Practice Post UTME IGBINEDION UNIVERSITY commerce 2018 Past Questions

Question 1

In a perfectly competitive market, the supply curve is downward-sloping because firms are willing to produce more at a lower price due to the law of increasing opportunity costs. However, this is not the case in a perfectly competitive market with a fixed supply of resources. What is the name of this market structure?

A. Monopolistic Competition

B. Oligopoly

Correct C. Perfect Competition

D. Monopoly

Correct Answer: C

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Question 2

A company is considering two different production methods for its new product. Method A requires an initial investment of ₦1,500,000 and produces 10,000 units per year, while Method B requires an initial investment of ₦2,000,000 and produces 15,000 units per year. If the company expects to sell each unit for ₦250, which production method should it choose?

Correct A. Method A

B. Method B

C. Both methods are equally profitable

D. Neither method is profitable

Correct Answer: A

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Question 3

A firm is considering two different advertising strategies. Strategy A involves a one-time payment of ₦500,000 to a popular influencer, while Strategy B involves a monthly payment of ₦50,000 to a smaller influencer. If the firm expects to sell 10,000 units per year, which advertising strategy should it choose?

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 4

A company is considering two different transportation methods for its goods. Method A involves a one-time payment of ₦200,000 to a shipping company, while Method B involves a monthly payment of ₦20,000 to a logistics company. If the company expects to transport 5,000 units per year, which transportation method should it choose?

A. Method A

Correct B. Method B

C. Both methods are equally effective

D. Neither method is effective

Correct Answer: B

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Question 5

A firm is considering two different storage methods for its inventory. Method A involves a one-time payment of ₦300,000 to a warehouse company, while Method B involves a monthly payment of ₦30,000 to a storage facility. If the firm expects to store 10,000 units per year, which storage method should it choose?

A. Method A

Correct B. Method B

C. Both methods are equally effective

D. Neither method is effective

Correct Answer: B

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Question 6

What is the primary objective of the International Chamber of Commerce (ICC) in its role as a facilitator of international trade?

A. To promote the interests of multinational corporations

Correct B. To facilitate the exchange of goods and services between countries

C. To provide a framework for the resolution of international trade disputes

D. To regulate the activities of international trade organizations

Correct Answer: B

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Question 7

A company is considering the introduction of a new product line. The product requires a significant investment in production facilities and marketing. Which of the following is a key consideration for the company in its decision-making process?

Correct A. The potential return on investment

B. The impact on the company's market share

C. The effect on the company's cash flow

D. The influence on the company's organizational structure

Correct Answer: A

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Question 8

A firm is considering the use of just-in-time (JIT) inventory management system. Which of the following is a key benefit of JIT?

Correct A. Reduced inventory costs

B. Improved product quality

C. Increased flexibility in production scheduling

D. Enhanced customer service

Correct Answer: A

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Question 9

A company is facing a shortage of skilled workers in a particular area. Which of the following is a potential solution?

A. Hiring temporary workers

Correct B. Providing training and development programs for existing employees

C. Outsourcing the work to a third-party contractor

D. Reducing the scope of the project

Correct Answer: B

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Question 10

A firm is considering the use of a total quality management (TQM) approach. Which of the following is a key principle of TQM?

A. Continuous improvement

B. Customer satisfaction

C. Employee involvement

Correct D. All of the above

Correct Answer: D

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Question 11

The concept of specialization in production is closely related to the idea of division of labor. Explain how the division of labor contributes to the efficiency of production.

Correct A. It increases the productivity of workers by allowing them to focus on a single task.

B. It reduces the cost of production by minimizing the use of resources.

C. It improves the quality of products by allowing workers to specialize in specific tasks.

D. It increases the demand for products by making them more attractive to consumers.

Correct Answer: A

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Question 12

A company has a production cost of ₦100,000 and a selling price of ₦150,000. If the company sells 500 units of the product, what is the profit?

A. ₦250,000

Correct B. ₦375,000

C. ₦500,000

D. ₦750,000

Correct Answer: B

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Question 13

A policyholder purchases a life insurance policy with a premium of ₦50,000 per annum. The policy pays a benefit of ₦1,000,000 in the event of the policyholder's death. If the policyholder dies after 5 years, what is the total benefit paid to the beneficiary?

