Practice post utme bowen university commerce 2018 Past Questions

Question 1

In a perfectly competitive market, the supply curve is a

Correct A. Horizontal line

B. Vertical line

C. U-shaped curve

D. Inverted U-shaped curve

Correct Answer: A

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Question 2

A firm's production function is given by Q = 2L^0.5 K^0.5. If the firm's capital (K) is fixed at 16 units, and labor (L) is increased from 4 units to 9 units, what is the percentage change in output?

A. 10%

B. 20%

Correct C. 30%

D. 40%

Correct Answer: C

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Question 3

A consumer's indifference curve is given by the equation u(x,y) = 2x + 3y. If the consumer's income is 100 units, and the prices of x and y are 5 units and 10 units respectively, what is the consumer's optimal bundle?

A. (20,10)

Correct B. (15,15)

C. (10,20)

D. (5,25)

Correct Answer: B

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Question 4

A firm's demand function is given by Q = 100 - 2P. If the firm's revenue is maximized at a price of 20 units, what is the firm's optimal quantity?

A. 40

Correct B. 50

C. 60

D. 70

Correct Answer: B

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Question 5

A firm's production function is given by Q = 2L^0.5 K^0.5. If the firm's capital (K) is fixed at 16 units, and labor (L) is increased from 4 units to 9 units, what is the percentage change in output?

A. 10%

B. 20%

Correct C. 30%

D. 40%

Correct Answer: C

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Question 6

The concept of specialization in production 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 exporting the good to other countries and importing other goods in return.

B. By investing in research and development to improve its production efficiency.

C. By imposing trade barriers to protect its domestic industry.

D. By diversifying its production to reduce dependence on a single industry.

Correct Answer: A

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Question 7

A company is considering launching a new product in a foreign market. What are the key factors that the company should consider when deciding whether to enter the foreign market?

Correct A. Market size, competition, and cultural differences.

B. Production costs, transportation costs, and exchange rates.

C. Government regulations, trade policies, and consumer preferences.

D. Marketing strategies, pricing, and distribution channels.

Correct Answer: A

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Question 8

A sole trader is considering expanding its business by hiring employees. What are the key advantages and disadvantages of this decision?

Correct A. Advantages: increased productivity, reduced workload, and access to new skills. Disadvantages: increased costs, loss of control, and potential conflicts.

B. Advantages: increased revenue, improved reputation, and access to new markets. Disadvantages: increased competition, reduced flexibility, and potential legal issues.

C. Advantages: increased efficiency, improved quality, and access to new technologies. Disadvantages: increased costs, reduced autonomy, and potential environmental impacts.

D. Advantages: increased customer satisfaction, improved brand image, and access to new customers. Disadvantages: increased costs, reduced flexibility, and potential legal issues.

Correct Answer: A

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Question 9

A company is considering entering into a joint venture with a foreign partner. What are the key benefits and risks of this decision?

Correct A. Benefits: access to new markets, technologies, and skills. Risks: loss of control, cultural differences, and potential conflicts.

B. Benefits: increased revenue, improved reputation, and access to new customers. Risks: increased competition, reduced flexibility, and potential legal issues.

C. Benefits: increased efficiency, improved quality, and access to new technologies. Risks: increased costs, reduced autonomy, and potential environmental impacts.

D. Benefits: increased customer satisfaction, improved brand image, and access to new customers. Risks: increased costs, reduced flexibility, and potential legal issues.

Correct Answer: A

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Question 10

A company is considering exporting its products to a foreign market. What are the key factors that the company should consider when deciding whether to export?

Correct A. Market size, competition, and cultural differences.

B. Production costs, transportation costs, and exchange rates.

C. Government regulations, trade policies, and consumer preferences.

D. Marketing strategies, pricing, and distribution channels.

Correct Answer: A

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Question 11

What is the primary function of the International Monetary Fund (IMF) in the global economy?

A. To regulate international trade

B. To stabilize exchange rates

Correct C. To provide emergency loans to countries in financial distress

D. To promote economic growth and development

Correct Answer: C

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Question 12

A company is considering two different production methods for its new product. Method A requires an initial investment of ₦1,500,000 and produces 10,000 units per year, while Method B requires an initial investment of ₦2,000,000 and produces 15,000 units per year. If the company expects to sell each unit for ₦500, what is the minimum number of years it must operate to break even using Method A?

