POST UTME VERITAS UNIVERSITY 2025 Commerce | Objective

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Question 1
A firm specializes in producing a single product, and its production function is given by the equation ( Q = 100L^0.5K^0.25 ), where Q is the quantity produced, L is labor, and K is capital. If the firm's current labor and capital inputs are 25 workers and ₦100,000 respectively, what is the maximum quantity of the product that can be produced?
A. 200 units
B. 250 units
Correct C. 300 units
D. 350 units

Correct Answer: C

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Question 2
A company has a 10% dividend yield on its shares, and the current market price of the shares is ₦50. If the company pays an annual dividend of ₦5 per share, what is the expected return on investment (ROI) for an investor who buys the shares at the current market price?
A. 5%
Correct B. 10%
C. 15%
D. 20%

Correct Answer: B

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Question 3
A firm is considering two different production processes to produce a product. Process A requires an initial investment of ₦100,000 and has a fixed cost of ₦20,000 per unit produced. Process B requires an initial investment of ₦150,000 and has a fixed cost of ₦15,000 per unit produced. If the firm produces 1,000 units of the product, what is the total cost of production for each process?
Correct A. Process A: ₦1,500,000; Process B: ₦1,200,000
B. Process A: ₦1,200,000; Process B: ₦1,500,000
C. Process A: ₦1,000,000; Process B: ₦1,200,000
D. Process A: ₦1,200,000; Process B: ₦1,000,000

Correct Answer: A

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Question 4
A consumer has a budget of ₦10,000 to spend on two goods, X and Y. The prices of the goods are ₦2,000 and ₦3,000 respectively. If the consumer spends ₦6,000 on good X, how much is left for good Y?
A. ₦2,000
Correct B. ₦3,000
C. ₦4,000
D. ₦5,000

Correct Answer: B

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Question 5
A firm has a production function given by the equation ( Q = 100L^0.5K^0.25 ), where Q is the quantity produced, L is labor, and K is capital. If the firm's current labor and capital inputs are 25 workers and ₦100,000 respectively, what is the marginal product of labor (MPL) when the firm produces 200 units of the product?
A. 0.5
Correct B. 1.0
C. 1.5
D. 2.0

Correct Answer: B

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Question 6
A company's marketing strategy involves a mix of advertising and public relations. Which of the following best describes the primary goal of this strategy?
Correct A. To increase brand awareness
B. To generate leads
C. To build customer loyalty
D. To create a competitive advantage

Correct Answer: A

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Question 7
A sole trader's business is affected by the following factors: market demand, competition, and government regulations. Which of the following best describes the impact of these factors on the business?
A. The factors increase the business's revenue
Correct B. The factors decrease the business's revenue
C. The factors have no impact on the business's revenue
D. The factors increase the business's costs

Correct Answer: B

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Question 8
A company's production process involves the following steps: design, manufacturing, and quality control. Which of the following best describes the primary goal of the quality control step?
A. To reduce production costs
B. To increase production efficiency
Correct C. To ensure product quality
D. To improve customer satisfaction

Correct Answer: C

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Question 9
A foreign trade agreement between two countries involves the exchange of goods and services. Which of the following best describes the primary benefit of this agreement?
A. Increased trade barriers
Correct B. Reduced trade costs
C. Improved economic growth
D. Increased competition

Correct Answer: B

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Question 10
A company's risk management strategy involves the following steps: risk identification, risk assessment, and risk mitigation. Which of the following best describes the primary goal of the risk mitigation step?
Correct A. To reduce the likelihood of a risk event
B. To increase the impact of a risk event
C. To transfer the risk to another party
D. To accept the risk

Correct Answer: A

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Question 11
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 greater than the market wage.
B. The marginal revenue product of labor is less than the market wage.
Correct C. The marginal revenue product of labor is equal to the market wage.
D. The marginal revenue product of labor is unrelated to the market wage.

