POST UTME ELIZADE UNIVERSITY 2022 Commerce | Objective

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Question 1
A company's production function is given by the equation ( Q = 100L^0.5K^0.25 ), where Q is the quantity produced, L is the number of labor hours, and K is the capital invested. If the company wants to increase its production by 20% while keeping labor hours constant, how much more capital should it invest?
A. ₦1000
Correct B. ₦5000
C. ₦2000
D. ₦10,000

Correct Answer: B

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Question 2
A firm's demand function is given by the equation ( P = 100 - 2Q ), where P is the price and Q is the quantity demanded. If the firm wants to increase its revenue by 10%, how much should it increase its price?
A. ₦5
Correct B. ₦10
C. ₦20
D. ₦50

Correct Answer: B

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Question 3
A bank's balance sheet is given by the equation ( AS = D + E ), where AS is the assets, D is the deposits, and E is the equity. If the bank wants to increase its assets by 15% while keeping deposits constant, how much should it increase its equity?
A. ₦5000
Correct B. ₦10,000
C. ₦20,000
D. ₦50,000

Correct Answer: B

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Question 4
A company's cost function is given by the equation ( C = 100L + 200K ), where C is the cost, L is the labor hours, and K is the capital invested. If the company wants to minimize its cost while producing 100 units, how many labor hours should it use?
A. 100
Correct B. 200
C. 300
D. 400

Correct Answer: B

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Question 5
A firm's supply function is given by the equation ( P = 50 + 2Q ), where P is the price and Q is the quantity supplied. If the firm wants to increase its revenue by 20%, how much should it increase its price?
A. ₦10
B. ₦20
Correct C. ₦30
D. ₦50

Correct Answer: C

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Question 6
A company's marketing strategy involves creating a sense of urgency among its customers. This is an example of which of the following marketing tactics?
Correct A. Scarcity
B. Exclusivity
C. Social Proof
D. Liking

Correct Answer: A

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Question 7
A consumer purchases a product online, but upon delivery, finds that it is damaged. The consumer seeks redress from the seller, citing the Consumer Protection Act. Which of the following is a fundamental principle of consumer protection?
A. The right to choose
Correct B. The right to safety
C. The right to be heard
D. The right to information

Correct Answer: B

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Question 8
A company produces a product that is subject to a patent. Which of the following is a type of patent?
Correct A. Utility patent
B. Design patent
C. Plant patent
D. Reissue patent

Correct Answer: A

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Question 9
A business owner seeks to minimize risk by diversifying their investments. Which of the following is a type of risk management strategy?
Correct A. Diversification
B. Hedging
C. Speculation
D. Arbitrage

Correct Answer: A

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Question 10
A company's production process involves the use of a machine that is prone to breakdowns. Which of the following is a type of production risk?
Correct A. Operational risk
B. Strategic risk
C. Financial risk
D. Compliance risk

Correct Answer: A

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Question 11
A sole trader's business is considered a separate legal entity from its owner. However, the owner is personally liable for all business debts and obligations. What is the name of this type of business organization?
Correct A. Sole Trader
B. Partnership
C. Limited Liability Company
D. Cooperative

Correct Answer: A

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Question 12
A company has a capital structure consisting of 60% equity and 40% debt. If the company's cost of equity is 12% and the cost of debt is 8%, what is the company's weighted average cost of capital (WACC)?
Correct A. 9.6%
B. 10.4%
C. 11.2%
D. 12.0%

Correct Answer: A

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Question 13
A firm is considering two different production processes to manufacture a product. Process A requires an initial investment of ₦10 million and generates revenue of ₦15 million per year. Process B requires an initial investment of ₦20 million and generates revenue of ₦25 million per year. If the firm's cost of capital is 10%, which process should it choose?
A. Process A
Correct B. Process B
C. Both processes are equally profitable
D. Neither process is profitable

Correct Answer: B

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Question 14
A company is considering a new transportation mode to reduce its logistics costs. The company currently uses a trucking service that costs ₦500,000 per trip. The new transportation mode, which is a rail service, costs ₦300,000 per trip. However, the rail service requires a one-time investment of ₦10 million to set up the rail line. If the company makes 100 trips per year, what is the total cost of the rail service?
A. ₦30 million
Correct B. ₦40 million
C. ₦50 million
D. ₦60 million

Correct Answer: B

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Question 15
A company has a portfolio of assets with a beta of 1.2. If the market risk premium is 5% and the risk-free rate is 2%, what is the expected return on the portfolio?
A. 4.4%
Correct B. 5.2%
C. 6.0%
D. 6.8%

Correct Answer: B

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Question 16
A company's warehousing and stock control system is designed to minimize costs while ensuring efficient inventory management. Which of the following is a key benefit of this system?
A. Reduced inventory levels
B. Improved customer satisfaction
C. Increased storage capacity
Correct D. Enhanced supply chain visibility

Correct Answer: D

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Question 17
A consumer protection agency has received complaints about a company's misleading advertising practices. Which of the following is a potential consequence of this behavior?
A. Financial penalties
B. Reputation damage
C. Loss of business licenses
Correct D. All of the above

Correct Answer: D

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Question 18
A sole trader has decided to expand their business by hiring additional staff. Which of the following is a key consideration for this decision?
A. Increased revenue
B. Improved productivity
C. Enhanced customer service
Correct D. Additional financial risks

Correct Answer: D

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Question 19
A company is considering the launch of a new product. Which of the following is a key factor in determining the product's market potential?
A. Target market size
B. Competitor analysis
C. Product life cycle
Correct D. All of the above

Correct Answer: D

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Question 20
A marketing manager is responsible for creating an advertising campaign for a new product. Which of the following is a key consideration for this campaign?
A. Target audience
B. Product features
C. Competitor analysis
Correct D. All of the above

Correct Answer: D

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Question 21
The marketing mix for a product can be modified to suit the needs of a specific target market. Which of the following is NOT a part of the marketing mix?
A. Product
B. Price
C. Promotion
Correct D. Place

Correct Answer: D

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Question 22
A company is considering exporting its products to a foreign market. Which of the following is a major 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 23
A consumer is considering purchasing a product from a company that has a reputation for producing high-quality products. Which of the following is a factor that influences the consumer's decision?
A. Price
B. Quality
Correct C. Brand recognition
D. Location

Correct Answer: C

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Question 24
A company is considering investing in a new project. Which of the following is a factor that should be considered when evaluating the project's potential return on investment?
A. Market demand
B. Production costs
C. Cash flow
Correct D. All of the above

Correct Answer: D

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Question 25
A company is considering entering a new market. Which of the following is a major risk associated with entering a new market?
A. Increased competition
B. Reduced market share
C. Uncertainty about market demand
Correct D. All of the above

Correct Answer: D

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