Practice Post UTME IGBINEDION UNIVERSITY commerce 2022 Past Questions

Question 1

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

A. Limited liability

B. Tax benefits

Correct C. Flexibility in decision-making

D. Easier to dissolve

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 finds that the product was manufactured by a company that had a history of producing defective products. What is the most appropriate action for the agency to take?

A. Issue a warning to the company

B. Impose a fine on the company

Correct C. Order the company to recall the defective products

D. Sue the company for damages

Correct Answer: C

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Question 4

A company uses the weighted average cost method to value its inventory. If the company has 1,000 units of inventory with a cost of ₦50 per unit, and 500 units of inventory with a cost of ₦75 per unit, what is the total value of the inventory?

A. ₦62,500

Correct B. ₦67,500

C. ₦72,500

D. ₦77,500

Correct Answer: B

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Question 5

A company has a warehouse with a capacity of 10,000 square meters. If the company receives a shipment of goods that requires 5,000 square meters of storage space, what is the percentage of the warehouse capacity that is utilized?

A. 25%

Correct B. 50%

C. 75%

D. 100%

Correct Answer: B

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Question 6

The concept of 'Gross Domestic Product' (GDP) is a measure of a nation's economic activity, but it has some limitations. What is one of the main criticisms of GDP?

A. It does not account for income inequality.

Correct B. It only measures the production of goods and services.

C. It does not account for the environmental impact of economic activity.

D. It only measures the consumption of goods and services.

Correct Answer: B

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Question 7

A company is considering two different marketing strategies: one that targets a niche market and another that targets a broader market. What is the primary advantage of targeting a niche market?

A. Increased market share.

B. Lower marketing costs.

Correct C. Higher profit margins.

D. Increased brand recognition.

Correct Answer: C

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Question 8

A bank is considering two different investment options: one that offers a high return but is also high-risk, and another that offers a lower return but is also lower-risk. What is the primary consideration for the bank when making this decision?

A. The potential return on investment.

Correct B. The level of risk involved.

C. The liquidity of the investment.

D. The tax implications of the investment.

Correct Answer: B

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Question 9

A company is considering implementing a just-in-time (JIT) inventory system. What is one of the primary benefits of JIT?

A. Reduced inventory costs.

B. Improved product quality.

C. Increased flexibility in production.

Correct D. Reduced lead times.

Correct Answer: D

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Question 10

A country is considering imposing tariffs on imported goods. What is one of the potential effects of this policy?

A. Increased government revenue.

B. Reduced imports.

Correct C. Increased prices for consumers.

D. Increased competition among domestic producers.

Correct Answer: C

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Question 11

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. Which of the following statements best describes the opportunity cost of a country?

A. The amount of money a country spends on imports

Correct B. The amount of time a country spends on producing a good

C. The amount of resources a country allocates to a particular industry

D. The amount of goods a country produces in excess of its domestic demand

Correct Answer: B

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Question 12

A firm's production function is given by Q = 2L^0.5 + 3K^0.5. If the firm's current input levels are L = 4 and K = 9, what is the marginal product of labor?

Correct A. 1

B. 2

C. 3

D. 4

Correct Answer: A

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Question 13

A company is considering two marketing strategies: Strategy A, which involves a 10% increase in advertising expenditure, and Strategy B, which involves a 20% increase in sales force size. Which strategy is likely to have a greater impact on sales?

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 14

A bank's balance sheet is given by Assets = Liabilities + Equity. If the bank's current assets are ₦100 million and its current liabilities are ₦80 million, what is the bank's equity?

A. ₦10 million

Correct B. ₦20 million

C. ₦30 million

D. ₦40 million

Correct Answer: B

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Question 15

A firm's production function is given by Q = 2L^0.5 + 3K^0.5. If the firm's current input levels are L = 4 and K = 9, what is the total product of labor?

A. 10

Correct B. 20

C. 30

D. 40

Correct Answer: B

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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. Which of the following is a correct example of comparative advantage?

A. Country A produces 100 units of good X and 50 units of good Y, while Country B produces 50 units of good X and 100 units of good Y.

B. Country A produces 50 units of good X and 100 units of good Y, while Country B produces 100 units of good X and 50 units of good Y.

Correct C. Country A produces 100 units of good X and 50 units of good Y, while Country B produces 50 units of good X and 100 units of good Y, but Country A has a lower opportunity cost for producing good X.

D. Country A produces 50 units of good X and 100 units of good Y, while Country B produces 100 units of good X and 50 units of good Y, but Country B has a lower opportunity cost for producing good Y.

Correct Answer: C

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Question 17

A firm's break-even point is the point at which its total revenue equals its total fixed costs. What is the formula for calculating the break-even point?

A. \frac{F}{P + V}

Correct B. \frac{F}{P - V}

C. \frac{F}{P + V}

D. \frac{F}{P - V}

Correct Answer: B

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Question 18

A warehouse manager wants to store 1000 units of inventory in a warehouse with a capacity of 2000 units. The manager wants to maintain a safety stock of 10% of the total inventory. What is the maximum number of units that can be stored in the warehouse?

Correct A. 900

B. 1000

C. 1100

D. 1200

Correct Answer: A

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Question 19

A bank has a reserve requirement of 10% and a cash reserve of ₦100,000. If the bank wants to increase its lending capacity, what is the maximum amount it can lend?

A. ₦900,000

Correct B. ₦1,000,000

C. ₦1,100,000

D. ₦1,200,000

Correct Answer: B

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Question 20

A firm has a probability of 0.6 that a customer will purchase a product. If the firm sells 1000 units of the product, what is the expected number of units sold?

Correct A. 600

B. 800

C. 1000

D. 1200

Correct Answer: A

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Question 21

A firm specializes in producing only one product. This specialization allows the firm to reduce its costs and increase its efficiency. What is the term for this type of specialization?

Correct A. Economies of scale

B. Economies of scope

C. Product differentiation

D. Vertical integration

Correct Answer: A

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Question 22

A consumer purchases a product from a store, but upon returning home, finds that the product is defective. The consumer contacts the store and requests a refund. What type of protection is the consumer seeking?

A. Warranty protection

Correct B. Consumer protection

C. Product liability

D. Return policy

Correct Answer: B

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Question 23

A firm exports goods to a foreign country. The firm must comply with the laws and regulations of the foreign country. What is the term for this type of compliance?

A. Import regulations

B. Export regulations

C. Foreign trade laws

Correct D. International business laws

Correct Answer: D

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Question 24

A firm purchases insurance to protect against losses due to natural disasters. What type of insurance is the firm purchasing?

A. Liability insurance

Correct B. Property insurance

C. Casualty insurance

D. Disability insurance

Correct Answer: B

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Question 25

A firm uses a just-in-time inventory system to manage its inventory levels. What is the primary benefit of this system?

A. Reduced inventory costs

Correct B. Improved inventory turnover

C. Increased inventory levels

D. Reduced production costs

Correct Answer: B

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