POST UTME CALEB UNIVERSITY 2025 Commerce | Objective

Are you preparing for POST UTME CALEB UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2025 Commerce (Objective) questions designed to simulate the real exam environment.

Practice these randomly selected questions to test your readiness.

Question 1
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. become elastic

Correct Answer: B

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Question 2
A company's marketing mix is a combination of four key elements: product, price, place, and
Correct A. promotion
B. distribution
C. packaging
D. packaging and distribution

Correct Answer: A

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Question 3
A sole trader is a type of business ownership where one person owns and operates the business. What is the main advantage of being a sole trader?
Correct A. Easy to set up and operate
B. High level of control and decision-making
C. Limited financial risk
D. Ability to raise capital from investors

Correct Answer: A

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Question 4
A company's financial statements include the balance sheet, income statement, and cash flow statement. Which statement provides information on a company's liquidity and solvency?
A. Balance sheet
B. Income statement
Correct C. Cash flow statement
D. Statement of changes in equity

Correct Answer: C

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Question 5
A company's marketing strategy involves identifying and targeting a specific market segment. What is the main advantage of targeting a specific market segment?
A. Increased market share
Correct B. Improved customer satisfaction
C. Reduced marketing costs
D. Increased competitiveness

Correct Answer: B

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Question 6
A company is considering launching a new product line. The product's expected profit is ₦1,500,000, and the initial investment is ₦2,000,000. If the company's cost of capital is 12% per annum, what is the internal rate of return (IRR) of the project?
A. 15%
Correct B. 12%
C. 18%
D. 20%

Correct Answer: B

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Question 7
A firm is considering two different marketing strategies for its new product. Strategy A involves a ₦500,000 advertising campaign, while Strategy B involves a ₦750,000 advertising campaign. If the firm's expected sales revenue is ₦3,000,000, what is the break-even point for each strategy?
Correct A. ₦1,250,000
B. ₦1,500,000
C. ₦1,750,000
D. ₦2,000,000

Correct Answer: A

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Question 8
A company is considering exporting its products to a foreign market. The company's export price is ₦1,200,000, and the foreign market's price is ₦1,500,000. If the company's transportation cost is ₦200,000, what is the company's export profit?
Correct A. ₦1,100,000
B. ₦1,200,000
C. ₦1,300,000
D. ₦1,400,000

Correct Answer: A

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Question 9
A firm is considering investing in a new warehouse. The warehouse's initial investment is ₦1,500,000, and the expected annual maintenance cost is ₦200,000. If the firm's cost of capital is 10% per annum, what is the net present value (NPV) of the investment?
A. ₦1,200,000
Correct B. ₦1,300,000
C. ₦1,400,000
D. ₦1,500,000

Correct Answer: B

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Question 10
A company is considering launching a new product line. The product's expected profit is ₦2,000,000, and the initial investment is ₦3,000,000. If the company's cost of capital is 15% per annum, what is the internal rate of return (IRR) of the project?
A. 16%
Correct B. 18%
C. 20%
D. 22%

Correct Answer: B

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Question 11
In a perfectly competitive market, what is the relationship between the marginal revenue product of labor and the market wage?
A. The marginal revenue product of labor is greater than the market wage.
B. The marginal revenue product of labor is less than the market wage.
Correct C. The marginal revenue product of labor is equal to the market wage.
D. The marginal revenue product of labor is unrelated to the market wage.

Correct Answer: C

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Question 12
A company's cost of capital is 10% per annum. If it invests in a project with a net present value of ₦1,500,000, what is the expected return on investment?
A. 15%
B. 12%
Correct C. 10%
D. 8%

Correct Answer: C

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Question 13
A sole trader has a business income of ₦500,000 and a personal income of ₦200,000. What is the total tax liability?
A. ₦60,000
B. ₦80,000
Correct C. ₦100,000
D. ₦120,000

Correct Answer: C

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Question 14
A company's marketing mix consists of product, price, place, and promotion. Which of the following is NOT a component of the marketing mix?
A. Product
B. Price
C. Place
Correct D. Research and Development

Correct Answer: D

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Question 15
A company uses the weighted average cost of capital (WACC) method to evaluate investment projects. If the WACC is 12% and the project's expected return is 15%, what is the expected return on investment?
A. 3%
B. 5%
C. 7%
Correct D. 9%

