Practice Post UTME AL-HIKMAH UNIVERSITY commerce 2017 Past Questions

Question 1

In a perfectly competitive market, what is the relationship between the marginal revenue (MR) and marginal cost (MC) of a firm?

A. MR > MC

B. MR < MC

Correct C. MR = MC

D. MR ≠ MC

Correct Answer: C

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Question 2

A company's production function is given by Q = 2L^0.5K^0.5. If the price of labor (L) is ₦100 per unit and the price of capital (K) is ₦200 per unit, what is the optimal combination of L and K that minimizes the cost of production?

A. L = 100, K = 50

Correct B. L = 50, K = 100

C. L = 100, K = 100

D. L = 50, K = 50

Correct Answer: B

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Question 3

A consumer has a utility function U(x, y) = 2x + 3y. If the prices of x and y are ₦50 and ₦75 respectively, and the consumer has a budget of ₦1500, what is the optimal bundle of x and y that maximizes utility?

A. x = 20, y = 10

B. x = 10, y = 20

Correct C. x = 15, y = 15

D. x = 25, y = 5

Correct Answer: C

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Question 4

A firm has a production function Q = 2L^0.5K^0.5. If the price of labor (L) is ₦100 per unit and the price of capital (K) is ₦200 per unit, what is the optimal combination of L and K that minimizes the cost of production?

A. L = 100, K = 50

Correct B. L = 50, K = 100

C. L = 100, K = 100

D. L = 50, K = 50

Correct Answer: B

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Question 5

A consumer has a utility function U(x, y) = 2x + 3y. If the prices of x and y are ₦50 and ₦75 respectively, and the consumer has a budget of ₦1500, what is the optimal bundle of x and y that maximizes utility?

A. x = 20, y = 10

B. x = 10, y = 20

Correct C. x = 15, y = 15

D. x = 25, y = 5

Correct Answer: C

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Question 6

In a perfectly competitive market, the law of supply states that as the price of a commodity increases, the quantity supplied will

A. increase

Correct B. decrease

C. remain constant

D. move in the opposite direction

Correct Answer: B

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Question 7

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current labor and capital inputs are L = 16 and K = 9, respectively, what is the firm's current output?

A. 24

Correct B. 36

C. 48

D. 64

Correct Answer: B

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Question 8

A consumer has a budget constraint of 100 and a preference for two goods, A and B. The prices of A and B are 20 and 30, respectively. If the consumer chooses to spend 80 on good A, what is the consumer's optimal consumption bundle?

A. A = 40, B = 0

Correct B. A = 60, B = 20

C. A = 80, B = 0

D. A = 100, B = 0

Correct Answer: B

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Question 9

A firm's cost function is given by C = 100 + 2L + 3K. If the firm's current labor and capital inputs are L = 20 and K = 15, respectively, what is the firm's current total cost?

A. 500

Correct B. 550

C. 600

D. 650

Correct Answer: B

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Question 10

A consumer has a utility function given by U = 2A + 3B. If the consumer's current consumption bundle is A = 10 and B = 20, what is the consumer's current utility?

A. 50

Correct B. 60

C. 70

D. 80

Correct Answer: B

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Question 11

A company's marketing strategy involves creating a sense of urgency among its customers. Which of the following is a characteristic of this strategy?

A. Scarcity

B. Perceived value

Correct C. Limited-time offer

D. Product differentiation

Correct Answer: C

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Question 12

A sole trader's business is not registered with the Corporate Affairs Commission. What is the legal implication of this?

A. The business is not liable for its debts

B. The business is not entitled to claim tax relief

C. The business is not required to file annual returns

Correct D. The business is not entitled to use the company name

Correct Answer: D

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Question 13

A company's production process involves the use of a machine that requires regular maintenance. Which of the following is a benefit of this maintenance?

A. Increased productivity

B. Reduced costs

Correct C. Improved product quality

D. Enhanced customer satisfaction

Correct Answer: C

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Question 14

A consumer protection agency has received a complaint about a company's advertising practices. Which of the following is a possible action the agency can take?

Correct A. Issue a warning to the company

B. Impose a fine on the company

C. Order the company to stop advertising

D. Refer the complaint to the police

Correct Answer: A

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Question 15

A company's marketing strategy involves creating a sense of exclusivity among its customers. Which of the following is a characteristic of this strategy?

A. Scarcity

B. Perceived value

C. Limited-time offer

Correct D. Product differentiation

Correct Answer: D

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Question 16

In a sole trade business, the owner's personal and business finances are not separate. Which of the following is a characteristic of a sole trade business?

A. Separate personal and business finances

B. No separate business name

Correct C. Owner has unlimited liability

D. Owner has limited liability

Correct Answer: C

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Question 17

A company's articles of association may be altered by a special resolution passed at a general meeting. Which of the following is a characteristic of a special resolution?

A. Requires a 75% majority vote

Correct B. Requires a 2/3 majority vote

C. Requires a 3/4 majority vote

D. Requires a 90% majority vote

Correct Answer: B

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Question 18

A company may be wound up by the court if it is just and equitable to do so. Which of the following is a ground for winding up a company?

A. The company is insolvent

B. The company is unable to pay its debts

Correct C. The company has committed a serious breach of its articles of association

D. The company has failed to file its annual returns

Correct Answer: C

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Question 19

A company may be wound up voluntarily by its members if it is just and equitable to do so. Which of the following is a ground for voluntary winding up?

A. The company is insolvent

B. The company is unable to pay its debts

C. The company has committed a serious breach of its articles of association

Correct D. The company has decided to cease trading

Correct Answer: D

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Question 20

A company may be wound up by the court if it is just and equitable to do so. Which of the following is a ground for winding up a company?

A. The company is insolvent

B. The company is unable to pay its debts

Correct C. The company has committed a serious breach of its articles of association

D. The company has failed to file its annual returns

Correct Answer: C

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Question 21

The concept of 'Gross Profit' in a business is calculated as the difference between the 'Selling Price' and the 'Cost Price'. However, if the 'Selling Price' is not known, how can the 'Gross Profit' be determined?

A. By using the 'Average Selling Price' method.

B. By using the 'Marginal Costing' method.

C. By using the 'Absorption Costing' method.

Correct D. By using the 'High-Low Method' of inventory valuation.

Correct Answer: D

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Question 22

A company has a 'Trade Discount' of 15% on its products. If the 'List Price' of a product is ₦1,500, what is the 'Selling Price' after the 'Trade Discount'?

Correct A. ₦1,275

B. ₦1,350

C. ₦1,425

D. ₦1,500

Correct Answer: A

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Question 23

A business has a 'Fixed Cost' of ₦50,000 per month and a 'Variable Cost' of ₦20 per unit sold. If the business sells 1,000 units in a month, what is the 'Total Cost'?

A. ₦52,000

Correct B. ₦55,000

C. ₦60,000

D. ₦65,000

Correct Answer: B

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Question 24

A company uses the 'Weighted Average Method' to value its inventory. If the company has three types of inventory with the following quantities and costs: Type A (100 units, ₦500 each), Type B (200 units, ₦300 each), and Type C (300 units, ₦200 each), what is the 'Weighted Average Cost' per unit?

A. ₦275

B. ₦300

Correct C. ₦325

D. ₦350

Correct Answer: C

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Question 25

A business has a 'Gross Profit Ratio' of 25% and a 'Net Profit Ratio' of 15%. If the 'Gross Profit' is ₦50,000, what is the 'Net Profit'?

A. ₦7,500

Correct B. ₦10,000

C. ₦12,500

D. ₦15,000

Correct Answer: B

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