Practice post utme veritas university economics 2021 Past Questions

Question 1

A firm's production function is given by Q = 2L^0.5H^0.5, where Q is output, L is labor and H is capital. If the firm's labor and capital are increased by 20% and 15% respectively, what is the percentage change in output?

A. 10%

Correct B. 12%

C. 15%

D. 18%

Correct Answer: B

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Question 2

A consumer's utility function is given by U = 2x^0.5y^0.5, where x and y are the quantities of two goods. If the consumer's income is ₦1000 and the prices of the two goods are ₦5 and ₦10 respectively, what is the consumer's optimal bundle of goods?

A. x = 20, y = 10

Correct B. x = 15, y = 15

C. x = 10, y = 20

D. x = 5, y = 25

Correct Answer: B

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Question 3

A firm's \cost function is given by C = 2L + 3H, where C is \cost, L is labor and H is capital. If the firm's labor and capital are increased by 20% and 15% respectively, what is the percentage change in \cost?

A. 10%

Correct B. 12%

C. 15%

D. 18%

Correct Answer: B

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Question 4

A consumer's budget constraint is given by 2x + 3y = 100, where x and y are the quantities of two goods. If the consumer's utility function is U = x^2 + y^2, what is the consumer's optimal bundle of goods?

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 5

A firm's production function is given by Q = 2L^0.5H^0.5, where Q is output, L is labor and H is capital. If the firm's labor and capital are increased by 20% and 15% respectively, what is the percentage change in output?

A. 10%

Correct B. 12%

C. 15%

D. 18%

Correct Answer: B

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Question 6

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current input levels are L = 16 and K = 9, what is the marginal product of labor (MPL) at this point?

Correct A. 1/2

B. 1

C. 2

D. 3

Correct Answer: A

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Question 7

A monopolist faces a demand curve given by P = 100 - 2Q. The firm's marginal \cost (MC) is given by MC = 20 + 2Q. What is the profit-maximizing quantity of output?

A. 10

Correct B. 20

C. 30

D. 40

Correct Answer: B

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Question 8

A consumer's utility function is given by U = 2x + 3y. The consumer's budget constraint is given by 2x + 3y = 12. What is the consumer's optimal bundle of x and y?

Correct A. x = 2, y = 4

B. x = 3, y = 3

C. x = 4, y = 2

D. x = 6, y = 0

Correct Answer: A

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Question 9

A government imposes a tax of ₦10 per unit on a firm's output. The firm's supply curve is given by Q = 100 - 2P. What is the new supply curve after the tax is imposed?

A. Q = 100 - 2P

Correct B. Q = 100 - 2\( P + 10 \)

C. Q = 100 - 2P - 10

D. Q = 100 - 2P + 10

Correct Answer: B

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Question 10

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current input levels are L = 16 and K = 9, what is the elasticity of output with respect to labor?

Correct A. 0.5

B. 1

C. 2

D. 3

Correct Answer: A

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Question 11

A firm's production function is given by Q = 2L^0.5 K^0.5. If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, and if the firm's budget constraint is given by 100L + 200K = ₦10000, find the optimal values of L and K.

A. L = 100, K = 25

Correct B. L = 50, K = 50

C. L = 25, K = 100

D. L = 10, K = 200

Correct Answer: B

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Question 12

A monopolist faces a demand curve given by Q = 100 - 2P. The monopolist's marginal \cost is given by MC = 5 + 2Q. Find the monopolist's profit-maximizing price and quantity.

A. P = ₦50, Q = 25

Correct B. P = ₦75, Q = 12.5

C. P = ₦100, Q = 0

D. P = ₦25, Q = 50

Correct Answer: B

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Question 13

A firm's production function is given by Q = 2L^0.5 K^0.5. If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, and if the firm's budget constraint is given by 100L + 200K = ₦10000, find the optimal values of L and K.

A. L = 100, K = 25

Correct B. L = 50, K = 50

C. L = 25, K = 100

D. L = 10, K = 200

Correct Answer: B

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Question 14

A monopolist faces a demand curve given by Q = 100 - 2P. The monopolist's marginal \cost is given by MC = 5 + 2Q. Find the monopolist's profit-maximizing price and quantity.

