POST UTME ABU 2024 Commerce | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A consumer protection agency is considering a new regulation that requires all companies to provide a 30-day money-back guarantee for their products. If the agency estimates that this regulation will result in a 10% increase in product returns, what is the expected increase in the cost of providing this guarantee?
A. ₦10
B. ₦20
C. ₦30
D. ₦40
Question 2
A sole trader operates a small business, selling handmade crafts online. The business has a single owner, who is responsible for all aspects of the business, including production, marketing, and finance. What is the primary advantage of this business structure?
A. Increased flexibility and autonomy
B. Reduced costs due to simplified management
C. Improved decision-making due to single ownership
D. Enhanced accountability due to multiple owners
Question 3
A company is considering investing in a new project with an initial cost of ₦1,500,000 and expected annual profits of ₦750,000. What is the payback period of the project?
A. 2 years
B. 3 years
C. 4 years
D. 5 years
Question 4
The concept of banking and financial institutions is closely related to the idea of money and credit. Which of the following is a correct example of a financial institution?
A. A commercial bank that provides checking and savings accounts.
B. A central bank that regulates the money supply and sets interest rates.
C. A non-bank financial institution that provides loans and credit to individuals and businesses.
D. A government agency that provides financial assistance to small businesses and entrepreneurs.
Question 5
A company's production function is given by Q = 100L^0.5K^0.5, where Q is the quantity produced, L is the labor input, and K is the capital input. If the company wants to increase its production by 20% while keeping labor input constant at 100 units, what percentage increase in capital input is required?
A. 10%
B. 20%
C. 30%
D. 40%
Question 6
A sole trader is a type of business ownership where one person owns and operates the business. What are the advantages of this type of business ownership?
A. Easy to set up, flexible, and low risk
B. Easy to set up, flexible, and high risk
C. Difficult to set up, inflexible, and low risk
D. Difficult to set up, inflexible, and high risk
Question 7
The concept of insurance and risk management is closely related to the idea of protecting against financial losses. Which of the following is a correct example of a type of insurance?
A. Life insurance that pays a death benefit to the beneficiary.
B. Health insurance that covers medical expenses and hospital stays.
C. Disability insurance that provides income replacement in case of injury or illness.
D. Liability insurance that protects against lawsuits and financial losses.
Question 8
A firm is considering two marketing strategies: Strategy A, which involves a 10% increase in advertising expenditure, and Strategy B, which involves a 5% decrease in advertising expenditure. If the firm's current advertising expenditure is ₦1,000,000, which strategy will result in a higher profit?
A. Strategy A
B. Strategy B
C. Both strategies will result in the same profit
D. Neither strategy will result in a higher profit
Question 9
A country is experiencing a trade deficit of ₦500 billion. If the exchange rate is ₦200 per dollar, what is the value of the trade deficit in dollars?
A. 2.5 billion
B. 2.0 billion
C. 1.5 billion
D. 1.0 billion
Question 10
A consumer protection agency is considering a new regulation that requires all companies to provide a 30-day money-back guarantee for their products. If the agency estimates that this regulation will result in a 10% increase in product returns, what is the expected increase in the cost of providing this guarantee?
A. ₦10
B. ₦20
C. ₦30
D. ₦40
Question 11
A firm specializes in producing only one product, which is a type of electronic component. The firm's production process involves a series of complex steps, including assembly, testing, and packaging. What is the primary advantage of this specialization?
A. Increased efficiency in production
B. Reduced costs due to economies of scale
C. Improved quality control
D. Enhanced customer satisfaction
Question 12
A company's production function is given by Q = 100L^0.5K^0.5, where Q is the quantity produced, L is the labor input, and K is the capital input. If the company wants to increase its production by 20% while keeping labor input constant at 100 units, what percentage increase in capital input is required?
A. 10%
B. 20%
C. 30%
D. 40%
Question 13
A company's share capital is divided into 10,000 shares of ₦10 each. If the company issues 8,000 shares, what is the total amount received from the issue of shares?
A. ₦80,000,000
B. ₦80,000,000.50
C. ₦80,000,000.51
D. ₦80,000,000.01
Question 14
A company is sued for violating the Consumer Protection Act. The court rules that the company must pay damages to the consumer. However, the company appeals the decision, arguing that the consumer was aware of the risks associated with the product. Which of the following is a valid defense for the company?
A. The consumer was aware of the risks associated with the product.
B. The company did not intentionally violate the Consumer Protection Act.
C. The product was not defective at the time of sale.
D. The consumer did not suffer any damages as a result of the product's defect.
Question 15
A company has a sole proprietorship business structure. Which of the following is a characteristic of a sole proprietorship?
A. The business is owned by one person.
B. The business is owned by multiple people.
C. The business is owned by the government.
D. The business is owned by a corporation.

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