POST UTME AAUA 2022 Commerce | Objective

Are you preparing for POST UTME AAUA exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2022 Commerce (Objective) questions designed to simulate the real exam environment.

Practice these randomly selected questions to test your readiness.

Question 1
In a perfectly competitive market, the supply curve is perfectly elastic. What is the implication of this on the firm's ability to influence market price?
A. The firm can influence market price
Correct B. The firm cannot influence market price
C. The firm can influence market price, but only in the short run
D. The firm can influence market price, but only in the long run

Correct Answer: B

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Question 2
A consumer has a budget of ₦1000 and is considering purchasing two goods, A and B. The price of good A is ₦500 and the price of good B is ₦300. Using the budget constraint, what is the maximum number of units of good A that the consumer can purchase?
Correct A. 2 units
B. 3 units
C. 4 units
D. 5 units

Correct Answer: A

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Question 3
A firm is considering investing in a new project with a net present value (NPV) of ₦100,000. The cost of capital is 10%. What is the internal rate of return (IRR) of the project?
A. 10%
Correct B. 12%
C. 15%
D. 18%

Correct Answer: B

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Question 4
A company is considering launching a new product in a market with a high level of competition. The company has a market share of 20% and is considering increasing its market share to 30%. Using the Porter's Five Forces framework, what is the likely impact on the company's profitability?
A. Profitability will increase
Correct B. Profitability will decrease
C. Profitability will remain the same
D. Insufficient information to determine the impact

Correct Answer: B

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Question 5
A consumer is considering purchasing a product with a price of ₦500. The consumer has a utility function U(x) = 2x - x^2, where x is the number of units of the product consumed. Using the utility function, what is the maximum number of units of the product that the consumer will purchase?
A. 1 unit
Correct B. 2 units
C. 3 units
D. 4 units

Correct Answer: B

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Question 6
In a perfectly competitive market, the law of supply states that as the price of a good increases, the quantity supplied will
A. decrease
Correct B. increase
C. remain constant
D. move in the opposite direction

Correct Answer: B

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Question 7
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm wants to produce 16 units of output, and the price of labor is ₦100 per unit, and the price of capital is ₦200 per unit, what is the minimum cost of production?
A. ₦4000
Correct B. ₦8000
C. ₦12000
D. ₦16000

Correct Answer: B

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Question 8
A life insurance policy has a premium of ₦5000 per year, and a death benefit of ₦200000. If the probability of death within the next year is 0.05, what is the expected value of the policy?
A. ₦10000
Correct B. ₦15000
C. ₦20000
D. ₦25000

Correct Answer: B

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Question 9
A firm has a budget constraint of ₦100000, and wants to maximize its profit. If the price of good X is ₦200, and the price of good Y is ₦300, and the firm produces 20 units of good X and 10 units of good Y, what is the maximum profit?
A. ₦20000
Correct B. ₦25000
C. ₦30000
D. ₦35000

Correct Answer: B

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Question 10
A firm's production function is given by Q = 3L^0.5K^0.5. If the firm wants to produce 9 units of output, and the price of labor is ₦150 per unit, and the price of capital is ₦250 per unit, what is the minimum cost of production?
A. ₦4500
Correct B. ₦6000
C. ₦7500
D. ₦9000

Correct Answer: B

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Question 11
In a warehouse with a storage capacity of 10,000 units, the inventory level is currently at 8,000 units. If the warehouse receives a shipment of 2,000 units and 500 units are sold, what is the new inventory level?
A. 6,500
Correct B. 7,000
C. 8,500
D. 9,000

Correct Answer: B

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Question 12
A company has a policy of maintaining a cash reserve of 20% of its total assets. If the company's total assets are ₦10,000,000, what is the amount of cash reserve?
Correct A. ₦1,000,000
B. ₦2,000,000
C. ₦3,000,000
D. ₦4,000,000

Correct Answer: A

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Question 13
A consumer purchases a product for ₦5,000 and pays a 10% sales tax. What is the total amount paid by the consumer?
A. ₦5,500
Correct B. ₦5,600
C. ₦5,700
D. ₦5,800