A. P = ₦50, Q = 25

Correct B. P = ₦75, Q = 12.5

C. P = ₦100, Q = 0

D. P = ₦25, Q = 50

Correct Answer: B

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Question 15

A firm's production function is given by Q = 2L^0.5 K^0.5. If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, and if the firm's budget constraint is given by 100L + 200K = ₦10000, find the optimal values of L and K.

A. L = 100, K = 25

Correct B. L = 50, K = 50

C. L = 25, K = 100

D. L = 10, K = 200

Correct Answer: B

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Question 16

The Central Bank of Nigeria (CBN) uses monetary policy to control inflation. Which of the following is a consequence of a contractionary monetary policy?

A. Increase in interest rates

Correct B. Decrease in money supply

C. Increase in inflation rate

D. Decrease in GDP

Correct Answer: B

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Question 17

A consumer has a budget constraint of 100 units of currency. She has two goods: A and B. The price of good A is 5 units of currency, and the price of good B is 10 units of currency. If she sp\ends all her budget on good A, how many units of good B can she buy?

A. 2 units

B. 4 units

Correct C. 6 units

D. 8 units

Correct Answer: C

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Question 18

A firm has a production function of Q = 2L + 3K, where Q is output, L is labor, and K is capital. If the firm hires 5 units of labor and 2 units of capital, what is the output?

A. 10

B. 12

Correct C. 15

D. 18

Correct Answer: C

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Question 19

A government imposes a tax on a good, which increases its price by 20%. What is the effect on the quantity demanded of the good?

A. Increase

Correct B. Decrease

C. No change

D. Indeterminate

Correct Answer: B

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Question 20

A country's GDP is 100 billion units of currency. Its GNP is 120 billion units of currency. What is the net factor income from abroad?

A. 10 billion

Correct B. 20 billion

C. 30 billion

D. 40 billion

Correct Answer: B

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Question 21

The government of Nigeria has introduced a new tax policy aimed at increa\sing revenue from the agricultural sector. The policy involves a 10% tax on all agricultural products sold in the country. If the total revenue from agricultural products before the tax was ₦10 billion, and the tax rate is 10%, what is the new revenue after the tax is imposed?

A. ₦11 billion

Correct B. ₦10.5 billion

C. ₦9.5 billion

D. ₦9 billion

Correct Answer: B

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Question 22

A firm is producing a good at a cons\tant marginal \cost of ₦100 per unit. The market demand for the good is given by the equation Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the firm is currently producing 50 units, what is the price at which it should sell the good to maximize profits?

A. ₦50

Correct B. ₦75

C. ₦100

D. ₦125

Correct Answer: B

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Question 23

The balance of payments (BOP) for a country can be represented by the following equation: BOP = X - M, where X is the value of exports and M is the value of imports. If the value of exports is ₦500 billion and the value of imports is ₦600 billion, what is the balance of payments?

Correct A. ₦100 billion

B. ₦200 billion

C. ₦300 billion

D. ₦400 billion

Correct Answer: A

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Question 24

The money supply in an economy is given by the equation M = kPY, where M is the money supply, k is a cons\tant, P is the price level, and Y is the national income. If the price level is ₦100, the national income is ₦500 billion, and the cons\tant k is 0.01, what is the money supply?

A. ₦5 billion

Correct B. ₦10 billion

C. ₦15 billion

D. ₦20 billion

Correct Answer: B

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Question 25

The demand for a good is given by the equation Q = 100 - 2P, where Q is the quantity demanded and P is the price. The supply of the good is given by the equation Q = 2P + 50, where Q is the quantity supplied and P is the price. If the price is ₦50, what is the quantity demanded and supplied?

Correct A. Qd = 50, Qs = 150

B. Qd = 150, Qs = 50

C. Qd = 100, Qs = 100

D. Qd = 200, Qs = 200

Correct Answer: A

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