Practice Post UTME GREENFIELD UNIVERSITY commerce 2019 Past Questions

Question 1

In a perfectly competitive market, the law of diminishing marginal utility implies that the marginal benefit of the last unit of a good consumed is always greater than the marginal cost of producing it. Which of the following is a correct statement regarding the relationship between marginal benefit and marginal cost?

A. Marginal benefit is always greater than marginal cost.

B. Marginal cost is always greater than marginal benefit.

C. Marginal benefit and marginal cost are equal.

Correct D. Marginal benefit is less than marginal cost.

Correct Answer: D

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Question 2

A company's production function is given by Q = 2L^0.5 + 3K^0.5, where Q is the quantity produced, L is labor, and K is capital. If the company wants to produce 10 units of output, how much labor should it hire if it has 4 units of capital?

A. 2 units

B. 4 units

Correct C. 6 units

D. 8 units

Correct Answer: C

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Question 3

A firm is considering two different production technologies: a traditional technology and a new technology. The traditional technology has a fixed cost of ₦100,000 and a variable cost of ₦50 per unit produced. The new technology has a fixed cost of ₦150,000 and a variable cost of ₦30 per unit produced. If the firm produces 10,000 units, which technology should it choose?

A. Traditional technology

Correct B. New technology

C. Either technology is equally profitable

D. Neither technology is profitable

Correct Answer: B

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Question 4

A consumer's indifference curve is given by the equation u(x,y) = 2x + 3y, where x is the quantity of good X consumed and y is the quantity of good Y consumed. If the consumer's income is ₦100,000 and the prices of good X and good Y are ₦50 and ₦30 respectively, how many units of good X should the consumer consume?

A. 10 units

Correct B. 20 units

C. 30 units

D. 40 units

Correct Answer: B

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Question 5

A firm's production function is given by Q = 2L^0.5 + 3K^0.5, where Q is the quantity produced, L is labor, and K is capital. If the firm wants to produce 10 units of output, how much capital should it invest if it has 4 units of labor?

A. 4 units

B. 6 units

Correct C. 8 units

D. 10 units

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 marginal revenue

D. increasing marginal cost

Correct Answer: A

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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 4 units of labor, how many units of capital does it need?

A. 2

B. 4

Correct C. 8

D. 16

Correct Answer: C

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Question 8

A company is considering two different marketing strategies. Strategy A involves a 10% increase in advertising expenditure, while Strategy B involves a 5% decrease in the price of the product. Which strategy is more likely to increase sales?

Correct A. Strategy A

B. Strategy B

C. Both strategies are equally effective

D. Neither strategy is effective

Correct Answer: A

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Question 9

A firm's revenue function is given by R = 100Q - 2Q^2. If the firm produces 10 units of output, what is its total revenue?

A. 800

Correct B. 900

C. 1000

D. 1100

Correct Answer: B

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Question 10

A company is considering investing in a new project. The project has a net present value (NPV) of ₦10,000 and a payback period of 5 years. What is the internal rate of return (IRR) of the project?

A. 10%

B. 15%

Correct C. 20%

D. 25%

Correct Answer: C

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Question 11

A sole trader's business is not registered with the Corporate Affairs Commission (CAC). What is the legal implication of this?

A. The business is not entitled to limited liability.

B. The business is not entitled to issue shares.

Correct C. The business is not entitled to sue or be sued in its own name.

D. The business is not entitled to open a corporate bank account.

Correct Answer: C

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Question 12

A company has a share capital of ₦10,000,000 divided into 10,000,000 ordinary shares of ₦1 each. If the company issues 2,000,000 shares at a premium of ₦0.50 per share, what is the amount of premium received?

A. ₦1,000,000

Correct B. ₦2,000,000

C. ₦5,000,000

D. ₦10,000,000

Correct Answer: B

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Question 13

A company has a profit of ₦5,000,000. If the company pays a dividend of 20% on its ordinary shares, what is the amount of dividend paid?

A. ₦1,000,000

Correct B. ₦2,000,000

C. ₦5,000,000

D. ₦10,000,000

Correct Answer: B

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Question 14

A company has a liability of ₦10,000,000. If the company has an asset of ₦20,000,000, what is the company's net worth?

A. ₦10,000,000

B. ₦20,000,000

Correct C. ₦30,000,000

D. ₦40,000,000

Correct Answer: C

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Question 15

A company has a turnover of ₦100,000,000. If the company's gross profit is ₦20,000,000, what is the company's gross profit percentage?

