Practice Post UTME AFE BABALOLA UNIVERSITY commerce 2020 Past Questions

Question 1

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 increases its labor input from 100 to 121 units and its capital input from 100 to 121 units, by how many percentage points will its quantity produced increase?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 2

A consumer has a budget constraint of 1000 and a preference for two goods, A and B, with prices of 10 and 20 respectively. If the consumer's indifference curve is tangent to the budget line at a point where the consumer is consuming 50 units of good A and 25 units of good B, what is the consumer's marginal rate of substitution (MRS) between good A and good B?

A. 1:1

Correct B. 1:2

C. 2:1

D. 3:1

Correct Answer: B

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Question 3

A firm's cost function is given by C = 100 + 2Q + 0.01Q^2, where C is the total cost and Q is the quantity produced. If the firm produces 100 units of output, what is its total cost?

A. 1200

B. 1300

Correct C. 1400

D. 1500

Correct Answer: C

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Question 4

A company has a production function 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 increases its labor input from 100 to 121 units and its capital input from 100 to 121 units, what is the new quantity produced?

A. 121

Correct B. 122

C. 123

D. 124

Correct Answer: B

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Question 5

A consumer has a budget constraint of 1000 and a preference for two goods, A and B, with prices of 10 and 20 respectively. If the consumer's indifference curve is tangent to the budget line at a point where the consumer is consuming 50 units of good A and 25 units of good B, what is the consumer's budget constraint equation?

Correct A. 10A + 20B = 1000

B. 10A + 20B = 1200

C. 10A + 20B = 1400

D. 10A + 20B = 1600

Correct Answer: A

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Question 6

A multinational corporation is considering expanding its operations into a new market. The company's marketing team has identified three potential target markets: Market A, Market B, and Market C. Each market has a different level of competition, consumer demand, and product life cycle. Which market segmentation strategy would be most appropriate for this company?

A. Market segmentation based on demographic characteristics

B. Market segmentation based on geographic location

Correct C. Market segmentation based on psychographic characteristics

D. Market segmentation based on firmographic characteristics

Correct Answer: C

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Question 7

A company is considering launching a new product in a new market. The company's marketing team has identified several potential product life cycles, including the introduction, growth, maturity, and decline stages. Which product life cycle stage is typically characterized by increasing market share and revenue?

A. Introduction stage

Correct B. Growth stage

C. Maturity stage

D. Decline stage

Correct Answer: B

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Question 8

A consumer protection agency is investigating a complaint about a company's advertising practices. The company has been accused of making false or misleading claims about its product. Which section of the Federal Trade Commission Act would be most relevant to this investigation?

Correct A. Section 5(a)

B. Section 5(b)

C. Section 12

D. Section 13

Correct Answer: A

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Question 9

A company is considering exporting its products to a new country. The company's international trade team has identified several potential trade barriers, including tariffs, quotas, and non-tariff barriers. Which type of trade barrier is typically imposed by a government to limit imports?

A. Tariff

Correct B. Quota

C. Non-tariff barrier

D. Export subsidy

Correct Answer: B

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Question 10

A company is considering investing in a new production facility. The company's production team has identified several potential production costs, including fixed costs, variable costs, and sunk costs. Which type of cost is typically incurred even if the company decides not to produce a product?

A. Fixed cost

B. Variable cost

Correct C. Sunk cost

D. Opportunity cost

Correct Answer: C

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Question 11

A sole trader's business is exposed to various risks, including market risk, credit risk, and operational risk. Which of the following is the most appropriate risk management strategy for a sole trader?

A. Diversification

B. Hedging

Correct C. Insurance

D. Diversification and Hedging

Correct Answer: C

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Question 12

A company has a warehouse with a capacity of 10,000 units. The company receives an order for 5,000 units. The warehouse is currently 70% full. What is the minimum number of units that can be stored in the warehouse after fulfilling the order?

Correct A. 3500

B. 4000

C. 4500

D. 5000

Correct Answer: A

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Question 13

A company uses the weighted average cost method to value its inventory. The company has two types of inventory: Type A and Type B. The cost of Type A is ₦100 per unit, and the cost of Type B is ₦120 per unit. The company has 100 units of Type A and 50 units of Type B. What is the total cost of the inventory?

A. ₦12000

Correct B. ₦13000

C. ₦14000

D. ₦15000

Correct Answer: B

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Question 14

A company has a warehouse with a capacity of 10,000 units. The company receives an order for 5,000 units. The warehouse is currently 70% full. What is the minimum number of units that can be stored in the warehouse after fulfilling the order?

Correct A. 3500

B. 4000

C. 4500

D. 5000

Correct Answer: A

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Question 15

A company uses the FIFO method to value its inventory. The company has two types of inventory: Type A and Type B. The cost of Type A is ₦100 per unit, and the cost of Type B is ₦120 per unit. The company has 100 units of Type A and 50 units of Type B. What is the total cost of the inventory?

A. ₦12000

Correct B. ₦13000

C. ₦14000

D. ₦15000

Correct Answer: B

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Question 16

In a just-in-time (JIT) inventory system, what is the primary goal of the warehouse manager?

A. To minimize inventory costs

B. To maximize storage capacity

Correct C. To reduce lead times

D. To increase order quantities

Correct Answer: C

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Question 17

A company has a production capacity of 10,000 units per month. The demand for the product is 12,000 units per month. What is the level of inventory required to meet the demand?

A. 8,000 units

B. 10,000 units

Correct C. 12,000 units

D. 14,000 units

Correct Answer: C

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Question 18

A bank offers a 5% interest rate on a 1-year fixed deposit. If the principal amount is ₦10,000, what is the interest earned?

A. ₦500

Correct B. ₦500.50

C. ₦500.25

D. ₦500.50

Correct Answer: B

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Question 19

A company has a marketing budget of ₦1,000,000. If the cost of advertising is ₦500,000 and the cost of promotion is ₦300,000, what is the amount left for other marketing activities?

A. ₦100,000

Correct B. ₦200,000

C. ₦300,000

D. ₦400,000

Correct Answer: B

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Question 20

A firm produces two products, A and B. The production process for product A requires 2 hours of labor and 1 hour of machine time, while product B requires 1 hour of labor and 2 hours of machine time. If the firm has 8 hours of labor and 6 hours of machine time available, how many units of product A and product B should be produced to maximize profit?

A. Product A: 4 units, Product B: 2 units

B. Product A: 2 units, Product B: 4 units

Correct C. Product A: 3 units, Product B: 3 units

D. Product A: 1 unit, Product B: 5 units

Correct Answer: C

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Question 21

The Consumer Protection Act of 1999 provides for the protection of consumers from unfair trade practices. Which of the following is a key provision of the Act?

A. The Act provides for the establishment of a Consumer Protection Council.

Correct B. The Act provides for the protection of consumers from unfair trade practices.

C. The Act provides for the establishment of a Consumer Protection Agency.

D. The Act provides for the protection of consumers from defective products.

Correct Answer: B

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Question 22

A company is considering the production of a new product. The product requires a specialized machine that costs ₦500,000. The company expects to sell 10,000 units of the product at ₦50 each. What is the minimum number of units the company must sell to break even?

A. 5,000

Correct B. 10,000

C. 15,000

D. 20,000

Correct Answer: B

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Question 23

A sole trader is considering the purchase of a new business. The business requires an initial investment of ₦200,000. The sole trader expects to earn a profit of ₦50,000 per year. What is the minimum number of years the sole trader must operate the business to recover the initial investment?

A. 2 years

B. 3 years

Correct C. 4 years

D. 5 years

Correct Answer: C

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Question 24

A company is considering the use of a new marketing strategy. The strategy involves the use of social media to promote the company's products. What is the primary advantage of using social media as a marketing tool?

A. Social media allows for the targeting of specific demographics.

B. Social media allows for the creation of a brand identity.

C. Social media allows for the measurement of campaign effectiveness.

Correct D. Social media allows for the creation of a viral marketing campaign.

Correct Answer: D

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Question 25

A company is considering the purchase of a new insurance policy. The policy provides for the coverage of business interruption losses. What is the primary advantage of purchasing this type of policy?

Correct A. The policy provides for the coverage of business interruption losses.

B. The policy provides for the coverage of property damage losses.

C. The policy provides for the coverage of liability losses.

D. The policy provides for the coverage of workers' compensation losses.

Correct Answer: A

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