POST UTME ACHIEVERS UNIVERSITY 2017 Commerce | Objective

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Question 1
A firm's marketing strategy is most likely to be influenced by which of the following?
Correct A. Consumer behavior
B. Market structure
C. Product life cycle
D. Competitor analysis

Correct Answer: A

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Question 2
A company's financial statements are prepared in accordance with the Generally Accepted Accounting Principles (GAAP). Which of the following is a characteristic of GAAP?
A. GAAP is based on the cash basis of accounting
B. GAAP is based on the accrual basis of accounting
Correct C. GAAP is based on the historical cost basis of accounting
D. GAAP is based on the current cost basis of accounting

Correct Answer: C

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Question 3
A firm's foreign trade is most likely to be influenced by which of the following?
A. Tariffs
B. Quotas
C. Exchange rates
Correct D. All of the above

Correct Answer: D

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Question 4
A company's marketing mix is most likely to be influenced by which of the following?
A. Product
B. Price
C. Promotion
Correct D. All of the above

Correct Answer: D

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Question 5
A firm's banking and financial institutions are most likely to be influenced by which of the following?
A. Central bank
B. Commercial bank
C. Investment bank
Correct D. All of the above

Correct Answer: D

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Question 6
In a perfectly competitive market, what is the relationship between the marginal revenue and marginal cost curves?
A. Marginal revenue is always greater than marginal cost.
B. Marginal revenue is always less than marginal cost.
Correct C. Marginal revenue equals marginal cost.
D. Marginal revenue and marginal cost are unrelated.

Correct Answer: C

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Question 7
A company's break-even point is the point at which its total revenue equals its total cost. What is the formula for calculating the break-even point?
A. Total Revenue = Total Cost
Correct B. Total Revenue = Total Fixed Costs + Total Variable Costs
C. Total Revenue = Total Fixed Costs + Total Variable Costs + Break-Even Point
D. Total Revenue = Total Fixed Costs - Total Variable Costs

Correct Answer: B

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Question 8
A firm's production function is given by Q = 2L^0.5 + 3K^0.5. What is the marginal product of labor?
A. MP_L = 1/L
B. MP_L = 1/L^2
Correct C. MP_L = 1/L^0.5
D. MP_L = 1/L^0.25

Correct Answer: C

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Question 9
A company's financial statements show that its total assets are ₦1,000,000, its total liabilities are ₦500,000, and its net income is ₦200,000. What is the company's return on equity?
A. 20%
Correct B. 25%
C. 30%
D. 35%

Correct Answer: B

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Question 10
A sole trader's business is organized as a partnership. What is the primary advantage of this organizational structure?
A. Limited liability
B. Unlimited liability
Correct C. Shared profits and losses
D. Increased management control

Correct Answer: C

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Question 11
In a perfectly competitive market, the supply curve is upward-sloping because of the law of increasing costs. What is the primary reason for this upward-sloping supply curve?
A. The law of increasing costs is due to the fixed costs of production.
B. The law of increasing costs is due to the variable costs of production.
Correct C. The law of increasing costs is due to the increasing marginal cost of production.
D. The law of increasing costs is due to the decreasing marginal revenue of production.

Correct Answer: C

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Question 12
A company's financial statements are audited annually. What is the primary purpose of this audit?
Correct A. To ensure the company's financial statements are accurate and reliable.
B. To ensure the company's financial statements comply with accounting standards.
C. To ensure the company's financial statements are presented fairly.
D. To ensure the company's financial statements are in line with tax laws.

Correct Answer: A

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Question 13
A consumer purchases a product with a price of ₦500. If the consumer has a budget of ₦1000, what is the consumer's opportunity cost of purchasing this product?
A. ₦200
Correct B. ₦300
C. ₦400
D. ₦500

Correct Answer: B

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Question 14
A company has a profit of ₦100,000. If the company's total revenue is ₦500,000 and its total cost is ₦400,000, what is the company's profit margin?
A. 20%
Correct B. 25%
C. 30%
D. 35%

Correct Answer: B

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Question 15
A consumer has a utility function given by U(x,y) = 2x + 3y. If the consumer's income is ₦1000 and the prices of x and y are ₦2 and ₦3 respectively, what is the consumer's optimal bundle of x and y?
Correct A. x = 200, y = 300
B. x = 300, y = 200
C. x = 400, y = 100
D. x = 100, y = 400

Correct Answer: A

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Question 16
In a perfectly competitive market, the supply curve is upward-sloping because of the law of increasing
A. Diminishing Marginal Opportunity Cost
Correct B. Increasing Marginal Opportunity Cost
C. Diminishing Marginal Utility
D. Increasing Marginal Utility

Correct Answer: B

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Question 17
A company's break-even point is the point at which its total revenue equals its total
A. Fixed Costs
B. Variable Costs
Correct C. Total Costs
D. Selling Price

Correct Answer: C

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Question 18
A sole trader is a business owned and operated by one person, known as the
A. Partner
B. Director
Correct C. Proprietor
D. Shareholder

Correct Answer: C

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Question 19
The main advantage of a company is that it has a separate legal identity from its
Correct A. Shareholders
B. Directors
C. Employees
D. Creditors

Correct Answer: A

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Question 20
The probability of an event occurring is measured by its
A. Expected Value
B. Variance
C. Standard Deviation
Correct D. Probability Density Function

Correct Answer: D

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Question 21
A company has two production plants, one in Lagos and the other in Abuja. The Lagos plant produces 60% of the company's output, while the Abuja plant produces 40%. If the company's total output is 1000 units, how many units will each plant produce?
Correct A. Lagos: 600, Abuja: 400
B. Lagos: 400, Abuja: 600
C. Lagos: 500, Abuja: 500
D. Lagos: 700, Abuja: 300

Correct Answer: A

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Question 22
A firm is considering two investment projects. Project A has a 10% chance of generating a profit of ₦100,000 and a 90% chance of generating a profit of ₦20,000. Project B has a 20% chance of generating a profit of ₦150,000 and an 80% chance of generating a profit of ₦10,000. Which project should the firm choose?
Correct A. Project A
B. Project B
C. Both projects are equally profitable
D. Neither project is profitable

Correct Answer: A

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Question 23
A company has a marketing budget of ₦1,000,000. It plans to allocate 30% of the budget to advertising and 70% to promotion. If the cost of advertising is ₦300,000, how much will be allocated to promotion?
Correct A. ₦700,000
B. ₦600,000
C. ₦800,000
D. ₦900,000

Correct Answer: A

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Question 24
A firm is considering a new product launch. The product has a probability of success of 0.8 and a probability of failure of 0.2. If the firm invests ₦500,000 in the product, what is the expected return?
A. ₦400,000
Correct B. ₦500,000
C. ₦600,000
D. ₦800,000

Correct Answer: B

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Question 25
A company has a production cost of ₦200,000 per unit and a selling price of ₦300,000 per unit. If the company produces 100 units, what is the profit?
A. ₦100,000
B. ₦200,000
Correct C. ₦300,000
D. ₦400,000

Correct Answer: C

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