Practice Post UTME OAU commerce 2025 Past Questions

Question 1

In a perfectly competitive market, what is the relationship between the marginal revenue product of labor and the market wage?

A. The marginal revenue product of labor is equal to the market wage.

B. The marginal revenue product of labor is greater than the market wage.

Correct C. The marginal revenue product of labor is less than the market wage.

D. The marginal revenue product of labor is unrelated to the market wage.

Correct Answer: C

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Question 2

A company's cost of capital is 8% per annum. If it invests in a project with a 10-year life and a net present value of ₦120,000, what is the project's internal rate of return?

A. 6%

Correct B. 8%

C. 10%

D. 12%

Correct Answer: B

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Question 3

A firm's production function is given by Q = 2L^0.5K^0.5. If the price of labor is ₦50 per unit and the price of capital is ₦100 per unit, what is the firm's optimal level of labor and capital?

A. L = 4, K = 16

B. L = 16, K = 4

Correct C. L = 8, K = 8

D. L = 2, K = 2

Correct Answer: C

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Question 4

A company has a cash flow of ₦100,000 in the first year, ₦120,000 in the second year, and ₦150,000 in the third year. If the cost of capital is 10% per annum, what is the company's present value?

A. ₦100,000

Correct B. ₦120,000

C. ₦150,000

D. ₦180,000

Correct Answer: B

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Question 5

A firm's demand function is given by Q = 100 - 2P. If the price elasticity of demand is 2, what is the firm's optimal price?

A. ₦20

Correct B. ₦30

C. ₦40

D. ₦50

Correct Answer: B

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Question 6

In a perfectly competitive market, the law of supply states that as the price of a commodity increases, the quantity supplied will

A. increase

Correct B. decrease

C. remain constant

D. become elastic

Correct Answer: B

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Question 7

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

A. 16

B. 18

Correct C. 20

D. 22

Correct Answer: C

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Question 8

A company has the following inventory levels: 100 units of product A, 200 units of product B, and 300 units of product C. If the company uses the First-In-First-Out (FIFO) method of inventory valuation, what is the total value of the inventory?

A. ₦120,000

B. ₦150,000

Correct C. ₦180,000

D. ₦200,000

Correct Answer: C

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Question 9

A firm's marketing mix is given by the 4 Ps: Product, Price, Place, and Promotion. If the firm wants to increase sales, which of the following would be the most effective way to do so?

A. Increase the price of the product

B. Improve the product's quality

Correct C. Increase the advertising budget

D. Reduce the product's price

Correct Answer: C

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Question 10

A company has the following financial statements: Income Statement and Balance Sheet. If the company's net income is ₦100,000 and its total assets are ₦500,000, what is the company's return on equity (ROE)?

A. 20%

Correct B. 25%

C. 30%

D. 35%

Correct Answer: B

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Question 11

The concept of comparative advantage in international trade is based on the idea that countries should specialize in producing goods for which they have a lower opportunity cost. Which of the following is a correct example of comparative advantage?

A. Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 50 units of wheat and 100 units of cloth.

B. Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 50 units of wheat and 150 units of cloth.

Correct C. Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 50 units of wheat and 50 units of cloth.

D. Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 50 units of wheat and 200 units of cloth.

Correct Answer: C

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Question 12

A consumer protection agency has the power to investigate complaints about unfair business practices. What is the primary purpose of this agency?

Correct A. To protect consumers from unfair business practices and ensure fair competition.

B. To regulate business practices and ensure compliance with laws and regulations.

C. To investigate complaints about unfair business practices and take enforcement action.

D. To provide education and awareness about consumer rights and responsibilities.

Correct Answer: A

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Question 13

A firm is considering two different production processes for a new product. Process A requires an initial investment of ₦10 million and produces 100 units per day, while Process B requires an initial investment of ₦5 million and produces 50 units per day. What is the opportunity cost of choosing Process A over Process B?

A. ₦5 million

B. ₦10 million

Correct C. ₦15 million

D. ₦20 million

Correct Answer: C

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Question 14

A company is considering exporting its products to a foreign market. What is the primary benefit of exporting?

