POST UTME BABCOCK UNIVERSITY 2020 Commerce | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A company is considering forming a partnership with another company. What are the benefits of a partnership?
A. Shared risk, shared profit
B. Increased market share, increased competition
C. Reduced costs, increased efficiency
D. Improved reputation, increased customer loyalty
Question 2
A firm has a production function Q = 2L^0.5K^0.5, where Q is output, L is labor, and K is capital. If labor increases by 20% and capital remains constant, what is the percentage change in output?
A. 10%
B. 20%
C. 30%
D. 40%
Question 3
A bank offers a loan of ₦500,000 at an interest rate of 12% per annum compounded annually. If the loan is repaid in 5 years, what is the total amount paid by the borrower?
A. ₦675,000
B. ₦725,000
C. ₦775,000
D. ₦825,000
Question 4
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. Using the budget constraint, find the consumer's optimal consumption bundle.
A. A = 2, B = 1
B. A = 1, B = 2
C. A = 3, B = 0
D. A = 0, B = 3
Question 5
A company has a warehouse with a capacity to store 10,000 units of goods. The company receives an order for 8,000 units, but due to a shortage of storage space, it can only store 6,000 units. The remaining 2,000 units are stored in a rented warehouse. If the cost of storing one unit in the company's warehouse is ₦5 and the cost of storing one unit in the rented warehouse is ₦10, what is the total cost of storing the 8,000 units?
A. ₦20,000
B. ₦30,000
C. ₦40,000
D. ₦50,000
Question 6
A bank has a customer who has a current account with a balance of ₦10,000. The customer withdraws ₦5,000 from the account. What is the new balance of the account?
A. ₦5,000
B. ₦10,000
C. ₦15,000
D. ₦20,000
Question 7
A bank's financial statement shows a decrease in cash reserves. This could be due to?
A. Increase in deposits
B. Decrease in loans
C. Increase in investments
D. Decrease in cash reserves
Question 8
An insurance company offers a policy with a premium of ₦10,000 per annum. The policy covers a maximum of ₦5 million in case of a loss. If the probability of a loss occurring is 0.05, what is the expected value of the policy?
A. ₦250,000
B. ₦500,000
C. ₦750,000
D. ₦1,000,000
Question 9
A company is considering two different production processes for its new product. The first process involves a high level of automation, while the second process involves a low level of automation. Which process is more likely to result in a higher level of quality?
A. The high level of automation will result in a higher level of quality.
B. The low level of automation will result in a higher level of quality.
C. The level of quality will be the same regardless of the production process.
D. There is not enough information to determine which process will result in a higher level of quality.
Question 10
A firm is considering exporting its product to a foreign market. The firm has conducted market research and determined that the demand for the product is elastic. What does this mean for the firm?
A. The firm can increase its price and still sell the product
B. The firm can decrease its price and still sell the product
C. The firm cannot increase its price or decrease its price
D. The firm can increase its price, but only slightly
Question 11
A firm has a capital structure consisting of 60% debt and 40% equity. If the cost of debt is 8% and the cost of equity is 12%, what is the weighted average cost of capital (WACC) for the firm?
A. 6%
B. 7%
C. 8%
D. 9%
Question 12
In a perfectly competitive market, the supply curve is upward-sloping because of the law of increasing opportunity costs. What is the opportunity cost of producing one more unit of a good?
A. The opportunity cost is the value of the next best alternative use of the resources.
B. The opportunity cost is the value of the next best alternative use of the resources, plus the cost of producing the good.
C. The opportunity cost is the value of the next best alternative use of the resources, minus the cost of producing the good.
D. The opportunity cost is the value of the next best alternative use of the resources, plus the cost of producing the good, plus the cost of transportation.
Question 13
A company is considering two different marketing strategies for its new product. Strategy A involves a high initial investment in advertising, but the company expects a high return on investment. Strategy B involves a lower initial investment in advertising, but the company expects a lower return on investment. Which strategy is more likely to be successful?
A. High-risk, high-reward strategy
B. Low-risk, low-reward strategy
C. High-risk, low-reward strategy
D. Low-risk, high-reward strategy
Question 14
In a perfectly competitive market, the law of diminishing marginal utility is most relevant to the production of which of the following goods?
A. Giffen goods
B. Normal goods
C. Inferior goods
D. Luxury goods
Question 15
A company is considering two different modes of transportation for its goods: road and rail. The cost of transporting goods by road is ₦5,000 per ton, while the cost of transporting goods by rail is ₦3,000 per ton. If the company transports 10,000 tons of goods per month, what is the total cost of transportation if the company uses a combination of road and rail?
A. ₦40,000,000
B. ₦45,000,000
C. ₦50,000,000
D. ₦55,000,000

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: