POST UTME FUTA 2020 Commerce | Objective

Are you preparing for POST UTME FUTA 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
In a perfectly competitive market, the law of supply states that the quantity supplied of a good increases as the price of the good increases, ceteris paribus. However, the law of supply also states that the quantity supplied of a good decreases as the price of the good decreases, ceteris paribus. Which of the following is a correct statement regarding the law of supply?
A. The law of supply is a fundamental concept in economics that explains the relationship between the price of a good and the quantity supplied of the good.
B. The law of supply is a concept that is only applicable in perfectly competitive markets.
Correct C. The law of supply states that the quantity supplied of a good increases as the price of the good increases, ceteris paribus.
D. The law of supply states that the quantity supplied of a good decreases as the price of the good increases, ceteris paribus.

Correct Answer: C

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Question 2
A firm's production function is given by Q = 2L^0.5K^0.5, where Q is the quantity produced, L is the number of labor hours, and K is the amount of capital. If the firm wants to produce 100 units of output, how many labor hours are required if the amount of capital is 400 units?
A. 100
B. 200
Correct C. 400
D. 500

Correct Answer: C

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Question 3
A consumer has a budget constraint of 100 units of currency and a preference for two goods, A and B. The prices of the goods are 5 units of currency for good A and 10 units of currency for good B. Using the budget constraint and the prices of the goods, calculate the consumer's indifference curve.
Correct A. The indifference curve is a straight line with a slope of -1.
B. The indifference curve is a straight line with a slope of 1.
C. The indifference curve is a curved line with a slope that increases as the quantity of good A increases.
D. The indifference curve is a curved line with a slope that decreases as the quantity of good A increases.

Correct Answer: A

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Question 4
A firm's cost function is given by C = 2L + 3K, where C is the total cost, L is the number of labor hours, and K is the amount of capital. If the firm wants to minimize its cost, how many labor hours are required if the amount of capital is 200 units?
A. 50
Correct B. 100
C. 200
D. 300

Correct Answer: B

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Question 5
A consumer has a utility function given by U = 2A + 3B, where U is the total utility, A is the quantity of good A, and B is the quantity of good B. If the consumer's budget constraint is 100 units of currency and the prices of the goods are 5 units of currency for good A and 10 units of currency for good B, calculate the consumer's optimal consumption bundle.
Correct A. The optimal consumption bundle is (20, 10).
B. The optimal consumption bundle is (10, 20).
C. The optimal consumption bundle is (15, 15).
D. The optimal consumption bundle is (5, 25).

Correct Answer: A

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Question 6
A company's marketing strategy involves a mix of advertising, personal selling, and sales promotion. Which of the following is NOT a characteristic of advertising?
A. It is a form of non-personal communication
B. It is a one-way communication process
Correct C. It is a form of personal communication
D. It is a form of sales promotion

Correct Answer: C

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Question 7
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm wants to produce 16 units of output, and it has a budget constraint of 100 units of labor and 50 units of capital, what is the opportunity cost of using labor?
A. 10 units of labor
Correct B. 20 units of labor
C. 30 units of labor
D. 40 units of labor

Correct Answer: B

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Question 8
A consumer's budget constraint is given by 2x + 3y = 12. If the consumer's indifference curve is given by u(x, y) = 2x + y, what is the consumer's optimal consumption bundle?
Correct A. (2, 4)
B. (4, 2)
C. (6, 0)
D. (0, 6)

Correct Answer: A

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Question 9
A firm's demand function is given by Q = 100 - 2P. If the firm's marginal revenue function is given by MR = 200 - 2Q, what is the firm's optimal price?
A. 20
Correct B. 30
C. 40
D. 50

Correct Answer: B

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Question 10
A consumer's utility function is given by u(x, y) = 2x + y. If the consumer's budget constraint is given by 2x + 3y = 12, what is the consumer's optimal consumption bundle?
Correct A. (2, 4)
B. (4, 2)
C. (6, 0)
D. (0, 6)

