POST UTME ABU 2020 Commerce | Objective

Practice these randomly selected questions to test your readiness.

Question 1
In a sole trader business, what is the primary advantage of using a petty cash system?
A. Improved cash flow management
B. Enhanced customer satisfaction
C. Increased employee productivity
D. Reduced administrative costs
Question 2
A company is considering the introduction of a new product line. The product requires a significant investment in research and development, but it is expected to generate substantial revenue. Which of the following is a key consideration for the company?
A. The potential impact on the company's market share
B. The level of competition in the market
C. The availability of resources for research and development
D. The potential for the product to cannibalize existing sales
Question 3
A firm's demand function is given by P = 100 - 2Q, where P is the price and Q is the quantity demanded. If the firm's marginal revenue function is MR = 200 - 4Q, what is the firm's optimal quantity produced?
A. 10
B. 20
C. 30
D. 40
Question 4
In a sole trader business, what is the primary advantage of using a sole proprietorship structure?
A. Limited liability
B. Flexibility in decision-making
C. Easy to establish
D. No tax benefits
Question 5
A company has two business units: A and B. Unit A has a profit margin of 20% and unit B has a profit margin of 15%. If the total profit is ₦1,500,000, what is the profit of unit A?
A. ₦300,000
B. ₦375,000
C. ₦450,000
D. ₦525,000
Question 6
A company has a warehouse with a capacity to store 5,000 units of stock. If the company receives an order for 2,000 units, what is the remaining capacity of the warehouse?
A. 2,000 units
B. 3,000 units
C. 4,000 units
D. 5,000 units
Question 7
A consumer purchases a product with a price tag of ₦1,500. If the consumer is entitled to a 10% discount, what is the amount the consumer needs to pay?
A. ₦1,350
B. ₦1,400
C. ₦1,450
D. ₦1,500
Question 8
A company has a production capacity of 1,000 units per day. If the current production level is 800 units per day and the demand rate is 700 units per day, what is the production shortfall?
A. 100
B. 200
C. 300
D. 400
Question 9
A company's cost function is given by C = 100 + 2L + 3K, where C is the total cost, L is the labor input, and K is the capital input. If the company increases its labor input from 50 units to 75 units, and its capital input from 50 units to 75 units, by how much will the total cost increase?
A. ₦500
B. ₦1000
C. ₦1500
D. ₦2000
Question 10
A company is considering the introduction of a new product line. What type of risk is the company exposed to?
A. Market risk
B. Credit risk
C. Operational risk
D. Liquidity risk
Question 11
A business is considering the use of a foreign exchange market to hedge against exchange rate risk. Which of the following would be a major advantage of using a forward contract?
A. Reduced exchange rate risk
B. Improved cash flow management
C. Increased employee productivity
D. Enhanced supply chain efficiency
Question 12
A sole trader is considering the purchase of a new piece of equipment for their business. The equipment will cost ₦50,000 and is expected to increase revenue by ₦20,000 per month. Which of the following is a key consideration for the sole trader?
A. The potential impact on the company's cash flow
B. The level of competition in the market
C. The availability of resources for the purchase
D. The potential for the equipment to increase the company's market share
Question 13
A bank offers a 5-year fixed deposit account with an interest rate of 10% per annum compounded annually. If a customer deposits ₦100,000 at the beginning of the first year, what is the amount in the account at the end of the fifth year?
A. ₦163,922.78
B. ₦164,922.78
C. ₦165,922.78
D. ₦166,922.78
Question 14
A producer specializes in the production of a single good. Which of the following is a benefit of specialization?
A. Increased efficiency in production.
B. Improved quality of the final product.
C. Reduced costs associated with production.
D. Increased demand for the final product.
Question 15
A firm's revenue function is given by R = 100Q - 2Q^2, where R is the total revenue and Q is the quantity sold. If the firm's marginal revenue function is MR = 100 - 4Q, what is the firm's optimal quantity sold?
A. 10
B. 20
C. 30
D. 40

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