POST UTME VERITAS UNIVERSITY 2024 Economics | Objective

Are you preparing for POST UTME VERITAS UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2024 Economics (Objective) questions designed to simulate the real exam environment.

Practice these randomly selected questions to test your readiness.

Question 1
The government of a country decides to implement a new tax on luxury goods to reduce income inequality. However, the tax is not progressive, meaning it is levied at the same rate on all luxury goods. Which of the following best describes the effect of this tax on the economy?
A. The tax will increase government revenue and reduce income inequality.
B. The tax will reduce government revenue and increase income inequality.
Correct C. The tax will have no effect on government revenue or income inequality.
D. The tax will increase government revenue but have no effect on income inequality.

Correct Answer: C

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Question 2
A monopolistically competitive firm faces a demand curve given by Q = 100 - 2P. The firm's marginal revenue (MR) is given by MR = 200 - 2Q. What is the firm's optimal price?
A. ₦50
Correct B. ₦75
C. ₦100
D. ₦125

Correct Answer: B

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Question 3
A country's GDP is given by the equation GDP = C + I + G + \( X - M \). If the country's consumption (C) is ₦100 billion, investment (I) is ₦20 billion, government sp\ending (G) is ₦30 billion, exports (X) are ₦40 billion, and imports (M) are ₦10 billion, what is the country's GDP?
A. ₦180 billion
B. ₦200 billion
C. ₦220 billion
Correct D. ₦240 billion

Correct Answer: D

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Question 4
A firm's demand curve is given by Q = 100 - 2P. The firm's marginal revenue (MR) is given by MR = 200 - 2Q. What is the firm's optimal quantity?
A. 50 units
Correct B. 75 units
C. 100 units
D. 125 units

Correct Answer: B

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Question 5
A country's GNP is given by the equation GNP = GDP + (net factor income from abroad). If the country's GDP is ₦200 billion and its net factor income from abroad is ₦20 billion, what is the country's GNP?
A. ₦220 billion
B. ₦240 billion
C. ₦260 billion
Correct D. ₦280 billion

Correct Answer: D

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Question 6
Suppose the demand for a product is given by the inverse demand function \( p = 100 - 2q \), where (p) is the price and (q) is the quantity demanded. If the price elasticity of demand is defined as \( E_d = \frac{dq}{dp} cdot \frac{p}{q} \), calculate the price elasticity of demand at the point where \( q = 20 \).
Correct A. -0.5
B. 0.5
C. 1.0
D. 2.0

Correct Answer: A

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Question 7
Consider a perfectly competitive market with a large number of firms producing a homogeneous product. If the market supply curve is given by \( q_s = 100 + 2p \), where \( q_s \) is the quantity supplied and (p) is the price, and the market demand curve is given by \( q_d = 150 - 3p \), where \( q_d \) is the quantity demanded, find the equilibrium price and quantity.
A. p = 30, q = 70
Correct B. p = 40, q = 80
C. p = 50, q = 90
D. p = 60, q = 100

Correct Answer: B

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Question 8
Suppose a country has a trade deficit of $100 million and imports $50 million worth of goods from another country. If the country's exports are valued at $200 million, calculate the balance of trade.
A. $50 million surplus
Correct B. $100 million deficit
C. $150 million surplus
D. $200 million deficit

Correct Answer: B

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Question 9
A consumer has a budget of $100 and faces the following prices for two goods: good A \costs $20 and good B \costs $30. If the consumer's utility function is given by \( U = 2x_A + 3x_B \), where \( x_A \) and \( x_B \) are the quantities of goods A and B consumed, respectively, find the consumer's optimal consumption bundle.
Correct A. \( x_A = 2, x_B = 1 \)
B. \( x_A = 3, x_B = 2 \)
C. \( x_A = 4, x_B = 3 \)
D. \( x_A = 5, x_B = 4 \)

Correct Answer: A

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Question 10
Suppose a country has a production possibility frontier (PPF) given by the equation \( Y = 2X + 3Z \), where (Y) is the total output, (X) is the quantity of good X produced, and (Z) is the quantity of good Z produced. If the country's resources are fully employed, find the maximum possible output.
A. \( Y = 5 \)
B. \( Y = 10 \)
Correct C. \( Y = 15 \)
D. \( Y = 20 \)

