POST UTME ELIZADE UNIVERSITY 2020 Commerce | Objective

Are you preparing for POST UTME ELIZADE UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2020 Commerce (Objective) questions designed to simulate the real exam environment.

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Question 1
In a sole trade business, what is the primary advantage of using a sole trader structure?
A. Limited liability
B. Easy to set up
Correct C. Flexibility in decision-making
D. No tax benefits

Correct Answer: C

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Question 2
A company has a share capital of ₦1,000,000, divided into 100,000 ordinary shares of ₦10 each. If the company issues 50,000 shares to the public, what is the amount of share capital received?
A. ₦500,000
Correct B. ₦750,000
C. ₦1,000,000
D. ₦1,250,000

Correct Answer: B

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Question 3
A consumer purchases a product with a list price of ₦20,000 and a discount of 15%. Calculate the amount of discount and the selling price.
Correct A. ₦3,000, ₦17,000
B. ₦2,500, ₦17,500
C. ₦3,500, ₦16,500
D. ₦4,000, ₦16,000

Correct Answer: A

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Question 4
A company's balance sheet shows a current ratio of 2:1. If the company's current assets are ₦500,000 and its current liabilities are ₦250,000, what is the amount of its non-current liabilities?
A. ₦250,000
B. ₦375,000
C. ₦500,000
Correct D. ₦750,000

Correct Answer: D

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Question 5
A bank offers a 5-year fixed deposit account with an interest rate of 10% per annum compounded annually. If a customer deposits ₦100,000, what is the amount of interest earned after 5 years?
Correct A. ₦21,091
B. ₦21,191
C. ₦21,291
D. ₦21,391

Correct Answer: A

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Question 6
In a perfectly competitive market, what is the relationship between the marginal revenue product of labor (MRPL) and the marginal factor cost of labor (MFC)?
A. MRPL > MFC
B. MRPL < MFC
Correct C. MRPL = MFC
D. MRPL is irrelevant to MFC

Correct Answer: C

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Question 7
A company is considering two different advertising strategies: Strategy A, which costs ₦1,000,000 and is expected to generate ₦2,000,000 in revenue, and Strategy B, which costs ₦500,000 and is expected to generate ₦1,500,000 in revenue. What is the break-even point for each strategy?
Correct A. Strategy A: 2 units, Strategy B: 3 units
B. Strategy A: 3 units, Strategy B: 2 units
C. Strategy A: 4 units, Strategy B: 5 units
D. Strategy A: 5 units, Strategy B: 4 units

Correct Answer: A

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Question 8
A firm is producing a good with the following cost function: C(q) = 2q^2 + 10q + 100. What is the marginal cost (MC) of producing the 5th unit?
A. ₦200
Correct B. ₦300
C. ₦400
D. ₦500

Correct Answer: B

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Question 9
A company is considering exporting its product to a foreign market. What is the primary advantage of exporting?
A. Increased market share
B. Reduced competition
Correct C. Access to new markets and customers
D. Lower production costs

Correct Answer: C

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Question 10
A sole trader is considering hiring an employee to help with the workload. What is the primary advantage of hiring an employee?
A. Increased profits
B. Reduced workload
Correct C. Improved productivity
D. Increased market share

Correct Answer: C

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Question 11
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. Which of the following is a correct example of comparative advantage?
A. Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 50 units of wheat and 100 units of cloth.
B. Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 50 units of wheat and 150 units of cloth.
Correct C. Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 50 units of wheat and 50 units of cloth.
D. Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 150 units of wheat and 100 units of cloth.

Correct Answer: C

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Question 12
A company is considering two different production processes for a new product. Process A requires an initial investment of ₦10 million and produces 100 units per month, while Process B requires an initial investment of ₦5 million and produces 50 units per month. If the company expects to sell each unit for ₦20,000, which process should it choose?
A. Process A, because it produces more units per month.
B. Process B, because it requires a lower initial investment.
C. Process A, because it has a higher profit margin.
Correct D. Process B, because it has a lower opportunity cost.

