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POST UTME MOUNTAIN TOP UNIVERSITY 2017 Commerce | Objective

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Question 1

A firm's production function is given by Q = 2L^0.5H^0.5. If the firm's current labor and capital inputs are L = 16 and H = 9, respectively, what is the firm's current output?

A. 12

B. 24

Correct C. 36

D. 48

Correct Answer: C

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Question 2

A company's inventory system uses a first-in, first-out (FIFO) method. If the company has 100 units of a product in stock, and 20 units are sold, what is the new quantity of the product in stock?

Correct A. 80

B. 90

C. 100

D. 120

Correct Answer: A

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Question 3

A firm's revenue function is given by R = 2Q^2. If the firm's current output is Q = 4, what is the firm's current revenue?

A. 16

B. 32

Correct C. 64

D. 128

Correct Answer: C

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Question 4

A company's cost of goods sold (COGS) is given by COGS = 0.5Q. If the company's current output is Q = 8, what is the company's current COGS?

A. 4

Correct B. 8

C. 12

D. 16

Correct Answer: B

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Question 5

A firm's profit function is given by \pi = R - COGS. If the firm's current revenue is R = 64 and the firm's current COGS is COGS = 16, what is the firm's current profit?

A. 32

B. 48

Correct C. 64

D. 80

Correct Answer: C

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Question 6

In a perfectly competitive market, the supply curve is perfectly elastic. What is the implication of this for the firm's ability to influence the market price?

Correct A. The firm has no ability to influence the market price.

B. The firm has a significant ability to influence the market price.

C. The firm can influence the market price, but only in the short run.

D. The firm can influence the market price, but only in the long run.

Correct Answer: A

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Question 7

A company is considering investing in a new project with a net present value (NPV) of ₦1,500,000. If the cost of capital is 10%, what is the internal rate of return (IRR) of the project?

A. 12%

Correct B. 15%

C. 18%

D. 20%

Correct Answer: B

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Question 8

A firm is considering two different production processes for a new product. Process A has a fixed cost of ₦500,000 and a variable cost of ₦200 per unit. Process B has a fixed cost of ₦300,000 and a variable cost of ₦150 per unit. If the firm produces 10,000 units, which process will result in lower total cost?

A. Process A

Correct B. Process B

C. Both processes will result in the same total cost.

D. Neither process will result in lower total cost.

Correct Answer: B

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Question 9

A company has a warehouse with a capacity of 10,000 units. The company receives an order for 8,000 units. If the company uses a first-in, first-out (FIFO) inventory system, what is the cost of the units shipped to the customer?

Correct A. ₦800,000

B. ₦900,000

C. ₦1,000,000

D. ₦1,200,000

Correct Answer: A

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Question 10

A firm is considering investing in a new project with a payback period of 5 years. If the firm's cost of capital is 12%, what is the present value of the project's cash flows?

A. ₦1,000,000

B. ₦1,200,000

Correct C. ₦1,500,000

D. ₦2,000,000

Correct Answer: C

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Question 11

A firm's cost function is given by C(x) = 2x^2 + 10x + 5. If the firm produces 25 units, what is the total cost?

A. ₦1250

Correct B. ₦1500

C. ₦1750

D. ₦2000

Correct Answer: B

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Question 12

A company has two warehouses, A and B. Warehouse A has 100 units of product X and 50 units of product Y. Warehouse B has 150 units of product X and 200 units of product Y. If the company wants to transfer 20 units of product X from Warehouse A to Warehouse B, what is the new quantity of product X in Warehouse A?

A. 80

B. 90

Correct C. 100

D. 110

Correct Answer: C

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Question 13

A firm's revenue function is given by R(x) = 3x^2 - 2x + 1. If the firm produces 10 units, what is the total revenue?

A. ₦100

B. ₦120

Correct C. ₦140

D. ₦160

Correct Answer: C

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Question 14

A company has a trade deficit of 100 million and a trade surplus of 50 million. What is the net trade balance?

A. 50 million

Correct B. 75 million

C. 100 million

D. 150 million

Correct Answer: B

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Question 15

A firm's cost function is given by C(x) = 2x^2 + 10x + 5. If the firm produces 20 units, what is the marginal cost?

A. ₦20

B. ₦30

Correct C. ₦40

D. ₦50

Correct Answer: C

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Question 16

A sole trader's business is considered a separate legal entity from its owner. What is the main reason for this separation?

Correct A. To limit the owner's personal liability

B. To simplify tax compliance

C. To increase the business's creditworthiness

D. To reduce the owner's control over the business

Correct Answer: A

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Question 17

A company's articles of association can be amended by a majority vote of its shareholders. What is the main purpose of this amendment?

A. To change the company's business objectives

Correct B. To increase the company's authorized capital

C. To reduce the company's dividend payout ratio

D. To change the company's management structure

Correct Answer: B

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Question 18

A producer's production function is given by Q = 2L^0.5 * K^0.5. What is the marginal product of labor (MPL) when L = 4 and K = 9?

A. 1

Correct B. 2

C. 3

D. 4

Correct Answer: B

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Question 19

A country's trade balance is given by TB = X - M, where X is the value of exports and M is the value of imports. If X = 100 and M = 80, what is the trade balance?

Correct A. 10

B. 20

C. 30

D. 40

Correct Answer: A

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Question 20

A firm's demand function is given by Q = 100 - 2P. What is the price elasticity of demand (PED) when Q = 50?

A. 0.5

B. 1

Correct C. 2

D. 3

Correct Answer: C

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Question 21

The concept of risk management in commerce involves identifying and assessing potential risks to a business. Which of the following is a key step in the risk management process?

Correct A. Risk identification

B. Risk assessment

C. Risk mitigation

D. Risk acceptance

Correct Answer: A

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Question 22

A company is considering the introduction of a new product line. Which of the following is a key factor to consider in the decision-making process?

Correct A. Market demand

B. Production costs

C. Marketing strategy

D. Financial resources

Correct Answer: A

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Question 23

A consumer has purchased a product that has a defect. Which of the following is a key right of the consumer under consumer protection law?

A. The right to a refund

B. The right to repair

Correct C. The right to compensation

D. The right to a replacement

Correct Answer: C

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Question 24

A company is considering the use of a sole trader business structure. Which of the following is a key advantage of this structure?

A. Easy to set up

B. Low administrative costs

Correct C. Flexibility in decision-making

D. Limited liability

Correct Answer: C

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Question 25

A company has a production process that involves the use of a machine. Which of the following is a key factor to consider in the design of the machine?

A. Efficiency

Correct B. Safety

C. Reliability

D. Cost-effectiveness

Correct Answer: B

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