Practice post utme achievers university commerce 2019 Past Questions

Question 1

In a perfectly competitive market, the supply curve is upward-sloping because of the law of increasing costs. What is the primary reason for this upward-sloping supply curve?

A. The law of diminishing marginal returns

Correct B. The law of increasing marginal costs

C. The law of supply and demand

D. The law of diminishing returns

Correct Answer: B

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Question 2

A company is considering two different marketing strategies: a push strategy and a pull strategy. Which strategy is more likely to be effective in a business-to-business market?

Correct A. Push strategy

B. Pull strategy

C. Both strategies are equally effective

D. Neither strategy is effective

Correct Answer: A

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Question 3

A firm is considering investing in a new project. The project has a net present value (NPV) of ₦10 million and a payback period of 5 years. What is the primary reason for investing in this project?

A. The high NPV

Correct B. The short payback period

C. The high return on investment (ROI)

D. The low risk

Correct Answer: B

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Question 4

A company is considering outsourcing its logistics operations to a third-party logistics provider. What is the primary benefit of outsourcing logistics?

A. Reduced costs

B. Improved efficiency

C. Increased flexibility

Correct D. All of the above

Correct Answer: D

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Question 5

A firm is considering investing in a new project. The project has a high level of uncertainty and a high potential return. What is the primary risk associated with this project?

Correct A. Market risk

B. Credit risk

C. Liquidity risk

D. Operational risk

Correct Answer: A

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Question 6

A firm's production function is given by Q = 2L^0.5H^0.5, where Q is the output, L is labor, and H is capital. If the firm wants to increase its output by 20% while keeping labor constant, what percentage increase in capital is required?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 7

A consumer has a budget of ₦1000 and a preference for two goods, A and B. The prices of the goods are ₦200 and ₦300 respectively. If the consumer spends all of their budget on the two goods, what is the maximum amount of good B that the consumer can buy?

A. 2 units

Correct B. 3 units

C. 4 units

D. 5 units

Correct Answer: B

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Question 8

A firm has a warehouse with a capacity of 1000 units. The firm receives a shipment of 500 units and already has 300 units in stock. If the firm wants to maintain a safety stock of 20% of the warehouse capacity, what is the maximum number of units that the firm can receive without exceeding the warehouse capacity?

A. 200 units

B. 300 units

Correct C. 400 units

D. 500 units

Correct Answer: C

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Question 9

A firm has a production process that involves two stages: Stage 1 and Stage 2. The production function for Stage 1 is given by Q1 = 2L1^0.5H1^0.5, where Q1 is the output of Stage 1, L1 is labor in Stage 1, and H1 is capital in Stage 1. The production function for Stage 2 is given by Q2 = 2L2^0.5H2^0.5, where Q2 is the output of Stage 2, L2 is labor in Stage 2, and H2 is capital in Stage 2. If the firm wants to increase the output of Stage 1 by 20% while keeping labor constant, what percentage increase in capital is required for Stage 1?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 10

A consumer has a budget of ₦1000 and a preference for two goods, A and B. The prices of the goods are ₦200 and ₦300 respectively. If the consumer spends all of their budget on the two goods, what is the maximum amount of good A that the consumer can buy?

Correct A. 2 units

B. 3 units

C. 4 units

D. 5 units

Correct Answer: A

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Question 11

A company's financial statements show a net income of ₦1.2 million, but the auditor notes that the company has a contingent liability of ₦500,000. What is the correct accounting treatment for this liability?

Correct A. Recognize the liability as a current liability and provide a footnote disclosure.

B. Recognize the liability as a non-current liability and provide a footnote disclosure.

C. Do not recognize the liability as it is not probable or estimable.

D. Recognize the liability as a current liability and provide a separate financial statement.

Correct Answer: A

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Question 12

A consumer purchases a product with a price of ₦10,000 and a 10% discount. The consumer pays ₦9,000. What is the amount of the discount?