Correct Answer: D

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Question 13
A consumer protection agency has received a complaint about a company that is selling a product with a misleading label. The label claims that the product is '100% natural' when in fact it contains 20% artificial ingredients. Which of the following is a correct statement about the agency's response?
Correct A. The agency should fine the company and order it to change the label.
B. The agency should investigate the company's manufacturing process to determine the extent of the deception.
C. The agency should inform the public about the misleading label and allow the company to correct it.
D. The agency should take no action, as the company is not violating any laws.

Correct Answer: A

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Question 14
A company is considering implementing a just-in-time inventory system. Which of the following is a benefit of this system?
A. Reduced inventory costs.
B. Improved customer satisfaction.
C. Increased efficiency in production.
Correct D. All of the above.

Correct Answer: D

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Question 15
A country is considering imposing tariffs on imported goods to protect its domestic industry. Which of the following is a potential consequence of this policy?
A. Increased competition in the domestic market.
B. Reduced prices for consumers.
Correct C. Increased unemployment in the domestic industry.
D. All of the above.

Correct Answer: C

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Question 16
In a sole trade business, what is the primary advantage of adopting a sole proprietorship structure?
A. Limited liability
B. Easy to set up
C. Tax benefits
Correct D. Flexibility in decision-making

Correct Answer: D

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Question 17
A company X has a capital of ₦10,000,000, divided into 100,000 ordinary shares of ₦100 each. If the company issues 20,000 shares to the public, what is the amount of money received from the public?
A. ₦2,000,000
Correct B. ₦4,000,000
C. ₦6,000,000
D. ₦8,000,000

Correct Answer: B

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Question 18
A consumer purchases a product with a price of ₦5,000 and a 10% discount. If the consumer pays ₦4,500, what is the amount of the discount?
Correct A. ₦500
B. ₦1,000
C. ₦1,500
D. ₦2,000

Correct Answer: A

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Question 19
A company has a fleet of 10 buses, each with a capacity of 50 passengers. If the company operates 5 routes, what is the total number of passengers that can be carried per day?
A. 2,500
B. 5,000
C. 7,500
Correct D. 10,000

Correct Answer: D

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Question 20
A life insurance policy has a premium of ₦10,000 per annum. If the policyholder pays the premium for 5 years, what is the total amount paid?
A. ₦50,000
B. ₦60,000
C. ₦70,000
Correct D. ₦80,000

Correct Answer: D

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Question 21
The Consumer Protection Act of 1999 in Nigeria provides for the protection of consumers from unfair trade practices. Which of the following is a key provision of the Act?
Correct A. Prohibition of misleading advertisements
B. Establishment of the Consumer Protection Council
C. Compulsory labeling of products
D. Prohibition of price-fixing agreements

Correct Answer: A

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Question 22
A company in Nigeria imports goods from China and sells them in Nigeria. The company is required to comply with which of the following regulations?
A. The Nigerian Customs Service regulations
Correct B. The Nigerian Standards Organization (SON) regulations
C. The Nigerian Consumer Protection Act
D. The Nigerian Trade Marks Act

Correct Answer: B

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Question 23
A warehouse in Nigeria stores goods worth ₦10 million. The warehouse is insured against theft and damage. The insurance premium is ₦200,000 per annum. What is the insurance premium as a percentage of the total value of the goods?
A. 2%
Correct B. 1%
C. 0.5%
D. 0.2%

Correct Answer: B

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Question 24
A sole trader in Nigeria has a business income of ₦500,000 and a business expense of ₦200,000. What is the sole trader's profit?
Correct A. ₦300,000
B. ₦400,000
C. ₦500,000
D. ₦600,000

Correct Answer: A

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Question 25
A company in Nigeria has a share capital of ₦1 million, divided into 10,000 shares of ₦100 each. The company issues 5,000 shares to the public at a premium of ₦20 per share. What is the total amount received from the public?
Correct A. ₦1,050,000
B. ₦1,050,000
C. ₦1,050,000
D. ₦1,050,000

Correct Answer: A

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