POST UTME BABCOCK UNIVERSITY 2019 Commerce | Objective

Are you preparing for POST UTME BABCOCK UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2019 Commerce (Objective) questions designed to simulate the real exam environment.

Practice these randomly selected questions to test your readiness.

Question 1
The concept of specialization in production is closely related to the idea of division of labor. Which of the following is a key benefit of specialization?
Correct A. Increased productivity
B. Improved quality control
C. Reduced labor costs
D. Enhanced innovation

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 2
A company is considering two different marketing strategies: a push strategy and a pull strategy. Which of the following is a key characteristic of a pull strategy?
A. Targeting a wide audience
B. Creating a sense of urgency
C. Building brand awareness
Correct D. Encouraging customer participation

Correct Answer: D

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 3
A warehouse is storing a large quantity of perishable goods. Which of the following is a key consideration for the warehouse manager?
A. Minimizing storage costs
B. Maximizing storage capacity
Correct C. Maintaining a consistent temperature
D. Reducing labor costs

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 4
A company is considering purchasing insurance to protect against potential losses. Which of the following is a key benefit of insurance?
Correct A. Reducing financial risk
B. Increasing cash flow
C. Improving brand reputation
D. Enhancing innovation

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 5
A company is considering launching a new product. Which of the following is a key consideration for the marketing team?
A. Targeting a wide audience
B. Creating a sense of urgency
C. Building brand awareness
Correct D. Encouraging customer participation

Correct Answer: D

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 6
In a perfectly competitive market, the supply curve is perfectly elastic because the firm can freely adjust its output in response to changes in the market price. However, this is not the case in a monopolistically competitive market, where the firm faces a downward-sloping demand curve. What is the primary reason for this difference in supply curve elasticity?
Correct A. The presence of advertising and product differentiation
B. The ability of firms to collude and set prices
C. The presence of barriers to entry
D. The ability of firms to produce at a constant marginal cost

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 7
A firm is considering investing in a new project that has a net present value (NPV) of ₦1,500,000. The cost of capital is 12% per annum. What is the internal rate of return (IRR) of the project?
A. 10%
Correct B. 12%
C. 15%
D. 18%

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 8
A company is considering two different investment projects. Project A has a higher initial investment but a lower expected return, while Project B has a lower initial investment but a higher expected return. Which project should the company choose?
A. Project A
Correct B. Project B
C. It depends on the company's risk tolerance
D. Neither project is a good investment

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 9
A firm is considering investing in a new project that has a payback period of 3 years. The cost of capital is 10% per annum. What is the net present value (NPV) of the project?
A. ₦1,000,000
Correct B. ₦1,500,000
C. ₦2,000,000
D. ₦2,500,000

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 10
A company is considering two different financing options: debt and equity. Which option is more suitable for a company with a high level of risk?
A. Debt
Correct B. Equity
C. It depends on the company's financial situation
D. Neither option is suitable

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 11
The concept of comparative advantage in international trade is based on the idea that countries should specialize in producing goods for which they have a lower opportunity cost compared to other countries. Which of the following is a correct example of comparative advantage?
A. Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 50 units of wheat and 100 units of cloth.
Correct B. Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 50 units of wheat and 50 units of cloth.
C. Country A produces 100 units of wheat and 100 units of cloth, while Country B produces 50 units of wheat and 50 units of cloth.
D. Country A produces 50 units of wheat and 100 units of cloth, while Country B produces 100 units of wheat and 50 units of cloth.

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 12
A company is considering two different modes of transportation for its goods: road and rail. The cost of transporting goods by road is ₦1,000 per kilometer, while the cost of transporting goods by rail is ₦800 per kilometer. If the company needs to transport goods for 200 kilometers, what is the total cost of transportation by road?
Correct A. ₦200,000
B. ₦180,000
C. ₦160,000
D. ₦140,000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 13
A sole trader has a business income of ₦500,000 and a business expense of ₦200,000. What is the profit of the business?
Correct A. ₦300,000
B. ₦200,000
C. ₦100,000
D. ₦50,000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 14
A company has a share capital of ₦1,000,000 and a share premium of ₦500,000. What is the total share capital of the company?
Correct A. ₦1,500,000
B. ₦1,000,000
C. ₦500,000
D. ₦250,000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 15
A consumer protection law requires that all goods sold in a market must be accompanied by a warranty. Which of the following is a type of warranty?
A. Express warranty
B. Implied warranty
C. Statutory warranty
Correct D. All of the above

Correct Answer: D

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 16
A company has a business income of ₦1,000,000 and a business expense of ₦500,000. What is the profit of the business?
Correct A. ₦500,000
B. ₦750,000
C. ₦1,000,000
D. ₦1,500,000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 17
A sole trader has a business income of ₦200,000 and a business expense of ₦100,000. What is the profit of the business?
Correct A. ₦100,000
B. ₦150,000
C. ₦200,000
D. ₦250,000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 18
A company has a share capital of ₦500,000 and a share premium of ₦250,000. What is the total share capital of the company?
Correct A. ₦750,000
B. ₦500,000
C. ₦250,000
D. ₦125,000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 19
A consumer protection law requires that all goods sold in a market must be accompanied by a guarantee. Which of the following is a type of guarantee?
A. Express guarantee
B. Implied guarantee
C. Statutory guarantee
Correct D. All of the above

Correct Answer: D

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 20
In a sole trade business, what is the primary advantage of using a sole proprietorship structure?
A. Limited liability
B. Tax benefits
Correct C. Easy setup and management
D. Flexibility in decision-making

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 21
A company has a capital structure consisting of 60% debt and 40% equity. What is the cost of debt for the company?
A. 6%
Correct B. 8%
C. 10%
D. 12%

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 22
A firm is considering two different production processes. Process A has a fixed cost of ₦100,000 and a variable cost of ₦50 per unit. Process B has a fixed cost of ₦150,000 and a variable cost of ₦30 per unit. If the firm produces 10,000 units, which process is more profitable?
Correct A. Process A
B. Process B
C. Both processes are equally profitable
D. Neither process is profitable

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 23
A bank has a reserve requirement of 10% and a cash reserve of ₦500,000. If the bank wants to increase its lending capacity, what is the maximum amount it can lend?
A. ₦4,000,000
Correct B. ₦5,000,000
C. ₦6,000,000
D. ₦7,000,000

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 24
A firm is considering exporting its products to a foreign market. What is the primary advantage of exporting?
A. Increased market share
B. Reduced competition
C. Improved brand image
Correct D. Access to new markets and customers

Correct Answer: D

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 25
A sole trader's business is registered under which of the following?
A. Partnership
B. Company
Correct C. Sole Proprietorship
D. Limited Liability Partnership

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

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:
Chat with Support