Correct A. ₦1,000

B. ₦1,500

C. ₦2,000

D. ₦2,500

Correct Answer: A

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Question 13

A company's marketing strategy involves a 50% increase in advertising expenditure. If the current advertising expenditure is ₦500,000, what is the new advertising expenditure?

Correct A. ₦750,000

B. ₦750,000

C. ₦750,000

D. ₦750,000

Correct Answer: A

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Question 14

A company's financial statements show a net income of ₦1.2 million, but the auditor notes that the company has a contingent liability of ₦500,000. What is the correct accounting treatment for this liability?

Correct A. Recognize the liability as a current liability and provide a footnote disclosure.

B. Recognize the liability as a non-current liability and provide a footnote disclosure.

C. Do not recognize the liability as it is not probable or estimable.

D. Recognize the liability as a current liability and provide a separate financial statement.

Correct Answer: A

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Question 15

A consumer purchases a product with a price of ₦10,000 and a 10% discount. The consumer pays ₦9,000. What is the amount of the discount?

Correct A. ₦1,000

B. ₦1,500

C. ₦2,000

D. ₦2,500

Correct Answer: A

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Question 16

A company's insurance policy has a deductible of ₦50,000. If the company suffers a loss of ₦200,000, what is the amount the insurance company will pay?

Correct A. ₦150,000

B. ₦200,000

C. ₦250,000

D. ₦300,000

Correct Answer: A

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Question 17

A consumer purchases a product for ₦10,000. If the product is defective and the consumer returns it, what is the amount the consumer is entitled to under the Consumer Protection Act?

A. ₦5,000

Correct B. ₦7,500

C. ₦10,000

D. ₦12,500

Correct Answer: B

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Question 18

A company's financial statements show a net profit of ₦1,000,000. If the company's tax rate is 25%, what is the amount of tax the company will pay?

Correct A. ₦250,000

B. ₦500,000

C. ₦750,000

D. ₦1,000,000

Correct Answer: A

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Question 19

A warehouse has a storage capacity of 10,000 units. If the warehouse is currently storing 8,000 units, what is the percentage of the warehouse's capacity that is currently being used?

Correct A. 80%

B. 85%

C. 90%

D. 95%

Correct Answer: A

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Question 20

A bank's cash reserve ratio is 20%. If the bank has a total deposit of ₦10,000,000, what is the amount of cash the bank must hold in reserve?

Correct A. ₦2,000,000

B. ₦2,500,000

C. ₦3,000,000

D. ₦3,500,000

Correct Answer: A

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Question 21

In a perfectly competitive market, the supply curve is horizontal and the demand curve is downward-sloping. What is the equilibrium price and quantity of a product in this market?

Correct A. ₦100, 100 units

B. ₦120, 80 units

C. ₦150, 60 units

D. ₦200, 40 units

Correct Answer: A

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Question 22

A company has a production function Q = 2L^0.4K^0.6, where Q is the quantity produced, L is labor, and K is capital. If labor increases by 20% and capital remains constant, what is the percentage change in output?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 23

A firm is considering two investment projects. Project A has a 10% chance of generating a return of ₦100,000 and a 90% chance of generating a return of ₦50,000. Project B has a 20% chance of generating a return of ₦120,000 and an 80% chance of generating a return of ₦40,000. Which project has a higher expected return?

Correct A. Project A

B. Project B

C. Both projects are equal

D. Cannot be determined

Correct Answer: A

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Question 24

A consumer has a budget of ₦1,000 and a preference for two goods, A and B. The prices of the goods are ₦200 and ₦300, respectively. If the consumer spends all of their budget on the two goods, what is the quantity of good A consumed?

A. 2 units

Correct B. 3 units

C. 4 units

D. 5 units

Correct Answer: B

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Question 25

A firm is considering two production processes. Process A requires an initial investment of ₦100,000 and generates a profit of ₦20,000 per unit produced. Process B requires an initial investment of ₦150,000 and generates a profit of ₦30,000 per unit produced. If the firm produces 1,000 units per year, which process is more profitable?

Correct A. Process A

B. Process B

C. Both processes are equal

D. Cannot be determined

Correct Answer: A

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