Practice post utme bsu commerce 2017 Past Questions

Question 1

A company is considering a new marketing strategy that involves partnering with a popular social media influencer. The influencer has a large following and is known for promoting products that align with the company's brand values. However, the influencer's fees are high, and the company is unsure if the partnership will generate sufficient returns on investment. What type of risk is the company taking on by partnering with the influencer?

A. Financial risk

B. Reputation risk

C. Operational risk

Correct D. Strategic risk

Correct Answer: D

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Question 2

A warehouse is storing a large quantity of perishable goods. The warehouse has a temperature control system that maintains a consistent temperature of 20°C. However, the system is not designed to handle extreme temperature fluctuations. What type of inventory management strategy should the warehouse use to minimize stock loss?

A. First-in, first-out (FIFO)

B. Last-in, first-out (LIFO)

Correct C. First-expired, first-out (FEFO)

D. Just-in-time (JIT)

Correct Answer: C

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Question 3

A bank is considering a new loan product that offers a variable interest rate tied to the prime lending rate. The loan product has a fixed term of 5 years and a minimum loan amount of ₦500,000. What type of risk is the bank taking on by offering this loan product?

Correct A. Credit risk

B. Liquidity risk

C. Market risk

D. Operational risk

Correct Answer: A

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Question 4

A company is considering a new transportation strategy that involves using a third-party logistics provider. The logistics provider has a reputation for being reliable and efficient, but the company is unsure if the provider will meet its delivery deadlines. What type of risk is the company taking on by using the logistics provider?

Correct A. Operational risk

B. Reputation risk

C. Strategic risk

D. Financial risk

Correct Answer: A

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Question 5

A sole trader is considering a new business venture that involves selling products online. The sole trader has a small initial investment and is unsure if the business will generate sufficient returns on investment. What type of business structure is the sole trader using?

Correct A. Sole trader

B. Partnership

C. Limited company

D. Cooperative

Correct Answer: A

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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 product in this market?

A. ₦100, 1000 units

Correct B. ₦120, 800 units

C. ₦150, 600 units

D. ₦180, 400 units

Correct Answer: B

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Question 7

A company is considering two different production processes for a new product. Process A has a fixed cost of ₦50,000 and a variable cost of ₦20 per unit. Process B has a fixed cost of ₦30,000 and a variable cost of ₦30 per unit. If the selling price of the product is ₦60 per unit, which process should the company use?

Correct A. Process A

B. Process B

C. Both processes are equally profitable

D. Neither process is profitable

Correct Answer: A

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Question 8

A life insurance policy pays a benefit of ₦1 million if the policyholder dies within the first year of the policy. The premium for the policy is ₦50,000 per year. If the probability of death within the first year is 0.05, what is the expected value of the policy?

Correct A. ₦45,000

B. ₦50,000

C. ₦55,000

D. ₦60,000

Correct Answer: A

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Question 9

A company has a fleet of 10 trucks that travel an average of 20,000 kilometers per year. The company pays ₦0.05 per kilometer for fuel. If the company wants to reduce its fuel costs by 10%, how many kilometers should each truck travel per year?

A. 18,000 km

Correct B. 19,000 km

C. 20,000 km

D. 21,000 km

Correct Answer: B

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Question 10

A communication company offers a package deal that includes 100 minutes of talk time, 100 texts, and 1 GB of data for ₦5,000. If the company wants to increase its revenue by 20%, how much should it charge for the package deal?

A. ₦6,000

B. ₦6,500

Correct C. ₦7,000

D. ₦7,500

Correct Answer: C

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Question 11

Determine the optimal warehouse layout for a retail store with a high volume of fast-moving products, using the principles of space utilization and material handling.

A. First-In-First-Out (FIFO) storage

B. Last-In-First-Out (LIFO) storage

Correct C. Zone storage

D. Class-based storage

Correct Answer: C

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Question 12

A company is considering the introduction of a new product line. The product has a high initial investment cost but low ongoing costs. Using the concept of break-even analysis, determine the minimum number of units that must be sold to break even.

A. 100 units

B. 500 units

Correct C. 1000 units

D. 2000 units

Correct Answer: C

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Question 13

A sole trader is considering the formation of a partnership. Using the concept of risk and return, determine the minimum number of partners required to achieve a 20% return on investment.

