Practice post utme unilag economics 2023 Past Questions

Question 1

A consumer's indifference curve is downward sloping and convex to the origin. Which of the following statements is true about the consumer's preferences?

A. The consumer prefers more of good X to less of good X.

Correct B. The consumer is indifferent between good X and good Y.

C. The consumer prefers more of good Y to less of good Y.

D. The consumer prefers good X to good Y.

Correct Answer: B

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Question 2

A perfectly competitive market has a supply curve that is upward sloping. Which of the following is a characteristic of the market?

A. The market is characterized by a downward sloping demand curve.

B. The market is characterized by a horizontal supply curve.

Correct C. The market is characterized by a downward sloping supply curve.

D. The market is characterized by a perfectly inelastic demand curve.

Correct Answer: C

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Question 3

A country's GDP is increa\sing at a rate of 5% per annum. Which of the following is a possible explanation for the increase in GDP?

A. The country has experienced an increase in population.

Correct B. The country has experienced an increase in the capital stock.

C. The country has experienced an increase in the labor force.

D. The country has experienced an increase in the price level.

Correct Answer: B

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Question 4

A monopolist faces a demand curve that is downward sloping and inelastic. Which of the following is a characteristic of the monopolist's supply curve?

Correct A. The supply curve is upward sloping.

B. The supply curve is downward sloping.

C. The supply curve is horizontal.

D. The supply curve is perfectly elastic.

Correct Answer: A

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Question 5

A country's inflation rate is 10% per annum. Which of the following is a possible explanation for the high inflation rate?

Correct A. The country has experienced an increase in the money supply.

B. The country has experienced an increase in the capital stock.

C. The country has experienced an increase in the labor force.

D. The country has experienced an increase in the price level.

Correct Answer: A

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Question 6

The Marshall-Lerner condition states that if the sum of the elasticities of demand for exports and imports is greater than 1, then a devaluation of the currency will lead to an improvement in the balance of payments. What is the implication of this condition for a country with an elasticity of demand for exports of 0.8 and an elasticity of demand for imports of 1.2?

A. The country will experience a deterioration in its balance of payments

B. The country will experience no change in its balance of payments

Correct C. The country will experience an improvement in its balance of payments

D. The country will experience a worsening of its trade deficit

Correct Answer: C

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Question 7

A country's GDP is calculated as the sum of the value of all final goods and services produced within its borders. However, if a country imports a good and then exports it after adding value to it, how should this be accounted for in the GDP calculation?

Correct A. The value added to the good should be included in the GDP calculation

B. The value added to the good should not be included in the GDP calculation

C. The value of the good should be included in the GDP calculation, but the value added should not

D. The value of the good should not be included in the GDP calculation, but the value added should

Correct Answer: A

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Question 8

A central bank uses open market operations to increase the money supply in an economy. What is the effect of this action on the interest rate?

A. The interest rate will increase

Correct B. The interest rate will decrease

C. The interest rate will remain unchanged

D. The interest rate will fluctuate

Correct Answer: B

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Question 9

A firm is considering whether to produce a good or to import it from another country. The firm's production \costs are $100 per unit, and the import price is $120 per unit. However, the firm also has to pay a 10% tariff on the imported good. What is the effective price of the imported good to the firm?

Correct A. $132

B. $140

C. $120

D. $108

Correct Answer: A

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Question 10

A country's inflation rate is 5% per annum, and its nominal interest rate is 10% per annum. What is the real interest rate?

Correct A. 5%

B. 10%

C. 15%

D. 20%

Correct Answer: A

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Question 11

A firm is operating in a perfectly competitive market with a production function given by Q = 2L^0.5K^0.5. If the price of the good is $10 and the wage rate is $5 per unit of labor, what is the optimal level of labor to hire?

A. 4 units

B. 6 units

Correct C. 8 units

D. 10 units

Correct Answer: C

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Question 12

The following diagram shows the supply and demand curves for a particular good. If the price of the good is currently $8, what is the equilibrium quantity?

A. 10 units

Correct B. 20 units

C. 30 units

D. 40 units

Correct Answer: B

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Question 13

A country's balance of payments is given by the following equation: BOP = X - M - I. If the country's exports (X) are $100 billion, imports (M) are $80 billion, and investment (I) is $20 billion, what is the balance of payments?

Correct A. $20 billion

B. $30 billion

C. $40 billion

D. $50 billion

Correct Answer: A

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Question 14

A firm is considering investing in a new project with a \cost of $100,000 and a potential return of $120,000. If the firm's \cost of capital is 10%, what is the net present value (NPV) of the project?

