Practice Post UTME ESUT commerce 2020 Past Questions

Question 1

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

C. ₦15,000

D. ₦20,000

Question 2

A company's production process involves the use of specialized machinery. Explain how the company can benefit from economies of scale in its production process.

A. By producing a large quantity of goods, the company can reduce its costs per unit.

B. By producing a small quantity of goods, the company can increase its market share.

C. By using specialized machinery, the company can increase its production speed.

D. By producing a variety of goods, the company can reduce its costs per unit.

Question 3

A company is considering implementing a new inventory management system that uses a just-in-time (JIT) approach. What is the primary benefit of using a JIT approach?

A. Reduced inventory costs

B. Improved product quality

C. Increased production efficiency

D. Enhanced customer satisfaction

Question 4

A firm specializes in producing only one product. This is an example of:

A. Division of Labour

B. Economies of Scale

C. Product Differentiation

D. Monopoly

Question 5

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

B. ₦300

C. ₦350

D. ₦400

Question 6

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?

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 the resources used to produce it

C. The cost of importing the good from another country

D. The cost of storing the good in a warehouse

Question 7

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?

A. Social media advertising

B. Influencer marketing

C. Both strategies are equally effective

D. Neither strategy is effective

Question 8

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

C. Brand personality

D. Distribution channels

Question 9

A company is considering two different production processes to manufacture a product. Process A requires an initial investment of ₦100,000 and has a variable cost of ₦50 per unit. Process B requires an initial investment of ₦150,000 and has a variable cost of ₦30 per unit. If the selling price of the product is ₦120 per unit, which process should the company choose?

A. Process A, because it has a lower initial investment and a higher selling price.

B. Process B, because it has a lower variable cost and a higher selling price.

C. Process A, because it has a lower variable cost and a lower initial investment.

D. Process B, because it has a higher initial investment and a higher selling price.

Question 10

In a perfectly competitive market, the supply curve is downward sloping because of the law of increasing opportunity cost. However, in a monopolistically competitive market, the supply curve is also downward sloping due to the law of diminishing marginal returns. Which of the following best describes the difference between these two market structures?

A. The law of increasing opportunity cost is more relevant in a perfectly competitive market, while the law of diminishing marginal returns is more relevant in a monopolistically competitive market.

B. The law of increasing opportunity cost is more relevant in a monopolistically competitive market, while the law of diminishing marginal returns is more relevant in a perfectly competitive market.

C. The law of increasing opportunity cost is more relevant in both market structures.

D. The law of diminishing marginal returns is more relevant in both market structures.

Question 11

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?

A. ₦700,000

B. ₦1,300,000

C. ₦1,500,000

D. ₦800,000

Question 12

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

B. Unlimited liability

C. Separate legal entity

D. No partnership

Question 13

A sole trader is considering whether to expand its business by hiring more employees. The sole trader's current profit is ₦100,000 per year, and the cost of hiring one additional employee is ₦50,000 per year. If the sole trader expects to increase its profit by ₦20,000 per year for each additional employee hired, should the sole trader expand its business?

A. Yes, because the expected increase in profit is greater than the cost of hiring an additional employee.

B. No, because the cost of hiring an additional employee is greater than the expected increase in profit.

C. Yes, because the sole trader's current profit is high enough to justify the cost of hiring an additional employee.

D. No, because the sole trader's current profit is too low to justify the cost of hiring an additional employee.

Question 14

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?

A. Fiscal Policy

B. Monetary Policy

C. Supply-Side Policy

D. Demand-Side Policy

Question 15

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

C. 1000 units

D. 1250 units

POST UTME ESUT 2020 Commerce | Objective

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