Practice Post UTME FUTA commerce 2021 Past Questions

Question 1

In a perfectly competitive market, the supply curve is upward sloping because of the law of increasing

A. diminishing marginal opportunity cost

Correct B. increasing marginal opportunity cost

C. decreasing marginal opportunity cost

D. constant marginal opportunity cost

Correct Answer: B

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Question 2

A firm's cost of capital is the minimum rate of return that investors require in exchange for

Correct A. equity and debt financing

B. equity financing only

C. debt financing only

D. operating expenses

Correct Answer: A

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Question 3

The diagram below shows the demand and supply curves for a perfectly competitive market. Which of the following statements is true?

A. The market is in equilibrium at point A

Correct B. The market is in equilibrium at point B

C. The market is in equilibrium at point C

D. The market is not in equilibrium

Correct Answer: B

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Question 4

A consumer's indifference curve shows the various combinations of two goods that the consumer is equally willing to

A. buy and sell

B. consume and save

Correct C. buy and consume

D. sell and save

Correct Answer: C

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Question 5

The diagram below shows the production possibilities frontier for a country. Which of the following statements is true?

A. The country is currently producing at point A

Correct B. The country is currently producing at point B

C. The country is currently producing at point C

D. The country is not producing at any point on the frontier

Correct Answer: B

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Question 6

A company's production function is given by Q = 100L^0.5K^0.25, where Q is the quantity produced, L is the labor input, and K is the capital input. If the company increases labor input from 4 to 9 units, and capital input from 16 to 25 units, by how much does the quantity produced increase?

A. 10

Correct B. 20

C. 30

D. 40

Correct Answer: B

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Question 7

A firm's demand function is given by P = 100 - 2Q, where P is the price and Q is the quantity demanded. If the firm's marginal revenue is given by MR = 200 - 4Q, what is the firm's optimal quantity?

A. 10

Correct B. 20

C. 30

D. 40

Correct Answer: B

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Question 8

A company's cost function is given by C = 100 + 2L + 3K, where C is the total cost, L is the labor input, and K is the capital input. If the company increases labor input from 4 to 9 units, and capital input from 16 to 25 units, by how much does the total cost increase?

A. 100

Correct B. 200

C. 300

D. 400

Correct Answer: B

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Question 9

A firm's revenue function is given by R = 100Q - 2Q^2, where R is the total revenue and Q is the quantity sold. If the firm's marginal revenue is given by MR = 100 - 4Q, what is the firm's optimal quantity?

A. 10

Correct B. 20

C. 30

D. 40

Correct Answer: B

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Question 10

A company's production function is given by Q = 100L^0.5K^0.25, where Q is the quantity produced, L is the labor input, and K is the capital input. If the company increases labor input from 4 to 9 units, and capital input from 16 to 25 units, by how much does the quantity produced increase?

A. 10

Correct B. 20

C. 30

D. 40

Correct Answer: B

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Question 11

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?

A. The law of diminishing marginal returns

Correct B. The law of increasing costs

C. The law of supply and demand

D. The law of diminishing returns

Correct Answer: B

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Question 12

A company is considering two different production processes to manufacture a product. Process A has a fixed cost of ₦100,000 and a variable cost of ₦50 per unit. Process B has a fixed cost of ₦150,000 and a variable cost of ₦30 per unit. If the selling price of the product is ₦120 per unit, which process should the company use to maximize its profit?

Correct A. Process A

B. Process B

C. Both processes are equally profitable

D. Neither process is profitable

Correct Answer: A

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Question 13

A firm is producing a product with the following cost function: C(x) = 2x^2 + 100x + 5000. If the selling price of the product is ₦120 per unit, what is the optimal quantity to produce to maximize profit?

A. 100 units

Correct B. 200 units

C. 300 units

D. 400 units

Correct Answer: B

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Question 14

A company is considering two different marketing strategies to promote a new product. Strategy A involves a ₦100,000 advertising campaign and is expected to increase sales by 20%. Strategy B involves a ₦150,000 advertising campaign and is expected to increase sales by 30%. If the company's current sales are ₦1,000,000, which strategy should the company use to maximize its revenue?

A. Strategy A

Correct B. Strategy B

C. Both strategies are equally effective

D. Neither strategy is effective

Correct Answer: B

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Question 15

A firm is producing a product with the following demand function: Q = 100 - 2P. If the firm's cost function is C(x) = 2x^2 + 100x + 5000, what is the optimal price to charge to maximize profit?

A. ₦50

Correct B. ₦60

C. ₦70

D. ₦80

Correct Answer: B

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Question 16

A company's production function is given by Q = 100L^0.5K^0.5, where Q is the quantity produced, L is the labor input, and K is the capital input. If the company increases its labor input from 100 to 121 units, and its capital input from 100 to 121 units, by how much will the quantity produced increase?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 17

A firm produces two goods, A and B, using two inputs, labor and capital. The production functions are given by Q_A = 2L^0.5K^0.5 and Q_B = 3L^0.5K^0.5. If the firm increases its labor input from 100 to 121 units, and its capital input from 100 to 121 units, by how much will the quantity of good A produced increase?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 18

A company's marketing strategy involves a 20% discount on all products for the first 100 customers. If the company sells 200 units of a product at the discounted price, and each unit sells for ₦1,000, what is the total revenue generated?

A. ₦180,000

B. ₦200,000

Correct C. ₦220,000

D. ₦240,000

Correct Answer: C

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Question 19

A firm's production function is given by Q = 100L^0.5K^0.5, where Q is the quantity produced, L is the labor input, and K is the capital input. If the firm increases its labor input from 100 to 121 units, and its capital input from 100 to 121 units, what is the marginal product of labor?

A. 5

Correct B. 10

C. 15

D. 20

Correct Answer: B

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Question 20

A company's marketing strategy involves a 20% discount on all products for the first 100 customers. If the company sells 200 units of a product at the discounted price, and each unit sells for ₦1,000, what is the total revenue generated?

A. ₦180,000

B. ₦200,000

Correct C. ₦220,000

D. ₦240,000

Correct Answer: C

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Question 21

In a sole trade business, the owner's personal assets are not protected from business liabilities. What is the primary reason for this?

Correct A. The business is not registered as a separate legal entity.

B. The owner has not obtained necessary licenses and permits.

C. The business is not insured against liabilities.

D. The owner has not separated personal and business finances.

Correct Answer: A

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Question 22

A company is considering a new production process that will increase its output by 20% but also increase its costs by 15%. What is the expected change in the company's profit?

Correct A. Increase by 5%

B. Decrease by 5%

C. Increase by 10%

D. Decrease by 10%

Correct Answer: A

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Question 23

A consumer protection law requires businesses to provide a 30-day cooling-off period for customers to return goods. What is the primary purpose of this law?

A. To protect consumers from faulty goods.

B. To protect businesses from fraudulent customers.

Correct C. To provide consumers with a chance to review goods before purchasing.

D. To promote competition among businesses.

Correct Answer: C

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Question 24

A company is considering a new marketing strategy that involves offering a 10% discount to customers who purchase a product online. What is the expected effect on the company's revenue?

Correct A. Increase by 5%

B. Decrease by 5%

C. Increase by 10%

D. Decrease by 10%

Correct Answer: A

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Question 25

A sole trade business has a total revenue of ₦1,000,000 and a total cost of ₦800,000. What is the business's profit?

A. ₦100,000

Correct B. ₦200,000

C. ₦300,000

D. ₦400,000

Correct Answer: B

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