POST UTME ESUT 2024 Commerce | Objective

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Question 1
A firm's production function is given by Q = 2L^0.5H^0.5, where Q is output, L is labor, and H is capital. If the firm's labor and capital are increased by 20% and 15% respectively, what is the percentage change in output?
A. 10%
B. 12%
Correct C. 15%
D. 18%

Correct Answer: C

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Question 2
A consumer has a budget of ₦1,500 and a preference for two goods: X and Y. The prices of X and Y are ₦500 and ₦300 respectively. If the consumer spends all of their budget, what is the maximum number of units of good X that the consumer can buy?
A. 3
Correct B. 4
C. 5
D. 6

Correct Answer: B

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Question 3
A firm's revenue function is given by R = 2Q^2, where R is revenue and Q is output. If the firm's output increases by 20%, what is the percentage change in revenue?
A. 40%
B. 44%
Correct C. 48%
D. 52%

Correct Answer: C

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Question 4
A consumer has a utility function given by U = 2X + 3Y, where X and Y are the quantities of two goods. If the consumer's income is ₦1,500 and the prices of X and Y are ₦500 and ₦300 respectively, what is the consumer's optimal bundle of goods?
Correct A. X = 3, Y = 2
B. X = 2, Y = 3
C. X = 1, Y = 4
D. X = 4, Y = 1

Correct Answer: A

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Question 5
A firm's cost function is given by C = 2L + 3H, where C is cost, L is labor, and H is capital. If the firm's labor and capital are increased by 20% and 15% respectively, what is the percentage change in cost?
A. 10%
B. 12%
Correct C. 15%
D. 18%

Correct Answer: C

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Question 6
In a perfectly competitive market, the supply curve is upward-sloping because of the law of increasing
Correct A. diminishing returns
B. increasing costs
C. decreasing demand
D. constant prices

Correct Answer: A

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Question 7
A firm's revenue is maximized when the marginal revenue equals the marginal cost. What is the relationship between the total revenue and the total cost at this point?
A. TR > TC
Correct B. TR = TC
C. TR < TC
D. TR is not related to TC

Correct Answer: B

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Question 8
A firm's demand curve is given by Qd = 100 - 2P. If the price elasticity of demand is -2, what is the price at which the firm will sell 50 units?
A. ₦20
Correct B. ₦30
C. ₦40
D. ₦50

Correct Answer: B

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Question 9
A firm's production function is given by Q = 2L + 3K. If the firm's cost function is given by C = 10L + 20K, what is the minimum cost of producing 10 units of output?
A. ₦100
Correct B. ₦150
C. ₦200
D. ₦250

Correct Answer: B

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Question 10
A firm's demand curve is given by Qd = 100 - 2P. If the price elasticity of demand is -2, what is the price at which the firm will sell 50 units?
A. ₦20
Correct B. ₦30
C. ₦40
D. ₦50

Correct Answer: B

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Question 11
A company specializes in producing and selling a single product. The production process involves three stages: raw material procurement, manufacturing, and packaging. The company uses a just-in-time (JIT) inventory system to manage its inventory levels. Which of the following is a characteristic of the JIT system?
A. High inventory levels
Correct B. Low inventory levels
C. High production costs
D. Low production costs

Correct Answer: B

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Question 12
A firm is considering two different marketing strategies: a push strategy and a pull strategy. The push strategy involves promoting the product to intermediaries, such as wholesalers and retailers, while the pull strategy involves promoting the product directly to the end consumer. Which of the following is a characteristic of the pull strategy?
A. Promoting the product to intermediaries
Correct B. Promoting the product directly to the end consumer
C. Using advertising to promote the product
D. Using sales promotions to promote the product

Correct Answer: B

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Question 13
A company is considering outsourcing its logistics operations to a third-party logistics provider. Which of the following is a benefit of outsourcing logistics operations?
A. Reduced transportation costs
B. Improved delivery times
Correct C. Increased flexibility in responding to changes in demand
D. Reduced inventory levels

Correct Answer: C

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Question 14
A firm is considering investing in a new production facility. The facility will be used to produce a new product that has a high demand in the market. Which of the following is a characteristic of the new product?
A. High production costs
B. Low production costs
Correct C. High demand in the market
D. Low demand in the market

Correct Answer: C

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Question 15
A company is considering implementing a new inventory management system. The system will use radio frequency identification (RFID) technology to track inventory levels in real-time. Which of the following is a benefit of using RFID technology?
Correct A. Improved inventory accuracy
B. Reduced inventory levels
C. Increased inventory costs
D. Reduced inventory costs

Correct Answer: A

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Question 16
In a perfectly competitive market, the law of supply states that as the price of a good increases, the quantity supplied will also increase. However, this is not always the case. What is the name of the phenomenon that occurs when the quantity supplied decreases as the price increases?
A. Giffen Goods
Correct B. Inferior Goods
C. Normal Goods
D. Substitutes

Correct Answer: B

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Question 17
A company is considering two different warehouses to store its products. Warehouse A has a capacity of 10,000 units and a storage cost of ₦5 per unit per year. Warehouse B has a capacity of 15,000 units and a storage cost of ₦7 per unit per year. If the company expects to store 12,000 units, which warehouse should it choose?
Correct A. Warehouse A
B. Warehouse B
C. Both Warehouses
D. Neither Warehouse

Correct Answer: A

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Question 18
A consumer is considering buying a product that costs ₦10,000. The product has a warranty that covers any defects for a period of 2 years. However, the consumer is concerned about the environmental impact of the product. Which of the following is a relevant factor for the consumer to consider?
A. Price
B. Quality
Correct C. Environmental Impact
D. Warranty

Correct Answer: C

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Question 19
A company is considering forming a partnership with another company. The partnership will be a general partnership, where both companies will share the profits and losses equally. However, one of the companies has a higher credit rating than the other. Which of the following is a potential risk of the partnership?
A. Increased Profits
B. Decreased Profits
Correct C. Increased Risk
D. Decreased Risk

Correct Answer: C

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Question 20
A company is considering expanding its operations to a new country. The company has conducted a market research and found that the demand for its product is high in the new country. However, the company is concerned about the political risk of the new market. Which of the following is a potential risk of the new market?
A. Increased Competition
B. Decreased Competition
Correct C. Increased Political Risk
D. Decreased Political Risk

Correct Answer: C

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Question 21
A company is sued for violating the Consumer Protection Act. The company's defense is that the consumer failed to read the fine print on the contract. Which of the following is a valid defense?
A. The consumer's failure to read the fine print is a valid defense.
B. The company's failure to disclose the terms of the contract is a valid defense.
C. The consumer's failure to understand the terms of the contract is a valid defense.
Correct D. The company's failure to provide a clear and concise contract is a valid defense.

Correct Answer: D

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Question 22
A firm specializes in producing only one product, which is a type of electronics. This is an example of
Correct A. Division of Labor
B. Economies of Scale
C. Product Differentiation
D. Vertical Integration

Correct Answer: A

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Question 23
A country's trade deficit is increasing due to a large imbalance between imports and exports. This can be attributed to
A. A decrease in domestic production
B. An increase in foreign investment
C. A decrease in foreign investment
Correct D. An increase in domestic consumption

Correct Answer: D

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Question 24
A sole trader is responsible for all the profits and losses of the business. 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 25
A company's inventory is valued at ₦100,000. If the company sells 20% of the inventory, how much will it receive in cash?
A. ₦20,000
Correct B. ₦80,000
C. ₦120,000
D. ₦140,000

Correct Answer: B

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