Correct Answer: C

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Question 12
A firm's production function is given by Q = 2L^0.5K^0.5. If the price of labor is 10 per unit and the price of capital is 20 per unit, what is the optimal level of labor and capital?
A. L = 4, K = 4
Correct B. L = 16, K = 1
C. L = 1, K = 16
D. L = 4, K = 16

Correct Answer: B

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Question 13
A company is considering two different marketing strategies: Strategy A, which involves a 10% increase in advertising expenditure, and Strategy B, which involves a 20% increase in sales force. Which strategy is likely to have a greater impact on sales?
A. Strategy A
Correct B. Strategy B
C. Both strategies are equally effective
D. Neither strategy is effective

Correct Answer: B

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Question 14
A firm's revenue function is given by R = 100L - 2L^2. If the firm's marginal revenue is 50 per unit, what is the optimal level of production?
A. L = 5
Correct B. L = 10
C. L = 15
D. L = 20

Correct Answer: B

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Question 15
A company is considering two different pricing strategies: Strategy A, which involves a 10% increase in price, and Strategy B, which involves a 20% decrease in price. Which strategy is likely to have a greater impact on sales?
A. Strategy A
Correct B. Strategy B
C. Both strategies are equally effective
D. Neither strategy is effective

Correct Answer: B

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Question 16
In a perfectly competitive market, the law of diminishing marginal utility implies that the demand curve for a firm's product is likely to be
A. inelastic
Correct B. elastic
C. unit elastic
D. perfectly inelastic

Correct Answer: B

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Question 17
A company's break-even point is the point at which its total revenue equals its total fixed costs and variable costs. If the company's total fixed costs are ₦120,000 and its variable costs are ₦50 per unit, and it sells its product at ₦100 per unit, how many units must it sell to break even?
A. 1000
B. 1200
Correct C. 1500
D. 1800

Correct Answer: C

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Question 18
A firm's production function is given by Q = 2L^(1/2)K^(1/2), where Q is output, L is labor, and K is capital. If the firm wants to produce 16 units of output, and it has 4 units of labor and 9 units of capital, how much more capital does it need to produce 16 units of output?
A. 1
B. 2
Correct C. 3
D. 4

Correct Answer: C

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Question 19
A company has the following budget constraint: 2X + 3Y = 12, where X is the number of units of good X produced and Y is the number of units of good Y produced. If the company wants to produce 4 units of good X, how many units of good Y can it produce?
A. 2
Correct B. 3
C. 4
D. 5

Correct Answer: B

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Question 20
A firm's demand function is given by P = 100 - 2Q, where P is price and Q is quantity. If the firm wants to maximize its revenue, how many units should it produce?
A. 20
Correct B. 30
C. 40
D. 50

Correct Answer: B

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Question 21
A firm specializes in producing a single product, which is a type of electronic device. The production process involves several stages, including design, prototyping, and manufacturing. If the firm decides to outsource the design stage to a third-party vendor, what type of risk is the firm taking on?
A. Operational risk
Correct B. Strategic risk
C. Financial risk
D. Reputational risk

Correct Answer: B

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Question 22
A company is considering expanding its operations to a new market. The company has identified several potential locations, but each location has its own unique characteristics, such as different consumer preferences and regulatory requirements. What type of analysis should the company conduct to determine which location is the most suitable?
A. SWOT analysis
B. Porter's Five Forces analysis
Correct C. PESTEL analysis
D. Boston Consulting Group matrix

Correct Answer: C

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Question 23
A consumer is considering purchasing a product from a company that has a history of producing high-quality products. However, the consumer is also aware that the company has been involved in some controversies in the past. What type of risk is the consumer taking on by purchasing the product?
A. Financial risk
Correct B. Reputational risk
C. Operational risk
D. Strategic risk

Correct Answer: B

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Question 24
A firm is considering entering a new market, but the firm is concerned about the potential risks involved. What type of analysis should the firm conduct to determine the potential risks and opportunities in the new market?
Correct A. SWOT analysis
B. Porter's Five Forces analysis
C. PESTEL analysis
D. Boston Consulting Group matrix

Correct Answer: A

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Question 25
A company is considering outsourcing some of its operations to a third-party vendor. What type of risk is the company taking on by outsourcing its operations?
Correct A. Operational risk
B. Strategic risk
C. Financial risk
D. Reputational risk

Correct Answer: A

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