Practice Post UTME OAU commerce 2020 Past Questions

Question 1

In a perfectly competitive market, the law of diminishing marginal utility implies that the demand curve for a firm's product is likely to be:

A. Vertical

Correct B. Horizontal

C. Inelastic

D. Perfectly Elastic

Correct Answer: B

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Question 2

A firm's production function is given by Q = 2L^(1/2)K^(1/2). If the firm's current labor and capital inputs are 4 and 9 respectively, what is the marginal product of labor?

A. 1

B. 2

Correct C. 3

D. 4

Correct Answer: C

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Question 3

A firm's revenue function is given by R = 100Q - 2Q^2. If the firm sells 10 units of its product, what is its total revenue?

A. 800

Correct B. 900

C. 1000

D. 1100

Correct Answer: B

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Question 4

A firm's cost function is given by C = 50 + 10L + 2K. If the firm's current labor and capital inputs are 5 and 8 respectively, what is its total cost?

A. 150

B. 200

Correct C. 250

D. 300

Correct Answer: C

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Question 5

A firm's profit function is given by π = R - C. If the firm's revenue and cost functions are R = 100Q - 2Q^2 and C = 50 + 10L + 2K respectively, what is the firm's profit when Q = 10, L = 5 and K = 8?

A. 50

B. 100

Correct C. 150

D. 200

Correct Answer: C

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Question 6

The demand for a product is given by the equation Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the price elasticity of demand is 0.5, find the price at which the quantity demanded is 50 units.

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 7

A company has two production plants, A and B. Plant A produces 100 units of a product per day, while plant B produces 150 units per day. If the total demand for the product is 250 units per day, what is the probability that plant A will produce more than 50% of the total demand?

A. 0.2

B. 0.4

C. 0.6

Correct D. 0.8

Correct Answer: D

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Question 8

A firm has a market share of 30% in a particular industry. If the industry's total market size is ₦100 million, what is the firm's revenue?

A. ₦20,000,000

Correct B. ₦30,000,000

C. ₦40,000,000

D. ₦50,000,000

Correct Answer: B

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Question 9

A company has a profit of ₦50,000 and a total revenue of ₦200,000. If the company's cost of goods sold is ₦100,000, what is its gross margin?

A. 0.2

B. 0.3

Correct C. 0.5

D. 0.7

Correct Answer: C

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Question 10

A firm has a market share of 20% in a particular industry. If the industry's total market size is ₦150 million, what is the firm's revenue?

A. ₦20,000,000

Correct B. ₦30,000,000

C. ₦40,000,000

D. ₦50,000,000

Correct Answer: B

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Question 11

A firm's production function is given by Q = 2L^0.5H^0.5, where Q is output, L is labor and H is capital. If the firm wants to increase output by 20% and labor by 15%, what percentage increase in capital is required?

A. 10%

B. 12%

Correct C. 15%

D. 18%

Correct Answer: C

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Question 12

A company is considering two marketing strategies: A and B. Strategy A has a probability of success of 0.6 and a cost of ₦100,000. Strategy B has a probability of success of 0.8 and a cost of ₦150,000. If the company wants to maximize its expected return, which strategy should it choose?

A. Strategy A

Correct B. Strategy B

C. Both strategies are equally good

D. Neither strategy is good

Correct Answer: B

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Question 13

A firm's demand function is given by Q = 100 - 2P, where Q is quantity demanded and P is price. If the firm wants to increase revenue by 20%, what price should it set?

A. ₦50

B. ₦60

Correct C. ₦70

D. ₦80

Correct Answer: C

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Question 14

A company has a production function Q = 2L^0.5H^0.5, where Q is output, L is labor and H is capital. If the company wants to increase output by 20% and labor by 15%, what percentage increase in capital is required?

A. 10%

B. 12%

Correct C. 15%

D. 18%

Correct Answer: C

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Question 15

A firm's demand function is given by Q = 100 - 2P, where Q is quantity demanded and P is price. If the firm wants to increase revenue by 20%, what price should it set?

A. ₦50

B. ₦60

Correct C. ₦70

D. ₦80

Correct Answer: C

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Question 16

The Consumer Protection Act of 1999 in Nigeria provides for the protection of consumers from unfair trade practices. Which of the following is a key provision of the Act?

A. The Act provides for the establishment of a Consumer Protection Council

Correct B. The Act provides for the protection of consumers from unfair trade practices

C. The Act provides for the establishment of a Consumer Protection Agency

D. The Act provides for the protection of consumers from environmental hazards

Correct Answer: B

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Question 17

A firm produces two goods, X and Y, using two inputs, labor (L) and capital (K). The production function for good X is given by QX = 2L^0.5 K^0.5. The production function for good Y is given by QY = 3L^0.25 K^0.75. If the firm has 100 units of labor and 200 units of capital, how many units of good X will it produce?

A. 50

B. 100

Correct C. 200

D. 300

Correct Answer: C

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Question 18

A bank has a reserve requirement of 10% and a cash reserve ratio of 5%. If the bank has 100 units of deposits, how much cash will it have to keep in reserve?

A. 5

Correct B. 10

C. 15

D. 20

Correct Answer: B

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Question 19

A firm imports goods from a foreign country. The foreign country has a tariff of 20% on the imported goods. If the firm imports 100 units of goods at a price of ₦100 per unit, what is the total cost of the imported goods?

A. ₦12000

Correct B. ₦14000

C. ₦16000

D. ₦18000

Correct Answer: B

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Question 20

A firm produces two goods, X and Y, using two inputs, labor (L) and capital (K). The production function for good X is given by QX = 2L^0.5 K^0.5. The production function for good Y is given by QY = 3L^0.25 K^0.75. If the firm has 100 units of labor and 200 units of capital, how many units of good Y will it produce?

A. 50

B. 100

C. 200

Correct D. 300

Correct Answer: D

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Question 21

In a perfectly competitive market, the supply curve is upward-sloping because of the law of increasing

A. diminishing marginal opportunity costs

Correct B. increasing marginal opportunity costs

C. decreasing marginal opportunity costs

D. constant marginal opportunity costs

Correct Answer: B

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Question 22

A firm's production function is given by Q = 2L + 3K, where Q is output, L is labor, and K is capital. If the firm wants to produce 12 units of output, how many units of capital will it need if it employs 4 units of labor?

A. 6

B. 8

Correct C. 10

D. 12

Correct Answer: C

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Question 23

A company has the following balance sheet: Assets = ₦100m, Liabilities = ₦50m, Equity = ₦50m. If the company issues 10m new shares at ₦5 per share, what will be the new equity value?

A. ₦60m

B. ₦65m

Correct C. ₦70m

D. ₦75m

Correct Answer: C

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Question 24

A firm's revenue function is given by R = 2Q^2 + 3Q, where R is revenue and Q is output. If the firm produces 5 units of output, what will be its revenue?

A. ₦35

B. ₦40

Correct C. ₦45

D. ₦50

Correct Answer: C

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Question 25

A company has the following cash flow statement: Cash Inflows = ₦100m, Cash Outflows = ₦80m. What will be the company's net cash flow?

Correct A. ₦10m

B. ₦15m

C. ₦20m

D. ₦25m

Correct Answer: A

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