POST UTME MOUNTAIN TOP UNIVERSITY 2020 Commerce | Objective

Are you preparing for POST UTME MOUNTAIN TOP UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2020 Commerce (Objective) questions designed to simulate the real exam environment.

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Question 1
In a market with perfect competition, the demand curve for a firm's product is given by the equation ( Q = 100 - 2P ). If the firm's marginal revenue (MR) is given by the equation ( MR = 50 - P ), find the equilibrium price and quantity.
Correct A. ( P = 25, Q = 75 )
B. ( P = 50, Q = 50 )
C. ( P = 75, Q = 25 )
D. ( P = 100, Q = 0 )

Correct Answer: A

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Question 2
A company's sole trader has an annual income of ₦1,500,000 and expenses of ₦800,000. If the company's tax rate is 20%, calculate the sole trader's net profit.
A. ₦250,000
Correct B. ₦300,000
C. ₦350,000
D. ₦400,000

Correct Answer: B

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Question 3
SHARED STIMULUS
| Advertising Claim | Actual Product Feature | | --- | --- | | Fastest car in the world | Average speed of 120 km/h | | Most fuel-efficient car | Fuel consumption of 10 liters/100km | | Best value for money | Price of ₦500,000 | | Most reliable car | Warranty period of 5 years |
A consumer protection agency has received complaints about a company's misleading advertising. The agency has collected the following data on the company's advertising claims and the actual product features:
A. The agency should take no action against the company.
B. The agency should issue a warning to the company.
Correct C. The agency should impose a fine on the company.
D. The agency should revoke the company's license.

Correct Answer: C

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Question 4
SHARED STIMULUS
| Year | Cash Flow | | --- | --- | | 0 | -₦100,000 | | 1 | ₦50,000 | | 2 | ₦100,000 | | 3 | ₦150,000 | | 4 | ₦200,000 |
A company is considering investing in a new project with the following cash flows:
A. The company should reject the project.
Correct B. The company should accept the project.
C. The company should wait for more information.
D. The company should negotiate with the project manager.

Correct Answer: B

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Question 5
SHARED STIMULUS
| Platform | Followers | Engagement | | --- | --- | --- | | Facebook | 100,000 | 10% | | Instagram | 50,000 | 5% | | Twitter | 20,000 | 2% |
A company's marketing strategy involves the use of social media platforms to promote its products. The company has the following data on its social media presence:
Correct A. The company should increase its social media advertising budget.
B. The company should decrease its social media advertising budget.
C. The company should maintain its current social media advertising budget.
D. The company should switch to a different marketing strategy.

Correct Answer: A

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Question 6
A consumer protection agency has been established to regulate the activities of businesses in a particular industry. Which of the following is a key responsibility of this agency?
A. To ensure that businesses comply with all relevant laws and regulations
Correct B. To investigate complaints from consumers and take action against businesses that have breached consumer rights
C. To promote fair competition among businesses in the industry
D. To provide training and education to businesses on consumer protection laws and regulations

Correct Answer: B

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Question 7
A firm is considering expanding its production capacity to meet increasing demand. However, this would require a significant investment in new equipment and technology. Which of the following production costs would be most affected by this expansion?
A. Fixed costs
Correct B. Variable costs
C. Semi-variable costs
D. Sunk costs

Correct Answer: B

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Question 8
A country has a trade deficit of 100 million and a trade surplus of 50 million with its trading partners. What is the overall balance of trade for this country?
A. Trade deficit of 50 million
Correct B. Trade surplus of 50 million
C. Trade deficit of 100 million
D. Trade surplus of 100 million

Correct Answer: B

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Question 9
A firm is considering entering a new market. Which of the following is a key consideration for the firm?
A. The level of competition in the market
B. The size of the market
C. The growth potential of the market
Correct D. All of the above

Correct Answer: D

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Question 10
A firm is considering outsourcing some of its production activities to a foreign country. Which of the following is a key advantage of this strategy?
Correct A. Lower labor costs
B. Access to new markets
C. Improved quality control
D. Reduced transportation costs

Correct Answer: A

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Question 11
A sole trader's business is not registered with the Corporate Affairs Commission (CAC). Which of the following is a consequence of this?
Correct A. The sole trader's business is not entitled to limited liability.
B. The sole trader's business is not required to file annual returns.
C. The sole trader's business is not eligible for tax deductions.
D. The sole trader's business is not subject to regulatory oversight.

