Practice Post UTME CRAWFORD UNIVERSITY commerce 2022 Past Questions

Question 1

A company is considering two different marketing strategies for its new product. Strategy A involves a high upfront cost of ₦1,500,000, but is expected to generate ₦3,000,000 in revenue over the first year. Strategy B involves a lower upfront cost of ₦500,000, but is expected to generate ₦2,000,000 in revenue over the first year. Which strategy should the company choose?

Correct A. Strategy A

B. Strategy B

C. Both strategies are equally viable

D. Neither strategy is viable

Correct Answer: A

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

Question 2

A firm is considering outsourcing its logistics operations to a third-party provider. The firm estimates that the cost of outsourcing will be ₦2,000,000 per year, while the cost of maintaining its own logistics operations will be ₦1,500,000 per year. However, the firm also estimates that outsourcing will result in a 10% increase in delivery times. What is the net effect of outsourcing on the firm's costs?

A. The firm's costs will decrease by ₦500,000 per year

Correct B. The firm's costs will increase by ₦500,000 per year

C. The firm's costs will remain the same

D. The firm's costs will increase by ₦1,000,000 per year

Correct Answer: B

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

Question 3

A company is considering implementing a just-in-time (JIT) inventory system. The company currently holds an average inventory level of ₦1,000,000. The JIT system would reduce inventory levels to ₦500,000, but would also result in a 5% increase in ordering costs. What is the net effect of implementing the JIT system on the company's inventory costs?

A. The company's inventory costs will decrease by ₦250,000

Correct B. The company's inventory costs will increase by ₦250,000

C. The company's inventory costs will remain the same

D. The company's inventory costs will increase by ₦500,000

Correct Answer: B

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

Question 4

A firm is considering investing in a new production technology that will increase its output by 20%. The firm currently produces 10,000 units per year, and sells each unit for ₦500. The new technology will cost ₦1,000,000 to implement, but will also result in a 10% increase in labor costs. What is the net effect of implementing the new technology on the firm's profits?

Correct A. The firm's profits will increase by ₦200,000

B. The firm's profits will decrease by ₦200,000

C. The firm's profits will remain the same

D. The firm's profits will increase by ₦500,000

Correct Answer: A

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

Question 5

A company is considering implementing a new marketing strategy that involves offering a discount to customers who purchase a certain product. The company estimates that the discount will result in a 10% increase in sales, but will also result in a 5% decrease in profit margins. What is the net effect of implementing the new marketing strategy on the company's profits?

A. The company's profits will increase by ₦100,000

Correct B. The company's profits will decrease by ₦100,000

C. The company's profits will remain the same

D. The company's profits will increase by ₦500,000

Correct Answer: B

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

Question 6

In a monopolistically competitive market, a firm's demand curve is downward sloping due to the presence of close substitutes. However, the firm's marginal revenue curve is not necessarily downward sloping. Explain why.

A. The firm's marginal revenue curve is downward sloping because the firm is a price taker.

Correct B. The firm's marginal revenue curve is downward sloping because the firm is a price setter.

C. The firm's marginal revenue curve is downward sloping because the firm is a monopolist.

D. The firm's marginal revenue curve is downward sloping because the firm is a perfect competitor.

Correct Answer: B

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 firm's cost of capital is 12% per annum. What is the internal rate of return (IRR) of the project?

Correct A. 15%

B. 12%

C. 10%

D. 8%

Correct Answer: A

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

Question 8

A consumer has a budget constraint of ₦10,000 and a preference for two goods, A and B. The prices of the goods are ₦5,000 and ₦3,000, respectively. Using the budget constraint and indifference curves, determine the consumer's optimal consumption bundle.

Correct A. A = 2 units, B = 1 unit

B. A = 1 unit, B = 2 units

C. A = 3 units, B = 0 units

D. A = 0 units, B = 3 units

Correct Answer: A

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 firm's cost of capital is 10% per annum. What is the net present value (NPV) of the project?

Correct A. ₦1,500,000

B. ₦1,000,000

C. ₦500,000

D. ₦200,000

Correct Answer: A

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

Question 10

A consumer has a utility function U(x, y) = 2x + 3y, where x and y are the quantities of two goods. The prices of the goods are ₦5,000 and ₦3,000, respectively. Using the budget constraint and utility function, determine the consumer's optimal consumption bundle.

Correct A. x = 2 units, y = 1 unit

B. x = 1 unit, y = 2 units

C. x = 3 units, y = 0 units

D. x = 0 units, y = 3 units

Correct Answer: A

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

Question 11

A firm specializes in producing two goods, X and Y. The production function for good X is given by ( Q_X = 2L^2 + 3K ), where L is labor and K is capital. The production function for good Y is given by ( Q_Y = 4L + 2K ). If the firm has 10 units of labor and 5 units of capital, how many units of good X will it produce?