Correct Answer: B

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Question 14
A bank offers a 5-year fixed deposit account with an interest rate of 12% per annum compounded annually. If the initial deposit is ₦100,000, what is the total amount at the end of the 5-year period?
Correct A. ₦163,922
B. ₦164,922
C. ₦165,922
D. ₦166,922

Correct Answer: A

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Question 15
A company has a policy of paying its employees a 10% bonus on their annual salary. If an employee's annual salary is ₦200,000, what is the bonus amount?
Correct A. ₦20,000
B. ₦22,000
C. ₦24,000
D. ₦26,000

Correct Answer: A

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Question 16
A company's production function is given by the equation Q = 100L^0.5K^0.5, where Q is the quantity produced, L is the number of labor hours, and K is the capital invested. If the company wants to increase its production by 20% while keeping labor hours constant at 100, how much capital should it invest?
A. ₦1250
B. ₦1500
Correct C. ₦1750
D. ₦2000

Correct Answer: C

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Question 17
A consumer has a budget of ₦1000 and a preference for two goods: X and Y. The prices of X and Y are ₦200 and ₦300 respectively. Using the indifference curve analysis, find the optimal combination of X and Y that the consumer will choose.
Correct A. ₦200X + ₦300Y = ₦1000
B. ₦300X + ₦200Y = ₦1000
C. ₦200X + ₦200Y = ₦1000
D. ₦300X + ₦300Y = ₦1000

Correct Answer: A

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Question 18
A company is considering two different marketing strategies: Strategy A and Strategy B. Strategy A involves a one-time investment of ₦500,000 and a monthly advertising expenditure of ₦50,000. Strategy B involves a one-time investment of ₦750,000 and a monthly advertising expenditure of ₦30,000. Using the break-even analysis, find the number of months it will take for the company to break even with each strategy.
A. 12 months
Correct B. 18 months
C. 24 months
D. 30 months

Correct Answer: B

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Question 19
A consumer has a utility function given by U(X, Y) = 2X + 3Y. The prices of X and Y are ₦200 and ₦300 respectively. Using the budget constraint, find the optimal combination of X and Y that the consumer will choose.
Correct A. ₦200X + ₦300Y = ₦1000
B. ₦300X + ₦200Y = ₦1000
C. ₦200X + ₦200Y = ₦1000
D. ₦300X + ₦300Y = ₦1000

Correct Answer: A

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Question 20
A company is considering two different production processes: Process A and Process B. Process A involves a fixed cost of ₦500,000 and a variable cost of ₦50 per unit produced. Process B involves a fixed cost of ₦750,000 and a variable cost of ₦30 per unit produced. Using the break-even analysis, find the number of units that must be produced to break even with each process.
A. 12,500 units
Correct B. 18,750 units
C. 25,000 units
D. 31,250 units

Correct Answer: B

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Question 21
A company has two production units, A and B, with production costs of ₦500,000 and ₦700,000 respectively. If the company produces 100 units of a product, and the selling price is ₦1,200 per unit, what is the minimum amount of money the company should allocate to unit A to maximize profit?
A. ₦300,000
B. ₦400,000
Correct C. ₦500,000
D. ₦600,000

Correct Answer: C

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Question 22
A sole trader has a business that generates ₦1,000,000 in revenue and ₦800,000 in expenses. If the sole trader's capital is ₦200,000, what is the amount of profit that the sole trader should declare for tax purposes?
A. ₦100,000
Correct B. ₦200,000
C. ₦300,000
D. ₦400,000

Correct Answer: B

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Question 23
A company has a warehouse with a capacity of 10,000 units. If the company receives 5,000 units of a product, what is the maximum amount of space that the company can allocate to the product?
A. 5,000 units
Correct B. 6,000 units
C. 7,000 units
D. 8,000 units

Correct Answer: B

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Question 24
A bank has a loan of ₦500,000 with an interest rate of 10% per annum. If the loan is for 5 years, what is the total amount that the bank will pay at the end of the loan period?
A. ₦750,000
B. ₦800,000
C. ₦850,000
Correct D. ₦900,000

Correct Answer: D

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Question 25
A company has a production line that produces 500 units of a product per day. If the company operates for 20 days, what is the total number of units produced?
A. 10,000 units
B. 12,000 units
Correct C. 15,000 units
D. 18,000 units

Correct Answer: C

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