Practice Post UTME FUTO commerce 2022 Past Questions

Question 1

In a sole trader business, what is the primary advantage of using a sole proprietorship structure?

A. Limited liability

B. Easy to set up

Correct C. Flexibility in decision-making

D. No tax benefits

Correct Answer: C

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Question 2

A company has a share capital of ₦500,000, divided into 5,000 shares of ₦100 each. If the company issues 2,000 shares at a premium of ₦20 per share, what is the total amount received from the issue of shares?

A. ₦400,000

Correct B. ₦420,000

C. ₦440,000

D. ₦460,000

Correct Answer: B

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Question 3

A consumer protection agency receives a complaint from a customer who purchased a defective product. The agency investigates and finds that the product was indeed defective. What is the next step the agency should take?

A. Compensate the customer

Correct B. Order the manufacturer to recall the product

C. Fine the manufacturer

D. Close the case

Correct Answer: B

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Question 4

A company uses a just-in-time (JIT) inventory system. What is the primary benefit of this system?

Correct A. Reduced inventory costs

B. Improved product quality

C. Increased flexibility in production

D. Enhanced customer service

Correct Answer: A

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Question 5

A marketing manager wants to promote a new product using social media. Which of the following social media platforms is most suitable for this purpose?

A. LinkedIn

B. Twitter

C. Facebook

Correct D. Instagram

Correct Answer: D

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Question 6

The Consumer Protection Act of 1999 provides for the protection of consumers against unfair trade practices. Which of the following is a fundamental right of consumers under this Act?

A. The right to receive accurate and adequate information about goods and services.

B. The right to choose between different goods and services.

Correct C. The right to be protected against unfair trade practices.

D. The right to receive compensation for any loss or damage suffered.

Correct Answer: C

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Question 7

In a perfectly competitive market, the supply curve is determined by the marginal cost curve. What is the shape of the marginal cost curve in the short run?

A. Increasing

B. Decreasing

C. Constant

Correct D. U-shaped

Correct Answer: D

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Question 8

A company has a production function given by Q = 2L^{0.5}K^{0.5} . If the company wants to produce 16 units of output, and the price of labor is ₦100 per unit, and the price of capital is ₦200 per unit, what is the minimum cost of production?

A. ₦800

B. ₦1200

Correct C. ₦1600

D. ₦2400

Correct Answer: C

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Question 9

A firm has a demand function given by P = 100 - 2Q . If the firm produces 20 units of output, what is the total revenue?

A. ₦1000

Correct B. ₦1200

C. ₦1400

D. ₦1600

Correct Answer: B

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Question 10

A company has a production function given by Q = 2L^{0.5}K^{0.5} . If the company wants to produce 16 units of output, and the price of labor is ₦100 per unit, and the price of capital is ₦200 per unit, what is the minimum cost of production?

A. ₦800

B. ₦1200

Correct C. ₦1600

D. ₦2400

Correct Answer: C

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Question 11

In a perfectly competitive market, the law of supply states that as the price of a commodity increases, the quantity supplied will

A. decrease

Correct B. increase

C. remain constant

D. become irrelevant

Correct Answer: B

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Question 12

A company's sole trader is responsible for all the profits and losses of the business. What is the name of this type of business?

Correct A. Sole Proprietorship

B. Partnership

C. Limited Liability Company

D. Cooperative Society

Correct Answer: A

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Question 13

A firm's revenue is calculated by multiplying the price of a product by the quantity sold. What is the formula for revenue?

Correct A. P x Q

B. P + Q

C. P - Q

D. P ÷ Q

Correct Answer: A

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Question 14

A consumer protection law that prohibits false or misleading advertising is known as

Correct A. Truth in Advertising Act

B. Consumer Protection Act

C. Deceptive Advertising Law

D. Fair Trade Act

Correct Answer: A

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Question 15

A company's financial statements are audited by an independent auditor to ensure that they are accurate and reliable. What is the purpose of auditing?

A. To detect fraud and errors

B. To ensure compliance with laws and regulations

Correct C. To provide assurance to stakeholders

D. To increase revenue

Correct Answer: C

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Question 16

The concept of specialization in production is closely related to the idea of comparative advantage. Explain how specialization leads to increased efficiency and productivity in international trade.

Correct A. Specialization leads to increased efficiency and productivity because it allows countries to focus on producing goods and services in which they have a comparative advantage.

B. Specialization leads to increased efficiency and productivity because it allows countries to reduce their production costs and increase their output.

C. Specialization leads to increased efficiency and productivity because it allows countries to increase their exports and earn more foreign exchange.

D. Specialization leads to increased efficiency and productivity because it allows countries to reduce their imports and increase their self-sufficiency.

Correct Answer: A

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Question 17

A company is considering two different modes of transportation for its goods: road and rail. The cost of transporting goods by road is ₦500 per kilometer, while the cost of transporting goods by rail is ₦300 per kilometer. If the company needs to transport 1000 kilometers of goods, what is the total cost of transportation by road and rail?

A. ₦500,000

B. ₦300,000

Correct C. ₦700,000

D. ₦800,000

Correct Answer: C

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Question 18

A firm is considering investing in a new project that has a net present value (NPV) of ₦1,000,000. The firm's cost of capital is 10% per annum. What is the internal rate of return (IRR) of the project?

A. 10%

Correct B. 12%

C. 15%

D. 18%

Correct Answer: B

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Question 19

A country's balance of payments (BOP) accounts are in equilibrium when the current account is equal to the capital account. Explain how this equilibrium is achieved.

Correct A. When the current account is equal to the capital account, the country's net foreign assets are zero.

B. When the current account is equal to the capital account, the country's exchange rate is fixed.

C. When the current account is equal to the capital account, the country's trade deficit is zero.

D. When the current account is equal to the capital account, the country's trade surplus is zero.

Correct Answer: A

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Question 20

A firm is considering exporting its goods to a foreign country. The firm's export price is ₦100 per unit, while the foreign country's import price is ₦120 per unit. What is the firm's export profit per unit?

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 21

The Central Bank of Nigeria (CBN) uses the following monetary policy tools to control inflation. Which one is NOT a primary tool?

A. Open Market Operations (OMO)

B. Reserve Requirements

C. Credit Controls

Correct D. Fiscal Policy

Correct Answer: D

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Question 22

A sole trader's business is registered as a sole proprietorship. What is the primary advantage of this business structure?

A. Limited liability

B. Easy to set up

Correct C. Flexibility in decision-making

D. Separation of ownership and management

Correct Answer: C

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Question 23

A company's financial statements are prepared using the accrual accounting method. What is the primary advantage of this method?

Correct A. Matching principle

B. Accurate representation of financial position

C. Easy to prepare financial statements

D. Separation of operating and non-operating activities

Correct Answer: A

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Question 24

A marketing manager is developing a new product launch campaign. What is the primary goal of the campaign?

A. To increase brand awareness

B. To generate sales leads

Correct C. To create a buzz around the product

D. To build customer loyalty

Correct Answer: C

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Question 25

An insurance company is offering a life insurance policy to a client. What is the primary benefit of the policy?

A. Tax-free benefits

B. Guaranteed returns

Correct C. Protection against death

D. Investment growth

Correct Answer: C

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POST UTME FUTO 2022 Commerce | Objective

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