POST UTME ABU 2018 Commerce | Objective

Are you preparing for POST UTME ABU exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2018 Commerce (Objective) questions designed to simulate the real exam environment.

Practice these randomly selected questions to test your readiness.

Question 1
In a sole trade business, what is the primary advantage of using a partnership structure?
Correct A. Increased capital base
B. Improved decision-making
C. Enhanced risk management
D. Simplified tax compliance

Correct Answer: A

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Question 2
A company has a production capacity of 100 units per day. If the demand for the product is 120 units per day, what is the level of excess demand?
Correct A. 20
B. 30
C. 40
D. 50

Correct Answer: A

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Question 3
A firm is considering two marketing strategies: product differentiation and market segmentation. Which strategy is more likely to increase market share?
Correct A. Product differentiation
B. Market segmentation
C. Both strategies are equally effective
D. Neither strategy is effective

Correct Answer: A

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Question 4
A company has a production cost of ₦100 per unit and a selling price of ₦150 per unit. What is the profit per unit?
Correct A. ₦50
B. ₦75
C. ₦100
D. ₦125

Correct Answer: A

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Question 5
A firm is considering two advertising strategies: print media and digital media. Which strategy is more likely to reach a younger audience?
A. Print media
Correct B. Digital media
C. Both strategies are equally effective
D. Neither strategy is effective

Correct Answer: B

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Question 6
A company is considering two marketing strategies: a mass marketing approach or a niche marketing approach. Which strategy is more likely to result in higher customer satisfaction?
A. Mass marketing
Correct B. Niche marketing
C. Both strategies are equally effective
D. Neither strategy is effective

Correct Answer: B

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Question 7
A sole trader is considering expanding their business by forming a partnership. What are the main advantages of forming a partnership?
Correct A. Increased capital, shared risk, and expertise
B. Reduced tax liability, increased flexibility
C. Improved reputation, increased customer base
D. None of the above

Correct Answer: A

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Question 8
A company is considering introducing a new product line. What is the main advantage of using a market research report to inform the decision?
Correct A. Reduced risk of market failure
B. Increased market share
C. Improved product design
D. None of the above

Correct Answer: A

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Question 9
A company is considering outsourcing its production to a foreign country. What is the main advantage of outsourcing?
Correct A. Reduced labor costs
B. Increased market share
C. Improved product quality
D. None of the above

Correct Answer: A

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Question 10
A company is considering introducing a new product line. What is the main disadvantage of using a market research report to inform the decision?
Correct A. Increased risk of market failure
B. Reduced market share
C. Improved product design
D. None of the above

Correct Answer: A

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Question 11
In a perfectly competitive market, the law of supply states that as the price of a good increases, the quantity supplied of that good will also increase. However, this is not always the case. What is the name of the phenomenon that occurs when the quantity supplied of a good decreases as the price of that good increases?
A. Giffen Goods
Correct B. Inferior Goods
C. Normal Goods
D. Veblen Goods

Correct Answer: B

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Question 12
A company is considering investing in a new project. The project has a net present value (NPV) of ₦1,500,000 and a payback period of 5 years. What is the internal rate of return (IRR) of the project?
A. 10%
B. 15%
Correct C. 20%
D. 25%

Correct Answer: C

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Question 13
A firm is producing a good with the following cost function: C(q) = 2q^2 + 10q + 100. If the firm is currently producing 10 units of the good, what is the marginal cost of producing the 11th unit?
A. ₦20
Correct B. ₦30
C. ₦40
D. ₦50

Correct Answer: B

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Question 14
A country is experiencing a trade deficit of ₦500 billion. If the country's GDP is ₦10 trillion, what is the trade deficit as a percentage of GDP?
A. 5%
Correct B. 10%
C. 15%
D. 20%

Correct Answer: B

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Question 15
A firm is considering exporting its product to a foreign market. The firm's production costs are as follows: labor costs = ₦100 per unit, raw materials costs = ₦50 per unit, and transportation costs = ₦20 per unit. If the firm sells its product for ₦200 per unit in the foreign market, what is the firm's profit per unit?
A. ₦30
B. ₦40
Correct C. ₦50
D. ₦60

Correct Answer: C

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Question 16
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 statements best describes the opportunity cost of a country?
Correct A. The amount of labor required to produce a good
B. The amount of capital required to produce a good
C. The amount of resources required to produce a good
D. The amount of time required to produce a good

Correct Answer: A

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Question 17
A company has a policy of paying its employees a fixed salary of ₦50,000 per month, plus a commission of 10% on sales. If the employee's sales for the month were ₦500,000, what is the employee's total earnings for the month?
A. ₦65,000
Correct B. ₦70,000
C. ₦75,000
D. ₦80,000

Correct Answer: B

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Question 18
A firm's production function is given by Q = 2L^0.5K^0.5, where Q is the quantity produced, L is the labor input, and K is the capital input. If the firm's labor input is 4 units and its capital input is 9 units, what is the quantity produced?
A. 6
B. 8
Correct C. 10
D. 12

Correct Answer: C

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Question 19
A company is considering two different marketing strategies: a high-low strategy and a penetration pricing strategy. Which of the following statements best describes the high-low strategy?
Correct A. A high-low strategy involves setting a high price for a product and then gradually reducing the price over time
B. A high-low strategy involves setting a low price for a product and then gradually increasing the price over time
C. A high-low strategy involves setting a fixed price for a product and then offering discounts to customers
D. A high-low strategy involves setting a low price for a product and then offering premium services to customers

Correct Answer: A

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Question 20
A firm's demand function is given by Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the firm's price is ₦20, what is the quantity demanded?
A. 40
Correct B. 60
C. 80
D. 100

Correct Answer: B

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Question 21
In a sole trader business, what is the primary advantage of using a separate business bank account?
A. Easy accounting and tax compliance
Correct B. Separation of personal and business finances
C. Increased credibility with suppliers and customers
D. Reduced risk of business failure

Correct Answer: B

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Question 22
A company has a share capital of ₦1,000,000, divided into 100,000 ordinary shares of ₦10 each. If the company issues 20,000 shares at a premium of ₦5 per share, what is the total amount received from the issue of shares?
A. ₦200,000
B. ₦250,000
C. ₦300,000
Correct D. ₦350,000

Correct Answer: D

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Question 23
A consumer purchases a product for ₦5,000 and pays a 5% sales tax. If the consumer returns the product and receives a refund of ₦4,750, what is the percentage decrease in the amount received?
A. 2.5%
Correct B. 5%
C. 7.5%
D. 10%

Correct Answer: B

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Question 24
A company uses the following data to calculate its weighted average cost of capital (WACC): Debt: 40%, Equity: 60%, Cost of debt: 10%, Cost of equity: 15%. What is the WACC?
A. 8%
Correct B. 10%
C. 12%
D. 14%

Correct Answer: B

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Question 25
A marketing manager wants to increase sales by 20% within the next quarter. If the current sales are ₦1,000,000, what is the target sales figure?
Correct A. ₦1,200,000
B. ₦1,200,500
C. ₦1,200,000
D. ₦1,200,500

Correct Answer: A

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