A. ₦2,500,000

B. ₦3,000,000

Correct C. ₦3,500,000

D. ₦4,000,000

Correct Answer: C

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Question 14

A company exports goods worth ₦10,000,000 to a foreign country. If the exchange rate is 1 USD = ₦500, what is the value of the exports in USD?

A. ₦20,000,000

Correct B. ₦25,000,000

C. ₦30,000,000

D. ₦35,000,000

Correct Answer: B

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Question 15

A bank has a reserve requirement of 10% and a cash reserve of ₦1,000,000. If the bank makes a loan of ₦5,000,000, what is the maximum amount of deposits that the bank can accept?

A. ₦6,000,000

B. ₦7,000,000

Correct C. ₦8,000,000

D. ₦9,000,000

Correct Answer: C

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Question 16

In a consumer protection scenario, a company is liable for damages caused by a defective product. However, the company argues that the consumer failed to follow the manufacturer's instructions, which led to the product malfunctioning. The consumer claims that the instructions were unclear and that the company should have provided clearer guidelines. Which of the following legal principles is most relevant to this situation?

A. Strict Liability

B. Negligence

Correct C. Breach of Warranty

D. Misrepresentation

Correct Answer: C

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Question 17

A company uses a third-party logistics provider to transport its goods. The logistics provider is responsible for ensuring that the goods are delivered on time and in good condition. However, the logistics provider fails to deliver the goods on time, resulting in a loss of business for the company. Which of the following transport laws is most relevant to this situation?

A. Carriage of Goods by Sea Act

B. Carriage of Goods by Air Act

Correct C. International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading

D. Uniform Customs and Practice for Documentary Credits

Correct Answer: C

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Question 18

A company stores its goods in a warehouse that is owned and operated by a third-party logistics provider. The logistics provider is responsible for ensuring that the goods are stored safely and securely. However, the logistics provider fails to properly secure the goods, resulting in a loss of inventory for the company. Which of the following warehousing and stock control principles is most relevant to this situation?

A. First-In-First-Out (FIFO)

B. Last-In-First-Out (LIFO)

C. Economic Order Quantity (EOQ)

Correct D. Just-In-Time (JIT)

Correct Answer: D

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Question 19

A company purchases an insurance policy to protect against losses due to natural disasters. However, the insurance policy has a high deductible, which the company must pay out of pocket before the insurance company will cover any losses. Which of the following insurance and risk management principles is most relevant to this situation?

Correct A. Deductible

B. Co-insurance

C. Excess

D. Self-insurance

Correct Answer: A

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Question 20

A company has a checking account with a bank that offers a low-interest rate on deposits. However, the bank also charges a monthly maintenance fee for the account. Which of the following banking and financial institutions principles is most relevant to this situation?

A. Interest Rate

Correct B. Fees

C. Minimum Balance

D. Compound Interest

Correct Answer: B

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Question 21

In a sole trader business, what is the primary advantage of using a cash basis of accounting?

Correct A. Easier tax compliance

B. Reduced accounting costs

C. Improved cash flow management

D. Enhanced financial reporting

Correct Answer: A

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Question 22

A company has a production process that involves the following steps: mixing, heating, and packaging. If the company wants to increase production by 20% without changing the existing equipment, what is the minimum number of additional workers required?

A. 10

Correct B. 12

C. 15

D. 18

Correct Answer: B

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Question 23

A warehouse has a storage capacity of 10,000 units. If the warehouse is currently 70% full, and 500 new units are received, what is the new percentage of capacity?

A. 60%

Correct B. 65%

C. 70%

D. 75%

Correct Answer: B

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Question 24

A company has a policy of paying its employees a bonus of 10% of their annual salary. If an employee's annual salary is ₦500,000, what is the bonus amount?

A. ₦50,000

Correct B. ₦55,000

C. ₦60,000

D. ₦65,000

Correct Answer: B

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Question 25

A sole trader business has a profit of ₦200,000 and a loss of ₦50,000 in two consecutive years. What is the net profit?

Correct A. ₦150,000

B. ₦175,000

C. ₦200,000

D. ₦225,000

Correct Answer: A

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