Practice post utme aaua commerce 2017 Past Questions

Question 1

In the context of international trade, what is the primary function of the World Trade Organization (WTO)?

A. To regulate international trade agreements

Correct B. To provide a platform for countries to settle trade disputes

C. To promote economic growth and development

D. To establish trade policies and tariffs

Correct Answer: B

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Question 2

A company is considering the introduction of a new product line. The product has a high fixed cost but low variable cost. Which of the following is the most appropriate pricing strategy?

A. Penetration pricing

B. Skim pricing

C. Bundle pricing

Correct D. Value-based pricing

Correct Answer: D

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Question 3

A consumer is considering purchasing a product with a price of ₦1,500. The consumer has a budget of ₦2,000. What is the consumer's willingness to pay?

A. ₦1,000

Correct B. ₦1,200

C. ₦1,500

D. ₦2,000

Correct Answer: B

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Question 4

A company is considering the use of a new marketing channel. The company has a limited budget and wants to reach a large number of customers. Which of the following marketing channels is most appropriate?

Correct A. Social media

B. Email marketing

C. Television advertising

D. Print advertising

Correct Answer: A

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Question 5

A consumer is considering purchasing a product with a price of ₦1,200. The consumer has a budget of ₦1,500. What is the consumer's willingness to pay?

A. ₦1,000

Correct B. ₦1,200

C. ₦1,500

D. ₦2,000

Correct Answer: B

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Question 6

The concept of comparative advantage in international trade is based on the idea that countries should specialize in producing goods for which they have a lower opportunity cost. Which of the following is a correct example of comparative advantage?

Correct A. Country A produces 100 units of good X and 50 units of good Y, while Country B produces 50 units of good X and 100 units of good Y.

B. Country A produces 100 units of good X and 50 units of good Y, while Country B produces 50 units of good X and 100 units of good Y.

C. Country A produces 100 units of good X and 50 units of good Y, while Country B produces 50 units of good X and 100 units of good Y.

D. Country A produces 100 units of good X and 50 units of good Y, while Country B produces 50 units of good X and 100 units of good Y.

Correct Answer: A

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Question 7

A company has a capital structure consisting of 60% debt and 40% equity. If the cost of debt is 8% and the cost of equity is 12%, what is the weighted average cost of capital (WACC)?

Correct A. 9.6%

B. 10.4%

C. 11.2%

D. 12.0%

Correct Answer: A

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Question 8

A firm is considering two different modes of transportation: road and rail. The cost of transporting goods by road is ₦100 per unit, while the cost of transporting goods by rail is ₦80 per unit. If the firm expects to transport 100 units of goods, what is the total cost of transportation?

A. ₦8,000

Correct B. ₦10,000

C. ₦12,000

D. ₦14,000

Correct Answer: B

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Question 9

A company has a cash balance of ₦100,000 and a bank overdraft of ₦50,000. What is the company's net cash position?

Correct A. ₦50,000

B. ₦100,000

C. ₦150,000

D. ₦200,000

Correct Answer: A

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Question 10

A firm is considering two different modes of communication: email and phone. The cost of sending an email is ₦5 per unit, while the cost of making a phone call is ₦10 per unit. If the firm expects to send 100 emails and make 50 phone calls, what is the total cost of communication?

A. ₦500

B. ₦1,000

Correct C. ₦1,500

D. ₦2,000

Correct Answer: C

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Question 11

The concept of specialization in production is closely related to the idea of comparative advantage. Explain how specialization leads to increased efficiency and productivity in international trade.

Correct A. Specialization leads to increased efficiency and productivity because it allows countries to focus on producing goods and services in which they have a comparative advantage.

B. Specialization leads to decreased efficiency and productivity because it limits the variety of goods and services produced by a country.

C. Specialization has no impact on efficiency and productivity in international trade.

D. Specialization leads to increased efficiency and productivity because it allows countries to produce goods and services at a lower cost.

Correct Answer: A

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Question 12

A company is considering two different marketing strategies: a push strategy and a pull strategy. Explain the key differences between these two strategies and provide an example of each.

Correct A. A push strategy involves promoting a product to intermediaries, such as wholesalers and retailers, who then sell the product to consumers. A pull strategy involves promoting a product directly to consumers, who then demand the product from intermediaries.

