POST UTME SKYLINE UNIVERSITY 2020 Commerce | Objective

Are you preparing for POST UTME SKYLINE 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
A sole trader's business is considered a separate legal entity from its owner. However, this separation is not absolute. Discuss the implications of this separation on the sole trader's personal liability.
A. The sole trader's personal liability is completely eliminated.
Correct B. The sole trader's personal liability is reduced, but not eliminated.
C. The sole trader's personal liability is increased.
D. The sole trader's personal liability remains unchanged.

Correct Answer: B

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Question 2
A company's memorandum of association is a document that outlines the company's constitution and rules. What is the purpose of this document?
A. To outline the company's business objectives.
Correct B. To outline the company's constitution and rules.
C. To outline the company's management structure.
D. To outline the company's financial policies.

Correct Answer: B

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Question 3
A consumer has purchased a product that has a manufacturing defect. The consumer is entitled to a refund or replacement. What is the legal basis for this entitlement?
A. The Sale of Goods Act.
Correct B. The Consumer Protection Act.
C. The Companies Act.
D. The Contract Act.

Correct Answer: B

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Question 4
A company has purchased an insurance policy to cover against business risks. What is the purpose of this policy?
A. To cover against business losses.
Correct B. To cover against business risks.
C. To cover against personal liabilities.
D. To cover against employee injuries.

Correct Answer: B

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Question 5
A warehouse has a storage capacity of 1000 units. The warehouse is currently storing 800 units. What is the percentage of storage capacity utilized?
A. 20%
B. 30%
Correct C. 40%
D. 50%

Correct Answer: C

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Question 6
In a just-in-time (JIT) inventory system, what is the primary goal of the vendor-managed inventory (VMI) program?
A. To reduce inventory costs by minimizing stock levels
Correct B. To improve supply chain visibility and responsiveness
C. To enhance customer satisfaction through faster delivery
D. To increase inventory turnover by reducing stockouts

Correct Answer: B

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Question 7
A company is considering the implementation of a warehouse management system (WMS) to improve its inventory management. What are the primary benefits of a WMS?
A. Improved inventory accuracy, reduced labor costs, and increased productivity
Correct B. Enhanced supply chain visibility, improved order fulfillment, and reduced inventory costs
C. Increased storage capacity, improved material handling, and reduced energy consumption
D. Improved customer service, reduced shipping costs, and increased sales

Correct Answer: B

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Question 8
A consumer purchases a product online and receives a defective item. What is the consumer's primary recourse under the Consumer Protection Act?
A. To return the product and receive a full refund
B. To exchange the product for a new one
Correct C. To seek compensation for damages and losses
D. To file a complaint with the relevant consumer protection agency

Correct Answer: C

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Question 9
A company is considering the implementation of a just-in-time (JIT) inventory system. What are the primary advantages of JIT?
Correct A. Reduced inventory costs, improved supply chain visibility, and enhanced customer satisfaction
B. Increased inventory turnover, reduced stockouts, and improved material handling
C. Improved product quality, reduced waste, and increased productivity
D. Reduced shipping costs, improved order fulfillment, and increased sales

Correct Answer: A

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Question 10
A consumer purchases a product and discovers that it is counterfeit. What are the consumer's primary rights under the Consumer Protection Act?
A. To return the product and receive a full refund
B. To exchange the product for a new one
Correct C. To seek compensation for damages and losses
D. To file a complaint with the relevant consumer protection agency

Correct Answer: C

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Question 11
A sole trader's business is considered a separate legal entity from the owner's personal assets. However, in the event of a lawsuit, the owner's personal assets may still be at risk. Which of the following best describes this situation?
A. Separate legal entity with no personal liability
Correct B. Separate legal entity with personal liability
C. No separate legal entity with personal liability
D. No separate legal entity with no personal liability

Correct Answer: B

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Question 12
A company's marketing strategy involves creating a brand identity that appeals to a specific demographic. Which of the following marketing mix elements is most closely related to this strategy?
A. Product
B. Price
Correct C. Promotion
D. Place

Correct Answer: C

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Question 13
A warehouse's inventory management system uses a first-in, first-out (FIFO) method to track stock levels. Which of the following is a potential disadvantage of this method?
A. Increased storage costs
B. Reduced stock obsolescence
Correct C. Difficulty in tracking stock levels
D. Inefficient use of storage space

Correct Answer: C

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Question 14
A manufacturing company specializes in producing a single product line. Which of the following is a potential advantage of this specialization?
A. Increased production costs
B. Reduced product variety
Correct C. Improved product quality
D. Increased market share

Correct Answer: C

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Question 15
A consumer protection law requires businesses to provide clear and accurate product labeling. Which of the following is a potential consequence of non-compliance?
A. Financial penalties
B. Product recall
C. Loss of business reputation
Correct D. All of the above

Correct Answer: D

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Question 16
A company is considering two different production methods for its product. Method A requires an initial investment of ₦1,500,000 and produces 10,000 units per month. Method B requires an initial investment of ₦2,000,000 and produces 15,000 units per month. If the selling price of each unit is ₦500, and the variable cost per unit is ₦200, which production method should the company choose?
A. Method A
Correct B. Method B
C. Both methods are equally profitable
D. Neither method is profitable

Correct Answer: B

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Question 17
A firm is considering two different advertising strategies for its product. Strategy A involves a one-time payment of ₦500,000 for a 30-second commercial during a popular TV show. Strategy B involves a monthly payment of ₦50,000 for a series of 12 commercials on a local radio station. If the firm expects to sell 10,000 units of the product in the next quarter, which advertising strategy should it choose?
Correct A. Strategy A
B. Strategy B
C. Both strategies are equally effective
D. Neither strategy is effective

Correct Answer: A

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Question 18
A company is considering two different transportation methods for its products. Method A involves hiring a truck for ₦50,000 per trip, with a capacity of 10,000 units. Method B involves hiring a train for ₦100,000 per trip, with a capacity of 20,000 units. If the company expects to transport 30,000 units in the next quarter, which transportation method should it choose?
A. Method A
Correct B. Method B
C. Both methods are equally effective
D. Neither method is effective

Correct Answer: B

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Question 19
A consumer protection agency is considering two different methods for resolving consumer complaints. Method A involves a formal hearing with a panel of three judges, while Method B involves a mediation session with a single mediator. If the agency expects to resolve 100 complaints in the next quarter, which method should it choose?
A. Method A
Correct B. Method B
C. Both methods are equally effective
D. Neither method is effective

Correct Answer: B

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Question 20
A firm is considering two different production methods for its product. Method A involves a one-time investment of ₦1,000,000 and produces 5,000 units per month. Method B involves a monthly investment of ₦50,000 and produces 10,000 units per month. If the firm expects to sell 20,000 units in the next quarter, which production method should it choose?
A. Method A
Correct B. Method B
C. Both methods are equally profitable
D. Neither method is profitable

Correct Answer: B

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Question 21
In a perfectly competitive market, the supply curve is upward-sloping because of the law of increasing marginal opportunity costs. However, in a monopolistically competitive market, the supply curve is also upward-sloping due to the presence of advertising and product differentiation. Which of the following is a correct statement regarding the supply curve in a monopolistically competitive market?
A. The supply curve is downward-sloping.
B. The supply curve is upward-sloping due to increasing marginal opportunity costs.
Correct C. The supply curve is upward-sloping due to advertising and product differentiation.
D. The supply curve is horizontal.

Correct Answer: C

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Question 22
A company has the following budget constraint: 2x + 3y = 12. If the price of x is 2 and the price of y is 3, what is the opportunity cost of producing one more unit of x?
A. 1 unit of y
Correct B. 2 units of y
C. 3 units of y
D. 4 units of y

Correct Answer: B

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Question 23
A firm is considering two different production processes. Process A requires an initial investment of ₦100,000 and has a variable cost of ₦50 per unit. Process B requires an initial investment of ₦150,000 and has a variable cost of ₦30 per unit. If the firm expects to produce 10,000 units, which process should it choose?
A. Process A
Correct B. Process B
C. Both processes are equally profitable
D. Neither process is profitable

Correct Answer: B

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Question 24
A country's GDP can be calculated using the following formula: GDP = C + I + G + (X - M). If the country's consumption is ₦500 billion, investment is ₦200 billion, government spending is ₦300 billion, exports are ₦400 billion, and imports are ₦200 billion, what is the country's GDP?
A. ₦1.2 trillion
Correct B. ₦1.3 trillion
C. ₦1.4 trillion
D. ₦1.5 trillion

Correct Answer: B

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Question 25
A firm is considering two different marketing strategies. Strategy A involves a high level of advertising and a low level of sales promotion. Strategy B involves a low level of advertising and a high level of sales promotion. If the firm expects to sell 10,000 units, which strategy should it choose?
Correct A. Strategy A
B. Strategy B
C. Both strategies are equally effective
D. Neither strategy is effective

Correct Answer: A

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