A. 20%

Correct B. 30%

C. 40%

D. 50%

Correct Answer: B

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Question 16

The concept of specialization in production is closely related to the idea of comparative advantage. Explain how a country can benefit from specializing in the production of a particular good, even if it is not the most efficient producer of that good.

A. By exporting the good at a lower price than other countries, the country can increase its revenue and stimulate economic growth.

Correct B. By specializing in the production of the good, the country can reduce its production costs and increase its competitiveness in the global market.

C. By focusing on the production of the good, the country can develop its human capital and improve its productivity.

D. By specializing in the production of the good, the country can increase its trade deficit and reduce its economic growth.

Correct Answer: B

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Question 17

A company is considering two different marketing strategies for its new product. Strategy A involves a high level of advertising and promotion, while Strategy B involves a low level of advertising and promotion. Which strategy is more likely to result in a higher return on investment (ROI)?

A. Strategy A, because it involves a high level of advertising and promotion.

B. Strategy B, because it involves a low level of advertising and promotion.

Correct C. Strategy A, because it involves a high level of advertising and promotion, but Strategy B is more likely to result in a higher ROI.

D. Strategy B, because it involves a low level of advertising and promotion, but Strategy A is more likely to result in a higher ROI.

Correct Answer: C

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Question 18

A bank is considering two different investment options for its customers. Option A involves investing in a high-risk, high-return stock, while Option B involves investing in a low-risk, low-return bond. Which option is more likely to result in a higher return on investment (ROI) for the bank?

A. Option A, because it involves a high-risk, high-return stock.

B. Option B, because it involves a low-risk, low-return bond.

C. Option A, because it involves a high-risk, high-return stock, but Option B is more likely to result in a higher ROI.

Correct D. Option B, because it involves a low-risk, low-return bond, but Option A is more likely to result in a higher ROI.

Correct Answer: D

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Question 19

A company is considering two different production strategies for its new product. Strategy A involves producing the product in-house, while Strategy B involves outsourcing the production to a third-party supplier. Which strategy is more likely to result in a higher quality product?

A. Strategy A, because it involves producing the product in-house.

B. Strategy B, because it involves outsourcing the production to a third-party supplier.

Correct C. Strategy A, because it involves producing the product in-house, but Strategy B is more likely to result in a higher quality product.

D. Strategy B, because it involves outsourcing the production to a third-party supplier, but Strategy A is more likely to result in a higher quality product.

Correct Answer: C

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Question 20

A company is considering two different marketing strategies for its new product. Strategy A involves a high level of advertising and promotion, while Strategy B involves a low level of advertising and promotion. Which strategy is more likely to result in a higher return on investment (ROI) for the company?

A. Strategy A, because it involves a high level of advertising and promotion.

B. Strategy B, because it involves a low level of advertising and promotion.

C. Strategy A, because it involves a high level of advertising and promotion, but Strategy B is more likely to result in a higher ROI.

Correct D. Strategy B, because it involves a low level of advertising and promotion, but Strategy A is more likely to result in a higher ROI.

Correct Answer: D

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Question 21

In a sole trader business, what is the primary advantage of using a separate business bank account?

Correct A. Separate personal and business finances

B. Easy to manage cash flow

C. Increased credibility with suppliers

D. Reduced tax liability

Correct Answer: A

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Question 22

A company has a share capital of ₦1,000,000, divided into 100,000 ordinary shares of ₦10 each. If the company issues 20,000 shares at a premium of ₦5 per share, what is the total amount received from the issue of shares?

A. ₦200,000

B. ₦250,000

C. ₦300,000

Correct D. ₦350,000

Correct Answer: D

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Question 23

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

A. Limited liability

B. Easy to manage cash flow

C. Increased credibility with suppliers

Correct D. No separation of personal and business finances

Correct Answer: D

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Question 24

A company has a profit of ₦500,000 and a tax rate of 25%. What is the amount of tax payable?

A. ₦125,000

B. ₦150,000

C. ₦175,000

Correct D. ₦200,000

Correct Answer: D

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Question 25

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

A. Increased credibility with suppliers

B. Easy to manage cash flow

C. No separation of personal and business finances

Correct D. Separate personal and business finances

Correct Answer: D

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