POST UTME SUMMIT UNIVERSITY 2017 Commerce | Objective

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Question 1 View Details
In a perfectly competitive market, the supply curve is upward-sloping because of the law of increasing
Correct A. diminishing returns
B. increasing costs
C. decreasing marginal revenue
D. constant returns to scale

Correct Answer: A

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Question 2 View Details
A company's break-even point is the point at which its total revenue equals its total
A. fixed costs
B. variable costs
Correct C. total costs
D. net income

Correct Answer: C

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Question 3 View Details
A firm's demand curve is downward-sloping because of the law of
Correct A. diminishing marginal utility
B. increasing marginal cost
C. decreasing marginal revenue
D. constant price elasticity

Correct Answer: A

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Question 4 View Details
A company's financial leverage ratio is calculated by dividing its total debt by its
A. total assets
B. total equity
Correct C. total liabilities
D. total revenue

Correct Answer: C

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Question 5 View Details
A firm's cost of capital is the minimum return required by investors to invest in the firm, and it is calculated by adding the risk-free rate to the
A. expected return on equity
B. expected return on assets
C. expected return on debt
Correct D. risk premium

Correct Answer: D

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Question 6 View Details
In a perfectly competitive market, the supply curve is upward-sloping because of the law of increasing
Correct A. diminishing returns
B. increasing opportunity costs
C. decreasing marginal utility
D. constant returns to scale

Correct Answer: A

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Question 7 View Details
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current output is 16 units and the wage rate is ₦100 per hour, what is the minimum amount of capital it must have to produce 16 units of output?
A. 10
Correct B. 20
C. 30
D. 40

Correct Answer: B

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Question 8 View Details
A firm's revenue function is given by R = 100x - 2x^2. If the firm's current price is ₦50 per unit, what is the maximum revenue it can earn?
A. ₦2500
Correct B. ₦3000
C. ₦3500
D. ₦4000

Correct Answer: B

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Question 9 View Details
A firm's cost function is given by C = 50 + 20L + 10K. If the firm's current output is 100 units and the wage rate is ₦50 per hour, what is the minimum amount of capital it must have to produce 100 units of output?
A. 5
Correct B. 10
C. 15
D. 20

Correct Answer: B

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Question 10 View Details
A firm's profit function is given by π = 100x - 2x^2 - 50 - 20L - 10K. If the firm's current output is 50 units and the wage rate is ₦50 per hour, what is the maximum profit it can earn?
A. ₦2500
Correct B. ₦3000
C. ₦3500
D. ₦4000

Correct Answer: B

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Question 11 View Details
In a perfectly competitive market, the law of supply states that as the price of a commodity increases, the quantity supplied will
A. decrease
Correct B. increase
C. remain constant
D. become elastic

Correct Answer: B

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Question 12 View Details
A firm's production function is given by Q = 2L^0.5 K^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. 24
B. 36
Correct C. 48
D. 64

Correct Answer: C

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Question 13 View Details
A consumer has a budget of ₦1000 and a preference for two goods, A and B. The prices of the goods are ₦200 and ₦300, respectively. If the consumer spends all of their budget, what is the consumer's optimal consumption bundle?
A. A = 2, B = 1
Correct B. A = 1, B = 2
C. A = 3, B = 0
D. A = 0, B = 3

Correct Answer: B

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Question 14 View Details
A firm's demand function is given by Q = 100 - 2P. If the firm's current price is P = 20, what is the firm's current quantity demanded?
A. 40
Correct B. 60
C. 80
D. 100

Correct Answer: B

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Question 15 View Details
A consumer has a utility function given by U = 2A + 3B. If the consumer's current consumption bundle is A = 2 and B = 3, what is the consumer's current utility?
A. 13
B. 15
Correct C. 17
D. 19

Correct Answer: C

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Question 16 View Details
A firm's production function is given by Q = 2L^0.5H^0.5, where L is labor and H is capital. If the firm wants to increase its output by 20% while keeping labor constant, what percentage increase in capital is required?
A. 10%
Correct B. 20%
C. 30%
D. 40%

Correct Answer: B

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Question 17 View Details
A consumer has a budget of ₦1000 and a preference for two goods, A and B. The prices of A and B are ₦200 and ₦300 respectively. If the consumer spends all of their budget, what is the maximum amount of good B that the consumer can buy?
A. 2 units
Correct B. 3 units
C. 4 units
D. 5 units

Correct Answer: B

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Question 18 View Details
A firm's cost function is given by C = 2L + 3H, where L is labor and H is capital. If the firm wants to minimize its costs while producing 100 units of output, what is the optimal combination of labor and capital?
Correct A. L = 20, H = 30
B. L = 30, H = 20
C. L = 40, H = 10
D. L = 50, H = 5

Correct Answer: A

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Question 19 View Details
A consumer has a budget of ₦500 and a preference for two goods, A and B. The prices of A and B are ₦100 and ₦200 respectively. If the consumer spends all of their budget, what is the maximum amount of good A that the consumer can buy?
Correct A. 2 units
B. 3 units
C. 4 units
D. 5 units

Correct Answer: A

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Question 20 View Details
A firm's revenue function is given by R = 2Q^2, where Q is the quantity sold. If the firm wants to maximize its revenue, what is the optimal quantity to produce?
A. 2 units
B. 3 units
Correct C. 4 units
D. 5 units

Correct Answer: C

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Question 21 View Details
In a market economy, the law of supply and demand determines the price of a product. However, in a command economy, the government sets the price. Which of the following is a characteristic of a command economy?
A. The government controls the means of production
B. The price is determined by the law of supply and demand
Correct C. The government sets the price
D. The market is free to operate

Correct Answer: C

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Question 22 View Details
A company has a production function 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 company wants to produce 100 units of output, and the cost of labor is ₦100 per unit and the cost of capital is ₦200 per unit, what is the minimum cost of production?
A. ₦10,000
Correct B. ₦20,000
C. ₦30,000
D. ₦40,000

Correct Answer: B

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Question 23 View Details
A consumer has a utility function given by U = 2x + 3y, where x and y are the quantities of two goods consumed. If the prices of the two goods are ₦5 and ₦10 respectively, and the consumer has a budget of ₦50, what is the optimal bundle of goods?
A. (5, 5)
Correct B. (10, 5)
C. (5, 10)
D. (10, 10)

Correct Answer: B

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Question 24 View Details
A firm has a production function 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 wants to produce 100 units of output, and the cost of labor is ₦100 per unit and the cost of capital is ₦200 per unit, what is the minimum cost of production?
A. ₦10,000
Correct B. ₦20,000
C. ₦30,000
D. ₦40,000

Correct Answer: B

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Question 25 View Details
A consumer has a utility function given by U = 2x + 3y, where x and y are the quantities of two goods consumed. If the prices of the two goods are ₦5 and ₦10 respectively, and the consumer has a budget of ₦50, what is the optimal bundle of goods?
A. (5, 5)
Correct B. (10, 5)
C. (5, 10)
D. (10, 10)

Correct Answer: B

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