POST UTME AAUA 2017 Commerce | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A consumer is considering purchasing a product that has a price of ₦1,000. The consumer has a budget of ₦2,000 and is willing to spend up to 50% of their budget on the product. Calculate the maximum amount the consumer is willing to pay for the product.
A. ₦1,000
B. ₦1,000
C. ₦1,000
D. ₦1,000
Question 2
A firm is considering two production methods for its product: Method A and Method B. Method A requires an initial investment of ₦1,500,000 and has a fixed cost of ₦200,000 per unit produced. Method B requires an initial investment of ₦1,000,000 and has a fixed cost of ₦150,000 per unit produced. If the selling price of the product is ₦500 per unit, and the firm produces 10,000 units per year, which production method should the firm adopt?
A. Method A
B. Method B
C. Both methods are equally profitable
D. Neither method is profitable
Question 3
A company has a capital structure consisting of 60% debt and 40% equity. If the cost of debt is 8% and the cost of equity is 12%, what is the weighted average cost of capital (WACC)?
A. 9.6%
B. 10.4%
C. 11.2%
D. 12.0%
Question 4
A firm's marketing mix is a combination of four key elements: product, price, promotion, and place. Which of the following is NOT a key element of the marketing mix?
A. Product
B. Price
C. Promotion
D. Research and Development
Question 5
A company is considering exporting its product to a foreign market. The company has a fixed cost of ₦500,000 and a variable cost of ₦200 per unit. The company expects to sell 1,000 units in the foreign market. Calculate the company's total revenue and profit.
A. Total revenue: ₦250,000; Total profit: ₦250,000
B. Total revenue: ₦250,000; Total profit: ₦50,000
C. Total revenue: ₦250,000; Total profit: ₦200,000
D. Total revenue: ₦250,000; Total profit: ₦300,000
Question 6
The concept of 'Supply and Demand' is a fundamental principle of economics. Which of the following is a characteristic of a demand curve?
A. It slopes upward to the right
B. It slopes downward to the left
C. It is a vertical line
D. It is a horizontal line
Question 7
In a perfectly competitive market, the supply curve is upward-sloping because of the law of increasing
A. diminishing returns
B. increasing costs
C. decreasing marginal revenue
D. increasing marginal cost
Question 8
A firm is considering two different modes of transportation: road and rail. The cost of transporting goods by road is ₦100 per unit, while the cost of transporting goods by rail is ₦80 per unit. If the firm expects to transport 100 units of goods, what is the total cost of transportation?
A. ₦8,000
B. ₦10,000
C. ₦12,000
D. ₦14,000
Question 9
A company is considering the introduction of a new product line. The product has a high fixed cost but low variable cost. Which of the following is the most appropriate pricing strategy?
A. Penetration pricing
B. Skim pricing
C. Bundle pricing
D. Value-based pricing
Question 10
In the context of international trade, what is the primary function of the World Trade Organization (WTO)?
A. To regulate international trade agreements
B. To provide a platform for countries to settle trade disputes
C. To promote economic growth and development
D. To establish trade policies and tariffs
Question 11
A firm is considering outsourcing its production to a foreign country. The firm has determined that outsourcing will reduce its production costs by 15%. However, the firm is concerned about the risks associated with outsourcing, including the risk of intellectual property theft. What should the firm do to mitigate these risks?
A. Use a contract that includes a clause that prohibits the foreign supplier from stealing the firm's intellectual property
B. Use a contract that includes a clause that requires the foreign supplier to pay a penalty if they steal the firm's intellectual property
C. Do not use any risk mitigation measures and rely on the foreign supplier to protect the firm's intellectual property
D. Use a combination of contract clauses to mitigate the risks
Question 12
A consumer has a budget constraint of 100 and a preference for two goods, A and B. The prices of A and B are 10 and 20 respectively. If the consumer's indifference curve is tangent to the budget line, what is the consumer's optimal consumption bundle?
A. A = 5, B = 2.5
B. A = 2.5, B = 5
C. A = 10, B = 0
D. A = 0, B = 10
Question 13
A firm is considering investing in a new production technology that will increase its productivity by 20%. However, the firm is concerned about the high initial investment required to implement the new technology. What should the firm do?
A. Invest in the new technology as it will increase productivity and lead to higher profits
B. Do not invest in the new technology as the high initial investment is not justified
C. Invest in the new technology but only partially, to test its effectiveness
D. Invest in the new technology but only if the government provides a subsidy to cover part of the initial investment
Question 14
A firm's cost of capital is 12%. If it invests ₦1,000,000 at this rate, what will be its expected return?
A. ₦120,000
B. ₦180,000
C. ₦240,000
D. ₦300,000
Question 15
A company has a cash balance of ₦100,000 and a bank overdraft of ₦50,000. What is the company's net cash position?
A. ₦50,000
B. ₦100,000
C. ₦150,000
D. ₦200,000

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