POST UTME AAUA 2019 Commerce | Objective

Are you preparing for POST UTME AAUA exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2019 Commerce (Objective) questions designed to simulate the real exam environment.

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Question 1
A company's sole trader is considering the purchase of a new piece of equipment for its business. The equipment costs ₦150,000 and has a useful life of 5 years. The company expects to use the equipment for 8 hours a day, 5 days a week. The equipment's maintenance cost is ₦10,000 per year. Calculate the annual depreciation of the equipment using the straight-line method.
A. ₦20,000
Correct B. ₦30,000
C. ₦40,000
D. ₦50,000

Correct Answer: B

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Question 2
A bank's customer deposits ₦100,000 into their savings account. The bank offers a 5% interest rate per annum, compounded annually. Calculate the amount in the customer's account after 2 years.
Correct A. ₦110,250
B. ₦110,500
C. ₦110,750
D. ₦111,000

Correct Answer: A

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Question 3
A company's sole trader is considering the purchase of a new piece of equipment for its business. The equipment costs ₦200,000 and has a useful life of 5 years. The company expects to use the equipment for 8 hours a day, 5 days a week. The equipment's maintenance cost is ₦15,000 per year. Calculate the annual depreciation of the equipment using the straight-line method.
A. ₦25,000
Correct B. ₦40,000
C. ₦55,000
D. ₦70,000

Correct Answer: B

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Question 4
A bank's customer withdraws ₦50,000 from their savings account. The bank offers a 5% interest rate per annum, compounded annually. Calculate the amount in the customer's account after 1 year.
Correct A. ₦47,500
B. ₦50,000
C. ₦52,500
D. ₦55,000

Correct Answer: A

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Question 5
A company's sole trader is considering the purchase of a new piece of equipment for its business. The equipment costs ₦300,000 and has a useful life of 5 years. The company expects to use the equipment for 8 hours a day, 5 days a week. The equipment's maintenance cost is ₦20,000 per year. Calculate the annual depreciation of the equipment using the straight-line method.
A. ₦30,000
Correct B. ₦60,000
C. ₦80,000
D. ₦100,000

Correct Answer: B

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Question 6
The concept of specialization in commerce refers to the process by which a firm focuses on producing a specific product or service, thereby increasing its efficiency and reducing costs. Which of the following is a benefit of specialization in commerce?
A. Increased competition
B. Improved product quality
Correct C. Reduced production costs
D. Increased market share

Correct Answer: C

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Question 7
A firm has the following inventory levels: 100 units of product A, 200 units of product B, and 50 units of product C. If the firm uses the First-In-First-Out (FIFO) inventory method, what is the total value of the inventory?
A. ₦100,000
Correct B. ₦120,000
C. ₦150,000
D. ₦180,000

Correct Answer: B

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Question 8
A consumer purchases a product for ₦1,000 and pays a sales tax of 10%. What is the total amount paid by the consumer?
A. ₦1,100
Correct B. ₦1,200
C. ₦1,300
D. ₦1,400

Correct Answer: B

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Question 9
A firm has a production capacity of 1,000 units per day. If the firm operates for 20 days, what is the total production?
Correct A. 20,000 units
B. 25,000 units
C. 30,000 units
D. 35,000 units

Correct Answer: A

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Question 10
A consumer has a budget of ₦10,000 and purchases two products, A and B, for ₦5,000 and ₦3,000 respectively. What is the remaining budget?
A. ₦2,000
Correct B. ₦3,000
C. ₦4,000
D. ₦5,000

Correct Answer: B

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Question 11
A firm specializes in producing only one good. This specialization is an example of:
A. Division of Labor
B. Economies of Scale
Correct C. Comparative Advantage
D. Opportunity Cost

Correct Answer: C

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Question 12
A country's trade deficit is 100 billion. This means that the country is importing 100 billion more than it is exporting. What is the value of the trade deficit in terms of the trade balance?
Correct A. -100 billion
B. 100 billion
C. 0
D. 200 billion

Correct Answer: A

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Question 13
A bank's reserve requirement is 10%. If the bank has 100,000 in deposits, how much must it hold in reserves?
Correct A. 10,000
B. 20,000
C. 30,000
D. 40,000