A. 2 partners

B. 3 partners

Correct C. 4 partners

D. 5 partners

Correct Answer: C

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Question 14

A company is considering the introduction of a new product line. The product has a high initial investment cost but low ongoing costs. Using the concept of break-even analysis, determine the minimum number of units that must be sold to break even.

A. 100 units

B. 500 units

Correct C. 1000 units

D. 2000 units

Correct Answer: C

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Question 15

A consumer is considering the purchase of a product with a price of ₦500. Using the concept of elasticity of demand, determine the minimum price increase required to reduce demand by 20%.

A. ₦10

B. ₦20

Correct C. ₦30

D. ₦40

Correct Answer: C

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Question 16

The Central Bank of Nigeria (CBN) uses monetary policy to control inflation by increasing the reserve requirement for commercial banks. This action will likely lead to a decrease in the money supply, causing a decrease in the price level. However, if the CBN also increases the discount rate, it will increase the cost of borrowing for commercial banks, which may lead to a decrease in the money supply. Which of the following is a correct statement about the effect of the CBN's actions on the money supply?

Correct A. The money supply will decrease due to the increase in the reserve requirement.

B. The money supply will increase due to the decrease in the discount rate.

C. The money supply will remain unchanged due to the offsetting effects of the two policies.

D. The money supply will increase due to the increase in the discount rate.

Correct Answer: A

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Question 17

A company is considering launching a new product in the Nigerian market. The company has conducted market research and found that the product is likely to be successful, but the company is concerned about the high cost of production. Which of the following marketing strategies would be most appropriate for the company?

A. Product differentiation

B. Market segmentation

C. Target marketing

Correct D. Positioning

Correct Answer: D

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Question 18

A consumer purchases a product from a retailer, but the product is defective. The consumer returns the product to the retailer, who refuses to replace it. The consumer then files a complaint with the Consumer Protection Council (CPC). Which of the following is a correct statement about the CPC's role in this situation?

A. The CPC will order the retailer to replace the product.

Correct B. The CPC will investigate the complaint and take action if necessary.

C. The CPC will not get involved in the dispute between the consumer and the retailer.

D. The CPC will fine the retailer for refusing to replace the product.

Correct Answer: B

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Question 19

A sole trader is considering expanding their business by hiring employees. Which of the following is a correct statement about the tax implications of this decision?

A. The sole trader will be able to claim a tax deduction for the salaries paid to employees.

Correct B. The sole trader will be required to pay PAYE on the salaries paid to employees.

C. The sole trader will be able to claim a tax credit for the salaries paid to employees.

D. The sole trader will not be required to pay tax on the salaries paid to employees.

Correct Answer: B

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Question 20

A company is considering launching a new product in the Nigerian market. The company has conducted market research and found that the product is likely to be successful. However, the company is concerned about the high cost of production. Which of the following marketing strategies would be most appropriate for the company?

A. Product differentiation

B. Market segmentation

C. Target marketing

Correct D. Positioning

Correct Answer: D

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Question 21

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

A. Increasing marginal cost

B. Decreasing marginal revenue

Correct C. Increasing marginal opportunity cost

D. Decreasing marginal utility

Correct Answer: C

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Question 22

A company's financial statements show that its net income has increased by 15% over the past year. However, its return on equity (ROE) has decreased by 5%. What could be the reason for this decrease in ROE?

A. Increase in debt-to-equity ratio

B. Decrease in operating expenses

C. Increase in dividend payout ratio

Correct D. Decrease in interest coverage ratio

Correct Answer: D

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Question 23

A sole trader has a business income of ₦1,500,000 and business expenses of ₦800,000. What is the sole trader's business profit?

Correct A. ₦700,000

B. ₦1,000,000

C. ₦1,300,000

D. ₦1,500,000

Correct Answer: A

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Question 24

A company's production function is given by Q = 2L^0.5K^0.5. If the company increases its labor input from 4 units to 6 units, and keeps its capital input constant at 9 units, what is the percentage change in output?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 25

A consumer has a budget constraint of ₦1,000 and a preference for two goods, A and B. The prices of goods A and B are ₦200 and ₦300 respectively. What is the consumer's optimal consumption bundle?

Correct A. (4, 2)

B. (2, 3)

C. (3, 2)

D. (2, 4)

Correct Answer: A

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