POST UTME UNILORIN 2021 Economics | Objective

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Question 1 View Details
Consider a production function given by \( Q = 100K^{\frac{1}{3}}L^{\frac{2}{3}} \), where Q is output, K is capital, and L is labor. Determine the returns to scale of this production function.
A. Increa\sing Returns to Scale
B. Decrea\sing Returns to Scale
Correct C. Cons\tant Returns to Scale
D. No Returns to Scale

Correct Answer: C

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Question 2 View Details
A firm's production function is given by \( Q = 2L^2 + 3K \), where Q is output, L is labor, and K is capital. If the firm increases labor from 4 units to 6 units, and capital from 5 units to 7 units, what is the percentage change in output?
A. 10%
Correct B. 20%
C. 30%
D. 40%

Correct Answer: B

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Question 3 View Details
A country's GDP is given by \( GDP = 1000 + 200Y - 50X \), where Y is government exp\enditure and X is taxes. If government exp\enditure increases by 10% and taxes decrease by 5%, what is the percentage change in GDP?
A. 5%
Correct B. 10%
C. 15%
D. 20%

Correct Answer: B

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Question 4 View Details
A firm's budget constraint is given by \( 10Y + 5X = 100 \), where Y is output and X is input. If the firm increases output by 20%, what is the percentage change in input?
A. 10%
Correct B. 20%
C. 30%
D. 40%

Correct Answer: B

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Question 5 View Details
A country's inflation rate is given by \( pi = \frac{MV}{PY} \), where M is money supply, V is velocity of money, P is price level, and Y is real GDP. If the money supply increases by 10%, and the velocity of money decreases by 5%, what is the percentage change in inflation rate?
A. 5%
Correct B. 10%
C. 15%
D. 20%

Correct Answer: B

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Question 6 View Details
A government plans to reduce poverty by increa\sing the minimum wage. However, this increase may lead to higher production \costs for firms, which could result in higher prices for consumers. U\sing the concept of opportunity \cost, explain why the government's plan may not be effective in reducing poverty.
Correct A. The increase in minimum wage will lead to higher production \costs, which will be passed on to consumers in the form of higher prices, thereby reducing the purcha\sing power of the poor.
B. The government's plan will lead to a decrease in the opportunity \cost of labor, cau\sing firms to hire more workers and reduce unemployment.
C. The increase in minimum wage will lead to a decrease in the opportunity \cost of leisure, cau\sing people to work less and enjoy more leisure time.
D. The government's plan will lead to a decrease in the opportunity \cost of education, cau\sing people to invest more in education and reduce poverty.

Correct Answer: A

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Question 7 View Details
A monopolistically competitive firm faces a downward-sloping demand curve. If the firm increases its price, what will happen to its revenue?
A. Revenue will increase because the firm is charging a higher price for its product.
Correct B. Revenue will decrease because the firm is charging a higher price for its product, but the quantity demanded will decrease.
C. Revenue will remain the same because the firm is charging a higher price for its product, but the quantity demanded will increase.
D. Revenue will increase because the firm is charging a higher price for its product, and the quantity demanded will increase.

Correct Answer: B

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Question 8 View Details
A consumer has a utility function given by U(x, y) = 2x + 3y. If the consumer's income is ₦1000 and the prices of x and y are ₦2 and ₦3 respectively, what is the consumer's optimal bundle?
Correct A. x = 200, y = 150
B. x = 150, y = 200
C. x = 100, y = 300
D. x = 300, y = 100

Correct Answer: A

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Question 9 View Details
A country has a trade deficit of ₦100 billion and a current account deficit of ₦50 billion. What is the balance of payments identity?
A. CA + FA = 0
B. CA + FA = 100
Correct C. CA + FA = -50
D. CA + FA = 50

Correct Answer: C

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Question 10 View Details
A firm has a production function given by Q = 2L + 3K. If the firm's \cost function is C = 10L + 20K, what is the firm's profit function?
Correct A. π = 2L + 3K - 10L - 20K
B. π = 2L + 3K + 10L + 20K
C. π = 2L + 3K + 10L - 20K
D. π = 2L + 3K - 10L + 20K

Correct Answer: A

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Question 11 View Details
A perfectly competitive firm's supply curve is a rec\tangular hyperbola. What is the slope of the supply curve?
A. 1/P
Correct B. -1/P
C. P
D. -P

Correct Answer: B

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Question 12 View Details
A monopolist faces a demand curve given by Q = 100 - 2P. What is the price elasticity of demand at a price of 50?
A. 2
Correct B. -2
C. 1/2
D. -1/2

Correct Answer: B

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Question 13 View Details
A firm's production function is given by Q = 10L^0.5K^0.5. What is the returns to scale?
Correct A. Increa\sing
B. Decrea\sing
C. Cons\tant
D. Indeterminate

Correct Answer: A

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Question 14 View Details
A consumer's budget constraint is given by 2X + 3Y = 60. What is the opportunity \cost of an additional unit of X?
Correct A. 3
B. 2
C. 1/2
D. 1/3

Correct Answer: A

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Question 15 View Details
A country's balance of payments is given by BOP = X - M. What is the effect of an increase in X on the BOP?
Correct A. Increase
B. Decrease
C. No effect
D. Indeterminate

Correct Answer: A

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Question 16 View Details
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current input levels are L = 4 and K = 9, what is the marginal product of labor (MPL) at these input levels?
A. 1
Correct B. 2
C. 3
D. 4

Correct Answer: B

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Question 17 View Details
A country's balance of payments (BOP) is given by the following equation: BOP = X - M + \( F - I \). If the country's current account balance is $100 billion, its capital account balance is $50 billion, and its financial account balance is -$200 billion, what is the country's overall BOP balance?
Correct A. 100
B. 50
C. -200
D. -150

Correct Answer: A

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Question 18 View Details
A government's budget constraint is given by the following equation: G = T + I + \( B - S \). If the government's current exp\enditure is $500 billion, its current revenue is $400 billion, its interest payments are $100 billion, and its budget deficit is $50 billion, what is the government's current budget balance?
Correct A. 50
B. -50
C. 100
D. -100

Correct Answer: A

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Question 19 View Details
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. 80
Correct B. 90
C. 70
D. 60

Correct Answer: B

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Question 20 View Details
A country's supply function is given by Q = 50 + 2P. If the country's current price is $30, what is the country's current quantity supplied?
A. 70
B. 80
Correct C. 90
D. 100

Correct Answer: C

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Question 21 View Details
A firm operating in a perfectly competitive market is characterized by which of the following?
A. A \single price maker
Correct B. Many buyers and sellers
C. A price setter
D. A monopolist

Correct Answer: B

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Question 22 View Details
The agricultural sector in Nigeria has been characterized by low productivity and low income levels. Which of the following policies would be most effective in addres\sing this issue?
A. Increa\sing government subsidies for fertilizers and pesticides
B. Implementing a policy of land reform
Correct C. Increa\sing investment in irrigation infrastructure
D. Increa\sing the use of genetically modified crops

Correct Answer: C

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Question 23 View Details
The GDP of a country is calculated as the sum of the value of all final goods and services produced within its borders. Which of the following is NOT included in the calculation of GDP?
A. Personal consumption exp\enditures
B. Gross investment
C. Government purchases
Correct D. Imports

Correct Answer: D

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Question 24 View Details
The government of a country has implemented a policy of import substitution industrialization. Which of the following is a likely consequence of this policy?
A. An increase in the production of consumer goods
Correct B. An increase in the production of capital goods
C. A decrease in the production of intermediate goods
D. An increase in the production of agricultural goods

Correct Answer: B

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Question 25 View Details
A country has a trade deficit of $100 million and a current account deficit of $50 million. Which of the following is a likely consequence of this situation?
A. A decrease in the value of the country's currency
B. An increase in the value of the country's currency
Correct C. A decrease in the country's foreign exchange reserves
D. An increase in the country's foreign exchange reserves

Correct Answer: C

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