POST UTME ESUT 2022 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 2022 Commerce (Objective) questions designed to simulate the real exam environment.

Practice these randomly selected questions to test your readiness.

Question 1
In a perfectly competitive market, the supply curve is upward-sloping because of the law of increasing costs. What is the primary reason for this upward-sloping supply curve?
Correct A. Increasing marginal costs due to the law of diminishing returns
B. Decreasing marginal costs due to the law of increasing returns
C. Fixed costs that do not change with output
D. Variable costs that do not change with output

Correct Answer: A

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Question 2
A company is considering two different production processes for its product. Process A requires an initial investment of ₦1,500,000 and has a variable cost of ₦200 per unit. Process B requires an initial investment of ₦2,000,000 and has a variable cost of ₦150 per unit. If the company produces 10,000 units, which process will result in lower total costs?
A. Process A
Correct B. Process B
C. Both processes will result in the same total costs
D. Neither process will result in lower total costs

Correct Answer: B

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Question 3
A firm is considering the following two investment opportunities: Opportunity A has a 10% chance of earning a return of ₦1,000,000 and a 90% chance of earning a return of ₦0. Opportunity B has a 20% chance of earning a return of ₦500,000 and an 80% chance of earning a return of ₦0. Which opportunity has a higher expected return?
Correct A. Opportunity A
B. Opportunity B
C. Both opportunities have the same expected return
D. Neither opportunity has a higher expected return

Correct Answer: A

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Question 4
A firm is considering the following two production processes for its product. Process A requires an initial investment of ₦1,000,000 and has a variable cost of ₦100 per unit. Process B requires an initial investment of ₦1,500,000 and has a variable cost of ₦80 per unit. If the firm produces 5,000 units, what is the total cost of production for each process?
Correct A. Process A: ₦1,500,000; Process B: ₦1,200,000
B. Process A: ₦1,200,000; Process B: ₦1,500,000
C. Process A: ₦1,000,000; Process B: ₦1,000,000
D. Process A: ₦1,500,000; Process B: ₦1,500,000

Correct Answer: A

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Question 5
A firm is considering the following two investment opportunities: Opportunity A has a 5% chance of earning a return of ₦500,000 and a 95% chance of earning a return of ₦0. Opportunity B has a 10% chance of earning a return of ₦250,000 and a 90% chance of earning a return of ₦0. Which opportunity has a higher expected return?
Correct A. Opportunity A
B. Opportunity B
C. Both opportunities have the same expected return
D. Neither opportunity has a higher expected return

Correct Answer: A

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Question 6
In a perfectly competitive market, the supply curve is horizontal and the demand curve is downward-sloping. If the market price falls from ₦100 to ₦80, what is the effect on the quantity supplied?
A. Quantity supplied increases
Correct B. Quantity supplied decreases
C. Quantity supplied remains the same
D. Quantity supplied is unaffected

Correct Answer: B

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Question 7
A company uses the following data to calculate its weighted average cost of capital (WACC):
Correct A. Debt: ₦100m, Equity: ₦200m, Cost of debt: 10%, Cost of equity: 15%
B. Debt: ₦200m, Equity: ₦100m, Cost of debt: 15%, Cost of equity: 10%
C. Debt: ₦300m, Equity: ₦100m, Cost of debt: 12%, Cost of equity: 18%
D. Debt: ₦100m, Equity: ₦300m, Cost of debt: 18%, Cost of equity: 12%

Correct Answer: A

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Question 8
A firm's production function is given by Q = 2L^0.5K^0.5, where Q is output, L is labor, and K is capital. If the firm increases labor from 4 units to 9 units, and capital from 9 units to 16 units, what is the percentage change in output?
A. 10%
Correct B. 20%
C. 30%
D. 40%

Correct Answer: B

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Question 9
A firm's revenue function is given by R = 100Q - 2Q^2, where R is revenue and Q is quantity sold. If the firm sells 10 units, what is the marginal revenue?
A. ₦800
Correct B. ₦900
C. ₦1000
D. ₦1100

Correct Answer: B

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Question 10
A firm's cost function is given by C = 50 + 10Q, where C is cost and Q is quantity produced. If the firm produces 5 units, what is the total cost?
A. ₦250
Correct B. ₦300
C. ₦350
D. ₦400

