POST UTME SUMMIT UNIVERSITY 2017 Commerce | Objective

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Question 1
A company's memorandum of association may provide for the issue of redeemable preference shares. What are the characteristics of redeemable preference shares?
A. Redeemable preference shares have a fixed dividend rate.
B. Redeemable preference shares have a variable dividend rate.
C. Redeemable preference shares have a higher claim on assets than ordinary shares.
D. Redeemable preference shares have a lower claim on assets than ordinary shares.
Question 2
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
C. 48
D. 64
Question 3
A company's articles of association may provide for a share capital of ₦1,000,000, divided into 100,000 ordinary shares of ₦10 each. Calculate the number of shares that can be issued to a new investor who pays ₦50,000.
A. 10,000 shares
B. 20,000 shares
C. 50,000 shares
D. 100,000 shares
Question 4
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
C. 17
D. 19
Question 5
In a perfectly competitive market, the supply curve is upward-sloping because of the law of increasing
A. diminishing returns
B. increasing opportunity costs
C. decreasing marginal utility
D. constant returns to scale
Question 6
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
B. ₦20,000
C. ₦30,000
D. ₦40,000
Question 7
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
C. 4 units
D. 5 units
Question 8
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
B. 3 units
C. 4 units
D. 5 units
Question 9
A company's insurance policy covers losses due to fire, theft, and natural disasters. The policy has a deductible of ₦50,000 and a premium of ₦200,000 per annum. Calculate the expected loss ratio for the company, assuming an average annual loss of ₦150,000.
A. 0.75
B. 0.80
C. 0.85
D. 0.90
Question 10
A company's memorandum of association may provide for the issue of preference shares. What are the characteristics of preference shares?
A. Preference shares have a fixed dividend rate.
B. Preference shares have a variable dividend rate.
C. Preference shares have a higher claim on assets than ordinary shares.
D. Preference shares have a lower claim on assets than ordinary shares.
Question 11
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
B. 10
C. 15
D. 20
Question 12
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
C. The government sets the price
D. The market is free to operate
Question 13
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
B. ₦3000
C. ₦3500
D. ₦4000
Question 14
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
B. 60
C. 80
D. 100
Question 15
A bank's balance sheet shows a cash balance of ₦500,000, a loan portfolio of ₦2,000,000, and a deposit account of ₦3,000,000. Calculate the bank's liquidity ratio, assuming a cash reserve requirement of 10%.
A. 0.25
B. 0.30
C. 0.35
D. 0.40

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