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POST UTME SUMMIT UNIVERSITY 2025 Economics | Objective

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Question 1

A firm's production function exhibits cons\tant returns to scale. If the firm's current output is 100 units and it increases its inputs by 20%, what will be the new output?

Correct A. 120 units

B. 100 units

C. 80 units

D. 140 units

Correct Answer: A

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Question 2

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

Correct A. (10, 20)

B. (20, 10)

C. (15, 15)

D. (25, 5)

Correct Answer: A

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Question 3

A country's demand for a good is given by the equation \( Q_d = 100 - 2P \) and the supply is given by \( Q_s = 2P - 100 \). If the government imposes a tax of ₦10 on the good, what will be the new equilibrium price?

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 4

A firm's production function exhibits decrea\sing returns to scale. If the firm's current output is 100 units and it increases its inputs by 20%, what will be the new output?

Correct A. 80 units

B. 100 units

C. 120 units

D. 140 units

Correct Answer: A

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Question 5

A country's balance of payments is given by the equation \( BOP = X - M \), where X is the value of exports and M is the value of imports. If the country's exports are ₦1000 and its imports are ₦800, what is the country's balance of payments?

Correct A. ₦200

B. ₦300

C. ₦400

D. ₦500

Correct Answer: A

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Question 6

A firm's \cost function is given by C(x) = 2x^2 + 5x + 10. If the firm's revenue function is R(x) = 20x - 0.5x^2, what is the profit function?

Correct A. P(x) = 15x^2 + 5x - 10

B. P(x) = 10x^2 - 5x + 20

C. P(x) = 5x^2 + 10x - 15

D. P(x) = 20x^2 - 10x + 5

Correct Answer: A

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Question 7

A monopolist faces a demand curve given by Qd = 100 - 2P. The firm's marginal \cost is MC = 10. What is the profit-maximizing price?

A. P = 40

Correct B. P = 50

C. P = 60

D. P = 70

Correct Answer: B

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Question 8

A firm's elasticity of demand is given by E_d = -2. If the firm increases its price by 10%, what is the percentage change in quantity demanded?

Correct A. -20%

B. -15%

C. -10%

D. -5%

Correct Answer: A

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Question 9

A firm is considering investing in a new project with the following cash flows: Year 0: -₦100,000; Year 1: ₦50,000; Year 2: ₦70,000; Year 3: ₦90,000. What is the net present value of the project?

A. ₦20,000

B. ₦30,000

Correct C. ₦40,000

D. ₦50,000

Correct Answer: C

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Question 10

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's output is 100 units, and the price of labor is ₦50 per unit, and the price of capital is ₦100 per unit, what is the minimum \cost of production?

A. ₦10,000

B. ₦12,000

Correct C. ₦15,000

D. ₦18,000

Correct Answer: C

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Question 11

The demand for a commodity 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 -2, what is the percentage change in quantity demanded when the price increases by 10%?

Correct A. 20%

B. 30%

C. 40%

D. 50%

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 MR = 20 - 2Q. What is the profit-maximizing quantity of output?

A. 20

Correct B. 30

C. 40

D. 50

Correct Answer: B

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Question 13

A government imposes a tax of ₦10 per unit on a commodity. If the supply curve is given by Qs = 2P and the demand curve is given by Qd = 100 - 2P, what is the new equilibrium price?

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 14

A firm has a total revenue function given by TR = 2Q^2 - 10Q + 100 and a total \cost function given by TC = Q^2 + 5Q + 50. What is the profit-maximizing quantity of output?

A. 5

Correct B. 10

C. 15

D. 20

Correct Answer: B

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Question 15

A government imposes a tax of ₦10 per unit on a commodity. If the supply curve is given by Qs = 2P and the demand curve is given by Qd = 100 - 2P, what is the new equilibrium quantity?

A. 20

Correct B. 30

C. 40

D. 50

Correct Answer: B

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Question 16

A firm's total revenue (TR) is given by the equation TR = 100x - 2x^2, where x is the number of units sold. If the firm's marginal revenue (MR) is 80, find the value of x.

A. 10

B. 20

Correct C. 30

D. 40

Correct Answer: C

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Question 17

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

Correct A. 20 billion naira

B. 30 billion naira

C. 40 billion naira

D. 50 billion naira

Correct Answer: A

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Question 18

A monopolist faces a demand curve given by Q = 100 - 2P. The firm's marginal \cost (MC) is 10. Find the price at which the firm will produce 50 units.

A. 20

Correct B. 30

C. 40

D. 50

Correct Answer: B

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Question 19

A government imposes a tax of 10% on a good. If the price of the good is 100 naira, what is the new price after the tax?

A. 90 naira

B. 100 naira

Correct C. 110 naira

D. 120 naira

Correct Answer: C

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Question 20

A firm's demand curve is given by Q = 100 - 2P. If the firm's marginal revenue (MR) is 80, find the price at which the firm will produce 50 units.

A. 20

Correct B. 30

C. 40

D. 50

Correct Answer: B

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Question 21

The Nigerian government has implemented policies to promote agricultural development. Which of the following is a likely consequence of these policies?

Correct A. Increased food production

B. Reduced agricultural exports

C. Increased agricultural imports

D. Decreased agricultural employment

Correct Answer: A

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Question 22

A monopolistically competitive firm faces a downward-sloping demand curve. What is the likely effect of an increase in the firm's fixed \costs?

A. Increase in price

Correct B. Decrease in quantity supplied

C. Increase in quantity supplied

D. No change in price

Correct Answer: B

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Question 23

A country's GDP is calculated as the sum of its consumption, investment, government sp\ending, and net exports. What is the value of the following expression?

A. 4

B. 5

Correct C. 6

D. 7

Correct Answer: C

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Question 24

A firm's \cost function is given by \( C = 2q^2 + 3q + 10 \). What is the marginal \cost when \( q = 4 \)?

A. 17

Correct B. 18

C. 19

D. 20

Correct Answer: B

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Question 25

A country's balance of payments is in equilibrium when its current account is equal to its capital account. What is the value of the following expression?

Correct A. 0

B. 1

C. 2

D. 3

Correct Answer: A

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