ABU Economics 2013/2014 Past Questions

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A consumer is said to be rational if

A.He buys as many goods as his income can buy
B.He tries to maximize his utility not withstanding his limited income
C.He maximizes his utility by borrowing money after exhausting his income
D.He produces maximum commodities

For a consumer of two commodities, equilibrium is attained when

A.MU₁=P₁ and MU₂ = P₂
B.MU₁/P₁ = MU₂/P₂
C.MU₁/P₂ = MU₂/P₁
D.MU₁/P₁ × MU₂/P₂

The law of diminishing marginal utility states that

A.The total utility of a commodity increases initially and decreases later
B.The marginal utility of a commodity diminishes as the consumer takes more of it
C.The marginal utility may be positive or negative
D.utility is a cardinal concept

One of the following is not a property of an indifference curve

A.Negative slope
B.non-intersection of difference curve
C.higher indifference curve equals higher utility
D.decreasing rate of technical substitution

With a given level of money income, a consumer maximizes satisfaction from the consumption of goods and services when the

A.total utility derived from each goods or service is increasing
B.marginal utility derived from each good or service is increasing at the same rate
C.marginal utility derived per naira spend is the same for all the goods and services
D.total utility derived from all the goods and services is large

If at 20k per kg, 2000kg of yam were purchased and at 10k per kilogram, 3000kg were purchased, the resultant point elasticity of demand is

A.0.33
B.0.001
C.1
D.10

If as the price of a commodity rises, the quantity demanded of the commodity remains the same then the demand for the commodity is

A.static
B.infinitely elastic
C.externally determined
D.perfectly inelastic

Which of the following factors, is an important determinant of the magnitude of price elasticity of demand

A.the time period
B.cost of storage
C.utility of the product
D.availabilty of factors of production

If an increase in the price of a commodity leads to an increase in the total revenue, then it means that the demand for this commodity is

A.normal
B.elastic
C.inelastic
D.abnormal

Given that the elasticity of demand for a commodity is 2.5, the percentage change in the quantity demanded as a result of 10 percent change in price is

A.0.25
B.0.40
C.4.00
D.25.00

A firm in a perfectly competitive market is faced with a demand curve whose elasticity is

A.unitary
B.greater than one
C.infinitely
D.less than one

The total quantity supplied of books per week is represented by the function $Qs = 70 + 1/2P$. At a price of 8.00. The quantity supplied is

A.70
B.74
C.76
D.86