POST UTME NILE UNIVERSITY 2023 Commerce | Objective

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Question 1
In a perfectly competitive market, the law of diminishing marginal utility is most relevant to the production of which of the following goods?
A. Giffen Goods
B. Normal Goods
Correct C. Inferior Goods
D. Superior Goods

Correct Answer: C

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Question 2
A firm's production function is given by Q = 2L^0.5 + 3K^0.5. If the firm's current inputs are L = 4 and K = 9, what is the marginal product of labor?
A. 1.5
Correct B. 2.5
C. 3.5
D. 4.5

Correct Answer: B

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Question 3
A company is considering two different advertising strategies. The first strategy involves a one-time payment of ₦100,000, while the second strategy involves a monthly payment of ₦10,000 for 12 months. Which strategy is more cost-effective?
Correct A. The one-time payment strategy
B. The monthly payment strategy
C. Both strategies are equally cost-effective
D. Neither strategy is cost-effective

Correct Answer: A

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Question 4
A firm's inventory level is given by the equation I = 2S + 3H, where S is the number of units sold and H is the number of units held in stock. If the firm sells 100 units and holds 50 units in stock, what is the new inventory level?
A. 150
Correct B. 200
C. 250
D. 300

Correct Answer: B

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Question 5
A company has a 10% chance of experiencing a loss of ₦100,000 and a 90% chance of experiencing no loss. What is the expected value of the company's loss?
A. ₦9,000
Correct B. ₦10,000
C. ₦11,000
D. ₦12,000

Correct Answer: B

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Question 6
A company's financial statements for the year ended December 31, 2022, are presented below. Calculate the company's return on equity (ROE) for the year.
A. 25%
B. 30%
Correct C. 35%
D. 40%

Correct Answer: C

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Question 7
A firm's production function is given by Q = 2L^0.5K^0.5, where Q is the quantity produced, L is the labor input, and K is the capital input. If the firm uses 100 units of labor and 400 units of capital, calculate the quantity produced.
A. 20
B. 30
Correct C. 40
D. 50

Correct Answer: C

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Question 8
A firm's demand function is given by Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the firm wants to maximize its revenue, what price should it charge?
A. 20
B. 30
Correct C. 40
D. 50

Correct Answer: C

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Question 9
A firm's cost function is given by C = 100 + 2L + 3K, where C is the total cost, L is the labor input, and K is the capital input. If the firm uses 50 units of labor and 200 units of capital, calculate the total cost.
A. 1500
B. 2000
Correct C. 2500
D. 3000

Correct Answer: C

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Question 10
A firm's revenue function is given by R = 100P - 2P^2, where R is the total revenue and P is the price. If the firm wants to maximize its revenue, what price should it charge?
A. 20
B. 30
Correct C. 40
D. 50

Correct Answer: C

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Question 11
A company is considering two marketing strategies for its new product. Strategy A involves a high initial investment in advertising, but the product is expected to have a long shelf life and low maintenance costs. Strategy B involves a lower initial investment in advertising, but the product has a shorter shelf life and higher maintenance costs. Which strategy is more likely to result in higher profits?
Correct A. Strategy A
B. Strategy B
C. Both strategies are equally likely to result in higher profits
D. Neither strategy is likely to result in higher profits

Correct Answer: A

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Question 12
A bank is considering a new loan product that offers a variable interest rate. The interest rate is expected to fluctuate based on market conditions. What type of risk is the bank taking on by offering this loan product?
A. Credit risk
B. Liquidity risk
Correct C. Market risk
D. Operational risk

Correct Answer: C

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Question 13
A company is considering outsourcing its production to a foreign country. What type of specialization is the company engaging in?
A. Vertical specialization
Correct B. Horizontal specialization
C. Product specialization
D. Process specialization

Correct Answer: B

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Question 14
A company has a policy of paying a fixed amount of money to its employees for every unit of product they sell. What type of insurance is the company using?
A. Life insurance
B. Health insurance
C. Disability insurance
Correct D. Commission insurance

Correct Answer: D

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Question 15
A country is considering imposing tariffs on imported goods to protect its domestic industry. What type of trade policy is the country engaging in?
Correct A. Protectionism
B. Free trade
C. Reciprocity
D. Most-favored-nation

Correct Answer: A

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Question 16
In a foreign trade transaction, a Nigerian exporter agrees to sell 1000 units of goods to a foreign buyer at the exchange rate of 1 = ₦450. If the exporter receives a payment of 5000, what is the amount in Nigerian Naira, rounded to the nearest naira?
A. ₦2250000
Correct B. ₦2500000
C. ₦2750000
D. ₦3000000

Correct Answer: B

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Question 17
A consumer protection agency receives a complaint from a customer who purchased a product online. The customer alleges that the product was not as described and was of poor quality. The agency investigates and finds that the product was indeed not as described. What is the agency's likely next step?
A. Issue a warning to the seller
Correct B. Order the seller to refund the customer's money
C. Ban the seller from selling on the platform
D. Close the case as it is not a serious offense

Correct Answer: B

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Question 18
A company is considering investing in a new project. The project has a high potential for returns, but it also carries a high level of risk. What is the primary consideration for the company when deciding whether to invest in the project?
A. The potential returns on investment
Correct B. The level of risk involved
C. The company's financial resources
D. The competition in the market

Correct Answer: B

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Question 19
A warehouse manager is responsible for storing and managing inventory for a company. The manager uses a first-in-first-out (FIFO) inventory system. What is the primary advantage of using a FIFO system?
A. It reduces the risk of inventory obsolescence
B. It minimizes the need for inventory tracking
Correct C. It ensures that the oldest inventory is sold first
D. It maximizes the use of warehouse space

Correct Answer: C

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Question 20
A bank offers a savings account with a 5% annual interest rate. If a customer deposits ₦100,000 into the account, how much will the customer have in the account after one year, assuming no withdrawals or deposits are made?
A. ₦105,000
B. ₦110,000
C. ₦115,000
Correct D. ₦120,000

Correct Answer: D

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Question 21
A bank's cash reserve ratio is 20%. If the bank has a total deposit of ₦1,000,000, what is the minimum amount of cash it must hold in reserve?
Correct A. ₦200,000
B. ₦250,000
C. ₦300,000
D. ₦400,000

Correct Answer: A

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Question 22
A company's break-even point is 80 units. If the selling price is ₦100 per unit and the variable cost is ₦60 per unit, what is the fixed cost?
A. ₦4,000
B. ₦6,000
Correct C. ₦8,000
D. ₦10,000

Correct Answer: C

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Question 23
A firm's demand function is given by Q = 100 - 2P. If the price elasticity of demand is -2, what is the price at which the firm should sell?
A. ₦20
B. ₦30
Correct C. ₦40
D. ₦50

Correct Answer: C

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Question 24
A logistics company has a warehouse with a capacity of 10,000 units. If the company receives a shipment of 5,000 units, what is the probability that the warehouse will be full?
A. 0.5
Correct B. 0.6
C. 0.7
D. 0.8

Correct Answer: B

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Question 25
A firm's cost function is given by C = 2Q^2 + 10Q + 100. If the firm produces 10 units, what is the total cost?
A. ₦1,100
B. ₦1,200
Correct C. ₦1,300
D. ₦1,400

Correct Answer: C

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