POST UTME BABCOCK UNIVERSITY 2021 Commerce | Objective

Are you preparing for POST UTME BABCOCK UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2021 Commerce (Objective) questions designed to simulate the real exam environment.

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Question 1
A bank's cash reserve ratio is 20%. If the bank has a total deposit of ₦1,000,000, how much of this amount is required to be kept in reserve?
Correct A. ₦200,000
B. ₦250,000
C. ₦300,000
D. ₦400,000

Correct Answer: A

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Question 2
A company's stock control system uses a first-in-first-out (FIFO) inventory method. If the company has 100 units of a product with a cost of ₦50 each, and 20 units are sold, what is the total cost of the units sold?
Correct A. ₦1,000
B. ₦1,200
C. ₦1,400
D. ₦1,600

Correct Answer: A

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Question 3
A transport company uses a fleet of 10 trucks to deliver goods. If each truck has a capacity of 5 tons, and the company delivers 50 tons of goods in a day, what is the total number of trips made by the trucks?
A. 10
Correct B. 15
C. 20
D. 25

Correct Answer: B

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Question 4
A warehouse has a storage capacity of 1,000 square meters. If the warehouse is currently occupied by 500 square meters of goods, and the warehouse manager wants to add 200 square meters of new goods, what is the total percentage of the warehouse that will be occupied?
A. 40%
B. 50%
Correct C. 60%
D. 70%

Correct Answer: C

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Question 5
A company's insurance policy has a deductible of ₦10,000. If the company has a claim of ₦50,000, how much of the claim will the insurance company pay?
A. ₦40,000
Correct B. ₦45,000
C. ₦50,000
D. ₦55,000

Correct Answer: B

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Question 6
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 commodity in such a 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 7
A company'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 company wants to produce 100 units of output, and the wage rate is ₦100 per unit of labor, and the rental rate of capital is ₦200 per unit of capital, how much should the company hire in terms of labor and capital?
A. L = 10 units, K = 20 units
Correct B. L = 20 units, K = 10 units
C. L = 25 units, K = 5 units
D. L = 5 units, K = 25 units

Correct Answer: B

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Question 8
A firm's demand function is given by P = 100 - 2Q, where P is the price and Q is the quantity demanded. If the firm's marginal revenue function is MR = 200 - 4Q, what is the firm's optimal quantity?
A. 20 units
B. 30 units
Correct C. 40 units
D. 50 units

Correct Answer: C

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Question 9
A company's marketing mix is given by the 4 Ps: Product, Price, Place, and Promotion. If the company wants to increase its sales, which of the following marketing strategies would be most effective?
A. Increase the price of the product
B. Improve the quality of the product
Correct C. Increase the advertising budget
D. Increase the number of distribution channels

Correct Answer: C

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Question 10
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 wants to produce 100 units of output, and the wage rate is ₦100 per unit of labor, and the rental rate of capital is ₦200 per unit of capital, what is the firm's total cost?
A. ₦5000
B. ₦6000
Correct C. ₦7000
D. ₦8000

Correct Answer: C

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Question 11
In a sole trader business, what is the primary advantage of using a sole proprietorship structure?
A. Limited liability
B. Tax benefits
Correct C. Flexibility in decision-making
D. Easy to establish

Correct Answer: C

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Question 12
A company X 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 13
A warehouse has a storage capacity of 10,000 units. If 5,000 units are already stored, what is the remaining storage capacity?
Correct A. 5,000 units
B. 10,000 units
C. 15,000 units
D. 20,000 units

Correct Answer: A

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Question 14
A company exports goods worth ₦500,000 to a foreign country. If the exchange rate is 1 USD = ₦200, what is the value of the export in USD?
Correct A. 2,500
B. 2,500.00
C. 2,500.00 USD
D. 2,500.00 USD

Correct Answer: A

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Question 15
A sole trader business has a profit of ₦100,000. If the business owner wants to distribute 20% of the profit as dividends, how much will the owner receive?
Correct A. ₦20,000
B. ₦30,000
C. ₦40,000
D. ₦50,000

Correct Answer: A

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Question 16
In a perfectly competitive market, the demand curve for a firm's product is its
Correct A. marginal revenue curve
B. marginal cost curve
C. average revenue curve
D. average cost curve

Correct Answer: A

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Question 17
A firm's break-even point is the point at which its total revenue equals its
A. total fixed costs
B. total variable costs
Correct C. total fixed and variable costs
D. net income

Correct Answer: C

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Question 18
A warehouse's inventory turnover ratio is calculated as the cost of goods sold divided by the average inventory level, multiplied by
A. 2
B. 3
C. 4
Correct D. 365

Correct Answer: D

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Question 19
A bank's reserve requirement is the minimum percentage of deposits that it must hold in reserve, rather than lending out. This is typically set by the
Correct A. central bank
B. commercial bank
C. government
D. stock exchange

Correct Answer: A

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Question 20
A firm's export price is the price at which it sells its product to foreign buyers, and is typically denominated in
A. local currency
Correct B. foreign currency
C. barter
D. countertrade

Correct Answer: B

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Question 21
In a perfectly competitive market, the law of supply states that as the price of a good increases, the quantity supplied will
Correct A. increase
B. decrease
C. remain constant
D. shift to the left

Correct Answer: A

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Question 22
A company's marketing mix can be described by the 4 Ps, which are
Correct A. Product, Price, Promotion, Place
B. Product, Price, Packaging, Place
C. Product, Price, Promotion, Packaging
D. Product, Place, Promotion, Packaging

Correct Answer: A

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Question 23
A consumer's willingness to pay for a product is influenced by
A. the product's price
B. the product's quality
C. the consumer's income
Correct D. all of the above

Correct Answer: D

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Question 24
A bank's primary function is to act as a
Correct A. depository institution
B. investment bank
C. commercial bank
D. central bank

Correct Answer: A

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Question 25
A company's financial statements can be used to evaluate its
A. liquidity
B. profitability
C. efficiency
Correct D. all of the above

Correct Answer: D

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