ₦40, 70

C. ₦30, 80

D. ₦20, 90

Correct Answer: B

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Question 2

A firm produces two goods, A and B, u\sing two inputs, Labour (L) and Capital (K). The production function for good A is given by Q_A = 10L^0.5K^0.5 and for good B is Q_B = 5L^0.2K^0.8. If the firm has 100 units of Labour and 200 units of Capital, what is the total output?

A. 1000

B. 1200

Correct C. 1500

D. 1800

Correct Answer: C

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Question 3

A country's GDP is ₦100 billion, its imports are ₦20 billion, and its exports are ₦15 billion. What is its net foreign income?

Correct A. ₦5 billion

B. ₦10 billion

C. ₦15 billion

D. ₦20 billion

Correct Answer: A

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Question 4

A firm's total revenue is given by the equation TR = 100Q - 2Q^2, where Q is the quantity sold. Find the quantity at which the firm's marginal revenue is equal to its marginal \cost.

A. 20

Correct B. 30

C. 40

D. 50

Correct Answer: B

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Question 5

A firm's demand function is given by the equation Qd = 100 - 2P, where P is the price. If the firm's supply function is Qs = 2P - 10, find the price at which the firm's demand equals its supply.

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 6

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 a certain threshold. What is the name of this threshold?

A. The Marshall-Lerner condition

B. The J-curve effect

C. The Balance of Payments Identity

Correct D. The Elasticity Condition

Correct Answer: D

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Question 7

A perfectly competitive firm's supply curve is upward-sloping because of the law of increa\sing \costs. What is the name of this law?

A. The Law of Diminishing Returns

Correct B. The Law of Increa\sing Costs

C. The Law of Supply

D. The Law of Demand

Correct Answer: B

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Question 8

A country's government decides to implement a value-added tax (VAT) to increase revenue. What type of tax is this?

A. Direct Tax

Correct B. Indirect Tax

C. Proportional Tax

D. Progressive Tax

Correct Answer: B

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Question 9

A monopolistically competitive firm's demand curve shifts to the left due to an increase in the number of firms in the industry. What is the name of this phenomenon?

A. The Law of Supply

B. The Law of Demand

Correct C. The Kinked Demand Curve

D. The Firm's Short-Run Supply Curve

Correct Answer: C

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Question 10

A country's government decides to implement a tax on imports to protect domestic industries. What type of tax is this?

Correct A. Tariff

B. Quota

C. Subsidy

D. Export Tax

Correct Answer: A

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Question 11

The demand for a commodity is said to be elastic if the percentage change in the quantity demanded is greater than the percentage change in the price. What is the formula for calculating the price elasticity of demand?

Correct A. E = \frac{\%\ \Delta Q}{\%\ \Delta P}

B. E = \frac{\%\ \Delta P}{\%\ \Delta Q}

C. E = \frac{\%\ \Delta Q + \%\ \Delta P}{2}

D. E = \frac{\%\ \Delta Q - \%\ \Delta P}{2}

Correct Answer: A

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Question 12

A monopolist faces a demand curve given by Q = 100 - 2P and a \cost function C(Q) = 10Q + 100. What is the profit-maximizing price and quantity?

Correct A. P = 40, Q = 30

B. P = 50, Q = 25

C. P = 60, Q = 20

D. P = 70, Q = 15

Correct Answer: A

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Question 13

A country's balance of payments is in equilibrium when the current account is equal to the capital account. What is the formula for the balance of payments equilibrium?

Correct A. CA = KA

B. CA = -KA

C. CA + KA = 0

D. CA - KA = 0

Correct Answer: A

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Question 14

A farmer in Nigeria produces wheat u\sing a production function Q = 100L^0.5K^0.5, where L is labor and K is capital. What is the marginal product of labor?

Correct A. \frac{50L^{0.5}K^{0.5}}{L}

B. \frac{50L^{0.5}K^{0.5}}{K}

C. \frac{50L^{0.5}K^{0.5}}{L + K}

D. \frac{50L^{0.5}K^{0.5}}{L - K}

Correct Answer: A

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Question 15

A country's agricultural sector is characterized by a production function Q = 100L^0.5K^0.5, where L is labor and K is capital. What is the returns to scale?

A. Increa\sing returns to scale

B. Decrea\sing returns to scale

Correct C. Cons\tant returns to scale

D. Negative returns to scale

Correct Answer: C

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Question 16

A country's balance of payments is in equilibrium when the current account is equal to the capital account. True or False?

A. True

Correct B. False

C. Dep\ends on the country's economic conditions

D. Not enough information to determine

Correct Answer: B

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Question 17

A firm's revenue function is given by R(x) = 2x^2 + 5x + 1. If the firm's marginal revenue is 10, find the value of x.

A. 1

Correct B. 2

C. 3

D. 4

Correct Answer: B

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Question 18

A consumer's utility function is given by U(x, y) = 2x + 3y. If the consumer's income is 100 and the prices of x and y are 5 and 3 respectively, find the optimal bundle of x and y.

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 19

A government's budget constraint is given by B = T + M, where B is the budget, T is the tax revenue, and M is the government's sp\ending. If the government's tax revenue is 100 and its sp\ending is 150, find the value of B.

A. 100

B. 150

Correct C. 200

D. 250

Correct Answer: C

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Question 20

A firm's production function is given by Q = 2L^2 + 3K^2, where Q is the output, L is the labor, and K is the capital. If the firm's labor is 5 and its capital is 10, find the value of Q.

A. 50

B. 100

Correct C. 150

D. 200

Correct Answer: C

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Question 21

A firm's production function is given by Q = 2L^0.5H^0.5. If the firm's current labor and capital inputs are L = 4 and H = 9, respectively, what is the firm's current output?

A. 8

B. 12

Correct C. 16

D. 20

Correct Answer: C

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Question 22

A consumer's utility function is given by U = 2x + 3y. If the consumer's current income is ₦1000 and the prices of x and y are ₦5 and ₦3, respectively, what is the consumer's optimal bundle of x and y?

Correct A. x = 20, y = 10

B. x = 15, y = 15

C. x = 10, y = 20

D. x = 5, y = 25

Correct Answer: A

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Question 23

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

A. 60

Correct B. 80

C. 90

D. 100

Correct Answer: B

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Question 24

A consumer's indifference curve is given by U = 2x + 3y. If the consumer's current income is ₦1000 and the prices of x and y are ₦5 and ₦3, respectively, what is the consumer's optimal bundle of x and y?

Correct A. x = 20, y = 10

B. x = 15, y = 15

C. x = 10, y = 20

D. x = 5, y = 25

Correct Answer: A

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Question 25

A firm's production function is given by Q = 2L^0.5H^0.5. If the firm's current labor and capital inputs are L = 4 and H = 9, respectively, what is the firm's current output?

A. 8

B. 12

Correct C. 16

D. 20

Correct Answer: C

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