POST UTME MADONNA UNIVERSITY 2022 Commerce | Objective

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Question 1 View Details
In a perfectly competitive market, the supply curve is upward-sloping because of the law of increasing costs. What is the primary reason for this upward-sloping supply curve?
A. The law of increasing costs is due to the fixed costs of production.
B. The law of increasing costs is due to the variable costs of production.
C. The law of increasing costs is due to the economies of scale.
Correct D. The law of increasing costs is due to the diseconomies of scale.

Correct Answer: D

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Question 2 View Details
A company has a production function given by Q = 2L^0.5K^0.5. If the company wants to produce 16 units of output, and the price of labor is ₦100 per unit, and the price of capital is ₦200 per unit, what is the minimum cost of production?
A. ₦4000
Correct B. ₦6000
C. ₦8000
D. ₦10000

Correct Answer: B

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Question 3 View Details
A firm is considering two different production processes: process A and process B. Process A has a fixed cost of ₦1000 and a variable cost of ₦50 per unit, while process B has a fixed cost of ₦500 and a variable cost of ₦75 per unit. If the firm produces 20 units of output, what is the total cost of production for each process?
A. Process A: ₦1500, Process B: ₦1500
Correct B. Process A: ₦1500, Process B: ₦1750
C. Process A: ₦1750, Process B: ₦1500
D. Process A: ₦1750, Process B: ₦2000

Correct Answer: B

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Question 4 View Details
A company has a market share of 30% in a perfectly competitive market. If the market demand curve is given by Qd = 100 - 2P, and the market supply curve is given by Qs = 20 + 3P, what is the equilibrium price and quantity?
A. P = ₦20, Q = 40
Correct B. P = ₦30, Q = 50
C. P = ₦40, Q = 60
D. P = ₦50, Q = 70

Correct Answer: B

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Question 5 View Details
A firm is considering two different marketing strategies: strategy A and strategy B. Strategy A involves a price of ₦100 and a quantity of 100 units, while strategy B involves a price of ₦120 and a quantity of 80 units. If the firm's revenue is given by R = P * Q, what is the total revenue for each strategy?
A. Strategy A: ₦10000, Strategy B: ₦9600
Correct B. Strategy A: ₦10000, Strategy B: ₦10000
C. Strategy A: ₦10000, Strategy B: ₦8000
D. Strategy A: ₦10000, Strategy B: ₦8000

Correct Answer: B

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Question 6 View Details
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 warning labels. 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 court will order the company to pay damages to the consumer.

Correct Answer: B

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Question 7 View Details
A sole trader is sued by a customer for breach of contract. The sole trader claims that the customer failed to pay for the goods as agreed. However, the customer claims that the goods were defective and did not meet the agreed specifications. Which of the following is the most likely outcome?
A. The court will rule in favor of the sole trader.
Correct B. The court will rule in favor of the customer.
C. The case will be dismissed due to lack of evidence.
D. The court will order the sole trader to pay damages to the customer.

Correct Answer: B

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Question 8 View Details
A company is considering setting up a new production line. The production line will require an initial investment of ₦10 million and will generate an annual profit of ₦2 million. However, the company's accountant has warned that the production line will also require an annual maintenance cost of ₦1 million. What is the net present value of the production line?
Correct A. ₦8 million
B. ₦9 million
C. ₦10 million
D. ₦11 million

Correct Answer: A

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Question 9 View Details
A bank is considering lending ₦5 million to a customer. The customer has a credit rating of 60% and a debt-to-equity ratio of 2:1. What is the bank's risk assessment of the loan?
Correct A. High risk
B. Medium risk
C. Low risk
D. Very low risk

Correct Answer: A

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Question 10 View Details
A company is considering outsourcing its production to a foreign supplier. The supplier has offered to supply the goods at a price of 10 per unit, which is 20% lower than the company's current production cost. However, the company's logistics manager has warned that the transportation costs will be higher due to the longer distance. What is the net cost savings to the company?
A. ₦1.5 million
Correct B. ₦2 million
C. ₦2.5 million
D. ₦3 million