Correct Answer: D

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Question 16
In a perfectly competitive market, the supply curve is downward sloping due to the law of increasing marginal opportunity costs. However, in a monopolistically competitive market, the supply curve is also downward sloping, but for a different reason. What is the primary reason for the downward sloping supply curve in a monopolistically competitive market?
A. The law of increasing marginal opportunity costs
Correct B. The presence of advertising and product differentiation
C. The presence of barriers to entry
D. The presence of economies of scale

Correct Answer: B

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Question 17
A firm is considering two different production processes to produce a certain good. Process A requires an initial investment of ₦100,000 and has a fixed cost of ₦50,000 per unit produced. Process B requires an initial investment of ₦150,000 and has a fixed cost of ₦30,000 per unit produced. If the firm produces 10 units of the good, what is the total cost of production for each process?
A. Process A: ₦500,000; Process B: ₦350,000
Correct B. Process A: ₦450,000; Process B: ₦320,000
C. Process A: ₦550,000; Process B: ₦380,000
D. Process A: ₦650,000; Process B: ₦480,000

Correct Answer: B

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Question 18
A company is considering two different modes of transportation to transport its goods from Lagos to Abuja. Mode A requires a transportation cost of ₦50 per kilometer and has a fixed cost of ₦10,000. Mode B requires a transportation cost of ₦40 per kilometer and has a fixed cost of ₦20,000. If the distance between Lagos and Abuja is 500 kilometers, what is the total transportation cost for each mode?
Correct A. Mode A: ₦35,000; Mode B: ₦30,000
B. Mode A: ₦30,000; Mode B: ₦35,000
C. Mode A: ₦25,000; Mode B: ₦40,000
D. Mode A: ₦20,000; Mode B: ₦45,000

Correct Answer: A

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Question 19
A bank is considering two different investment options. Option A has a return of 10% per annum and a risk level of 5. Option B has a return of 15% per annum and a risk level of 8. If the bank has a risk tolerance of 6, which option should it choose?
Correct A. Option A
B. Option B
C. Both options are equally risky
D. Neither option is suitable

Correct Answer: A

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Question 20
A company is considering two different marketing strategies. Strategy A involves a high level of advertising and a low level of sales promotion. Strategy B involves a low level of advertising and a high level of sales promotion. If the company has a budget of ₦100,000, which strategy should it choose?
Correct A. Strategy A
B. Strategy B
C. Both strategies are equally effective
D. Neither strategy is suitable

Correct Answer: A

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Question 21
A firm specializes in producing two goods, A and B, using two inputs, labor and capital. The production functions for A and B are given by the following equations: A = 2L + 3K and B = 4L + 2K, where L is labor and K is capital. If the firm has 10 units of labor and 8 units of capital, what is the opportunity cost of producing one more unit of good A?
A. ₦50
Correct B. ₦75
C. ₦100
D. ₦125

Correct Answer: B

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Question 22
A company has a portfolio of stocks with the following returns: Stock A has a return of 8% per annum, Stock B has a return of 12% per annum, and Stock C has a return of 15% per annum. If the company allocates 30% of its portfolio to Stock A, 40% to Stock B, and 30% to Stock C, what is the expected return on the portfolio?
A. 10%
Correct B. 12%
C. 14%
D. 16%

Correct Answer: B

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Question 23
A firm is considering two investment projects, X and Y. Project X has a net present value (NPV) of ₦100,000 and a payback period of 5 years. Project Y has an NPV of ₦120,000 and a payback period of 4 years. Which project should the firm choose?
A. Project X
Correct B. Project Y
C. Both projects are equally attractive
D. Neither project is attractive

Correct Answer: B

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Question 24
A country's trade balance is given by the following equation: TB = X - M, where TB is the trade balance, X is the value of exports, and M is the value of imports. If the value of exports is ₦500 billion and the value of imports is ₦600 billion, what is the trade balance?
Correct A. ₦-100 billion
B. ₦0 billion
C. ₦100 billion
D. ₦200 billion

Correct Answer: A

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Question 25
A firm is considering a new product launch. The product has a fixed cost of ₦500,000 and a variable cost of ₦200 per unit. If the firm expects to sell 10,000 units of the product, what is the total cost of production?
A. ₦2,500,000
B. ₦3,000,000
Correct C. ₦3,500,000
D. ₦4,000,000

Correct Answer: C

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