Practice Post UTME AFE BABALOLA UNIVERSITY commerce 2024 Past Questions

Question 1

A commercial bank's primary function is to act as a _______ between the surplus units and the deficit units in the economy.

A. banker

B. broker

C. agent

Correct D. intermediary

Correct Answer: D

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Question 2

The _______ of a business refers to the process of converting inputs into outputs.

Correct A. production

B. distribution

C. consumption

D. marketing

Correct Answer: A

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Question 3

A consumer protection law that prohibits unfair or deceptive acts or practices in the marketplace is known as a _______ law.

A. deceptive

B. unfair

C. fraudulent

Correct D. deceptive or unfair

Correct Answer: D

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Question 4

The _______ of a business refers to the process of creating and communicating value to customers.

A. production

B. distribution

C. consumption

Correct D. marketing

Correct Answer: D

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Question 5

A _______ is a type of insurance that pays a lump sum benefit if the policyholder dies within a specified period.

Correct A. life insurance

B. health insurance

C. disability insurance

D. accident insurance

Correct Answer: A

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Question 6

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 7

A consumer purchases a product with a price of ₦5,000. If the product is subject to a 10% sales tax, what is the amount of tax paid?

Correct A. ₦500

B. ₦1,000

C. ₦5,000

D. ₦10,000

Correct Answer: A

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Question 8

A company uses the following transportation modes: road, rail, and air. If the cost of transportation is ₦10,000 per ton for road, ₦8,000 per ton for rail, and ₦12,000 per ton for air, what is the total cost of transportation for a shipment of 100 tons?

A. ₦1,200,000

Correct B. ₦1,400,000

C. ₦1,600,000

D. ₦1,800,000

Correct Answer: B

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Question 9

A business organization has a cash reserve of ₦500,000 and a credit reserve of ₦200,000. If the business needs to make a payment of ₦700,000, what is the total amount of funds available for the payment?

A. ₦700,000

B. ₦800,000

C. ₦900,000

Correct D. ₦1,000,000

Correct Answer: D

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Question 10

A company has a warehouse with a capacity of 10,000 units. If the company receives an order for 8,000 units, what is the remaining capacity of the warehouse?

Correct A. 2,000 units

B. 4,000 units

C. 6,000 units

D. 8,000 units

Correct Answer: A

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Question 11

The following diagram represents a production possibility frontier for a firm that produces two goods, X and Y. What is the opportunity cost of producing one more unit of good X?

A. 1 unit of good Y

Correct B. 2 units of good Y

C. 3 units of good Y

D. 4 units of good Y

Correct Answer: B

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Question 12

A company is considering two different marketing strategies for its new product. Strategy A involves a high level of advertising and promotion, while Strategy B involves a low level of advertising and promotion. Which strategy is more likely to result in a higher return on investment (ROI)?

Correct A. Strategy A

B. Strategy B

C. Both strategies are equally likely to result in a higher ROI

D. Neither strategy is likely to result in a higher ROI

Correct Answer: A

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Question 13

A consumer protection agency has received a complaint from a customer who claims that a company has sold a defective product. The agency has gathered evidence that the company has a history of selling defective products. What is the most likely legal remedy for the customer?

Correct A. The customer can sue the company for damages

B. The customer can file a complaint with the consumer protection agency

C. The customer can return the defective product for a full refund

D. The customer can cancel the purchase and receive a partial refund

Correct Answer: A

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Question 14

A sole trader has decided to expand their business by hiring additional employees. What is the most likely tax implication of this decision?

A. The sole trader will be required to pay a higher rate of income tax

B. The sole trader will be required to pay a higher rate of corporation tax

Correct C. The sole trader will be able to claim a tax deduction for the salaries of the new employees

D. The sole trader will not be required to pay any additional taxes

Correct Answer: C

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Question 15

A company is considering the introduction of a new product to its existing product line. The new product will require a significant investment in research and development, but it is expected to generate a high return on investment (ROI). What is the most likely reason for the company's decision to introduce the new product?

A. The company wants to increase its market share

B. The company wants to reduce its costs

C. The company wants to increase its revenue

Correct D. The company wants to diversify its product line

Correct Answer: D

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Question 16

In a perfectly competitive market, the law of supply states that the quantity of a good supplied is inversely related to the price of the good. If the price of a commodity increases by 20% and the quantity supplied decreases by 15%, what is the price elasticity of supply?

A. 0.5

Correct B. 1.0

C. 1.5

D. 2.0

Correct Answer: B

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Question 17

A firm's production function is given by Q = 2L^0.5K^0.5, where Q is output, L is labor and K is capital. If the firm wants to increase its output by 20% and labor increases by 10%, what is the percentage increase in capital required?

A. 5%

B. 10%

Correct C. 15%

D. 20%

Correct Answer: C

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Question 18

A consumer has a budget of ₦1000 and a preference for two goods, A and B. The prices of the goods are ₦200 and ₦300 respectively. The consumer's indifference curves are given by the equation U = 2x^0.5y^0.5, where U is utility, x is the quantity of good A and y is the quantity of good B. If the consumer is initially at point (2, 2), what is the new point on the indifference curve that the consumer will move to after a price increase of 20%?

Correct A. (1, 3)

B. (2, 2)

C. (3, 1)

D. (4, 0)

Correct Answer: A

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Question 19

A firm's cost function is given by C = 2L + 3K, where C is cost, L is labor and K is capital. If the firm wants to minimize its cost and labor increases by 10%, what is the percentage increase in capital required?

A. 5%

Correct B. 10%

C. 15%

D. 20%

Correct Answer: B

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Question 20

A consumer has a budget of ₦1000 and a preference for two goods, A and B. The prices of the goods are ₦200 and ₦300 respectively. The consumer's indifference curves are given by the equation U = 2x^0.5y^0.5, where U is utility, x is the quantity of good A and y is the quantity of good B. If the consumer is initially at point (2, 2), what is the new point on the indifference curve that the consumer will move to after a price increase of 20%?

Correct A. (1, 3)

B. (2, 2)

C. (3, 1)

D. (4, 0)

Correct Answer: A

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Question 21

In the context of international trade, what is the primary function of the World Trade Organization (WTO)?

A. To regulate international trade agreements

Correct B. To provide a platform for countries to negotiate trade agreements

C. To enforce trade sanctions against non-compliant countries

D. To promote economic development in developing countries

Correct Answer: B

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Question 22

A company is considering investing in a new project with a expected return of 12% and a standard deviation of 8%. What is the expected value of the project?

A. 10%

Correct B. 12%

C. 15%

D. 18%

Correct Answer: B

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Question 23

A sole trader has a business income of ₦500,000 and a business expense of ₦200,000. What is the profit before tax?

Correct A. ₦300,000

B. ₦400,000

C. ₦500,000

D. ₦600,000

Correct Answer: A

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Question 24

A company has a production capacity of 10,000 units per month. If the demand for the product is 12,000 units per month, what is the level of production specialization?

A. 50%

B. 60%

C. 70%

Correct D. 80%

Correct Answer: D

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Question 25

A company has a risk management strategy that involves diversification of its investments. What is the primary benefit of this strategy?

Correct A. Reduced risk

B. Increased returns

C. Improved liquidity

D. Enhanced reputation

Correct Answer: A

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