POST UTME OAU 2017 Commerce | Objective

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Question 1
A firm specializes in producing a single product, which is a type of commodity. The commodity is characterized by its homogeneity and perfect substitutability. What is the name of this type of commodity?
A. Standardized commodity
B. Differentiated product
C. Homogeneous product
Correct D. Perfectly competitive commodity

Correct Answer: D

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Question 2
A bank's balance sheet is a statement that presents its financial position at a particular point in time. What is the name of the section of the balance sheet that shows the bank's assets?
A. Liabilities
B. Equity
Correct C. Assets
D. Revenue

Correct Answer: C

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Question 3
A firm's production function is given by the equation Q = 2L^0.5K^0.5. If the firm 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. ₦400
B. ₦800
C. ₦1200
Correct D. ₦1600

Correct Answer: D

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Question 4
A firm's revenue function is given by the equation R = 2Q^2. If the firm produces 4 units of output, what is the total revenue?
A. ₦16
B. ₦32
C. ₦64
Correct D. ₦128

Correct Answer: D

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Question 5
A firm's cost function is given by the equation C = 2L + 3K. If the firm hires 2 units of labor and 1 unit of capital, what is the total cost?
A. ₦10
B. ₦20
Correct C. ₦30
D. ₦40

Correct Answer: C

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Question 6
In a monopolistically competitive market, a firm's demand curve is downward sloping due to the presence of close substitutes. However, the firm's marginal revenue curve is not necessarily downward sloping. What is the reason for this?
Correct A. The firm's marginal revenue curve is downward sloping because the firm is a price taker.
B. The firm's marginal revenue curve is downward sloping because the firm is a price maker.
C. The firm's marginal revenue curve is downward sloping because the firm's demand curve is downward sloping.
D. The firm's marginal revenue curve is downward sloping because the firm is a monopolist.

Correct Answer: A

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Question 7
A company is considering two different production processes for a new product. Process A has a higher fixed cost but a lower variable cost per unit, while Process B has a lower fixed cost but a higher variable cost per unit. Which process should the company choose if it expects to produce 10,000 units?
Correct A. Process A
B. Process B
C. It depends on the company's expectations for future production levels.
D. The company should choose the process with the lower total cost.

Correct Answer: A

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Question 8
A firm is considering two different advertising strategies. Strategy A involves a high upfront cost but a low ongoing cost, while Strategy B involves a low upfront cost but a high ongoing cost. Which strategy should the firm choose if it expects to advertise for 5 years?
Correct A. Strategy A
B. Strategy B
C. It depends on the firm's expectations for future advertising needs.
D. The firm should choose the strategy with the lower total cost.

Correct Answer: A

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Question 9
A company is considering two different modes of transportation for its products. Mode A involves a high fixed cost but a low variable cost per unit, while Mode B involves a low fixed cost but a high variable cost per unit. Which mode should the company choose if it expects to transport 10,000 units?
Correct A. Mode A
B. Mode B
C. It depends on the company's expectations for future transportation needs.
D. The company should choose the mode with the lower total cost.

Correct Answer: A

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Question 10
A firm is considering two different types of insurance policies. Policy A has a high premium but a low deductible, while Policy B has a low premium but a high deductible. Which policy should the firm choose if it expects to make a claim every year?
A. Policy A
Correct B. Policy B
C. It depends on the firm's expectations for future claims.
D. The firm should choose the policy with the lower premium.

Correct Answer: B

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Question 11
In a perfectly competitive market, the supply curve is upward-sloping because
Correct A. Firms are willing to supply more at a higher price
B. Firms are willing to supply less at a lower price
C. Firms are willing to supply more at a lower price
D. Firms are willing to supply less at a higher price

Correct Answer: A

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Question 12
A firm's break-even point is the point at which its total revenue equals its total cost. Which of the following is NOT a factor that affects a firm's break-even point?
A. Fixed costs
B. Variable costs
C. Selling price
Correct D. Interest rates

Correct Answer: D

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Question 13
A firm's marketing mix consists of four Ps: product, price, promotion, and
Correct A. Place
B. People
C. Process
D. Product

Correct Answer: A

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Question 14
A firm's supply curve is upward-sloping because
Correct A. Firms are willing to supply more at a higher price
B. Firms are willing to supply less at a lower price
C. Firms are willing to supply more at a lower price
D. Firms are willing to supply less at a higher price

Correct Answer: A

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Question 15
A firm's break-even point is the point at which its total revenue equals its total cost. Which of the following is a factor that affects a firm's break-even point?
A. Fixed costs
B. Variable costs
Correct C. Selling price
D. Interest rates

Correct Answer: C

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Question 16
In a warehouse with a storage capacity of 10,000 units, the inventory level is currently at 8,000 units. If the warehouse receives a shipment of 2,000 units and 500 units are sold, what is the new inventory level?
A. 6,000
Correct B. 7,500
C. 8,500
D. 9,000

Correct Answer: B

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Question 17
A company has two branches, one in Lagos and the other in Abuja. The Lagos branch has a profit of ₦1,500,000 and the Abuja branch has a loss of ₦800,000. What is the overall profit of the company?
Correct A. ₦1,700,000
B. ₦1,300,000
C. ₦1,000,000
D. ₦900,000

Correct Answer: A

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Question 18
A firm produces two products, A and B. Product A requires 2 hours of labor and 3 units of raw material, while product B requires 3 hours of labor and 2 units of raw material. If the firm has 120 hours of labor and 180 units of raw material available, how many units of product A and product B should the firm produce to maximize profit?
Correct A. (40, 60)
B. (60, 40)
C. (50, 50)
D. (30, 70)

Correct Answer: A

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Question 19
A life insurance policy has a premium of ₦50,000 per year and a benefit of ₦1,000,000. If the policyholder dies after 5 years, what is the total benefit paid to the beneficiary?
Correct A. ₦5,000,000
B. ₦4,500,000
C. ₦4,000,000
D. ₦3,500,000

Correct Answer: A

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Question 20
A company uses the marketing mix to promote its product. If the company increases the price of the product by 10% and reduces the advertising budget by 20%, what is the new marketing mix?
Correct A. (10, 80)
B. (20, 80)
C. (15, 85)
D. (12, 82)

Correct Answer: A

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Question 21
The marketing mix of a product is often described as the 4 Ps. Which of the following is NOT one of the 4 Ps?
A. Product
B. Price
C. Place
Correct D. Profit

Correct Answer: D

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Question 22
A company is considering exporting its products to a foreign market. What is the primary advantage of exporting?
A. Increased market share
B. Reduced competition
Correct C. Access to new customers
D. Improved profit margins

Correct Answer: C

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Question 23
A warehouse is used to store goods before they are shipped to customers. What is the primary benefit of using a warehouse?
A. Reduced transportation costs
Correct B. Improved inventory management
C. Increased storage capacity
D. Enhanced customer service

Correct Answer: B

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Question 24
A bank is considering offering a new loan product to its customers. What is the primary consideration for the bank?
A. Interest rate
B. Loan term
Correct C. Credit risk
D. Fees and charges

Correct Answer: C

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Question 25
An insurance company is considering offering a new policy to its customers. What is the primary consideration for the insurance company?
A. Premium rate
B. Policy term
Correct C. Risk assessment
D. Claims handling

Correct Answer: C

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