POST UTME LASU 2022 Commerce | Objective

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Question 1
In a perfectly competitive market, the supply curve is upward-sloping because of the law of increasing marginal opportunity costs. However, this is not the case in a market with a single firm. What is the name of this phenomenon?
A. Economies of scale
B. Increasing marginal opportunity costs
C. Diminishing marginal returns
Correct D. Monopoly power

Correct Answer: D

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Question 2
A firm's cost of capital is the minimum return that investors demand for their investment in the firm. What is the name of the formula used to calculate the cost of capital?
Correct A. WACC = (E/V) x Re + (D/V) x Rd x (1 - Tc)
B. WACC = (E/V) x Re + (D/V) x Rd x Tc
C. WACC = (E/V) x Re + (D/V) x Rd
D. WACC = (E/V) x Re + (D/V) x Rd x (1 + Tc)

Correct Answer: A

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Question 3
A firm's break-even point is the point at which its total revenue equals its total fixed costs. What is the name of the formula used to calculate the break-even point?
Correct A. Break-even point = Fixed costs / (Selling price - Variable costs)
B. Break-even point = Fixed costs / (Selling price + Variable costs)
C. Break-even point = Fixed costs / (Selling price - Variable costs) x (1 + Tc)
D. Break-even point = Fixed costs / (Selling price + Variable costs) x (1 - Tc)

Correct Answer: A

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Question 4
A firm's cash flow is the difference between its cash inflows and cash outflows. What is the name of the formula used to calculate the cash flow?
Correct A. Cash flow = Cash inflows - Cash outflows
B. Cash flow = Cash inflows + Cash outflows
C. Cash flow = Cash inflows - Cash outflows x (1 - Tc)
D. Cash flow = Cash inflows + Cash outflows x (1 + Tc)

Correct Answer: A

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Question 5
A firm's return on investment (ROI) is the ratio of its net income to its total investment. What is the name of the formula used to calculate the ROI?
Correct A. ROI = Net income / Total investment
B. ROI = Net income / Total investment x (1 - Tc)
C. ROI = Net income / Total investment x (1 + Tc)
D. ROI = Net income / Total investment x (1 - Tc) x (1 + Tc)

Correct Answer: A

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Question 6
A company is sued for violating the Consumer Protection Act. The company's defense is that the consumer was aware of the risks associated with the product. However, the consumer claims that the company failed to provide adequate warnings. Which of the following is the most likely outcome?
A. The court will rule in favor of the company.
Correct B. The court will rule in favor of the consumer.
C. The case will be dismissed due to lack of evidence.
D. The case will be sent back to the lower court for re-trial.

Correct Answer: B

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Question 7
A firm specializes in producing only one type of product. This is an example of:
A. Economies of scale
B. Diversification
Correct C. Production and specialization
D. Vertical integration

Correct Answer: C

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Question 8
A warehouse manager wants to store 500 boxes of goods. The warehouse has a capacity of 2000 square feet. Each box occupies 0.5 square feet. What is the maximum number of boxes that can be stored in the warehouse?
A. 1000
Correct B. 2000
C. 5000
D. 10000

Correct Answer: B

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Question 9
A bank offers a loan of ₦500,000 at an interest rate of 10% per annum. The loan is repayable in 5 years. What is the total interest paid over the 5-year period?
A. ₦50,000
B. ₦75,000
C. ₦100,000
Correct D. ₦125,000

Correct Answer: D

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Question 10
A company uses a just-in-time inventory system. This means that:
A. The company orders large quantities of goods in advance.
Correct B. The company produces goods as soon as they are ordered.
C. The company stores a large inventory of goods.
D. The company uses a warehouse to store goods.

Correct Answer: B

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Question 11
A company's sole trader is considering purchasing a liability insurance policy to cover potential losses due to business operations. What type of risk is the sole trader trying to mitigate?
Correct A. Operational risk
B. Financial risk
C. Strategic risk
D. Compliance risk

Correct Answer: A

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Question 12
A company's marketing strategy involves creating a new product line. The company wants to assess the potential market size for the new product. Which of the following methods would be most appropriate for estimating the market size?
A. Conjoint analysis
B. Cluster analysis
Correct C. Regression analysis
D. Decision tree analysis

Correct Answer: C

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Question 13
A company's warehouse is experiencing stockouts due to inadequate inventory management. Which of the following inventory control methods would be most effective in preventing stockouts?
Correct A. Just-in-time inventory system
B. Economic order quantity (EOQ) model
C. Materials requirements planning (MRP)
D. Total quality management (TQM)

Correct Answer: A

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Question 14
A consumer is considering purchasing a product from a company that has a history of violating consumer rights. Which of the following laws would be most relevant in protecting the consumer's rights?
Correct A. Consumer Protection Act
B. Competition and Consumer Protection Act
C. Companies and Allied Matters Act
D. Bank and Other Financial Institutions Act

Correct Answer: A

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Question 15
A company is considering outsourcing its logistics operations to a third-party provider. Which of the following benefits would be most relevant in justifying the decision to outsource?
A. Reduced costs
Correct B. Improved efficiency
C. Enhanced customer service
D. Increased flexibility

Correct Answer: B

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Question 16
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. be unaffected

Correct Answer: B

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Question 17
A firm's revenue is calculated as the product of the price per unit and the quantity sold. If the price per unit is ₦50 and the quantity sold is 100 units, what is the total revenue?
A. ₦4000
Correct B. ₦5000
C. ₦6000
D. ₦7000

Correct Answer: B

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Question 18
A consumer protection law that prohibits false or misleading advertising is known as
A. Deceptive Advertising Act
Correct B. Truth-in-Advertising Act
C. Consumer Protection Act
D. Fair Trade Act

Correct Answer: B

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Question 19
A firm's cost of production includes all the expenses incurred in producing a good or service. Which of the following is NOT a cost of production?
A. Fixed costs
B. Variable costs
Correct C. Opportunity costs
D. Sunk costs

Correct Answer: C

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Question 20
A diagram showing the relationship between the price of a commodity and the quantity demanded is known as
Correct A. Demand curve
B. Supply curve
C. Equilibrium curve
D. Market demand curve

Correct Answer: A

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Question 21
In a perfectly competitive market, the supply curve is typically represented by a
Correct A. Horizontal Line
B. U-Shaped Curve
C. Inclined Plane
D. Vertical Line

Correct Answer: A

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Question 22
A firm's production function is given by Q = 2L^(1/2)K^(1/2). If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, and if the firm's budget constraint is ₦10,000, then the firm's optimal input combination is
A. L = 100, K = 50
Correct B. L = 50, K = 100
C. L = 200, K = 50
D. L = 50, K = 200

Correct Answer: B

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Question 23
A consumer's indifference curve is given by U = 2x + 3y. If the consumer's budget constraint is 100x + 50y = 1000, then the consumer's optimal consumption bundle is
Correct A. (50, 20)
B. (20, 50)
C. (30, 30)
D. (40, 40)

Correct Answer: A

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Question 24
A firm's cost function is given by C = 2L + 3K. If the firm's revenue function is given by R = 100L + 200K, then the firm's profit function is
Correct A. P = 100L + 200K - 2L - 3K
B. P = 100L + 200K - 2L + 3K
C. P = 100L + 200K + 2L + 3K
D. P = 100L + 200K - 2L - 3K

Correct Answer: A

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Question 25
A consumer's utility function is given by U = 2x + 3y. If the consumer's budget constraint is 100x + 50y = 1000, then the consumer's optimal consumption bundle is
Correct A. (50, 20)
B. (20, 50)
C. (30, 30)
D. (40, 40)

Correct Answer: A

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