Practice post utme afe babalola university commerce 2019 Past Questions

Question 1

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?

A. Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 50 units of wheat and 100 units of cloth.

B. Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 50 units of wheat and 150 units of cloth.

Correct C. Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 50 units of wheat and 50 units of cloth.

D. Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 100 units of wheat and 100 units of cloth.

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 2

A company has a sole proprietorship business structure. What is the primary advantage of this structure?

A. Unlimited personal liability

Correct B. Easy to set up and maintain

C. Passive income

D. No tax benefits

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 3

A company has a business insurance policy that covers against fire damage. The policy has a deductible of ₦100,000. If the company suffers a fire loss of ₦500,000, what is the amount that the insurance company will pay?

Correct A. ₦400,000

B. ₦500,000

C. ₦600,000

D. ₦700,000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 4

A bank has a reserve requirement of 10%. If the bank has a deposit of ₦1,000,000, what is the minimum amount of reserves that the bank must hold?

A. ₦100,000

Correct B. ₦200,000

C. ₦300,000

D. ₦400,000

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 5

A company is considering launching a new product. The company has a marketing budget of ₦500,000. If the company wants to allocate 20% of the budget to advertising, what is the amount that the company will allocate to advertising?

A. ₦100,000

Correct B. ₦200,000

C. ₦300,000

D. ₦400,000

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 6

A company's sole trader, Mr. A, has a warehouse with a capacity of 1000 units. He receives an order for 750 units. If he has already stocked 300 units, how many more units must he order to meet the demand?

Correct A. 500

B. 750

C. 1000

D. 1250

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 7

A bank offers a 5% discount on a loan of ₦100,000 for the first 6 months. If the interest rate is 12% per annum, what is the total interest paid at the end of the 6 months?

Correct A. ₦6,000

B. ₦6,500

C. ₦7,000

D. ₦7,500

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 8

A company's marketing strategy involves a 10% increase in sales for every 5% decrease in price. If the initial price is ₦100 and the initial sales are 100 units, what is the new price and sales after a 5% decrease in price?

Correct A. ₦90, 90 units

B. ₦95, 110 units

C. ₦100, 120 units

D. ₦105, 130 units

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 9

A life insurance policy has a premium of ₦10,000 per annum. If the policyholder dies after 5 years, the insurance company pays a lump sum of ₦200,000. What is the present value of the policy if the interest rate is 8% per annum?

A. ₦50,000

Correct B. ₦60,000

C. ₦70,000

D. ₦80,000

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 10

A company's sole trader, Mr. B, has a warehouse with a capacity of 1500 units. He receives an order for 1200 units. If he has already stocked 800 units, how many more units must he order to meet the demand?

A. 200

B. 300

Correct C. 400

D. 500

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 11

The concept of production and specialization is closely related to the idea of comparative advantage. Explain how a country can benefit from specializing in the production of a particular good, even if it is not the most efficient producer of that good.

Correct A. By producing a good that it is relatively good at producing, a country can increase its overall productivity and efficiency.

B. By specializing in the production of a good, a country can reduce its costs and increase its competitiveness in the global market.

C. By producing a good that it is relatively good at producing, a country can increase its exports and earn more foreign exchange.

D. By specializing in the production of a good, a country can reduce its dependence on imports and increase its self-sufficiency.

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 12

A company is considering two different marketing strategies for its new product. The first strategy involves a high level of advertising and promotion, while the second strategy involves a low level of advertising and promotion. Which strategy is more likely to be effective in increasing sales?

Correct A. The high level of advertising and promotion is more likely to be effective in increasing sales.

B. The low level of advertising and promotion is more likely to be effective in increasing sales.

C. Both strategies are equally effective in increasing sales.

D. There is not enough information to determine which strategy is more effective.

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 13

A company is considering the use of just-in-time (JIT) inventory management system. What are the advantages and disadvantages of using a JIT system?

Correct A. Advantages: reduced inventory costs, improved product quality, and increased efficiency. Disadvantages: increased risk of stockouts, higher transportation costs, and reduced flexibility.