Correct Answer: A

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Question 12
A company's articles of association specify that the company's shares are to be issued at a par value of ₦10. What is the par value of the company's shares?
A. ₦5
Correct B. ₦10
C. ₦20
D. ₦50

Correct Answer: B

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Question 13
A firm specializes in the production of textiles. Which of the following is a characteristic of specialization?
A. The firm produces a wide range of products.
Correct B. The firm produces a single product.
C. The firm produces a limited range of products.
D. The firm produces no products.

Correct Answer: B

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Question 14
A company uses the just-in-time (JIT) inventory system. Which of the following is a benefit of JIT?
A. Reduced inventory costs.
B. Improved product quality.
C. Increased production efficiency.
Correct D. All of the above.

Correct Answer: D

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Question 15
A firm uses the transportation cost minimization model to determine the optimal transportation route. Which of the following is a constraint of the model?
A. The cost of transportation is directly proportional to the distance traveled.
B. The cost of transportation is inversely proportional to the distance traveled.
Correct C. The firm has a fixed transportation budget.
D. The firm has a limited number of vehicles available.

Correct Answer: C

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Question 16
A bank's cash reserve ratio is 20%. If the bank has a total deposit of ₦10,000,000, how much cash must it reserve?
Correct A. ₦2,000,000
B. ₦1,500,000
C. ₦2,500,000
D. ₦3,000,000

Correct Answer: A

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Question 17
A company's marketing strategy involves a 10% discount on all products. If a customer buys a product worth ₦5,000, how much will they pay?
Correct A. ₦4,500
B. ₦4,000
C. ₦4,750
D. ₦5,000

Correct Answer: A

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Question 18
A warehouse has a storage capacity of 10,000 units. If it currently has 8,000 units and receives a shipment of 2,000 units, what is the new storage capacity?
A. 10,000
Correct B. 12,000
C. 8,000
D. 6,000

Correct Answer: B

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Question 19
A company exports goods worth ₦1,000,000 to a foreign country. If the exchange rate is 1 USD = 360 Naira, how much is the export worth in USD?
Correct A. 2,778.57
B. 2,500
C. 3,000
D. 3,500

Correct Answer: A

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Question 20
A consumer protection law states that a company must provide a 30-day warranty for all products. If a customer buys a product on January 1st, what is the last date for warranty claims?
A. February 1st
Correct B. February 28th
C. March 1st
D. March 31st

Correct Answer: B

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Question 21
A sole trader's business is registered under which of the following?
A. Partnership
B. Limited Liability Company
Correct C. Sole Proprietorship
D. Cooperative Society

Correct Answer: C

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Question 22
A consumer purchases a product with a price tag of ₦1,500. If the consumer pays with a ₦500 note and ₦1,000 in coins, what is the change due to the consumer?
A. ₦0
Correct B. ₦250
C. ₦500
D. ₦1,000

Correct Answer: B

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Question 23
A company's financial year ends on 31st December. What is the accounting period for the company?
Correct A. 1st January to 31st December
B. 1st January to 31st March
C. 1st April to 31st March
D. 1st June to 31st May

Correct Answer: A

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Question 24
A bank's reserve requirement is 10%. If the bank has ₦1,000,000 in deposits, how much must it keep in reserve?
A. ₦0
Correct B. ₦100,000
C. ₦200,000
D. ₦500,000

Correct Answer: B

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Question 25
A warehouse has a storage capacity of 10,000 units. If the warehouse is currently storing 8,000 units, what is the percentage of the warehouse's capacity that is currently being used?
A. 50%
B. 60%
Correct C. 80%
D. 90%

Correct Answer: C

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