Practice Post UTME JOSEPH AYO BABALOLA UNIVERSITY commerce 2021 Past Questions

Question 1

In a perfectly competitive market, the supply curve is perfectly elastic, and the demand curve is downward sloping. What is the effect of an increase in the price of a good on the quantity supplied?

A. The quantity supplied decreases

Correct B. The quantity supplied increases

C. The quantity supplied remains unchanged

D. The quantity supplied becomes perfectly inelastic

Correct Answer: B

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Question 2

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's labor and capital inputs are increased by 20% and 15% respectively, what is the percentage change in output?

A. -5%

B. 0%

Correct C. 5%

D. 10%

Correct Answer: C

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Question 3

A firm's revenue function is given by R = 100Q - 2Q^2. If the firm's output is increased by 10%, what is the percentage change in revenue?

Correct A. -10%

B. 0%

C. 5%

D. 10%

Correct Answer: A

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Question 4

A firm's cost function is given by C = 50 + 10L + 5K. If the firm's labor and capital inputs are increased by 20% and 15% respectively, what is the percentage change in total cost?

A. -5%

B. 0%

C. 5%

Correct D. 10%

Correct Answer: D

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Question 5

A firm's profit function is given by π = R - C. If the firm's revenue and cost functions are given by R = 100Q - 2Q^2 and C = 50 + 10L + 5K respectively, what is the effect of an increase in output on profit?

Correct A. Profit increases

B. Profit decreases

C. Profit remains unchanged

D. Profit becomes perfectly elastic

Correct Answer: A

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Question 6

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

A. increase

Correct B. decrease

C. remain the same

D. become perfectly inelastic

Correct Answer: B

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Question 7

A company's break-even point is the point at which its total revenue equals its total cost. If a company's total fixed costs are ₦50,000 and its variable costs are ₦20 per unit, and it sells its product for ₦50 per unit, how many units must it sell to break even?

A. 1000 units

Correct B. 2000 units

C. 5000 units

D. 10,000 units

Correct Answer: B

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Question 8

A firm is considering two different production processes for its product. Process A has a fixed cost of ₦10,000 and a variable cost of ₦5 per unit, while Process B has a fixed cost of ₦20,000 and a variable cost of ₦3 per unit. If the selling price of the product is ₦15 per unit, which process should the firm use to maximize its profit?

A. Process A

Correct B. Process B

C. Both processes are equally profitable

D. Neither process is profitable

Correct Answer: B

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Question 9

A consumer has a budget of ₦10,000 and is considering purchasing two different products, A and B. Product A costs ₦5,000 and Product B costs ₦3,000. If the consumer has already spent ₦2,000 on other products, how much money is left for the consumer to spend on Product A and Product B?

A. ₦3,000

B. ₦5,000

Correct C. ₦7,000

D. ₦10,000

Correct Answer: C

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Question 10

A company has a warehouse with a capacity of 10,000 units. The company receives a shipment of 5,000 units and already has 3,000 units in stock. If the company wants to maintain a safety stock of 20% of the total capacity, how many units can the company store in the warehouse?

A. 6,000 units

Correct B. 8,000 units

C. 10,000 units

D. 12,000 units

Correct Answer: B

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Question 11

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

A. The business is not required to file annual returns with the CAC.

B. The business is not required to pay annual fees to the CAC.

Correct C. The business is not entitled to limited liability.

D. The business is not entitled to issue share certificates.

Correct Answer: C

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Question 12

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. ₦220,000

B. ₦240,000

Correct C. ₦260,000

D. ₦280,000

Correct Answer: C

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Question 13

A consumer purchases a product from a retailer for ₦10,000. If the retailer offers a discount of 10% on the product, how much will the consumer pay?

Correct A. ₦9,000

B. ₦9,500

C. ₦10,000

D. ₦10,500

Correct Answer: A

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Question 14

A company's transport manager is responsible for the safe transportation of goods. What is the primary responsibility of the transport manager?

A. To ensure that goods are delivered on time.

Correct B. To ensure that goods are transported safely.

C. To ensure that goods are transported at the lowest cost.

D. To ensure that goods are transported by the most convenient route.

Correct Answer: B

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Question 15

A company uses a marketing strategy that involves creating a sense of urgency to encourage customers to make a purchase. What type of marketing strategy is this?

A. Scarcity marketing

Correct B. Urgency marketing

C. Social proof marketing

D. Authority marketing

Correct Answer: B

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Question 16

A company has a warehouse with a capacity to store 1000 units of goods. The warehouse is currently 70% full, and the company wants to store an additional 500 units of goods. If the storage cost is ₦5 per unit and the rental cost is ₦1000 per day, what is the minimum number of days the company needs to rent the warehouse to store the additional 500 units of goods?

A. 10 days

Correct B. 15 days

C. 20 days

D. 25 days

Correct Answer: B

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Question 17

A firm is considering two different production processes for a new 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 ₦80 per unit, what is the minimum number of units that the firm needs to produce to break even?

A. 1000 units

B. 1200 units

Correct C. 1500 units

D. 2000 units

Correct Answer: C

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Question 18

A company has a marketing budget of ₦1,000,000 to promote a new product. The company wants to allocate the budget to three different advertising channels: TV, Radio, and Print. If the cost of advertising on TV is ₦300,000, the cost of advertising on Radio is ₦200,000, and the cost of advertising on Print is ₦500,000, what is the maximum number of units of the product that the company can sell with the allocated budget?

A. 10,000 units

Correct B. 12,000 units

C. 15,000 units

D. 20,000 units

Correct Answer: B

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Question 19

A firm is considering two different insurance policies to cover its business risks. Policy A has a premium of ₦50,000 and a deductible of ₦20,000. Policy B has a premium of ₦30,000 and a deductible of ₦10,000. If the firm expects to incur a loss of ₦100,000, what is the minimum premium that the firm needs to pay to cover the loss?

A. ₦40,000

B. ₦45,000

Correct C. ₦50,000

D. ₦55,000

Correct Answer: C

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Question 20

A company has a warehouse with a capacity to store 1000 units of goods. The warehouse is currently 70% full, and the company wants to store an additional 500 units of goods. If the storage cost is ₦5 per unit and the rental cost is ₦1000 per day, what is the minimum number of days the company needs to rent the warehouse to store the additional 500 units of goods?

A. 10 days

Correct B. 15 days

C. 20 days

D. 25 days

Correct Answer: B

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Question 21

A firm specializes in producing only one good. This specialization is an example of which of the following?

A. Division of Labor

B. Economies of Scale

Correct C. Comparative Advantage

D. Opportunity Cost

Correct Answer: C

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Question 22

A sole trader is a business owned by one person. What is the main advantage of this type of business?

A. Easy to set up

B. Less tax to pay

Correct C. More control over the business

D. More opportunities for growth

Correct Answer: C

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Question 23

A company is a business owned by shareholders. What is the main disadvantage of this type of business?

A. More tax to pay

B. Less control over the business

C. More opportunities for growth

Correct D. More risk of bankruptcy

Correct Answer: D

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Question 24

A firm uses a combination of road, rail, and air transport to move its goods. What is the main advantage of this type of transport?

A. Faster delivery

B. Cheaper delivery

C. More reliable delivery

Correct D. More flexible delivery

Correct Answer: D

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Question 25

A firm uses a combination of advertising and sales promotion to market its products. What is the main advantage of this type of marketing?

A. More sales

B. More profits

C. More customer loyalty

Correct D. More brand awareness

Correct Answer: D

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