A. 5

Correct B. 6

C. 7

D. 8

Correct Answer: B

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Question 13

A firm is considering two different advertising strategies for its new product. Strategy A involves a one-time payment of ₦500,000 to a popular celebrity to endorse the product, while Strategy B involves a series of 12 monthly payments of ₦50,000 to a popular social media influencer. If the firm expects to sell 10,000 units of the product per year, and each unit sells for ₦500, what is the total cost of Strategy A?

Correct A. ₦500,000

B. ₦600,000

C. ₦700,000

D. ₦800,000

Correct Answer: A

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Question 14

A company is considering two different modes of transportation for its goods: road and rail. The cost of transporting goods by road is ₦500 per kilometer, while the cost of transporting goods by rail is ₦300 per kilometer. If the company expects to transport 10,000 kilometers of goods per year, what is the total cost of transportation using the road mode?

A. ₦5,000,000

Correct B. ₦5,500,000

C. ₦6,000,000

D. ₦6,500,000

Correct Answer: B

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Question 15

A firm is considering two different production methods for its new product. Method A requires an initial investment of ₦1,000,000 and produces 5,000 units per year, while Method B requires an initial investment of ₦1,500,000 and produces 10,000 units per year. If the firm expects to sell each unit for ₦1,000, what is the minimum number of years it must operate to break even using Method B?

A. 3

Correct B. 4

C. 5

D. 6

Correct Answer: B

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Question 16

A company's marketing strategy involves a mix of advertising, sales promotions, and public relations. Which of the following is NOT a characteristic of a successful marketing strategy?

A. It is customer-centric

Correct B. It is cost-effective

C. It is sustainable

D. It is environmentally friendly

Correct Answer: B

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Question 17

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's output is 16 units, and the number of workers (L) is 4, find the number of machines (K) required.

A. 1

Correct B. 2

C. 3

D. 4

Correct Answer: B

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Question 18

A consumer purchases a product for ₦1,000 and sells it for ₦1,200. What is the percentage profit made on the sale?

A. 10%

Correct B. 15%

C. 20%

D. 25%

Correct Answer: B

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Question 19

A firm's cost function is given by C = 2L + 3K. If the firm's output is 16 units, and the number of workers (L) is 4, find the total cost of production.

A. ₦20

B. ₦30

Correct C. ₦40

D. ₦50

Correct Answer: C

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Question 20

A consumer has a budget of ₦5,000 to spend on two products, A and B. The price of product A is ₦2,000, and the price of product B is ₦2,500. If the consumer spends all the budget on the two products, what is the maximum amount that can be spent on product B?

A. ₦2,000

B. ₦2,500

Correct C. ₦3,000

D. ₦3,500

Correct Answer: C

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Question 21

A company's sole trader has a business that is involved in the sale of insurance policies. The company's sole trader has a policy of paying 10% of the premium to the insurance company for each policy sold. If the company's sole trader sells 500 policies in a year and the premium for each policy is ₦5,000, what is the total amount paid to the insurance company in a year?

Correct A. ₦1,250,000

B. ₦1,500,000

C. ₦2,000,000

D. ₦2,500,000

Correct Answer: A

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Question 22

A consumer protection law requires that all businesses must provide a 30-day cooling-off period for customers to return goods. If a customer buys a product on the 29th of January and wants to return it, what is the latest date the customer can return the product?

A. 28th February

Correct B. 29th February

C. 1st March

D. 2nd March

Correct Answer: B

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Question 23

A company's sole trader has a business that is involved in the transportation of goods. The company's sole trader uses a vehicle that has a capacity of 10 tons. If the company's sole trader transports 8 tons of goods in a day, what is the remaining capacity of the vehicle?

Correct A. 2 tons

B. 5 tons

C. 8 tons

D. 10 tons

Correct Answer: A

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Question 24

A company's sole trader has a business that is involved in the storage of goods. The company's sole trader uses a warehouse that has a capacity of 1,000 square meters. If the company's sole trader stores 500 square meters of goods in a day, what is the remaining capacity of the warehouse?

A. 500 square meters

Correct B. 750 square meters

C. 1,000 square meters

D. 1,250 square meters

Correct Answer: B

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Question 25

A company's sole trader has a business that is involved in the sale of goods. The company's sole trader has a policy of paying 5% of the selling price to the supplier for each item sold. If the company's sole trader sells 100 items in a day and the selling price for each item is ₦1,000, what is the total amount paid to the supplier in a day?

A. ₦5,000

Correct B. ₦10,000

C. ₦15,000

D. ₦20,000

Correct Answer: B

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