Correct Answer: A

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Question 14
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm has 100 units of labor and 100 units of capital, what is the maximum value of output?
A. 100
B. 200
Correct C. 300
D. 400

Correct Answer: C

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Question 15
A country's GDP is 1 trillion. If the country's population is 100 million, what is the GDP per capita?
A. 10,000
Correct B. 20,000
C. 30,000
D. 40,000

Correct Answer: B

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Question 16
In a perfectly competitive market, the law of supply states that as the price of a good increases, the quantity supplied will
A. increase
Correct B. decrease
C. remain the same
D. move in the opposite direction

Correct Answer: B

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Question 17
A company's production function is given by the equation Q = 2L^0.5K^0.5, where Q is the quantity produced, L is labor and K is capital. If the company wants to increase production by 25%, what percentage increase in labor and capital is required?
A. 10%
B. 20%
Correct C. 25%
D. 50%

Correct Answer: C

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Question 18
A firm is considering two different production processes: process A and process B. Process A has a fixed cost of ₦100,000 and a variable cost of ₦50 per unit, while process B has a fixed cost of ₦150,000 and a variable cost of ₦30 per unit. If the firm produces 10,000 units, what is the total cost of production for each process?
A. ₦500,000
B. ₦600,000
Correct C. ₦700,000
D. ₦800,000

Correct Answer: C

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Question 19
A country's trade balance is given by the equation TB = X - M, where TB is the trade balance, X is exports and M is imports. If the country's exports are ₦500 billion and imports are ₦600 billion, what is the trade balance?
A. ₦100 billion
Correct B. ₦200 billion
C. ₦300 billion
D. ₦400 billion

Correct Answer: B

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Question 20
A firm's demand function is given by the equation Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the firm wants to increase revenue by 20%, what price should it charge?
A. ₦20
B. ₦30
Correct C. ₦40
D. ₦50

Correct Answer: C

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Question 21
In a perfectly competitive market, the supply curve is determined by the marginal cost curve. However, in a real-world scenario, the supply curve is often influenced by other factors such as the law of diminishing returns. Which of the following best describes the relationship between the law of diminishing returns and the supply curve?
A. The law of diminishing returns causes the supply curve to shift to the left.
B. The law of diminishing returns causes the supply curve to shift to the right.
Correct C. The law of diminishing returns causes the supply curve to become flatter.
D. The law of diminishing returns has no effect on the supply curve.

Correct Answer: C

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Question 22
A company is considering two different production methods to produce a product. Method A requires an initial investment of ₦100,000 and produces 100 units per day. Method B requires an initial investment of ₦150,000 and produces 120 units per day. If the company wants to produce 1,000 units per day, which method should it choose?
A. Method A
Correct B. Method B
C. Both methods are equally profitable
D. Neither method is profitable

Correct Answer: B

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Question 23
A firm is considering two different marketing strategies to promote its product. Strategy A involves a ₦50,000 advertising campaign that is expected to increase sales by 10%. Strategy B involves a ₦100,000 advertising campaign that is expected to increase sales by 20%. If the firm wants to maximize its profits, which strategy should it choose?
A. Strategy A
Correct B. Strategy B
C. Both strategies are equally profitable
D. Neither strategy is profitable

Correct Answer: B

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Question 24
A company is considering two different warehouse management systems to manage its inventory. System A costs ₦50,000 per year and has a storage capacity of 1,000 units. System B costs ₦100,000 per year and has a storage capacity of 2,000 units. If the company wants to minimize its costs, which system should it choose?
Correct A. System A
B. System B
C. Both systems are equally expensive
D. Neither system is cost-effective

Correct Answer: A

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Question 25
A firm is considering two different banking options to finance its business. Option A involves a loan of ₦500,000 at an interest rate of 10% per annum. Option B involves a loan of ₦750,000 at an interest rate of 8% per annum. If the firm wants to minimize its interest payments, which option should it choose?
A. Option A
Correct B. Option B
C. Both options are equally expensive
D. Neither option is cost-effective

Correct Answer: B

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