Correct Answer: C

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Question 11
The elasticity of demand for a product is 0.5. If the price of the product increases by 10%, what is the percentage change in the quantity demanded?
Correct A. 5%
B. 10%
C. 15%
D. 20%

Correct Answer: A

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Question 12
A firm's production function is given by Q = 2L^0.5K^0.5. If the price of labor increases by 20% and the price of capital increases by 15%, what is the new production level?
A. 10
Correct B. 12
C. 15
D. 18

Correct Answer: B

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Question 13
A country's GDP is 100 billion naira. If the inflation rate is 5% and the population is 200 million, what is the per capita income?
Correct A. ₦500
B. ₦5000
C. ₦50,000
D. ₦500,000

Correct Answer: A

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Question 14
A firm's tax rate is 20%. If the firm's profit is 100 million naira, what is the tax liability?
A. ₦10,000,000
Correct B. ₦20,000,000
C. ₦30,000,000
D. ₦40,000,000

Correct Answer: B

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Question 15
A consumer's utility function is given by U = 2x + 3y. If the prices of x and y are 5 and 10 respectively, and the consumer's income is 100, what is the optimal bundle of x and y?
A. x = 10, y = 5
Correct B. x = 15, y = 10
C. x = 20, y = 15
D. x = 25, y = 20

Correct Answer: B

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Question 16
A government imposes a tax on a firm's profits. The tax rate is 20% of the profit. If the firm's profit is ₦1,000,000, what is the amount of tax paid?
Correct A. ₦200,000
B. ₦250,000
C. ₦300,000
D. ₦400,000

Correct Answer: A

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Question 17
A firm's demand curve is given by the equation Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the price is ₦50, what is the quantity demanded?
A. 50
Correct B. 75
C. 100
D. 125

Correct Answer: B

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Question 18
A country's balance of payments is given by the equation BOP = X - M, where BOP is the balance of payments, X is the exports, and M is the imports. If the exports are ₦500,000,000 and the imports are ₦300,000,000, what is the balance of payments?
Correct A. ₦200,000,000
B. ₦300,000,000
C. ₦400,000,000
D. ₦500,000,000

Correct Answer: A

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Question 19
A consumer's utility function is given by the equation U = 2x + 3y, where U is the utility and x and y are the quantities of two goods. If the quantities of the two goods are 5 and 3 respectively, what is the utility?
A. 13
Correct B. 15
C. 17
D. 19

Correct Answer: B

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Question 20
A firm's supply curve is given by the equation Q = 2P + 10, where Q is the quantity supplied and P is the price. If the price is ₦20, what is the quantity supplied?
A. 30
B. 40
Correct C. 50
D. 60

Correct Answer: C

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Question 21
A country's money supply is given by the equation M = 1000 + 0.5B, where M is the money supply and B is the bank reserves. If the bank reserves are ₦500,000, what is the money supply?
Correct A. ₦1,250,000
B. ₦1,300,000
C. ₦1,350,000
D. ₦1,400,000

Correct Answer: A

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Question 22
A firm's \cost function is given by the equation C = 2Q + 10, where C is the \cost and Q is the quantity produced. If the quantity produced is 20, what is the \cost?
A. ₦50
B. ₦60
Correct C. ₦70
D. ₦80

Correct Answer: C

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Question 23
A country's inflation rate is given by the equation I = 2M + 10, where I is the inflation rate and M is the money supply. If the money supply is ₦1,000,000, what is the inflation rate?
A. 2%
Correct B. 4%
C. 6%
D. 8%

Correct Answer: B

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Question 24
A firm's revenue function is given by the equation R = 2PQ, where R is the revenue and P and Q are the price and quantity sold respectively. If the price is ₦20 and the quantity sold is 20, what is the revenue?
A. ₦800
B. ₦1,000
C. ₦1,200
D. ₦1,400

Correct Answer: VIEW ANSWER

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Question 25
A government imposes a tax on a firm's profits. The tax rate is 20% of the profits. If the firm's profits before tax are ₦1,000,000, what is the amount of tax paid?
Correct A. ₦200,000
B. ₦150,000
C. ₦250,000
D. ₦300,000

Correct Answer: A

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