A. $10,000

Correct B. $20,000

C. $30,000

D. $40,000

Correct Answer: B

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Question 15

A country's money supply is given by the equation: M = kPY. If the country's price level (P) is 100, the money supply (M) is $100 billion, and the velocity of money (k) is 2, what is the country's GDP (Y)?

A. $50 billion

B. $60 billion

Correct C. $70 billion

D. $80 billion

Correct Answer: C

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Question 16

Determine the price elasticity of demand for a product whose demand function is given by Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the price increases by 10% and the quantity demanded decreases by 15%, calculate the price elasticity of demand.

Correct A. -0.15

B. 0.15

C. 1.5

D. -1.5

Correct Answer: A

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Question 17

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 income is ₦1000 and the prices of the two goods are ₦5 and ₦10 respectively, determine the optimal quantities of the two goods to consume.

A. x = 100, y = 50

B. x = 50, y = 100

Correct C. x = 75, y = 75

D. x = 25, y = 25

Correct Answer: C

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Question 18

A country's balance of payments account is given by the following equation: BOP = X - M - $ F - I $, where BOP is the balance of payments, X is the value of exports, M is the value of imports, F is the value of foreign investment, and I is the value of domestic investment. If the value of exports is ₦500 billion, the value of imports is ₦600 billion, the value of foreign investment is ₦200 billion, and the value of domestic investment is ₦300 billion, determine the balance of payments.

Correct A. ₦-100 billion

B. ₦100 billion

C. ₦200 billion

D. ₦300 billion

Correct Answer: A

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Question 19

A farmer produces two crops, maize and yam. The production functions for the two crops are given by Qm = 100 - 2Lm and Qy = 150 - 3Ly, where Qm and Qy are the quantities of maize and yam produced respectively, and Lm and Ly are the quantities of labor used for maize and yam respectively. If the farmer has 100 units of labor to allocate between the two crops, determine the optimal allocation of labor between maize and yam.

A. Lm = 50, Ly = 50

Correct B. Lm = 75, Ly = 25

C. Lm = 25, Ly = 75

D. Lm = 100, Ly = 0

Correct Answer: B

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Question 20

A country's economic growth rate is given by the following equation: GR = $ I + G $ / $ C + I + G $, where GR is the growth rate, I is the value of investment, G is the value of government sp\ending, and C is the value of consumption. If the value of investment is ₦500 billion, the value of government sp\ending is ₦200 billion, and the value of consumption is ₦300 billion, determine the economic growth rate.

A. 0.25

B. 0.33

Correct C. 0.5

D. 0.67

Correct Answer: C

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Question 21

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. Which of the following statements is true about the elasticity of demand?

Correct A. The elasticity of demand is always greater than 1

B. The elasticity of demand is always less than 1

C. The elasticity of demand is equal to 1

D. The elasticity of demand is greater than or equal to 1

Correct Answer: A

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Question 22

A farmer in Nigeria produces maize and soybeans. The production function for maize is Q = 1000 + 20L - 0.5L^2, where Q is the quantity of maize produced and L is the labor used. If the farmer uses 100 units of labor, how many units of maize will be produced?

A. 900

Correct B. 1000

C. 1100

D. 1200

Correct Answer: B

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Question 23

The government of Nigeria has introduced a policy to increase the production of rice in the country. The policy includes providing subsidies to farmers and increa\sing the supply of fertilizers. What is the likely effect of this policy on the price of rice?

A. The price of rice will increase

Correct B. The price of rice will decrease

C. The price of rice will remain the same

D. The price of rice will fluctuate

Correct Answer: B

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Question 24

A consumer has a budget of ₦1000 to sp\end on two goods, X and Y. The price of good X is ₦200 and the price of good Y is ₦300. If the consumer sp\ends all of their budget on the two goods, how many units of good X will they buy?

A. 2

Correct B. 3

C. 4

D. 5

Correct Answer: B

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Question 25

A firm produces two goods, A and B. The production function for good A is Q_A = 100 + 20L - 0.5L^2, where Q_A is the quantity of good A produced and L is the labor used. The production function for good B is Q_B = 50 + 10L - 0.2L^2, where Q_B is the quantity of good B produced and L is the labor used. If the firm uses 50 units of labor, how many units of good A and good B will be produced?

A. Q_A = 900, Q_B = 400

Correct B. Q_A = 1000, Q_B = 500

C. Q_A = 1100, Q_B = 600

D. Q_A = 1200, Q_B = 700

Correct Answer: B

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