A. 20

B. 25

Correct C. 30

D. 35

Correct Answer: C

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

Question 12

A consumer has a budget of ₦1000 and is willing to spend up to ₦500 on good X and up to ₦300 on good Y. The price of good X is ₦200 and the price of good Y is ₦150. How many units of good X will the consumer buy?

A. 2

Correct B. 3

C. 4

D. 5

Correct Answer: B

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

Question 13

A bank offers a 5% interest rate on deposits. If a customer deposits ₦1000, how much interest will the customer earn in one year?

Correct A. ₦50

B. ₦55

C. ₦60

D. ₦65

Correct Answer: A

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

Question 14

A firm has a warehouse with a capacity of 1000 units. The firm currently has 500 units of good X and 300 units of good Y in the warehouse. If the firm receives an order for 200 units of good X and 150 units of good Y, what is the total capacity of the warehouse after fulfilling the order?

A. 1200

Correct B. 1300

C. 1400

D. 1500

Correct Answer: B

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

Question 15

A firm has a risk management policy that requires it to pay a premium of ₦500 for every ₦1000 of assets. If the firm has ₦500,000 in assets, how much premium will the firm pay?

A. ₦2500

Correct B. ₦5000

C. ₦7500

D. ₦10,000

Correct Answer: B

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

Question 16

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. What is the opportunity cost of producing a good?

Correct A. The cost of producing the good in terms of other goods that could be produced instead

B. The cost of producing the good in terms of labor hours

C. The cost of producing the good in terms of raw materials

D. The cost of producing the good in terms of capital investment

Correct Answer: A

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

Question 17

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's labor and capital inputs are 4 and 9 respectively, what is the firm's output?

A. 8

Correct B. 16

C. 32

D. 64

Correct Answer: B

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

Question 18

A country's trade balance is given by TB = X - M, where X is the value of exports and M is the value of imports. If the country's exports are ₦1000 and imports are ₦800, what is the country's trade balance?

Correct A. ₦200

B. ₦400

C. ₦600

D. ₦800

Correct Answer: A

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

Question 19

A firm's demand function is given by Q = 100 - 2P. If the firm's price is ₦20, what is the firm's quantity demanded?

A. 40

Correct B. 60

C. 80

D. 100

Correct Answer: B

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

Question 20

A country's GNP is given by GNP = C + I + G + (X - M). If the country's consumption is ₦500, investment is ₦200, government spending is ₦300, exports are ₦1000, and imports are ₦800, what is the country's GNP?

A. ₦2500

B. ₦3000

Correct C. ₦3500

D. ₦4000

Correct Answer: C

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

Question 21

A company is considering two different production methods for its new product. Method A involves a higher initial investment but lower production costs, while Method B involves a lower initial investment but higher production costs. If the company expects to produce 10,000 units per year for 5 years, and the market price of the product is ₦500 per unit, which production method should the company choose?

Correct A. Method A

B. Method B

C. Method C

D. Method D

Correct Answer: A

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

Question 22

A firm is considering two different advertising strategies for its new product. Strategy A involves a higher initial investment but lower ongoing costs, while Strategy B involves a lower initial investment but higher ongoing costs. If the firm expects to sell 10,000 units per year for 5 years, and the market price of the product is ₦500 per unit, which advertising strategy should the firm choose?

Correct A. Strategy A

B. Strategy B

C. Strategy C

D. Strategy D

Correct Answer: A

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

Question 23

A company is considering two different insurance policies for its employees. Policy A provides a higher level of coverage but has a higher premium, while Policy B provides a lower level of coverage but has a lower premium. If the company expects to pay a premium of ₦10,000 per year for 5 years, and the expected cost of claims is ₦50,000 per year, which insurance policy should the company choose?

Correct A. Policy A

B. Policy B

C. Policy C

D. Policy D

Correct Answer: A

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

Question 24

A firm is considering two different production methods for its new product. Method A involves a higher initial investment but lower production costs, while Method B involves a lower initial investment but higher production costs. If the firm expects to produce 10,000 units per year for 5 years, and the market price of the product is ₦500 per unit, which production method should the firm choose?

Correct A. Method A

B. Method B

C. Method C

D. Method D

Correct Answer: A

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

Question 25

A company is considering two different marketing strategies for its new product. Strategy A involves a higher initial investment but lower ongoing costs, while Strategy B involves a lower initial investment but higher ongoing costs. If the company expects to sell 10,000 units per year for 5 years, and the market price of the product is ₦500 per unit, which marketing strategy should the company choose?

Correct A. Strategy A

B. Strategy B

C. Strategy C

D. Strategy D

Correct Answer: A

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

POST UTME CRAWFORD UNIVERSITY 2022 Commerce | Objective

Master the Exam!

Help others prepare! Share this practice hub: