POST UTME MADONNA UNIVERSITY 2019 Commerce | Objective

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Question 1
The Consumer Protection Act of 1999 in Nigeria provides for the protection of consumers from unfair trade practices. Which of the following is a key provision of the Act?
A. Prohibition of false or misleading advertisements
B. Establishment of the Consumer Protection Council
Correct C. Provision for compensation for consumers who suffer loss or injury
D. Regulation of consumer credit

Correct Answer: C

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Question 2
A company is considering the introduction of a new product. The product has a high potential for sales, but it also has a high risk of failure. Which of the following is the most appropriate decision-making approach for the company?
A. Break-even analysis
Correct B. Decision tree analysis
C. Sensitivity analysis
D. Cost-benefit analysis

Correct Answer: B

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Question 3
A warehouse has a storage capacity of 10,000 units. The warehouse is currently 70% full. If 500 units are received in a shipment, what is the new percentage of the warehouse that is full?
A. 60%
B. 65%
C. 70%
Correct D. 75%

Correct Answer: D

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Question 4
A company is considering the use of just-in-time (JIT) inventory management. Which of the following is a key benefit 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 5
A company is considering the use of outsourcing for its production needs. Which of the following is a key advantage of outsourcing?
A. Reduced labor costs
B. Improved product quality
C. Increased flexibility in production
Correct D. Reduced capital expenditures

Correct Answer: D

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Question 6
A sole trader's business is not required to register with the Corporate Affairs Commission (CAC) if its annual turnover is less than ₦5 million. Which of the following is a correct statement regarding the registration of a sole trader's business?
A. A sole trader's business is required to register with the CAC if its annual turnover is more than ₦5 million.
Correct B. A sole trader's business is not required to register with the CAC if its annual turnover is less than ₦5 million.
C. A sole trader's business is required to register with the CAC if it has more than 10 employees.
D. A sole trader's business is not required to register with the CAC if it has more than 10 employees.

Correct Answer: B

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Question 7
A company's memorandum of association is a document that outlines the company's
A. objectives and goals
B. powers and duties of the directors
Correct C. rights and interests of the shareholders
D. terms and conditions of employment of the employees

Correct Answer: C

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Question 8
A warehouse is a facility used for the storage of goods, and it is an essential part of the supply chain. Which of the following is a benefit of using a warehouse?
A. Reduced transportation costs
B. Increased storage capacity
C. Improved inventory management
Correct D. All of the above

Correct Answer: D

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Question 9
A consumer protection law is a law that protects consumers from unfair or deceptive business practices. Which of the following is a right of a consumer under consumer protection law?
A. The right to return goods that are defective or damaged
B. The right to cancel a contract within a specified period
C. The right to compensation for losses suffered as a result of a business practice
Correct D. All of the above

Correct Answer: D

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Question 10
A company's articles of association is a document that outlines the company's
A. powers and duties of the directors
B. rights and interests of the shareholders
C. terms and conditions of employment of the employees
Correct D. rules and regulations governing the company's operations

Correct Answer: D

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Question 11
In a market economy, the law of supply and demand determines the price of a commodity. However, in a planned economy, the government sets the price of a commodity. Which of the following is a characteristic of a planned economy?
A. The government controls the production and distribution of goods.
B. The market forces of supply and demand determine the price of goods.
Correct C. The government sets the price of goods and services.
D. The economy is based on private ownership of resources.

Correct Answer: C

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Question 12
A company's marketing strategy involves creating a brand identity that appeals to a specific target market. Which of the following is a key element of a brand identity?
A. The company's mission statement.
Correct B. The company's logo and color scheme.
C. The company's product features and benefits.
D. The company's target market demographics.

Correct Answer: B

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Question 13
A consumer protection law requires businesses to provide clear and accurate information about their products. Which of the following is a key provision of this law?
A. The business must provide a warranty for the product.
B. The business must disclose any potential risks associated with the product.
Correct C. The business must provide clear and accurate labeling of the product.
D. The business must provide a refund or exchange policy for the product.

Correct Answer: C

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Question 14
A company's insurance policy covers losses due to natural disasters. Which of the following is a type of insurance policy that covers losses due to natural disasters?
A. Liability insurance.
Correct B. Property insurance.
C. Business interruption insurance.
D. Workers' compensation insurance.

Correct Answer: B

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Question 15
A company's marketing strategy involves creating a sense of urgency to encourage customers to make a purchase. Which of the following is a technique used to create a sense of urgency?
Correct A. Limited-time offer.
B. Free shipping.
C. Price matching.
D. Gift wrapping.

Correct Answer: A

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Question 16
A firm's production function is given by Q = 2L^(1/2)K^(1/2), where Q is the quantity produced, L is the labor input, and K is the capital input. If the firm's labor input increases by 25% and the capital input remains constant, by what percentage will the quantity produced increase?
A. 12.5%
B. 25%
Correct C. 37.5%
D. 50%

Correct Answer: C

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Question 17
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 promotions. If the company's current advertising expenditure is ₦1,000,000 and its current sales promotions expenditure is ₦500,000, which strategy will result in a higher total marketing expenditure?
A. Strategy A
Correct B. Strategy B
C. Both strategies will result in the same total marketing expenditure
D. Neither strategy will result in a higher total marketing expenditure

Correct Answer: B

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Question 18
A warehouse has a storage capacity of 10,000 units. The warehouse is currently 75% full, with 7,500 units stored. If 2,000 more units are received, what percentage of the warehouse's capacity will be occupied?
A. 62.5%
B. 75%
Correct C. 87.5%
D. 90%

Correct Answer: C

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Question 19
A country's foreign trade balance is given by the equation B = X - M, where B is the balance, X is the value of exports, and M is the value of imports. If the value of exports increases by 15% and the value of imports remains constant, by what percentage will the balance increase?
A. 10%
Correct B. 12.5%
C. 15%
D. 20%

Correct Answer: B

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Question 20
A firm's production function is given by Q = 3L^(2/3)K^(1/3), where Q is the quantity produced, L is the labor input, and K is the capital input. If the firm's labor input increases by 20% and the capital input remains constant, by what percentage will the quantity produced increase?
A. 20%
B. 25%
Correct C. 30%
D. 40%

Correct Answer: C

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Question 21
In a sole trade business, what is the primary advantage of using a sole proprietorship structure?
A. Limited liability
B. Easy to establish
Correct C. Flexibility in decision-making
D. Tax benefits

Correct Answer: C

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Question 22
A company has a capital structure consisting of 60% debt and 40% equity. If the cost of debt is 8% and the cost of equity is 12%, what is the weighted average cost of capital (WACC)?
A. 6%
Correct B. 7%
C. 8%
D. 9%

Correct Answer: B

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Question 23
A consumer protection law requires that all businesses provide a clear and concise warranty statement to customers. Which of the following is NOT a requirement of the warranty statement?
A. Duration of the warranty
B. Scope of the warranty
C. Method of warranty claim
Correct D. Language used in the warranty statement

Correct Answer: D

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Question 24
A company is considering a new marketing strategy that involves social media advertising. Which of the following is a potential risk associated with this strategy?
A. Increased brand awareness
B. Improved customer engagement
Correct C. Negative publicity
D. Reduced marketing costs

Correct Answer: C

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Question 25
A sole trade business has a profit of ₦100,000 and a loss of ₦50,000 in two consecutive years. What is the net profit of the business over the two-year period?
A. ₦50,000
Correct B. ₦75,000
C. ₦100,000
D. ₦125,000

Correct Answer: B

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