B. Advantages: reduced inventory costs, improved product quality, and increased efficiency. Disadvantages: increased risk of stockouts, higher transportation costs, and reduced flexibility.

C. Advantages: reduced inventory costs, improved product quality, and increased efficiency. Disadvantages: increased risk of stockouts, higher transportation costs, and reduced flexibility.

D. Advantages: reduced inventory costs, improved product quality, and increased efficiency. Disadvantages: increased risk of stockouts, higher transportation costs, and reduced flexibility.

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 14

A company has a warehouse with a capacity to store 1000 units of inventory. The company receives an order for 500 units of inventory. What is the new level of inventory in the warehouse?

A. 500

B. 750

Correct C. 1000

D. 1500

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 15

A company has a warehouse with a capacity to store 1000 units of inventory. The company receives an order for 500 units of inventory. What is the new level of inventory in the warehouse?

A. 500

B. 750

Correct C. 1000

D. 1500

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 16

A sole trader's business is considered a separate legal entity from its owner. However, the owner's personal assets are not protected in case of business debts. What is the name of this type of business structure?

Correct A. Sole Trader

B. Partnership

C. Limited Liability Company

D. Cooperative

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 17

A company's production process involves the transformation of raw materials into finished goods. What is the name of this process?

Correct A. Manufacturing

B. Assembly

C. Packaging

D. Quality Control

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 18

A country's foreign trade involves the exchange of goods and services with other countries. What is the name of this type of trade?

A. Import

B. Export

Correct C. Foreign Trade

D. International Trade

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 19

A bank's primary function is to act as a financial intermediary between savers and borrowers. What is the name of this function?

A. Lending

B. Depositing

C. Investing

Correct D. Intermediation

Correct Answer: D

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 20

A consumer's protection is ensured through various laws and regulations. What is the name of this type of protection?

Correct A. Consumer Protection

B. Product Liability

C. Warranty

D. Guarantee

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 21

In a consumer protection case, a court may award damages to a consumer for a breach of contract if the consumer can prove that the breach was caused by the supplier's negligence. Which of the following is a correct statement regarding the burden of proof in such a case?

A. The consumer must prove that the supplier was negligent.

B. The supplier must prove that they were not negligent.

Correct C. The consumer must prove that the breach was caused by the supplier's negligence.

D. The supplier must prove that the breach was not caused by their negligence.

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 22

A bank's primary objective is to maximize shareholder value. Which of the following is a correct statement regarding the bank's role in the economy?

A. To provide loans to consumers at low interest rates.

B. To manage the country's foreign exchange reserves.

Correct C. To act as a financial intermediary between savers and borrowers.

D. To print money to finance government spending.

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 23

A warehouse manager is responsible for ensuring that goods are stored and retrieved efficiently. Which of the following is a correct statement regarding the warehouse's inventory management system?

A. The system uses a first-in, first-out (FIFO) inventory rotation method.

B. The system uses a last-in, first-out (LIFO) inventory rotation method.

C. The system uses a just-in-time (JIT) inventory management system.

Correct D. The system uses a perpetual inventory system.

Correct Answer: D

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 24

A marketing manager is responsible for developing a marketing strategy that meets the company's objectives. Which of the following is a correct statement regarding the marketing mix?

Correct A. The marketing mix consists of product, price, promotion, and place.

B. The marketing mix consists of product, price, promotion, and people.

C. The marketing mix consists of product, price, promotion, and process.

D. The marketing mix consists of product, price, promotion, and profit.

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 25

A production manager is responsible for ensuring that goods are produced efficiently and effectively. Which of the following is a correct statement regarding the production process?

Correct A. The production process involves the transformation of raw materials into finished goods.

B. The production process involves the assembly of components into finished goods.

C. The production process involves the manufacture of goods using a combination of human labor and machine-based automation.

D. The production process involves the outsourcing of production to a third-party supplier.

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

POST UTME AFE BABALOLA UNIVERSITY 2019 Commerce | Objective

Master the Exam!

Help others prepare! Share this practice hub: