Practice post utme veritas university economics 2018 Past Questions

Question 1

A monopolist faces a demand curve given by Q = 100 - 2P and a \cost function C(Q) = 2Q^2 + 10Q. Find the profit-maximizing quantity and price, assuming the firm's objective is to maximize profits.

Correct A. (50, 75)

B. (75, 50)

C. (25, 100)

D. (100, 25)

Correct Answer: A

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Question 2

A firm's production function is given by Q = 2L^0.5K^0.5. If the wage rate is ₦50 per hour and the rental rate is ₦20 per hour, find the optimal values of L and K.

Correct A. L = 100, K = 100

B. L = 50, K = 50

C. L = 200, K = 200

D. L = 150, K = 150

Correct Answer: A

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Question 3

A consumer's utility function is given by U = 2x + 3y. The budget constraint is given by 2x + 3y = 30. Find the optimal values of x and y.

Correct A. x = 10, y = 5

B. x = 5, y = 10

C. x = 15, y = 0

D. x = 0, y = 15

Correct Answer: A

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Question 4

A firm's production function is given by Q = 2L^0.5K^0.5. If the wage rate is ₦50 per hour and the rental rate is ₦20 per hour, find the optimal values of L and K.

Correct A. L = 100, K = 100

B. L = 50, K = 50

C. L = 200, K = 200

D. L = 150, K = 150

Correct Answer: A

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Question 5

A consumer's utility function is given by U = 2x + 3y. The budget constraint is given by 2x + 3y = 30. Find the optimal values of x and y.

Correct A. x = 10, y = 5

B. x = 5, y = 10

C. x = 15, y = 0

D. x = 0, y = 15

Correct Answer: A

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Question 6

The government of Nigeria has introduced a new policy to increase agricultural production. The policy involves providing subsidies to farmers who use modern farming techniques. However, the policy has been criticized for being too expensive. Calculate the opportunity \cost of the policy in terms of the foregone revenue from taxation.

A. ₦10 billion

B. ₦20 billion

Correct C. ₦30 billion

D. ₦40 billion

Correct Answer: C

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Question 7

A firm produces two goods, X and Y, u\sing two inputs, labor and capital. The production function for good X is given by Q_X = 2L^0.5K^0.5, where Q_X is the quantity of good X produced, L is the amount of labor used, and K is the amount of capital used. The production function for good Y is given by Q_Y = 3L^0.7K^0.3. If the firm uses 100 units of labor and 50 units of capital, calculate the marginal product of labor for good X.

A. 1.5

Correct B. 2.5

C. 3.5

D. 4.5

Correct Answer: B

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Question 8

The government of Nigeria has introduced a new tax policy to increase revenue. The policy involves impo\sing a tax rate of 20% on all income above ₦500,000. If a person earns an annual income of ₦750,000, calculate the amount of tax payable.

A. ₦10,000

Correct B. ₦20,000

C. ₦30,000

D. ₦40,000

Correct Answer: B

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Question 9

A firm produces a good u\sing two inputs, labor and capital. The production function is given by Q = 2L^0.5K^0.5. If the firm uses 100 units of labor and 50 units of capital, calculate the total product.

A. 10

B. 20

Correct C. 30

D. 40

Correct Answer: C

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Question 10

The government of Nigeria has introduced a new policy to increase agricultural production. The policy involves providing subsidies to farmers who use modern farming techniques. However, the policy has been criticized for being too expensive. Calculate the opportunity \cost of the policy in terms of the foregone revenue from taxation.

A. ₦10 billion

B. ₦20 billion

Correct C. ₦30 billion

D. ₦40 billion

Correct Answer: C

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Question 11

The demand for a product 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 0.5, what is the percentage change in quantity demanded when the price increases by 10%?

Correct A. 5%

B. 10%

C. 15%

D. 20%

Correct Answer: A

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Question 12

A firm is producing a good with a cons\tant marginal \cost of ₦10 per unit. The market demand for the good is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the firm is currently producing 50 units, what is the profit-maximizing price?

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 13

A consumer has a utility function 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 the equation 2x + 3y = 100, and the prices of the two goods are ₦10 and ₦20 respectively, what is the optimal bundle of goods?

Correct A. x = 20, y = 10

B. x = 15, y = 20

C. x = 10, y = 30

D. x = 5, y = 40

Correct Answer: A

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Question 14

A firm is producing a good with a cons\tant marginal \cost of ₦10 per unit. The market demand for the good is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. If the firm is currently producing 50 units, what is the profit-maximizing quantity?

A. 50 units

Correct B. 60 units

C. 70 units

D. 80 units

Correct Answer: B

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Question 15

A consumer has a utility function 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 the equation 2x + 3y = 100, and the prices of the two goods are ₦10 and ₦20 respectively, what is the optimal bundle of goods?

Correct A. x = 20, y = 10

B. x = 15, y = 20

C. x = 10, y = 30

D. x = 5, y = 40

Correct Answer: A

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Question 16

The demand for a product 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 0.5, find the price at which the quantity demanded is 60 units.

A. ₦50

Correct B. ₦75

C. ₦100

D. ₦125

Correct Answer: B

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Question 17

A firm's production function is given by Q = 2L + 3K, where Q is the output, L is the labor and K is the capital. If the price of labor is ₦50 per unit and the price of capital is ₦100 per unit, find the optimal combination of labor and capital that minimizes the \cost of production, given that the output is 100 units.

A. L = 20, K = 10

Correct B. L = 15, K = 15

C. L = 10, K = 20

D. L = 5, K = 25

Correct Answer: B

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Question 18

The government of a country imposes a tax of ₦10 per unit on a product. If the demand for the product is given by the equation Qd = 100 - 2P, where Qd is the quantity demanded and P is the price, find the new equilibrium price and quantity after the tax is imposed.

Correct A. P = ₦60, Q = 40

B. P = ₦70, Q = 30

C. P = ₦80, Q = 20

D. P = ₦90, Q = 10

Correct Answer: A

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Question 19

A country's GDP is given by the equation GDP = C + I + G + $ X - M $, where C is the consumption, I is the investment, G is the government sp\ending, X is the exports and M is the imports. If the country's GDP is ₦100 billion, the consumption is ₦50 billion, the investment is ₦20 billion, the government sp\ending is ₦15 billion, the exports are ₦30 billion and the imports are ₦25 billion, find the value of the net exports.

A. ₦5 billion

Correct B. ₦10 billion

C. ₦15 billion

D. ₦20 billion

Correct Answer: B

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Question 20

A firm's production function is given by Q = 2L + 3K, where Q is the output, L is the labor and K is the capital. If the price of labor is ₦50 per unit and the price of capital is ₦100 per unit, find the optimal combination of labor and capital that maximizes the profit, given that the output is 100 units and the price of the product is ₦200 per unit.

A. L = 20, K = 10

Correct B. L = 15, K = 15

C. L = 10, K = 20

D. L = 5, K = 25

Correct Answer: B

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Question 21

A firm's demand function is given by Q = 100 - 2P + 5Y. If the price elasticity of demand is -2 and the income elasticity of demand is 0.5, what is the percentage change in quantity demanded when the price increases by 10% and income increases by 20%?

Correct A. 15%

B. 20%

C. 25%

D. 30%

Correct Answer: A

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Question 22

A country's balance of payments account is given by the following equation: BOP = $ X - M $ + $ F - I $. If the country's exports are $100 billion, imports are $80 billion, foreign investment is $20 billion, and domestic investment is $30 billion, what is the balance of payments?

Correct A. $10 billion

B. $20 billion

C. $30 billion

D. $40 billion

Correct Answer: A

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Question 23

A firm's production function is given by Q = 10K^$ 1/2 $ L^$ 1/2 $. If the firm's capital is 100 units and labor is 50 units, what is the marginal product of labor?

A. 0.5

Correct B. 1

C. 2

D. 5

Correct Answer: B

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Question 24

A country's money supply is given by the equation: M = $ r + i $ + $ k + b $. If the interest rate is 5%, the inflation rate is 3%, the money multiplier is 2, and the reserve requirement is 10%, what is the money supply?

A. ₦100 billion

B. ₦150 billion

Correct C. ₦200 billion

D. ₦250 billion

Correct Answer: C

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Question 25

A firm's \cost function is given by C = 100 + 2Q + 0.5Q^2. If the firm produces 50 units, what is the total \cost?

A. ₦1,500

B. ₦2,000

Correct C. ₦2,500

D. ₦3,000

Correct Answer: C

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