Practice Post UTME CRAWFORD UNIVERSITY commerce 2024 Past Questions

Question 1

In a perfectly competitive market, the supply curve is upward-sloping because

Correct A. Firms are willing to supply more of a good as its price increases.

B. Firms are willing to supply less of a good as its price increases.

C. Firms are willing to supply more of a good as its price decreases.

D. Firms are willing to supply less of a good as its price decreases.

Correct Answer: A

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Question 2

A firm's production function is given by Q = 2L^(1/2)K^(1/2). If the firm's labor and capital inputs are 4 and 9 respectively, what is the firm's output?

A. 12

Correct B. 16

C. 20

D. 24

Correct Answer: B

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Question 3

A consumer's indifference curve is given by U = 2x + 3y. If the consumer's income is 100 and the prices of x and y are 5 and 10 respectively, what is the consumer's optimal bundle?

Correct A. x = 5, y = 5

B. x = 10, y = 10

C. x = 15, y = 5

D. x = 5, y = 15

Correct Answer: A

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Question 4

A firm's cost function is given by C = 2L + 3K. If the firm's labor and capital inputs are 4 and 9 respectively, what is the firm's total cost?

A. 20

Correct B. 30

C. 40

D. 50

Correct Answer: B

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Question 5

A consumer's budget constraint is given by 2x + 3y = 100. If the consumer's income is 100 and the prices of x and y are 5 and 10 respectively, what is the consumer's optimal bundle?

A. x = 20, y = 20

Correct B. x = 15, y = 25

C. x = 25, y = 15

D. x = 10, y = 30

Correct Answer: B

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Question 6

A firm's decision to produce a new product involves a trade-off between the costs of production and the potential profits. Which of the following is an example of a cost that the firm should consider when deciding whether to produce the new product?

Correct A. Opportunity cost

B. Fixed cost

C. Variable cost

D. Sunk cost

Correct Answer: A

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Question 7

A company is considering two different transportation modes to move its products from the factory to the warehouse. Mode A costs ₦100 per unit and has a fixed cost of ₦5000, while Mode B costs ₦120 per unit and has a fixed cost of ₦3000. If the company needs to move 1000 units, which mode should it choose?

A. Mode A

Correct B. Mode B

C. Both modes are equally expensive

D. Neither mode is suitable

Correct Answer: B

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Question 8

A firm is considering two different production processes to produce a new product. Process A has a higher fixed cost but a lower variable cost, while Process B has a lower fixed cost but a higher variable cost. Which process should the firm choose if it expects to produce 1000 units?

Correct A. Process A

B. Process B

C. Both processes are equally expensive

D. Neither process is suitable

Correct Answer: A

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Question 9

A company is considering two different storage options for its products. Option A costs ₦500 per unit and has a capacity of 1000 units, while Option B costs ₦300 per unit and has a capacity of 500 units. If the company needs to store 2000 units, which option should it choose?

Correct A. Option A

B. Option B

C. Both options are equally expensive

D. Neither option is suitable

Correct Answer: A

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Question 10

A firm is considering two different marketing strategies to promote its new product. Strategy A involves a high level of advertising and promotion, while Strategy B involves a low level of advertising and promotion. Which strategy should the firm choose if it expects to sell 1000 units?

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 11

A firm produces two goods, A and B, using two inputs, labor (L) and capital (K). The production function for good A is given by ( Q_A = 2L^{0.4}K^{0.6} ), while the production function for good B is given by ( Q_B = 3L^{0.7}K^{0.3} ). If the firm has 100 units of labor and 50 units of capital, and the prices of labor and capital are ₦100 and ₦200 respectively, what is the optimal production plan for the firm?

A. Produce 50 units of good A and 50 units of good B

B. Produce 100 units of good A and 0 units of good B

C. Produce 0 units of good A and 100 units of good B

Correct D. Produce 75 units of good A and 25 units of good B

Correct Answer: D

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Question 12

A company is considering two different marketing strategies for its new product. Strategy A involves a high upfront cost of ₦500,000, but is expected to generate ₦1,000,000 in revenue over the next 5 years. Strategy B involves a lower upfront cost of ₦200,000, but is expected to generate ₦800,000 in revenue over the next 5 years. What is the net present value (NPV) of each strategy, assuming a discount rate of 10%?

Correct A. Strategy A has a higher NPV

B. Strategy B has a higher NPV

C. Both strategies have the same NPV

D. Neither strategy has a positive NPV

Correct Answer: A

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Question 13

A consumer has a budget of ₦10,000 and is considering purchasing two different products, A and B. Product A costs ₦5,000 and has a utility of 10, while product B costs ₦3,000 and has a utility of 8. What is the consumer's optimal consumption plan?

