POST UTME AFE BABALOLA UNIVERSITY 2025 Commerce | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A firm specializes in producing only one good. This specialization is an example of which of the following production concepts?
A. Economies of scale
B. Division of labor
C. Comparative advantage
D. Opportunity cost
Question 2
A company has a fleet of 5 trucks that travel an average of 150 km per day. If the company pays ₦0.75 per km for fuel, what is the total daily fuel cost?
A. ₦1,125
B. ₦1,500
C. ₦1,875
D. ₦2,250
Question 3
In a competitive market, a firm's demand curve is downward sloping. What is the likely effect of an increase in the firm's production costs on its supply curve?
A. The supply curve shifts to the left.
B. The supply curve shifts to the right.
C. The supply curve remains unchanged.
D. The demand curve shifts to the left.
Question 4
A company is considering exporting its products to a new country. Which of the following is a key consideration when evaluating the export market?
A. Market demand
B. Trade agreements
C. Transportation costs
D. All of the above
Question 5
A firm produces a product with a fixed cost of ₦100,000 and a variable cost of ₦50 per unit. If the firm sells 1,000 units of the product, what is the likely effect on the firm's profit?
A. The profit increases by ₦50,000.
B. The profit decreases by ₦50,000.
C. The profit remains unchanged.
D. The profit increases by ₦100,000.
Question 6
A firm is considering two different transportation modes to move its products from the factory to the warehouse. The cost of using mode A is given by C_A = 10x + 20y, where x is the distance and y is the weight of the product. The cost of using mode B is given by C_B = 15x + 15y. If the distance and weight of the product are 100 km and 500 kg respectively, which mode of transportation is more cost-effective?
A. Mode A
B. Mode B
C. Both modes are equally cost-effective
D. Neither mode is cost-effective
Question 7
A sole trader has an annual income of ₦1,500,000 and an annual expenditure of ₦1,200,000. What is the sole trader's profit?
A. ₦300,000
B. ₦400,000
C. ₦500,000
D. ₦600,000
Question 8
A company is considering exporting its products to a new country. Which of the following is a key consideration when evaluating the export market?
A. Market demand
B. Trade agreements
C. Transportation costs
D. All of the above
Question 9
A firm uses a just-in-time (JIT) inventory system to manage its inventory levels. This system is an example of which of the following inventory management techniques?
A. Materials requirements planning (MRP)
B. Total quality control (TQC)
C. Just-in-time (JIT)
D. Vendor-managed inventory (VMI)
Question 10
A company's production function is given by the Cobb-Douglas production function: Q = 10L^0.4K^0.6, where Q is the quantity produced, L is labor, and K is capital. If the company wants to increase its production by 20% while keeping labor constant, what percentage increase in capital is required?
A. 15%
B. 20%
C. 25%
D. 30%
Question 11
A company imports goods worth ₦10 million from a foreign country. The company pays a customs duty of 10% on the imported goods. What is the total amount paid by the company?
A. ₦11 million
B. ₦11.5 million
C. ₦12 million
D. ₦12.5 million
Question 12
A firm's inventory is valued at the lower of cost and net realizable value. This is an example of which of the following inventory valuation methods?
A. First-in, first-out (FIFO)
B. Last-in, first-out (LIFO)
C. Weighted average cost (WAC)
D. Lower of cost and net realizable value (LCNRV)
Question 13
A firm's cost function is given by C = 2L + 3K. If the firm's current cost is ₦1200 and the number of workers (L) is 3, how many machines (K) are required?
A. 2
B. 4
C. 6
D. 8
Question 14
A company's financial statements show that its current ratio is 2.5 and its acid-test ratio is 1.8. What can be inferred about the company's liquidity position?
A. The company has a high level of liquidity and can easily meet its short-term obligations.
B. The company has a moderate level of liquidity and may face some difficulties in meeting its short-term obligations.
C. The company has a low level of liquidity and is likely to face significant difficulties in meeting its short-term obligations.
D. The company's liquidity position cannot be determined from the given information.
Question 15
A company is considering entering a new market. Which of the following is a key factor to consider when evaluating the market's potential?
A. Market Size
B. Market Growth Rate
C. Market Competition
D. All of the above

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows
Help others prepare! Share this practice hub: