POST UTME VERITAS UNIVERSITY 2022 Commerce | Objective

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Question 1
In a perfectly competitive market, the law of diminishing marginal utility implies that as the quantity of a good increases, the marginal utility of each additional unit of the good
Correct A. decreases
B. remains constant
C. increases
D. becomes negative

Correct Answer: A

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Question 2
A company's sole trader is responsible for all the profits and losses of the business. What is the name of this type of business organization?
A. Partnership
B. Limited Liability Company
Correct C. Sole Trader
D. Cooperative Society

Correct Answer: C

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Question 3
A firm's production function is given by Q = 2L^0.5 + 3K^0.5. If the firm's current level of labor and capital are L = 4 and K = 9, respectively, what is the firm's current level of output?
A. 13
Correct B. 15
C. 17
D. 19

Correct Answer: B

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Question 4
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 on the two goods, what is the maximum amount of good A that the consumer can buy?
A. 3
Correct B. 4
C. 5
D. 6

Correct Answer: B

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Question 5
A firm's cost function is given by C(Q) = 2Q^2 + 3Q. If the firm produces 10 units of output, what is the firm's total cost?
A. 50
B. 60
Correct C. 70
D. 80

Correct Answer: C

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Question 6
A company is considering exporting its products to a foreign market. Which of the following is a key consideration in the company's decision-making process?
A. Political stability in the foreign market
Correct B. Economic conditions in the foreign market
C. Cultural differences between the company's home market and the foreign market
D. Language barriers in the foreign market

Correct Answer: B

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Question 7
A consumer purchases a product with a 10% discount. If the original price of the product is ₦1,500, what is the amount of the discount?
Correct A. ₦150
B. ₦150.00
C. ₦150.00
D. ₦150

Correct Answer: A

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Question 8
A company's marketing strategy involves creating a sense of urgency among its customers. Which of the following tactics is most likely to achieve this goal?
A. Offering a limited-time discount
Correct B. Creating a sense of scarcity
C. Providing excellent customer service
D. Using social media to promote the product

Correct Answer: B

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Question 9
A consumer is considering purchasing a product that has a 2-year warranty. Which of the following is a key benefit of the warranty?
A. The product is more likely to be durable
Correct B. The consumer has peace of mind
C. The consumer can return the product if it is defective
D. The consumer can upgrade the product

Correct Answer: B

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Question 10
A company is considering outsourcing its production to a foreign country. Which of the following is a key consideration in the company's decision-making process?
Correct A. Labor costs in the foreign country
B. Economic conditions in the foreign country
C. Cultural differences between the company's home market and the foreign market
D. Language barriers in the foreign market

Correct Answer: A

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Question 11
In a perfectly competitive market, the supply curve is horizontal and the demand curve is downward-sloping. What is the equilibrium price and quantity in such a market?
Correct A. ₦100, 100 units
B. ₦120, 80 units
C. ₦150, 60 units
D. ₦180, 40 units

Correct Answer: A

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Question 12
A company's production function is given by Q = 2L^0.5K^0.5. If the company wants to produce 400 units of output, and the wage rate is ₦50 per hour, and the rental rate is ₦20 per unit of capital, what is the optimal combination of labor and capital?
Correct A. L = 100, K = 100
B. L = 50, K = 200
C. L = 200, K = 50
D. L = 100, K = 200

Correct Answer: A

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Question 13
A firm's demand function is given by Q = 100 - 2P. If the firm's marginal cost is ₦20, and the fixed cost is ₦100, what is the optimal price and quantity?
A. P = ₦40, Q = 60
B. P = ₦30, Q = 70
Correct C. P = ₦20, Q = 80
D. P = ₦10, Q = 90

Correct Answer: C

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Question 14
A company's marketing mix is given by the 4 Ps: Product, Price, Place, and Promotion. If the company wants to increase sales, which of the following would be the most effective strategy?
A. Increase the price of the product
B. Improve the quality of the product
Correct C. Increase the advertising budget
D. Improve the distribution channels

Correct Answer: C

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Question 15
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm wants to produce 400 units of output, and the wage rate is ₦50 per hour, and the rental rate is ₦20 per unit of capital, what is the optimal combination of labor and capital?
Correct A. L = 100, K = 100
B. L = 50, K = 200
C. L = 200, K = 50
D. L = 100, K = 200

Correct Answer: A

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Question 16
A company is considering the introduction of a new product line. The product line is expected to generate additional revenue of ₦1.2 billion in the first year, ₦1.5 billion in the second year, and ₦1.8 billion in the third year. If the company's cost of capital is 12% per annum, what is the present value of the expected cash flows from the new product line?
A. ₦1.1 billion
Correct B. ₦1.2 billion
C. ₦1.3 billion
D. ₦1.4 billion

Correct Answer: B

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Question 17
A sole trader, Mr. A, has a business income of ₦500,000 and a business expense of ₦200,000. If he has a personal income of ₦300,000 and a personal expense of ₦100,000, what is his total taxable income?
A. ₦600,000
B. ₦700,000
Correct C. ₦800,000
D. ₦900,000

Correct Answer: C

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Question 18
A company has a market share of 30% in the industry. If the industry's total sales revenue is ₦10 billion, what is the company's market value?
A. ₦3 billion
B. ₦3.5 billion
Correct C. ₦4 billion
D. ₦4.5 billion

Correct Answer: C

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Question 19
A company is considering the purchase of a new machine that costs ₦5 million. The machine is expected to generate additional revenue of ₦2 million per year for 5 years. If the company's cost of capital is 15% per annum, what is the net present value of the investment?
A. ₦1.5 million
Correct B. ₦2 million
C. ₦2.5 million
D. ₦3 million

Correct Answer: B

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Question 20
A company has a debt of ₦10 million and an equity of ₦20 million. If the company's debt-to-equity ratio is 0.5, what is the company's total capital?
A. ₦15 million
B. ₦20 million
Correct C. ₦25 million
D. ₦30 million

Correct Answer: C

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Question 21
A company's financial statements show a decrease in revenue and an increase in expenses. The company's net income has decreased by 15%. What is the most likely reason for this decrease in net income?
Correct A. Decrease in revenue
B. Increase in expenses
C. Increase in assets
D. Decrease in liabilities

Correct Answer: A

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Question 22
A sole trader has a business income of ₦1,500,000 and business expenses of ₦800,000. What is the sole trader's net profit?
Correct A. ₦700,000
B. ₦1,000,000
C. ₦1,300,000
D. ₦1,500,000

Correct Answer: A

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Question 23
A company has a market value of ₦10,000,000 and a book value of ₦8,000,000. What is the company's market-to-book ratio?
Correct A. 1.25
B. 1.5
C. 1.75
D. 2.0

Correct Answer: A

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Question 24
A company has a debt-to-equity ratio of 0.8. If the company's total debt is ₦6,000,000, what is the company's total equity?
A. ₦7,500,000
Correct B. ₦8,000,000
C. ₦8,500,000
D. ₦9,000,000

Correct Answer: B

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Question 25
A company has a return on equity (ROE) of 15%. If the company's net income is ₦1,200,000, what is the company's total equity?
Correct A. ₦8,000,000
B. ₦8,500,000
C. ₦9,000,000
D. ₦10,000,000

Correct Answer: A

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