POST UTME BOWEN UNIVERSITY 2020 Commerce | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A business owner purchases an insurance policy to protect against losses due to fire. What type of risk is being managed?
A. Operational risk
B. Financial risk
C. Strategic risk
D. Compliance risk
Question 2
A company's production function is given by Q = 2L^0.5K^0.5. If the company wants to produce 400 units of output, and the price of labor is ₦50 per unit, while the price of capital is ₦100 per unit, what is the optimal combination of labor and capital?
A. L = 100, K = 400
B. L = 400, K = 100
C. L = 200, K = 200
D. L = 50, K = 800
Question 3
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 compared to other countries. Which of the following is a correct example of comparative advantage?
A. A country that can produce 100 units of wheat with the same amount of labor as 50 units of rice has a comparative advantage in producing wheat.
B. A country that can produce 50 units of wheat with the same amount of labor as 100 units of rice has a comparative advantage in producing wheat.
C. A country that can produce 100 units of wheat with the same amount of labor as 100 units of rice has a comparative advantage in producing wheat.
D. A country that can produce 50 units of wheat with the same amount of labor as 50 units of rice has a comparative advantage in producing wheat.
Question 4
A production process involves the following costs: fixed costs of ₦100,000, variable costs of ₦50 per unit, and a selling price of ₦75 per unit. If the company produces 10,000 units, what is the profit?
A. ₦250,000
B. ₦300,000
C. ₦350,000
D. ₦400,000
Question 5
A company's business law requires it to provide a warranty for its products. What is the primary purpose of this warranty?
A. To protect the consumer
B. To increase sales
C. To reduce costs
D. To enhance reputation
Question 6
The concept of 'moral hazard' in insurance is closely related to which of the following?
A. Adverse selection
B. Moral hazard
C. Risk aversion
D. Diversification
Question 7
A consumer's indifference curve is a graphical representation of the various combinations of two goods that the consumer is willing to buy at a given price. Which of the following is a correct property of an indifference curve?
A. An indifference curve is downward sloping
B. An indifference curve is upward sloping
C. An indifference curve is a straight line
D. An indifference curve is a circle
Question 8
A sole trader's business is not registered with the Corporate Affairs Commission (CAC). What is the legal implication of this?
A. The business is not entitled to limited liability.
B. The business is not required to file annual returns.
C. The business is not subject to company law.
D. The business is not entitled to issue share certificates.
Question 9
A company has a capital structure consisting of 60% debt and 40% equity. If the cost of debt is 8% and the cost of equity is 12%, what is the weighted average cost of capital (WACC)?
A. 7.68%
B. 8.32%
C. 9.12%
D. 10.24%
Question 10
A company has a budget constraint of ₦100,000 to spend on advertising and promotion. If the cost of advertising is ₦50,000 and the cost of promotion is ₦30,000, what is the opportunity cost of advertising?
A. ₦20,000
B. ₦30,000
C. ₦40,000
D. ₦50,000
Question 11
A firm's revenue function is given by R = 100x - 2x^2, where x is the number of units sold. If the firm wants to maximize its revenue, what is the optimal number of units to sell?
A. 20 units
B. 30 units
C. 40 units
D. 50 units
Question 12
A firm's production function is given by Q = 3L^0.5K^0.5. If the firm wants to produce 300 units of output, and the price of labor is ₦60 per unit, while the price of capital is ₦120 per unit, what is the optimal combination of labor and capital?
A. L = 150, K = 600
B. L = 600, K = 150
C. L = 300, K = 300
D. L = 75, K = 900
Question 13
A consumer purchases a product with a price of ₦1,500. If the consumer is entitled to a 10% discount, what is the amount the consumer pays?
A. ₦1,350
B. ₦1,400
C. ₦1,450
D. ₦1,500
Question 14
A firm's break-even point is the point at which its total revenue equals its total fixed and variable costs. Which of the following is a correct formula for calculating the break-even point?
A. Break-even point = Total fixed costs / (Selling price - Variable costs)
B. Break-even point = Total fixed costs + Variable costs
C. Break-even point = Total revenue / Total fixed costs
D. Break-even point = Total revenue - Total fixed costs
Question 15
A company has a business interruption insurance policy with a deductible of ₦50,000. If the company suffers a loss of ₦200,000, what is the amount payable under the policy?
A. ₦150,000
B. ₦175,000
C. ₦200,000
D. ₦225,000

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