Correct Answer: A

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Question 11
A company's production function is given by the Cobb-Douglas production function: Q = 10L^0.4K^0.6. If the company's labor input increases by 20% and its capital input remains constant, what is the percentage change in output?
A. 10%
Correct B. 12%
C. 15%
D. 18%

Correct Answer: B

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Question 12
A consumer has a utility function given by U = 2x + 3y. If the consumer's income is ₦1000 and the prices of x and y are ₦5 and ₦10 respectively, what is the consumer's optimal bundle?
A. x = 100, y = 50
Correct B. x = 150, y = 25
C. x = 200, y = 0
D. x = 0, y = 100

Correct Answer: B

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Question 13
A firm's cost function is given by C = 2L + 3K. If the firm's labor input is 10 units and its capital input is 5 units, what is the firm's total cost?
A. ₦25
B. ₦30
Correct C. ₦35
D. ₦40

Correct Answer: C

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Question 14
A bank's reserve requirement is 20%. If the bank's deposits are ₦100,000, what is the bank's required reserve?
Correct A. ₦20,000
B. ₦25,000
C. ₦30,000
D. ₦35,000

Correct Answer: A

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Question 15
A firm's revenue function is given by R = 2x + 3y. If the firm's output is 10 units, what is the firm's revenue?
A. ₦25
B. ₦30
Correct C. ₦35
D. ₦40

Correct Answer: C

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Question 16
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 compared to other countries. Which of the following is a correct example of comparative advantage?
A. Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 50 units of wheat and 100 units of cloth.
B. Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 50 units of wheat and 150 units of cloth.
Correct C. Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 50 units of wheat and 50 units of cloth.
D. Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 150 units of wheat and 50 units of cloth.

Correct Answer: C

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Question 17
A firm's production function is given by Q = 2L^0.5K^0.5, where Q is the quantity produced, L is labor, and K is capital. If the firm wants to produce 100 units of output, and labor is fixed at 25 units, how much capital is required?
A. 25
B. 50
C. 100
Correct D. 200

Correct Answer: D

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Question 18
A bank's balance sheet is given by Assets = Liabilities + Equity. If the bank's assets are worth ₦100 million, and liabilities are ₦80 million, what is the bank's equity?
A. ₦10 million
B. ₦20 million
Correct C. ₦30 million
D. ₦40 million

Correct Answer: C

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Question 19
A firm's revenue function is given by R = 2Q^2, where R is revenue and Q is quantity produced. If the firm produces 10 units of output, what is its revenue?
A. ₦100
B. ₦200
Correct C. ₦400
D. ₦800

Correct Answer: C

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Question 20
A country's trade balance is given by Trade Balance = Exports - Imports. If the country's exports are ₦100 million and imports are ₦80 million, what is its trade balance?
A. ₦10 million
B. ₦20 million
Correct C. ₦30 million
D. ₦40 million

Correct Answer: C

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Question 21
The Central Bank of Nigeria (CBN) uses the following monetary policy tools to control inflation: Open Market Operations (OMO), Reserve Requirements, and Moral Suasion. 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 22
A company's marketing mix is a combination of the following elements: Product, Price, Place, and Promotion. Which of the following is NOT a part of the marketing mix?
A. Product
B. Price
C. Place
Correct D. Packaging

Correct Answer: D

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Question 23
The following are the main types of foreign exchange markets: Spot Market, Forward Market, and Futures Market. Which of the following is NOT a type of foreign exchange market?
A. Spot Market
B. Forward Market
C. Futures Market
Correct D. Options Market

Correct Answer: D

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Question 24
The following are the main characteristics of a consumer: Wants, Needs, Income, and Demographics. Which of the following is NOT a characteristic of a consumer?
A. Wants
B. Needs
C. Income
Correct D. Psychographics

Correct Answer: D

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Question 25
The following are the main types of business organizations: Sole Proprietorship, Partnership, Corporation, and Cooperative. Which of the following is NOT a type of business organization?
A. Sole Proprietorship
B. Partnership
C. Corporation
Correct D. Government Agency

Correct Answer: D

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