B. A push strategy involves promoting a product directly to consumers, who then demand the product from intermediaries. A pull strategy involves promoting a product to intermediaries, such as wholesalers and retailers, who then sell the product to consumers.

C. A push strategy has no impact on the marketing mix.

D. A pull strategy involves promoting a product to both intermediaries and consumers.

Correct Answer: A

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Question 13

A consumer is considering purchasing a product that has a price of ₦1,500. The consumer has a budget of ₦2,000 and is willing to spend up to 75% of their budget on the product. Calculate the maximum amount the consumer is willing to pay for the product.

A. ₦1,500

Correct B. ₦1,500

C. ₦1,500

D. ₦1,500

Correct Answer: B

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Question 14

A company is considering exporting its product to a foreign market. The company has a fixed cost of ₦500,000 and a variable cost of ₦200 per unit. The company expects to sell 1,000 units in the foreign market. Calculate the company's total revenue and profit.

Correct A. Total revenue: ₦250,000; Total profit: ₦250,000

B. Total revenue: ₦250,000; Total profit: ₦50,000

C. Total revenue: ₦250,000; Total profit: ₦200,000

D. Total revenue: ₦250,000; Total profit: ₦300,000

Correct Answer: A

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Question 15

A consumer is considering purchasing a product that has a price of ₦1,000. The consumer has a budget of ₦2,000 and is willing to spend up to 50% of their budget on the product. Calculate the maximum amount the consumer is willing to pay for the product.

A. ₦1,000

Correct B. ₦1,000

C. ₦1,000

D. ₦1,000

Correct Answer: B

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Question 16

A firm's decision to outsource its logistics to a third-party logistics provider is an example of which type of risk management strategy?

A. Hedging

B. Diversification

Correct C. Outsourcing

D. Vertical integration

Correct Answer: C

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Question 17

A bank's cash reserve ratio is 10%. If the bank has a total deposit of ₦1,000,000, how much cash must it reserve?

Correct A. ₦100,000

B. ₦200,000

C. ₦300,000

D. ₦400,000

Correct Answer: A

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Question 18

A firm's cost of capital is 12%. If it invests ₦1,000,000 at this rate, what will be its expected return?

Correct A. ₦120,000

B. ₦180,000

C. ₦240,000

D. ₦300,000

Correct Answer: A

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Question 19

A firm's break-even point is ₦50,000. If it sells 100 units at ₦500 each, what is its profit?

A. ₦20,000

B. ₦30,000

C. ₦40,000

Correct D. ₦50,000

Correct Answer: D

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Question 20

A firm's inventory turnover ratio is 4 times. If it has an average inventory value of ₦100,000, what is its cost of goods sold?

A. ₦400,000

B. ₦500,000

C. ₦600,000

Correct D. ₦800,000

Correct Answer: D

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Question 21

A company is considering two marketing strategies: one that targets a niche market with a high-end product and another that targets a mass market with a low-end product. Which strategy is more likely to result in higher profits?

Correct A. Niche market strategy

B. Mass market strategy

C. Both strategies are equally likely to result in higher profits

D. It depends on the company's resources and capabilities

Correct Answer: A

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Question 22

A sole trader is considering hiring an employee to help with the business. What are the tax implications of this decision?

Correct A. The sole trader will be liable for the employee's taxes

B. The employee will be liable for their own taxes

C. The sole trader will not be liable for the employee's taxes

D. It depends on the employee's tax status

Correct Answer: A

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Question 23

A company is considering outsourcing its logistics to a third-party provider. What are the benefits of this decision?

A. Reduced costs

B. Increased efficiency

C. Improved customer service

Correct D. All of the above

Correct Answer: D

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Question 24

A consumer is considering purchasing a product with a 10-year warranty. What are the implications of this decision?

A. The consumer will have to pay for repairs or replacements after 10 years

B. The consumer will have to pay for repairs or replacements before 10 years

Correct C. The consumer will not have to pay for repairs or replacements

D. It depends on the product's condition after 10 years

Correct Answer: C

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Question 25

A company is considering entering into a contract with a supplier. What are the key terms that the company should include in the contract?

A. Price, quantity, and delivery terms

B. Payment terms, warranty, and liability

Correct C. All of the above

D. None of the above

Correct Answer: C

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