Practice Post UTME AL-HIKMAH UNIVERSITY commerce 2025 Past Questions

Question 1

A sole trader's business is exposed to the risk of a major fire that could result in significant financial losses. Which of the following insurance policies would be most suitable for the business?

Correct A. Fire insurance policy

B. Public liability insurance policy

C. Professional indemnity insurance policy

D. Business interruption insurance policy

Correct Answer: A

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Question 2

A company is considering the introduction of a new product line. The product requires a significant investment in marketing and advertising. Which of the following marketing strategies would be most effective in promoting the new product?

A. Social media marketing

B. Influencer marketing

Correct C. Content marketing

D. Event marketing

Correct Answer: C

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Question 3

A warehouse is storing a large quantity of perishable goods. The warehouse manager needs to determine the optimal storage capacity to minimize stockouts and overstocking. Which of the following inventory management techniques would be most suitable?

Correct A. Economic order quantity (EOQ) model

B. Just-in-time (JIT) inventory system

C. Vendor-managed inventory (VMI) system

D. Radio frequency identification (RFID) system

Correct Answer: A

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Question 4

A company is exporting goods to a foreign country. The company needs to determine the most suitable mode of transportation to minimize costs and ensure timely delivery. Which of the following transportation modes would be most suitable?

A. Air freight

Correct B. Ocean freight

C. Land freight

D. Rail freight

Correct Answer: B

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Question 5

A company is considering the introduction of a new product line. The product requires a significant investment in marketing and advertising. Which of the following marketing strategies would be most effective in promoting the new product?

A. Social media marketing

B. Influencer marketing

Correct C. Content marketing

D. Event marketing

Correct Answer: C

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Question 6

A firm's production function is given by Q = 2L^0.5H^0.5, where Q is output, L is labor, and H is capital. If the firm wants to increase its output by 20% while keeping labor constant at 16 units, how much capital should it invest?

A. 32

B. 64

Correct C. 128

D. 256

Correct Answer: C

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Question 7

A company has two warehouses, A and B, with capacities of 1000 and 500 units, respectively. Warehouse A has 800 units of stock, while Warehouse B has 200 units of stock. If the company wants to transfer 300 units of stock from Warehouse A to Warehouse B, what will be the new stock levels in each warehouse?

A. Warehouse A: 500, Warehouse B: 800

B. Warehouse A: 600, Warehouse B: 700

C. Warehouse A: 700, Warehouse B: 600

Correct D. Warehouse A: 800, Warehouse B: 500

Correct Answer: D

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Question 8

A firm is considering two different production processes for its product. Process A requires an initial investment of ₦10 million and has a variable cost of ₦5 per unit. Process B requires an initial investment of ₦20 million and has a variable cost of ₦3 per unit. If the firm expects to produce 100,000 units, which process should it choose?

Correct A. Process A

B. Process B

C. Both processes are equally profitable

D. Neither process is profitable

Correct Answer: A

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Question 9

A company is considering exporting its product to a foreign market. The company's product sells for ₦500 per unit in the domestic market and ₦600 per unit in the foreign market. If the company expects to sell 10,000 units in the foreign market, what will be its total revenue?

Correct A. ₦6,000,000

B. ₦5,000,000

C. ₦4,000,000

D. ₦3,000,000

Correct Answer: A

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Question 10

A firm is considering two different production technologies for its product. Technology A requires an initial investment of ₦5 million and has a variable cost of ₦2 per unit. Technology B requires an initial investment of ₦10 million and has a variable cost of ₦1 per unit. If the firm expects to produce 50,000 units, which technology should it choose?

A. Technology A

Correct B. Technology B

C. Both technologies are equally profitable

D. Neither technology is profitable

Correct Answer: B

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Question 11

A firm's production function is given by Q = 2L^(1/2)K^(1/2), where Q is output, L is labor and K is capital. If the firm's labor and capital inputs are 16 and 9 respectively, what is the firm's output?

A. 32

Correct B. 64

C. 128

D. 256

Correct Answer: B

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Question 12

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. If the consumer's indifference curve is given by the equation U = 2x + 3y, where x and y are the quantities of goods A and B respectively, what is the consumer's optimal bundle?