Correct Answer: B

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Question 11 View Details
In a perfectly competitive market, the demand curve for a firm's product is its
Correct A. marginal revenue curve
B. average revenue curve
C. marginal cost curve
D. average cost curve

Correct Answer: A

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Question 12 View Details
A company's marketing strategy involves creating a unique selling proposition (USP) to differentiate its product from those of its competitors. Which of the following is NOT a characteristic of a USP?
A. It is a statement that highlights the benefits of a product
B. It is a statement that highlights the features of a product
Correct C. It is a statement that highlights the price of a product
D. It is a statement that highlights the quality of a product

Correct Answer: C

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Question 13 View Details
A firm'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. average cost

Correct Answer: C

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Question 14 View Details
A company's supply chain involves the transportation of goods from the manufacturer to the retailer. Which of the following modes of transportation is MOST suitable for transporting perishable goods?
Correct A. Road transport
B. Rail transport
C. Air transport
D. Sea transport

Correct Answer: A

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Question 15 View Details
A firm's risk management strategy involves the use of insurance to mitigate potential losses. Which of the following types of insurance is MOST suitable for a firm that operates in a high-risk industry?
Correct A. Liability insurance
B. Property insurance
C. Business interruption insurance
D. Professional indemnity insurance

Correct Answer: A

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Question 16 View Details
A company's marketing strategy involves creating a sense of urgency to encourage customers to make a purchase. This tactic is an example of which of the following?
Correct A. Scarcity principle
B. Loss aversion
C. Endowment effect
D. Social proof

Correct Answer: A

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Question 17 View Details
A sole trader's business is registered with the Corporate Affairs Commission (CAC). Which of the following is a characteristic of a sole trader?
A. Limited liability
Correct B. Unlimited liability
C. Separate legal entity
D. No partnership

Correct Answer: B

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Question 18 View Details
A company's foreign trade involves exporting goods to a country with a different currency. Which of the following is a type of exchange rate?
Correct A. Spot rate
B. Forward rate
C. Nominal rate
D. Real rate

Correct Answer: A

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Question 19 View Details
A company's marketing strategy involves creating a sense of exclusivity to encourage customers to make a purchase. This tactic is an example of which of the following?
A. Scarcity principle
B. Loss aversion
C. Endowment effect
Correct D. Social proof

Correct Answer: D

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Question 20 View Details
A company's business involves transporting goods from one location to another. Which of the following is a type of transportation?
Correct A. Land transport
B. Air transport
C. Sea transport
D. Rail transport

Correct Answer: A

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Question 21 View Details
A company's marketing strategy involves creating a sense of social proof to encourage customers to make a purchase. This tactic is an example of which of the following?
A. Scarcity principle
B. Loss aversion
C. Endowment effect
Correct D. Social proof

Correct Answer: D

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Question 22 View Details
A company's business involves creating and selling products. Which of the following is a type of business unit?
Correct A. Sole trader
B. Partnership
C. Company
D. Cooperative

Correct Answer: A

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Question 23 View Details
A company's marketing strategy involves creating a sense of urgency to encourage customers to make a purchase. This tactic is an example of which of the following?
Correct A. Scarcity principle
B. Loss aversion
C. Endowment effect
D. Social proof

Correct Answer: A

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Question 24 View Details
A company's business involves transporting goods from one location to another. Which of the following is a type of transportation?
A. Land transport
Correct B. Air transport
C. Sea transport
D. Rail transport

Correct Answer: B

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Question 25 View Details
A company's marketing strategy involves creating a sense of exclusivity to encourage customers to make a purchase. This tactic is an example of which of the following?
A. Scarcity principle
B. Loss aversion
C. Endowment effect
Correct D. Social proof

Correct Answer: D

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