POST UTME AAUA 2025 Commerce | Objective

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Question 1
In a perfectly competitive market, the supply curve is upward-sloping because of the law of increasing
Correct A. diminishing returns
B. increasing costs
C. decreasing supply
D. increasing demand

Correct Answer: A

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Question 2
A company's financial statements include the following information: Net Income = ₦1250, Total Assets = ₦25000, Total Liabilities = ₦15000. What is the company's Return on Equity (ROE)?
Correct A. 0.05
B. 0.10
C. 0.15
D. 0.20

Correct Answer: A

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Question 3
A consumer protection agency is investigating a complaint about a company's advertising practices. The company claims that its ads are 'substantially truthful' but the agency argues that they are 'misleading'. Which of the following is a key difference between these two claims?
A. Truthfulness vs. accuracy
B. Intent vs. effect
Correct C. Substantially truthful vs. misleading
D. Commercial speech vs. non-commercial speech

Correct Answer: C

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Question 4
A firm is considering two different production processes: one that requires an initial investment of ₦10000 and another that requires an initial investment of ₦20000. If the firm expects to produce 100 units of output per year for 5 years, what is the present value of the expected cash flows from each process?
A. ₦50000
Correct B. ₦60000
C. ₦70000
D. ₦80000

Correct Answer: B

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Question 5
A company's financial statements include the following information: Net Income = ₦15000, Total Assets = ₦30000, Total Liabilities = ₦20000. What is the company's Debt-to-Equity Ratio?
A. 0.50
Correct B. 0.67
C. 0.75
D. 0.83

Correct Answer: B

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Question 6
A company's production function is given by Q = 100L^0.5K^0.5, where Q is the quantity produced, L is the labor input, and K is the capital input. If the company increases its labor input from 100 units to 121 units, and its capital input from 100 units to 121 units, by how much will the quantity produced increase?
A. 10 units
Correct B. 20 units
C. 30 units
D. 40 units

Correct Answer: B

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Question 7
A firm's revenue function is given by R(x) = 2x^2 + 10x, where x is the number of units sold. If the firm sells 5 units, what is its profit?
A. ₦50
Correct B. ₦60
C. ₦70
D. ₦80

Correct Answer: B

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Question 8
A consumer's utility function is given by U(x, y) = 2x + 3y, where x is the quantity of good X and y is the quantity of good Y. If the consumer's income is ₦100 and the prices of good X and good Y are ₦5 and ₦3 respectively, how many units of good X should the consumer buy?
A. 10 units
Correct B. 15 units
C. 20 units
D. 25 units

Correct Answer: B

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Question 9
A firm's cost function is given by C(x) = 2x^2 + 5x, where x is the number of units produced. If the firm produces 10 units, what is its total cost?
A. ₦150
B. ₦200
Correct C. ₦250
D. ₦300

Correct Answer: C

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Question 10
A consumer's budget constraint is given by 2x + 3y = 100, where x is the quantity of good X and y is the quantity of good Y. If the consumer's utility function is U(x, y) = 2x + 3y, what is the consumer's optimal consumption bundle?
Correct A. (20, 30)
B. (30, 20)
C. (40, 10)
D. (10, 40)

Correct Answer: A

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Question 11
In a sole proprietorship, the owner's personal assets are
Correct A. liable for business debts
B. not liable for business debts
C. liable for business profits
D. not liable for business losses

Correct Answer: A

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Question 12
A company's articles of association can be amended by
A. a simple majority vote
Correct B. a two-thirds majority vote
C. a unanimous vote
D. by a court order

Correct Answer: B

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Question 13
The primary purpose of a limited liability company is to
Correct A. limit the liability of its owners
B. increase the liability of its owners
C. provide tax benefits to its owners
D. provide management benefits to its owners

Correct Answer: A

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Question 14
A consumer protection law that prohibits unfair trade practices is
Correct A. Consumer Protection Act
B. Fair Trade Act
C. Competition Act
D. Consumer Rights Act

Correct Answer: A

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Question 15
A cargo insurance policy that covers the risk of loss or damage to goods during transit is
A. all-risk policy
B. named-perils policy
C. open-perils policy
Correct D. transit policy

Correct Answer: D

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Question 16
A firm's risk management strategy involves diversification, hedging, and insurance. Which of the following is NOT a benefit of diversification?
A. Reduced risk exposure
Correct B. Increased potential for high returns
C. Improved cash flow management
D. Enhanced reputation

Correct Answer: B

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Question 17
A consumer protection agency is responsible for enforcing consumer rights. Which of the following is a key provision of the Consumer Protection Act?
Correct A. Prohibition of unfair contract terms
B. Right to withdraw from a contract
C. Protection of consumer data
D. Compulsory arbitration

Correct Answer: A

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Question 18
A firm's warehousing and stock control system involves the use of barcodes, RFID tags, and inventory management software. Which of the following is a benefit of using RFID tags?
Correct A. Improved inventory accuracy
B. Enhanced security features
C. Increased storage capacity
D. Reduced labor costs

Correct Answer: A

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Question 19
A firm's home and foreign trade activities involve the importation and exportation of goods. Which of the following is a key consideration in determining the most suitable mode of transportation?
A. Distance and time
Correct B. Cost and reliability
C. Security and customs clearance
D. Environmental impact

Correct Answer: B

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Question 20
A firm's business law obligations involve compliance with relevant laws and regulations. Which of the following is a key provision of the Companies and Allied Matters Act?
A. Requirement for annual general meetings
B. Prohibition of insider trading
C. Protection of minority shareholders
Correct D. Compulsory audit of financial statements

Correct Answer: D

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Question 21
Determine the total revenue generated by a company that sells 500 units of a product at ₦250 each, and incurs a fixed cost of ₦150,000, and a variable cost of ₦120 per unit.
A. ₦120,000
B. ₦150,000
C. ₦175,000
Correct D. ₦200,000

Correct Answer: D

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Question 22
A company has two warehouses, A and B. Warehouse A has 200 units of a product, while Warehouse B has 300 units. If 50 units are transferred from Warehouse A to Warehouse B, what is the new ratio of units in Warehouse A to units in Warehouse B?
A. 1:1
B. 1:2
Correct C. 2:3
D. 3:4

Correct Answer: C

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Question 23
A sole trader has an initial capital of ₦100,000 and incurs a profit of ₦50,000 in the first year. If the profit is reinvested, what is the total capital after 3 years?
A. ₦225,000
B. ₦250,000
C. ₦275,000
Correct D. ₦300,000

Correct Answer: D

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Question 24
A company uses a just-in-time inventory system. If the lead time is 5 days, and the daily demand is 100 units, what is the maximum inventory level?
A. 500 units
B. 750 units
C. 1000 units
Correct D. 1250 units

Correct Answer: D

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Question 25
A company has a warehouse with a capacity of 1000 units. If the current inventory level is 800 units, and the daily demand is 50 units, what is the maximum time the warehouse can operate without reordering?
A. 10 days
B. 15 days
Correct C. 20 days
D. 25 days

Correct Answer: C

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