POST UTME LEAD CITY UNIVERSITY 2018 Commerce | Objective

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Question 1
In a perfectly competitive market, the law of supply states that as the price of a commodity increases, the quantity supplied will
A. increase
Correct B. decrease
C. remain constant
D. move in the opposite direction

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 current output is 16 units and the number of workers (L) is 4, how many machines (K) are required?
A. 4
Correct B. 6
C. 8
D. 10

Correct Answer: B

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Question 3
A company has a warehouse with a capacity of 1000 units. The warehouse is currently 75% full. If 150 units are added to the warehouse, what percentage of the warehouse is now full?
A. 80
Correct B. 85
C. 90
D. 95

Correct Answer: B

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Question 4
A firm is considering two different investment opportunities. Opportunity A has a 10% chance of returning 100,000 and a 90% chance of returning 0. Opportunity B has a 20% chance of returning 120,000 and an 80% chance of returning 0. Which opportunity has a higher expected return?
A. Opportunity A
Correct B. Opportunity B
C. Both opportunities have the same expected return
D. Neither opportunity has a higher expected return

Correct Answer: B

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Question 5
A company is considering exporting its products to a foreign market. The company has a fixed cost of 10,000 and a variable cost of 5 per unit. If the selling price is 15 per unit, what is the minimum quantity that the company must sell to break even?
A. 1000
B. 2000
Correct C. 3000
D. 4000

Correct Answer: C

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Question 6
A company's production process involves a series of complex operations. If the company adopts a just-in-time (JIT) inventory system, what is the primary benefit?
Correct A. Reduced inventory costs
B. Improved product quality
C. Increased production capacity
D. Enhanced supply chain visibility

Correct Answer: A

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Question 7
A firm's marketing strategy involves a mix of product, price, place, and promotion. If the firm decides to increase its advertising budget, what is the likely outcome?
A. Increased market share
Correct B. Improved brand recognition
C. Reduced production costs
D. Enhanced customer loyalty

Correct Answer: B

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Question 8
A company's insurance policy covers losses due to fire, theft, and natural disasters. If the company experiences a fire that destroys its warehouse, what is the likely outcome?
A. The company will receive a full payout
Correct B. The company will receive a partial payout
C. The company will not receive any payout
D. The company will be required to pay a deductible

Correct Answer: B

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Question 9
A firm's production process involves a series of complex operations. If the firm decides to adopt a lean production system, what is the primary benefit?
Correct A. Reduced production costs
B. Improved product quality
C. Increased production capacity
D. Enhanced supply chain visibility

Correct Answer: A

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Question 10
A company's marketing strategy involves a mix of product, price, place, and promotion. If the company decides to launch a new product, what is the likely outcome?
Correct A. Increased market share
B. Improved brand recognition
C. Reduced production costs
D. Enhanced customer loyalty

Correct Answer: A

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Question 11
In a sole trade business, what is the primary advantage of adopting a sole proprietorship structure?
A. Limited liability
B. Easy to set up
Correct C. Flexibility in decision-making
D. No tax benefits

Correct Answer: C

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Question 12
A company has a capital structure consisting of 60% debt and 40% equity. If the company's cost of debt is 8% and its cost of equity is 12%, what is the company's weighted average cost of capital (WACC)?
A. 6%
Correct B. 7%
C. 8%
D. 9%

Correct Answer: B

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Question 13
A consumer protection agency has the power to investigate complaints against businesses. Which of the following is a valid reason for the agency to investigate a complaint?
Correct A. The business has a history of violating consumer rights
B. The consumer has filed a complaint against the business
C. The business has not provided adequate customer service
D. The consumer has not paid for a product

Correct Answer: A

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Question 14
A company is considering exporting its products to a foreign market. What is the primary advantage of exporting?
A. Increased competition
B. Improved market share
Correct C. Access to new markets and customers
D. Reduced production costs

Correct Answer: C

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Question 15
A marketing manager is developing a marketing strategy for a new product. Which of the following is a valid marketing objective?
Correct A. To increase sales revenue
B. To reduce production costs
C. To improve brand awareness
D. To decrease market share

Correct Answer: A

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Question 16
A firm specializes in producing only one product. This specialization allows the firm to focus on a specific market segment and develop expertise in that area. What is the primary benefit of specialization for the firm?
A. Increased efficiency
B. Reduced costs
Correct C. Improved product quality
D. Enhanced customer satisfaction

Correct Answer: C

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Question 17
A company is considering expanding its operations to a new market. The company has identified two potential locations: Location A and Location B. Location A has a larger market size, but Location B has a more favorable business environment. Which location should the company choose?
A. Location A
Correct B. Location B
C. Both locations
D. Neither location

Correct Answer: B

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Question 18
A firm is considering implementing a just-in-time (JIT) inventory system. What is the primary benefit of JIT for the firm?
Correct A. Reduced inventory costs
B. Improved product quality
C. Increased efficiency
D. Enhanced customer satisfaction

Correct Answer: A

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Question 19
A company is considering exporting its products to a new market. What is the primary benefit of exporting for the company?
Correct A. Increased revenue
B. Improved product quality
C. Enhanced customer satisfaction
D. Reduced costs

Correct Answer: A

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Question 20
A firm is considering implementing a total quality management (TQM) system. What is the primary benefit of TQM for the firm?
Correct A. Improved product quality
B. Enhanced customer satisfaction
C. Increased efficiency
D. Reduced costs

Correct Answer: A

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Question 21
A company's sole trader is considering expanding its operations to a new market. Which of the following business units would be most suitable for this expansion?
A. Sole Trader
B. Limited Liability Partnership
Correct C. Private Limited Company
D. Public Limited Company

Correct Answer: C

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Question 22
A bank's cash management system is designed to minimize the risk of cash shortages. Which of the following cash management techniques would be most effective in achieving this goal?
A. Cash Budgeting
B. Cash Forecasting
C. Cash Pooling
Correct D. Cash Concentration

Correct Answer: D

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Question 23
A company's marketing strategy is focused on increasing brand awareness. Which of the following advertising techniques would be most effective in achieving this goal?
A. Print Advertising
B. Television Advertising
C. Radio Advertising
Correct D. Digital Advertising

Correct Answer: D

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Question 24
A company's warehousing and stock control system is designed to minimize stockouts and overstocking. Which of the following inventory management techniques would be most effective in achieving this goal?
Correct A. Just-In-Time Inventory System
B. Economic Order Quantity (EOQ) System
C. ABC Analysis
D. Vendor-Managed Inventory (VMI) System

Correct Answer: A

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Question 25
A company's financial management system is designed to minimize the risk of financial distress. Which of the following financial management techniques would be most effective in achieving this goal?
A. Financial Leverage
B. Operating Leverage
Correct C. Risk Management
D. Financial Planning

Correct Answer: C

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