Correct A. Increased revenue and profit

B. Reduced competition and market share

C. Improved brand recognition and reputation

D. Enhanced market research and analysis

Correct Answer: A

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Question 15

A consumer has purchased a product that has a defect. What is the primary responsibility of the consumer in this situation?

Correct A. To report the defect to the manufacturer and request a replacement

B. To return the product to the store and request a refund

C. To contact the consumer protection agency and file a complaint

D. To ignore the defect and continue using the product

Correct Answer: A

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Question 16

A firm is considering two different production processes for a new product. Process A requires an initial investment of ₦10 million and produces 100 units per day, while Process B requires an initial investment of ₦5 million and produces 50 units per day. What is the opportunity cost of choosing Process B over Process A?

A. ₦5 million

Correct B. ₦10 million

C. ₦15 million

D. ₦20 million

Correct Answer: B

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Question 17

A company is considering importing a product from a foreign supplier. What is the primary benefit of importing?

Correct A. Increased revenue and profit

B. Reduced competition and market share

C. Improved brand recognition and reputation

D. Enhanced market research and analysis

Correct Answer: A

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Question 18

A consumer has purchased a product that has a defect. What is the primary responsibility of the manufacturer in this situation?

Correct A. To report the defect to the consumer and request a replacement

B. To return the product to the store and request a refund

C. To contact the consumer protection agency and file a complaint

D. To ignore the defect and continue producing the product

Correct Answer: A

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Question 19

A firm is considering two different production processes for a new product. Process A requires an initial investment of ₦10 million and produces 100 units per day, while Process B requires an initial investment of ₦5 million and produces 50 units per day. What is the opportunity cost of choosing Process A over Process B?

A. ₦5 million

B. ₦10 million

C. ₦15 million

D. ₦20 million

Correct Answer: VIEW ANSWER

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Question 20

The concept of comparative advantage in international trade is based on the idea that countries should specialize in producing goods for which they have a lower opportunity cost. Which of the following is a correct example of comparative advantage?

A. Country A produces 100 units of good X and 50 units of good Y, while Country B produces 50 units of good X and 100 units of good Y.

Correct B. Country A produces 100 units of good X and 50 units of good Y, while Country B produces 50 units of good X and 100 units of good Z.

C. Country A produces 100 units of good X and 50 units of good Y, while Country B produces 50 units of good X and 100 units of good W.

D. Country A produces 100 units of good X and 50 units of good Y, while Country B produces 50 units of good X and 100 units of good V.

Correct Answer: B

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Question 21

A consumer protection law requires that all goods sold in a country must be labeled with their country of origin. Which of the following is a correct example of a country of origin label?

Correct A. A label that reads 'Made in China'

B. A label that reads 'Product of USA'

C. A label that reads 'Imported from Japan'

D. A label that reads 'Exported to Nigeria'

Correct Answer: A

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Question 22

A firm produces two goods, X and Y, using two inputs, labor and capital. The production function for good X is given by QX = 2L^0.5K^0.5, where QX is the quantity of good X produced, L is the amount of labor used, and K is the amount of capital used. The production function for good Y is given by QY = 3L^0.7K^0.3, where QY is the quantity of good Y produced. If the firm uses 100 units of labor and 50 units of capital, what is the quantity of good X produced?

A. 50

B. 100

Correct C. 200

D. 250

Correct Answer: C

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Question 23

A bank offers a loan of ₦100,000 at an interest rate of 10% per annum compounded annually. If the loan is repaid after 5 years, what is the total amount paid by the borrower?

Correct A. ₦163,922

B. ₦164,000

C. ₦164,100

D. ₦164,200

Correct Answer: A

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Question 24

A firm's production function is given by Q = 2L^0.5K^0.5, where Q is the quantity produced, L is the amount of labor used, and K is the amount of capital used. If the firm uses 100 units of labor and 50 units of capital, what is the marginal product of labor?

A. 0.5

Correct B. 1

C. 2

D. 5

Correct Answer: B

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Question 25

A consumer's budget constraint is given by 2X + 3Y = 100, where X and Y are the quantities of two goods consumed. If the consumer's income is ₦100 and the price of good X is ₦2, what is the quantity of good Y consumed?

A. 20

B. 30

Correct C. 40

D. 50

Correct Answer: C

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