POST UTME WELLSPRING UNIVERSITY 2020 Economics | Objective

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Question 1
The Marshall-Lerner condition states that if the sum of the elasticities of demand for imports and exports 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 on the trade balance?
A. A devaluation will lead to an increase in the trade balance.
B. A devaluation will lead to a decrease in the trade balance.
C. The trade balance will remain unchanged.
D. The Marshall-Lerner condition is irrelevant to the trade balance.
Question 2
A government imposes a tax on a firm's output. Which of the following is a characteristic of the supply curve?
A. Inelastic supply
B. Elastic supply
C. Unit elastic supply
D. Perfectly inelastic supply
Question 3
In a perfectly competitive market, the demand curve for a firm's product is its
A. marginal revenue curve
B. marginal \cost curve
C. average revenue curve
D. average \cost curve
Question 4
Consider a consumer with a utility function ( U(x,y) = 2x + 3y - x^2 - 2y^2 ). If the consumer's income is ₦1000 and the prices of x and y are ₦2 and ₦3 respectively, find the optimal bundle of x and y u\sing Lagrange multipliers.
A. \( x = 10, y = 5 \)
B. \( x = 5, y = 10 \)
C. \( x = 15, y = 0 \)
D. \( x = 0, y = 15 \)
Question 5
A firm's \cost function is given by C = 100 + 2L + 3K. If the firm's labor and capital inputs are increased by 10% and 5% respectively, what is the percentage change in \cost?
A. 5%
B. 10%
C. 15%
D. 20%
Question 6
A consumer's utility function is given by U = 2x + 3y. If the consumer's income is ₦1000 and the prices of x and y are ₦5 and ₦10 respectively, what is the consumer's optimal bundle of x and y?
A. x = 40, y = 20
B. x = 20, y = 40
C. x = 60, y = 10
D. x = 10, y = 60
Question 7
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's labor and capital inputs are increased by 20% and 15% respectively, what is the percentage change in output?
A. 5%
B. 10%
C. 15%
D. 20%
Question 8
A firm is producing a good with a production function Q = 2L^\( 1/2 \)K^\( 1/2 \). If the price of the good is $10 and the wage rate is $5 per hour, determine the optimal level of labor employment u\sing the first-order condition.
A. L = 4
B. L = 8
C. L = 16
D. L = 32
Question 9
A consumer's utility function is given by U = 2x^0.5y^0.5. If the consumer's income is ₦1000 and the prices of x and y are ₦5 and ₦3 respectively, what is the consumer's optimal bundle of x and y?
A. x = 10, y = 10
B. x = 20, y = 5
C. x = 5, y = 20
D. x = 15, y = 15
Question 10
A government imposes a tax on a firm's output. Which of the following is a characteristic of the supply curve?
A. Inelastic supply
B. Elastic supply
C. Unit elastic supply
D. Perfectly inelastic supply
Question 11
A consumer has the following utility function: U = 2x + 3y. If the prices of x and y are ₦5 and ₦10 respectively, and the consumer has a budget of ₦50, what is the optimal bundle of x and y?
A. (5, 2)
B. (10, 1)
C. (15, 0)
D. (0, 5)
Question 12
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 budget constraint is 2x + 3y = 12, find the consumer's optimal consumption bundle.
A. x = 2, y = 4
B. x = 4, y = 2
C. x = 3, y = 3
D. x = 1, y = 5
Question 13
Consider a firm with a production function \( Q = 2L^0.5K^{0.5} \). If the firm has 100 units of Labour and 50 units of Capital, find the firm's marginal product of Labour and Capital.
A. \( MPL = 0.5, MPC = 0.5 \)
B. \( MPL = 0.25, MPC = 0.25 \)
C. \( MPL = 0.1, MPC = 0.1 \)
D. \( MPL = 0.05, MPC = 0.05 \)
Question 14
The demand for a product is given by Qd = 100 - 2P, where Qd is the quantity demanded and P is the price. The supply of the product is given by Qs = 2P - 50, where Qs is the quantity supplied. Find the elasticity of demand.
A. 0.5
B. 1
C. 1.5
D. 2
Question 15
Consider a country with a GDP of ₦100 billion and a GNP of ₦120 billion. If the country's net factor income from abroad is ₦20 billion, find the country's net national product.
A. ₦100 billion
B. ₦120 billion
C. ₦140 billion
D. ₦160 billion

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