POST UTME CHRISTOPHER UNIVERSITY 2019 Commerce | Objective

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Question 1
A sole trader's business is not required to register with the Corporate Affairs Commission (CAC) if its annual turnover is less than ₦25 million. Which of the following is a correct statement regarding this requirement?
A. The sole trader must register with the CAC regardless of its annual turnover.
Correct B. The sole trader is exempt from registering with the CAC if its annual turnover is less than ₦25 million.
C. The sole trader must register with the CAC if its annual turnover exceeds ₦25 million.
D. The sole trader is not required to register with the CAC if it has fewer than 10 employees.

Correct Answer: B

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Question 2
A company's Memorandum and Articles of Association (MAA) are the primary documents that outline its constitutional framework. Which of the following is a key feature of the MAA?
A. The MAA outlines the company's business objectives and strategies.
B. The MAA specifies the company's share capital and dividend policy.
Correct C. The MAA defines the company's constitutional framework, including its name, objects, and management structure.
D. The MAA outlines the company's employment policies and staff benefits.

Correct Answer: C

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Question 3
A consumer protection law requires businesses to provide a cooling-off period for customers to cancel their purchases. Which of the following is a key benefit of this provision?
A. It allows businesses to recover their costs in case of a cancellation.
B. It enables customers to compare prices and make informed purchasing decisions.
Correct C. It provides customers with a safe and secure way to cancel their purchases within a specified timeframe.
D. It reduces the risk of product returns and refunds for businesses.

Correct Answer: C

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Question 4
A bank's cash reserve ratio (CRR) is the percentage of customer deposits that it must hold in reserve. Which of the following is a key purpose of the CRR?
A. To reduce the risk of bank runs and maintain financial stability.
B. To increase the bank's lending capacity and stimulate economic growth.
Correct C. To ensure that banks maintain a minimum level of liquidity and meet their payment obligations.
D. To reduce the bank's operating costs and improve its profitability.

Correct Answer: C

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Question 5
A company's financial statements, including its balance sheet and income statement, are prepared in accordance with Generally Accepted Accounting Principles (GAAP). Which of the following is a key principle of GAAP?
A. The going concern assumption, which assumes that the company will continue to operate for the foreseeable future.
B. The historical cost principle, which requires assets and liabilities to be recorded at their historical cost.
Correct C. The matching principle, which requires expenses to be matched with the revenues they help to generate.
D. The materiality principle, which requires financial information to be disclosed if it is material to the company's financial position or performance.

Correct Answer: C

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Question 6
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?
Correct A. Country A produces 10 units of wheat and 5 units of cloth, while Country B produces 5 units of wheat and 10 units of cloth.
B. Country A produces 10 units of wheat and 10 units of cloth, while Country B produces 5 units of wheat and 5 units of cloth.
C. Country A produces 10 units of wheat and 5 units of cloth, while Country B produces 10 units of wheat and 10 units of cloth.
D. Country A produces 5 units of wheat and 10 units of cloth, while Country B produces 10 units of wheat and 5 units of cloth.

Correct Answer: A

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Question 7
A bank's cash reserve ratio is the percentage of deposits that must be held in reserve rather than loaned out. If a bank has a cash reserve ratio of 20% and deposits of ₦10,000,000, how much can it loan out?
Correct A. ₦8,000,000
B. ₦9,000,000
C. ₦10,000,000
D. ₦12,000,000

Correct Answer: A

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Question 8
A firm's production function is given by Q = 2L^0.5K^0.5, where Q is output, L is labor, and K is capital. If labor increases from 100 to 121, and capital remains constant at 400, what is the percentage increase in output?
A. 10%
Correct B. 20%
C. 30%
D. 40%

Correct Answer: B

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Question 9
A company's marketing mix is given by the 4 Ps: product, price, promotion, and place. Which of the following is an example of a product strategy?
A. Offering a discount on a product
Correct B. Introducing a new product feature
C. Changing the packaging of a product
D. Increasing the price of a product

Correct Answer: B

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Question 10
A firm's supply curve is given by Q = 100 + 2P, where Q is quantity supplied and P is price. If the price increases from ₦10 to ₦15, what is the change in quantity supplied?
A. ₦50
Correct B. ₦100
C. ₦150
D. ₦200

