Practice Post UTME LAUTECH commerce 2025 Past Questions

Question 1

A company is considering launching a new product line. The product has a high demand in the market, but the production costs are expected to be high. The company's marketing manager has suggested that the product be launched in a limited quantity to test the market response. However, the financial controller is concerned that the high production costs may lead to a loss. Which of the following marketing strategies is most appropriate for this situation?

Correct A. Test Market Strategy

B. Product Line Extension

C. Market Penetration Strategy

D. Market Development Strategy

Correct Answer: A

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Question 2

A consumer has purchased a product from a company, but the product has a defect. The consumer has contacted the company's customer service department, but the company has refused to replace the product. The consumer is considering taking legal action against the company. Which of the following laws is most relevant to this situation?

Correct A. Consumer Protection Act

B. Sales of Goods Act

C. Unfair Contract Terms Act

D. Unfair Trading Regulations

Correct Answer: A

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Question 3

A company is considering setting up a sole trade business. The company's owner-manager has a good understanding of the market and has identified a niche area where the company can offer a unique product or service. However, the owner-manager is concerned about the risks associated with a sole trade business. Which of the following is a key advantage of a sole trade business?

Correct A. Flexibility

B. Limited liability

C. Tax benefits

D. Easy to set up

Correct Answer: A

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Question 4

A company is considering setting up a warehouse to store its products. The company's logistics manager has identified a suitable location for the warehouse, but the manager is concerned about the costs associated with setting up and maintaining the warehouse. Which of the following is a key consideration when setting up a warehouse?

Correct A. Location

B. Security

C. Storage capacity

D. Transportation costs

Correct Answer: A

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Question 5

A company is considering launching a new product line. The product has a high demand in the market, but the production costs are expected to be high. The company's marketing manager has suggested that the product be launched in a limited quantity to test the market response. However, the financial controller is concerned that the high production costs may lead to a loss. Which of the following marketing strategies is most appropriate for this situation?

Correct A. Test Market Strategy

B. Product Line Extension

C. Market Penetration Strategy

D. Market Development Strategy

Correct Answer: A

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Question 6

In a perfectly competitive market, the demand curve for a firm's product is its

Correct A. marginal revenue curve

B. marginal cost curve

C. average revenue curve

D. average cost curve

Correct Answer: A

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Question 7

A company's break-even point is the point at which its total revenue equals its

A. total fixed costs

B. total variable costs

Correct C. total costs

D. net income

Correct Answer: C

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Question 8

A firm's marginal revenue product is the change in its total revenue resulting from a one-unit change in the quantity of a variable input, such as labor. If the firm's marginal revenue product of labor is 100, and the wage rate is 80, then the firm should

A. hire more labor

Correct B. hire less labor

C. not hire any labor

D. fire some labor

Correct Answer: B

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Question 9

A firm's demand for a variable input, such as labor, is said to be perfectly inelastic if the quantity of the input demanded does not change in response to changes in the wage rate. If the firm's demand for labor is perfectly inelastic, then the firm's marginal revenue product of labor is equal to the

Correct A. marginal cost of labor

B. marginal revenue product of labor

C. average product of labor

D. marginal factor cost of labor

Correct Answer: A

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Question 10

A firm's production function is given by the equation Q = 2L^2 + 5L + 10, where Q is the quantity of output and L is the quantity of labor. If the firm's wage rate is 20 per hour, and the firm wants to maximize its profit, then it should hire

A. 10 units of labor

Correct B. 20 units of labor

C. 30 units of labor

D. 40 units of labor

Correct Answer: B

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Question 11

A firm specializes in producing a single product. Which of the following is a characteristic of a specialized firm?

A. It has a high level of production efficiency

B. It has a low level of production efficiency

C. It has a high level of product variety

Correct D. It has a low level of product variety

Correct Answer: D

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Question 12

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 new level of output?

A. 25%

B. 30%

Correct C. 35%

D. 40%

Correct Answer: C

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Question 13

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

A. 90%

B. 95%

C. 100%

Correct D. 105%

Correct Answer: D

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Question 14

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

A. 60%

B. 65%

C. 70%

Correct D. 75%

Correct Answer: D

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Question 15

A firm's profit function is given by ΔP = 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 new level of profit if the firm's output is increased by 10%?

A. 90%

B. 95%

C. 100%

Correct D. 105%

Correct Answer: D

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Question 16

The Central Bank of Nigeria (CBN) uses the monetary policy framework to regulate the money supply in the economy. Which of the following instruments is used by the CBN to reduce the money supply?

A. Open Market Operations (OMO)

Correct B. Reserve Requirements

C. Cash Reserve Ratio (CRR)

D. Statutory Reserve Requirements

Correct Answer: B

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Question 17

A firm's production function is given by Q = 2L^0.5K^0.5, where Q is the output, L is the labor and K is the capital. If the firm wants to increase its output by 20% and the labor is increased by 10%, what is the percentage increase in capital required?

A. 5%

B. 10%

Correct C. 15%

D. 20%

Correct Answer: C

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Question 18

A company is considering two marketing strategies: Strategy A and Strategy B. Strategy A has a probability of success of 0.6 and a probability of failure of 0.4. Strategy B has a probability of success of 0.7 and a probability of failure of 0.3. If the company wants to maximize its expected profit, which strategy should it choose?

A. Strategy A

Correct B. Strategy B

C. Both strategies have the same expected profit

D. Neither strategy has a higher expected profit

Correct Answer: B

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Question 19

A firm's demand function is given by Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the firm wants to maximize its revenue, what is the optimal price?

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 20

A firm's production function is given by Q = 2L^0.5K^0.5, where Q is the output, L is the labor and K is the capital. If the firm wants to increase its output by 20% and the labor is increased by 10%, what is the percentage increase in capital required?

A. 5%

B. 10%

Correct C. 15%

D. 20%

Correct Answer: C

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Question 21

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, given its relative efficiency in producing that good compared to other countries.

Correct A. By producing a good at a lower opportunity cost than other countries

B. By producing a good at a higher opportunity cost than other countries

C. By producing a good at the same opportunity cost as other countries

D. By producing a good at a lower price than other countries

Correct Answer: A

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Question 22

A company has a budget of ₦1,500,000 to spend on advertising its new product. If the cost of advertising on television is ₦500,000 and the cost of advertising on radio is ₦300,000, what is the maximum amount the company can spend on advertising on both television and radio?

A. ₦1,000,000

Correct B. ₦1,200,000

C. ₦1,300,000

D. ₦1,500,000

Correct Answer: B

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Question 23

A firm has the following production costs: variable costs = ₦500,000, fixed costs = ₦200,000, and total revenue = ₦1,200,000. What is the firm's profit?

A. ₦200,000

Correct B. ₦300,000

C. ₦400,000

D. ₦500,000

Correct Answer: B

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Question 24

A company has a policy of paying its employees a 10% bonus on their monthly salary. If an employee's monthly salary is ₦50,000, what is the bonus amount?

A. ₦5,000

Correct B. ₦5,500

C. ₦6,000

D. ₦6,500

Correct Answer: B

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Question 25

A firm has the following financial statements: assets = ₦1,500,000, liabilities = ₦800,000, and equity = ₦700,000. What is the firm's debt-to-equity ratio?

A. 1:1

Correct B. 1:2

C. 2:1

D. 3:1

Correct Answer: B

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