Correct A. (2, 3)

B. (3, 2)

C. (4, 1)

D. (1, 4)

Correct Answer: A

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Question 13

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's labor and capital inputs are 10 and 5 respectively, what is the firm's cost?

A. ₦50

Correct B. ₦75

C. ₦100

D. ₦125

Correct Answer: B

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Question 14

A consumer has a budget of ₦500 and a preference for two goods, A and B. The prices of the goods are ₦100 and ₦200 respectively. If the consumer's indifference curve is given by the equation U = x + 2y, where x and y are the quantities of goods A and B respectively, what is the consumer's optimal bundle?

A. (2, 1)

Correct B. (1, 2)

C. (3, 0)

D. (0, 3)

Correct Answer: B

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Question 15

A firm's revenue function is given by R = 2x^2, where R is revenue and x is the quantity sold. If the firm sells 5 units, what is the firm's revenue?

A. ₦50

B. ₦100

Correct C. ₦200

D. ₦500

Correct Answer: C

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Question 16

A company's financial performance can be evaluated using various metrics. Which of the following is NOT a key performance indicator (KPI) for a company's financial health?

A. Return on Equity (ROE)

B. Debt-to-Equity Ratio

C. Current Ratio

Correct D. Gross Margin

Correct Answer: D

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Question 17

A firm is considering two different investment opportunities. Opportunity A has a 10% chance of returning ₦10,000 and a 90% chance of returning ₦0. Opportunity B has a 20% chance of returning ₦5,000 and an 80% chance of returning ₦0. Which opportunity has a higher expected return?

Correct A. Opportunity A

B. Opportunity B

C. Both opportunities have the same expected return

D. Neither opportunity has a higher expected return

Correct Answer: A

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Question 18

A company is considering exporting its products to a foreign market. Which of the following is a key factor to consider when evaluating the feasibility of this decision?

A. Political stability of the foreign market

B. Economic growth rate of the foreign market

C. Cultural differences between the home and foreign markets

Correct D. All of the above

Correct Answer: D

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Question 19

A sole trader is considering hiring an employee to help with the business. Which of the following is a key consideration when evaluating the decision to hire an employee?

A. The cost of hiring an employee

B. The potential increase in revenue

C. The impact on the business's cash flow

Correct D. All of the above

Correct Answer: D

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Question 20

A company is considering investing in a new project. The project has a 5% chance of returning ₦100,000 and a 95% chance of returning ₦0. What is the expected return on investment (ROI) for this project?

Correct A. 5%

B. 10%

C. 15%

D. 20%

Correct Answer: A

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Question 21

A company's production function is given by Q = 100L^0.5K^0.5, 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. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 22

A firm is considering two marketing strategies: Strategy A, which involves a 10% increase in advertising expenditure, and Strategy B, which involves a 20% increase in sales force. If the firm's current advertising expenditure is ₦100,000 and its current sales force is 10 people, what is the total cost of Strategy A?

Correct A. ₦110,000

B. ₦120,000

C. ₦130,000

D. ₦140,000

Correct Answer: A

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Question 23

A bank offers a 5-year fixed deposit account with an interest rate of 12% per annum compounded annually. If a customer deposits ₦100,000 at the beginning of the first year, what is the future value of the investment at the end of the fifth year?

Correct A. ₦163,170.71

B. ₦164,170.71

C. ₦165,170.71

D. ₦166,170.71

Correct Answer: A

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Question 24

A company's cost function is given by C = 2Q^2 + 10Q, where C is the total cost and Q is the quantity produced. If the company produces 10 units, what is the total cost?

A. ₦200

B. ₦300

Correct C. ₦400

D. ₦500

Correct Answer: C

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Question 25

A firm is considering two production strategies: Strategy A, which involves producing 100 units of a product, and Strategy B, which involves producing 200 units of the same product. If the firm's current production cost is ₦50 per unit, what is the total production cost of Strategy A?

Correct A. ₦5,000

B. ₦10,000

C. ₦15,000

D. ₦20,000

Correct Answer: A

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