Correct Answer: B

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Question 11
In the context of foreign trade, what is the primary objective of the Most Favoured Nation (MFN) clause in the World Trade Organization (WTO) agreements?
A. To promote fair competition among member countries
Correct B. To encourage trade liberalization and reduce tariffs
C. To protect domestic industries from foreign competition
D. To facilitate the exchange of goods and services among member countries

Correct Answer: B

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Question 12
A company has a policy of paying its employees a 10% bonus on their annual salaries. If an employee's salary is ₦500,000, what is the total amount the employee will receive at the end of the year?
Correct A. ₦550,000
B. ₦500,000
C. ₦450,000
D. ₦550,000

Correct Answer: A

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Question 13
A firm has a fixed cost of ₦200,000 and a variable cost of ₦50 per unit. If the firm produces 100 units, what is the total cost?
A. ₦5,500,000
Correct B. ₦5,000,000
C. ₦6,000,000
D. ₦6,500,000

Correct Answer: B

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Question 14
A company has a 20% dividend payout ratio. If the company's net income is ₦1,000,000, what is the amount of dividend paid to shareholders?
Correct A. ₦200,000
B. ₦150,000
C. ₦250,000
D. ₦300,000

Correct Answer: A

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Question 15
A firm has a market share of 30% in a particular industry. If the industry's total sales are ₦10,000,000, what is the firm's sales revenue?
Correct A. ₦3,000,000
B. ₦2,000,000
C. ₦4,000,000
D. ₦5,000,000

Correct Answer: A

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Question 16
A company's warehouse is experiencing a high rate of stock damage due to inadequate storage facilities. Which of the following warehousing strategies would be most effective in reducing stock damage?
A. First-In-First-Out (FIFO) storage
B. Last-In-First-Out (LIFO) storage
Correct C. Just-In-Time (JIT) inventory management
D. Cross-Docking

Correct Answer: C

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Question 17
A consumer has purchased a product with a defect. The consumer is entitled to a refund or replacement under the Consumer Protection Act. Which of the following is a requirement for the consumer to be eligible for a refund or replacement?
A. The product must be within the warranty period
Correct B. The consumer must provide proof of purchase
C. The product must be defective due to a manufacturing fault
D. The consumer must have purchased the product from an authorized dealer

Correct Answer: B

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Question 18
A company is exporting goods to a foreign country. The company must comply with the regulations of the importing country. Which of the following is a requirement for the company to comply with the regulations of the importing country?
A. The company must obtain an export license
Correct B. The company must comply with the importing country's customs regulations
C. The company must comply with the importing country's tax laws
D. The company must comply with the importing country's labor laws

Correct Answer: B

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Question 19
A company is using a marketing strategy that involves creating a sense of urgency among customers to purchase a product. Which of the following marketing strategies is the company using?
A. Scarcity marketing
B. Social proof marketing
Correct C. Urgency marketing
D. Limited-time offer marketing

Correct Answer: C

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Question 20
A company is using a transportation mode that involves the movement of goods by road. Which of the following transportation modes is the company using?
Correct A. Road transportation
B. Rail transportation
C. Air transportation
D. Water transportation

Correct Answer: A

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Question 21
The Consumer Protection Act of 1999 provides for the establishment of the National Consumer Protection Agency (NCPA). Which of the following is a primary function of the NCPA?
Correct A. To investigate complaints from consumers
B. To provide education and awareness on consumer rights
C. To establish standards for consumer products
D. To regulate consumer credit

Correct Answer: A

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Question 22
A company has a warehouse with a capacity of 10,000 units. The company receives an order for 5,000 units. What is the percentage of the warehouse capacity utilized?
A. 25%
B. 30%
Correct C. 50%
D. 75%

Correct Answer: C

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Question 23
A sole trader has a business income of ₦500,000 and expenses of ₦300,000. What is the profit before tax?
Correct A. ₦100,000
B. ₦200,000
C. ₦300,000
D. ₦400,000

Correct Answer: A

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Question 24
A company has a bank loan of ₦2,000,000 at an interest rate of 12% per annum. What is the interest payable after 1 year?
Correct A. ₦240,000
B. ₦240,000
C. ₦240,000
D. ₦240,000

Correct Answer: A

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Question 25
A company has a fire insurance policy with a premium of ₦50,000. The company pays a claim of ₦200,000. What is the benefit ratio?
A. 2:1
Correct B. 3:1
C. 4:1
D. 5:1

Correct Answer: B

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