Correct Answer: B

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Question 11
A company's marketing strategy involves a mix of advertising, sales promotions, and public relations. Which of the following is a key benefit of using a mix of these strategies?
A. Increased brand awareness
B. Improved customer loyalty
Correct C. Enhanced product differentiation
D. Reduced marketing costs

Correct Answer: C

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Question 12
A firm's warehousing and stock control system involves a first-in-first-out (FIFO) inventory management policy. What is the primary advantage of this policy?
A. Reduced inventory costs
Correct B. Improved product freshness
C. Enhanced customer satisfaction
D. Increased storage capacity

Correct Answer: B

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Question 13
A consumer protection law requires businesses to provide clear and accurate product labeling. Which of the following is a key aspect of effective product labeling?
A. Compliance with industry standards
Correct B. Clear and concise language
C. Inclusion of warning labels
D. Use of technical jargon

Correct Answer: B

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Question 14
A company's marketing strategy involves the use of social media platforms to engage with customers. Which of the following is a key benefit of using social media marketing?
A. Increased brand awareness
Correct B. Improved customer engagement
C. Enhanced product differentiation
D. Reduced marketing costs

Correct Answer: B

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Question 15
A firm's transport and communication system involves the use of a logistics management software to track shipments. Which of the following is a key benefit of using this software?
Correct A. Improved shipment tracking
B. Enhanced customer satisfaction
C. Reduced transportation costs
D. Increased storage capacity

Correct Answer: A

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Question 16
In a perfectly competitive market, the supply curve is horizontal and the demand curve is downward-sloping. What is the equilibrium price and quantity of a product in this market?
A. ₦100, 100 units
Correct B. ₦120, 80 units
C. ₦150, 60 units
D. ₦180, 40 units

Correct Answer: B

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Question 17
A firm's production function is given by Q = 2L^(1/2)K^(1/2). If the firm's current inputs are L = 16 and K = 9, what is the firm's current output?
A. 24
B. 36
Correct C. 48
D. 60

Correct Answer: C

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Question 18
A firm's revenue function is given by R = 100Q - 2Q^2. If the firm's current price is ₦10 and the quantity sold is 10 units, what is the firm's current revenue?
A. ₦80
Correct B. ₦100
C. ₦120
D. ₦140

Correct Answer: B

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Question 19
A firm's cost function is given by C = 50 + 10Q. If the firm's current output is 10 units, what is the firm's current cost?
A. ₦150
B. ₦160
Correct C. ₦170
D. ₦180

Correct Answer: C

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Question 20
A firm's profit function is given by π = R - C. If the firm's current revenue is ₦100 and the current cost is ₦60, what is the firm's current profit?
A. ₦40
B. ₦50
Correct C. ₦60
D. ₦70

Correct Answer: C

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Question 21
A company is considering two marketing strategies: Strategy A involves a 10% increase in advertising expenditure, while Strategy B involves a 20% increase in sales force. If the company's current advertising expenditure is ₦1,500,000 and its current sales force is 50 people, which strategy would result in a higher increase in revenue?
A. Strategy A
Correct B. Strategy B
C. Both strategies would result in the same increase in revenue
D. Neither strategy would result in an increase in revenue

Correct Answer: B

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Question 22
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, how much will the customer have in the account at the end of the fifth year?
Correct A. ₦163,217.68
B. ₦163,217.68
C. ₦163,217.68
D. ₦163,217.68

Correct Answer: A

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Question 23
A company has a 10% dividend yield on its shares. If the company's share price is ₦50, what is the dividend per share?
Correct A. ₦5
B. ₦5
C. ₦5
D. ₦5

Correct Answer: A

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Question 24
A cargo ship travels from Lagos to Kano, a distance of 1,500 km. If the ship travels at an average speed of 50 km/h, how many hours will it take to complete the journey?
Correct A. 30 hours
B. 30 hours
C. 30 hours
D. 30 hours

Correct Answer: A

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Question 25
A company has a 10% markup on its products. If the cost price of a product is ₦100, what is the selling price?
Correct A. ₦110
B. ₦110
C. ₦110
D. ₦110

Correct Answer: A

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