Correct A. Buy 1 unit of product A and 1 unit of product B

B. Buy 2 units of product A and 0 units of product B

C. Buy 0 units of product A and 3 units of product B

D. Buy 1 unit of product A and 2 units of product B

Correct Answer: A

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Question 14

A firm is considering two different production technologies for its new product. Technology A involves a higher upfront cost of ₦500,000, but is expected to reduce production costs by 20% over the next 5 years. Technology B involves a lower upfront cost of ₦200,000, but is expected to reduce production costs by 10% over the next 5 years. What is the present value of the cost savings for each technology, assuming a discount rate of 10%?

Correct A. Technology A has a higher present value of cost savings

B. Technology B has a higher present value of cost savings

C. Both technologies have the same present value of cost savings

D. Neither technology has a positive present value of cost savings

Correct Answer: A

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Question 15

A consumer has a utility function given by ( U(x,y) = 2x + 3y ), where x and y are the quantities of two different goods consumed. The prices of the two goods are ₦5 and ₦3 respectively. What is the consumer's optimal consumption plan?

Correct A. Buy 2 units of good x and 1 unit of good y

B. Buy 1 unit of good x and 2 units of good y

C. Buy 3 units of good x and 0 units of good y

D. Buy 0 units of good x and 3 units of good y

Correct Answer: A

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Question 16

A company is considering a new marketing strategy that involves creating a social media campaign to promote its products. The campaign will be run for 6 months, with a budget of ₦1,500,000. The company expects to generate a return on investment (ROI) of 20% per month. What is the total ROI for the 6-month period?

A. ₦3,000,000

B. ₦3,600,000

Correct C. ₦4,200,000

D. ₦4,800,000

Correct Answer: C

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Question 17

A firm is considering two different transportation modes to deliver its products. Mode A costs ₦500 per unit and has a fixed cost of ₦10,000. Mode B costs ₦300 per unit and has a fixed cost of ₦20,000. If the firm needs to deliver 1,000 units, which mode should it choose?

Correct A. Mode A

B. Mode B

C. Both modes are equally cost-effective

D. Neither mode is cost-effective

Correct Answer: A

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Question 18

A company has a warehouse with a capacity of 10,000 units. The company receives a shipment of 8,000 units and then sells 2,000 units. What is the new stock level?

A. 8,000 units

Correct B. 6,000 units

C. 10,000 units

D. 12,000 units

Correct Answer: B

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Question 19

A firm has a production capacity of 5,000 units per month. The firm produces 3,000 units in the first month and 4,000 units in the second month. What is the total production level for the two months?

A. 7,000 units

Correct B. 8,000 units

C. 9,000 units

D. 10,000 units

Correct Answer: B

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Question 20

A company has a risk management strategy that involves diversifying its investments across different asset classes. The company invests 60% of its portfolio in stocks, 20% in bonds, and 20% in real estate. What is the expected return on investment (ROI) for the portfolio?

A. 10%

Correct B. 12%

C. 15%

D. 18%

Correct Answer: B

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Question 21

A firm's production function is given by Q = 2L^0.4K^0.3, where Q is output, L is labor, and K is capital. If the firm's current labor and capital inputs are 100 units and 200 units, respectively, what is the marginal product of labor?

Correct A. 0.8

B. 1.6

C. 2.4

D. 3.2

Correct Answer: A

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Question 22

A company is considering two marketing strategies: Strategy A, which involves a 10% increase in advertising expenditure, and Strategy B, which involves a 15% decrease in advertising expenditure. If the current advertising expenditure is ₦1,000,000, which strategy will result in a higher revenue?

Correct A. Strategy A

B. Strategy B

C. Both strategies will result in the same revenue

D. Neither strategy will result in a higher revenue

Correct Answer: A

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Question 23

A firm's demand function is given by Q = 100 - 2P, where Q is quantity demanded and P is price. If the firm's current price is ₦50, what is the marginal revenue?

A. ₦100

B. ₦50

Correct C. ₦-50

D. ₦-100

Correct Answer: C

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Question 24

A country's foreign trade balance is given by B = X - M, where B is balance, X is exports, and M is imports. If the country's current exports and imports are ₦500,000,000 and ₦700,000,000, respectively, what is the balance?

Correct A. ₦-200,000,000

B. ₦100,000,000

C. ₦200,000,000

D. ₦300,000,000

Correct Answer: A

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Question 25

A firm's production function is given by Q = 2L^0.4K^0.3, where Q is output, L is labor, and K is capital. If the firm's current labor and capital inputs are 100 units and 200 units, respectively, what is the marginal product of capital?

A. 0.6

Correct B. 1.2

C. 1.8

D. 2.4

Correct Answer: B

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