Practice Post UTME BOWEN UNIVERSITY commerce 2024 Past Questions

Question 1

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

A. increase

Correct B. decrease

C. remain constant

D. become elastic

Correct Answer: B

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Question 2

The diagram below represents a production possibility frontier. If the economy is currently at point A, which of the following is a consequence of a shift to point B?

Correct A. An increase in the production of both goods

B. A decrease in the production of both goods

C. An increase in the production of good X and a decrease in the production of good Y

D. A decrease in the production of good X and an increase in the production of good Y

Correct Answer: A

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Question 3

A firm's production function is given by the equation Q = 2L + 3K, where Q is the quantity produced, L is the number of labor hours, and K is the amount of capital invested. If the firm currently employs 10 labor hours and invests ₦1000 in capital, what is the quantity produced?

A. 30

B. 40

Correct C. 50

D. 60

Correct Answer: C

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Question 4

A firm's cost function is given by the equation C = 2L + 3K, where C is the total cost, L is the number of labor hours, and K is the amount of capital invested. If the firm currently employs 10 labor hours and invests ₦1000 in capital, what is the total cost?

A. ₦2000

B. ₦3000

Correct C. ₦4000

D. ₦5000

Correct Answer: C

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Question 5

A firm's revenue function is given by the equation R = 2Q - 3, where R is the total revenue and Q is the quantity produced. If the firm produces 20 units, what is the total revenue?

A. ₦40

B. ₦50

Correct C. ₦60

D. ₦70

Correct Answer: C

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Question 6

In a warehouse with a storage capacity of 10,000 units, the inventory level is currently at 8,000 units. The warehouse receives a shipment of 2,000 units on the first day of the month and sells 1,500 units on the same day. If the warehouse operates on a first-in, first-out (FIFO) inventory system, what is the total number of units in the warehouse at the end of the first day?

Correct A. 9,500

B. 10,000

C. 8,500

D. 7,000

Correct Answer: A

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Question 7

A company is sued for violating the Consumer Protection Act. The company's defense is that the consumer did not read the fine print on the contract. However, the consumer claims that the company failed to provide adequate disclosure of the terms and conditions. Which of the following is the most likely outcome of this case?

Correct A. The company is liable for damages.

B. The consumer is liable for damages.

C. The case is dismissed.

D. The company is not liable for damages.

Correct Answer: A

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Question 8

A sole trader has a business income of ₦500,000 and expenses of ₦300,000. What is the sole trader's profit before tax?

Correct A. ₦200,000

B. ₦250,000

C. ₦300,000

D. ₦400,000

Correct Answer: A

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Question 9

A company has a 10% dividend yield on its shares. If the company's share price is ₦100, what is the dividend per share?

Correct A. ₦10

B. ₦5

C. ₦15

D. ₦20

Correct Answer: A

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Question 10

A company has a 20% increase in sales from last year. If the company's sales last year were ₦1,000,000, what is the company's sales for this year?

A. ₦1,200,000

Correct B. ₦1,500,000

C. ₦1,200,000

D. ₦1,000,000

Correct Answer: B

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Question 11

A company is considering a new marketing strategy to increase sales. The strategy involves offering a discount of 15% on all products. However, the company also wants to ensure that the average revenue per customer does not decrease. If the current average revenue per customer is ₦1,500, what is the minimum price at which the company must sell each product to maintain the average revenue per customer?

Correct A. ₦1,300

B. ₦1,400

C. ₦1,500

D. ₦1,600

Correct Answer: A

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Question 12

A sole trader is considering expanding their business by hiring employees. However, they are concerned about the potential increase in costs. If the sole trader currently earns ₦2,000 per day and the cost of hiring an employee is ₦1,500 per day, what is the minimum number of employees the sole trader must hire to increase their daily earnings by at least 20%?

A. 1

Correct B. 2

C. 3

D. 4

Correct Answer: B

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Question 13

A company is considering a new production strategy to increase efficiency. The strategy involves outsourcing 20% of its production to a third-party supplier. If the company currently produces 10,000 units per month and the third-party supplier charges ₦500 per unit, what is the total cost of outsourcing 20% of the production?

A. ₦10,000

Correct B. ₦12,000

C. ₦15,000

D. ₦20,000

Correct Answer: B

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Question 14

A company is considering a new marketing strategy to increase sales. The strategy involves offering a free gift with every purchase. However, the company also wants to ensure that the cost of the free gift does not exceed 10% of the total revenue. If the company currently sells 1,000 units per month at ₦1,000 per unit, what is the maximum cost of the free gift?

A. ₦10,000

Correct B. ₦12,000

C. ₦15,000

D. ₦20,000

Correct Answer: B

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Question 15

A company is considering a new production strategy to increase efficiency. The strategy involves implementing a just-in-time inventory system. If the company currently holds an average inventory of 5,000 units and the cost of holding inventory is ₦500 per unit per month, what is the total cost of holding inventory?

A. ₦2,500,000

B. ₦3,000,000

Correct C. ₦4,000,000

D. ₦5,000,000

Correct Answer: C

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Question 16

A firm produces two goods, X and Y, using two inputs, labor (L) and capital (K). The production function for good X is given by ( X = 2L^0.5K^{0.25} ), while that for good Y is ( Y = 3L^{0.75}K^{0.125} ). If the firm has 100 units of labor and 150 units of capital, and the prices of labor and capital are ₦50 and ₦100 respectively, what is the opportunity cost of producing one more unit of good X?

A. ₦150

B. ₦200

Correct C. ₦250

D. ₦300

Correct Answer: C

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Question 17

A company is considering launching a new product. The market research indicates that the demand for the product is given by ( Q = 100 - 2P ), where Q is the quantity demanded and P is the price. The company's cost function is ( C = 50Q + 100 ). What is the profit-maximizing price?

A. ₦50

Correct B. ₦60

C. ₦70

D. ₦80

Correct Answer: B

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Question 18

A consumer has a budget of ₦1000 and faces the following prices: ( P_x = 2x + 5 ) and ( P_y = 3y + 2 ). The consumer's utility function is given by ( U = 2x + 3y ). What is the consumer's optimal bundle of goods?

Correct A. x = 10, y = 5

B. x = 5, y = 10

C. x = 15, y = 3

D. x = 20, y = 2

Correct Answer: A

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Question 19

A firm is considering expanding its production capacity. The firm's production function is given by ( Q = 2L^0.5K^{0.25} ), where Q is the quantity produced, L is the labor input, and K is the capital input. The firm has 100 units of labor and 150 units of capital. What is the marginal product of labor?

A. 1.5

Correct B. 2.5

C. 3.5

D. 4.5

Correct Answer: B

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Question 20

A consumer has a budget of ₦1000 and faces the following prices: ( P_x = 2x + 5 ) and ( P_y = 3y + 2 ). The consumer's utility function is given by ( U = 2x + 3y ). What is the consumer's optimal bundle of goods?

Correct A. x = 10, y = 5

B. x = 5, y = 10

C. x = 15, y = 3

D. x = 20, y = 2

Correct Answer: A

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Question 21

The Consumer Protection Act of 1999 provides for the establishment of the Consumer Protection Council. What is the primary function of the Consumer Protection Council?

A. To promote consumer awareness and education

Correct B. To investigate consumer complaints and prosecute offenders

C. To establish standards for consumer products and services

D. To provide compensation to consumers for losses incurred

Correct Answer: B

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Question 22

A company is considering the introduction of a new product. The product has a high potential for success, but it also carries a high level of risk. What type of product is this?

Correct A. A high-risk product

B. A low-risk product

C. A high-potential product

D. A low-potential product

Correct Answer: A

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Question 23

A bank is considering the introduction of a new loan product. The product has a high interest rate, but it also has a low risk of default. What type of loan product is this?

A. A high-risk loan product

B. A low-risk loan product

Correct C. A high-interest loan product

D. A low-interest loan product

Correct Answer: C

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Question 24

A company is considering the introduction of a new production process. The process has a high potential for efficiency, but it also carries a high level of risk. What type of production process is this?

A. A high-efficiency production process

B. A low-efficiency production process

Correct C. A high-risk production process

D. A low-risk production process

Correct Answer: C

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Question 25

A company is considering the introduction of a new insurance product. The product has a high potential for success, but it also carries a high level of risk. What type of insurance product is this?

Correct A. A high-risk insurance product

B. A low-risk insurance product

C. A high-potential insurance product

D. A low-potential insurance product

Correct Answer: A

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