POST UTME ESUT 2020 Commerce | Objective

Are you preparing for POST UTME ESUT 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
A firm specializes in producing a single product. If the production function is given by Q = 100L^0.4K^0.6, where L is labor and K is capital, and the firm's budget constraint is given by W_L L + W_K K = 1000, where W_L is the wage rate and W_K is the rental rate of capital, what is the firm's optimal level of labor and capital?
A. (L, K) = (10, 20)
B. (L, K) = (20, 10)
Correct C. (L, K) = (15, 15)
D. (L, K) = (25, 5)

Correct Answer: C

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Question 2
A company has two warehouses, A and B, with capacities of 1000 and 500 units, respectively. Warehouse A has a storage cost of ₦10 per unit, while Warehouse B has a storage cost of ₦15 per unit. If the company has 1200 units to store, what is the minimum total storage cost?
A. ₦12,000
Correct B. ₦13,500
C. ₦15,000
D. ₦16,500

Correct Answer: B

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Question 3
A bank offers a 5-year fixed deposit account with an interest rate of 8% per annum compounded annually. If a customer deposits ₦100,000, what is the future value of the investment after 5 years?
Correct A. ₦163,922
B. ₦164,922
C. ₦165,922
D. ₦166,922

Correct Answer: A

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Question 4
A company has a production function given by Q = 2L^0.5K^0.5, where L is labor and K is capital. If the company's budget constraint is given by W_L L + W_K K = 1000, where W_L is the wage rate and W_K is the rental rate of capital, and the company wants to maximize its profit, what is the optimal level of labor and capital?
A. (L, K) = (10, 20)
B. (L, K) = (20, 10)
Correct C. (L, K) = (15, 15)
D. (L, K) = (25, 5)

Correct Answer: C

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Question 5
A firm has a production function given by Q = 100L^0.4K^0.6, where L is labor and K is capital. If the firm's budget constraint is given by W_L L + W_K K = 1000, where W_L is the wage rate and W_K is the rental rate of capital, and the firm wants to maximize its profit, what is the optimal level of labor and capital?
A. (L, K) = (10, 20)
B. (L, K) = (20, 10)
Correct C. (L, K) = (15, 15)
D. (L, K) = (25, 5)

Correct Answer: C

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Question 6
A firm specializes in producing only one product. This is an example of:
Correct A. Division of Labour
B. Economies of Scale
C. Product Differentiation
D. Monopoly

Correct Answer: A

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Question 7
The process of transferring risk from one party to another is known as:
A. Risk Management
Correct B. Insurance
C. Hedging
D. Diversification

Correct Answer: B

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Question 8
A bank's primary function is to act as a:
A. Central Bank
Correct B. Commercial Bank
C. Investment Bank
D. Merchant Bank

Correct Answer: B

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Question 9
The concept of 'just-in-time' inventory system is based on the idea of:
Correct A. Reducing Inventory Costs
B. Increasing Inventory Levels
C. Minimizing Stockouts
D. Maximizing Production Capacity

Correct Answer: A

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Question 10
A firm's production function is given by the equation: Q = 2L + 3K. If the firm's output is 15 units, and the wage rate is ₦100 per hour, and the rental rate is ₦50 per unit, then the firm's total cost is:
A. ₦250
Correct B. ₦300
C. ₦350
D. ₦400

Correct Answer: B

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Question 11
A sole trader's business is registered under the Companies and Allied Matters Act, 2020. Which of the following is a characteristic of a sole trader?
A. Limited liability
Correct B. Unlimited liability
C. Separate legal entity
D. No partnership

Correct Answer: B

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Question 12
A company's marketing strategy involves creating a brand identity that appeals to a specific target audience. Which of the following is a key element of a brand identity?
A. Product features
B. Price strategy
Correct C. Brand personality
D. Distribution channels

Correct Answer: C

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Question 13
A business is considering exporting its products to a foreign market. Which of the following is a key consideration in the export decision?
A. Market demand
B. Transportation costs
Correct C. Tariffs and trade agreements
D. Currency exchange rates

Correct Answer: C

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Question 14
A company's warehouse is using a first-in, first-out (FIFO) inventory system. Which of the following is a characteristic of FIFO?
Correct A. Oldest items are sold first
B. Newest items are sold first
C. Items are sold in the order they are received
D. Items are sold in the order they are produced

Correct Answer: A

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Question 15
A business is considering implementing a just-in-time (JIT) inventory system. Which of the following is a key benefit of JIT?
A. Reduced inventory costs
B. Improved product quality
C. Increased efficiency
Correct D. All of the above

Correct Answer: D

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Question 16
The Central Bank of Nigeria (CBN) uses the following monetary policy tools to control inflation: Open Market Operations (OMO), Reserve Requirements, and the Discount Rate. Which of the following is NOT a monetary policy tool used by the CBN?
Correct A. Fiscal Policy
B. Monetary Policy
C. Supply-Side Policy
D. Demand-Side Policy

Correct Answer: A

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Question 17
A firm's break-even point is the point at which its total revenue equals its total fixed costs. If a firm's total fixed costs are ₦50,000 and its selling price is ₦100, what is the break-even point in units sold?
A. 500 units
B. 750 units
Correct C. 1000 units
D. 1250 units

Correct Answer: C

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Question 18
A warehouse has a storage capacity of 1000 units. If 300 units are already stored, what is the remaining storage capacity?
A. 200 units
B. 300 units
C. 400 units
Correct D. 500 units

Correct Answer: D

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Question 19
A firm's insurance policy has a deductible of ₦10,000 and a policy limit of ₦50,000. If the firm suffers a loss of ₦60,000, what is the insurance company's liability?
A. ₦20,000
B. ₦30,000
Correct C. ₦40,000
D. ₦50,000

Correct Answer: C

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Question 20
A firm uses the following transportation costs: ₦5 per unit for transportation by road and ₦10 per unit for transportation by air. If the firm has 1000 units to transport and the cost of transportation by road is ₦5000, what is the cost of transportation by air?
A. ₦5000
B. ₦10,000
Correct C. ₦15,000
D. ₦20,000

Correct Answer: C

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Question 21
A company is considering two different marketing strategies: one that focuses on social media advertising and another that focuses on influencer marketing. Which strategy is more likely to be effective in reaching a younger demographic?
Correct A. Social media advertising
B. Influencer marketing
C. Both strategies are equally effective
D. Neither strategy is effective

Correct Answer: A

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Question 22
A sole trader has a business income of ₦1,500,000 and business expenses of ₦800,000. What is the sole trader's business profit?
Correct A. ₦700,000
B. ₦1,300,000
C. ₦1,500,000
D. ₦800,000

Correct Answer: A

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Question 23
A company has a 10% dividend yield and a current share price of ₦100. What is the annual dividend payment per share?
Correct A. ₦10
B. ₦12
C. ₦15
D. ₦20

Correct Answer: A

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Question 24
A consumer has a credit card with a balance of ₦50,000 and an annual interest rate of 20%. What is the total interest paid after one year?
Correct A. ₦10,000
B. ₦12,000
C. ₦15,000
D. ₦20,000

Correct Answer: A

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Question 25
A company has a market value of ₦1,000,000 and a book value of ₦800,000. What is the company's market-to-book ratio?
Correct A. 1.25
B. 1.33
C. 1.50
D. 2.00

Correct Answer: A

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