POST UTME CHRISTOPHER UNIVERSITY 2021 Commerce | Objective

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Question 1
In a perfectly competitive market, the law of diminishing marginal utility is most relevant to the production of which good?
A. A luxury item
Correct B. A necessity
C. A public good
D. A private good

Correct Answer: B

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Question 2
A firm's production function is given by Q = 2L^0.5 + 3K^0.5. If the firm's current inputs are L = 9 and K = 16, what is the marginal product of labor?
A. 1
Correct B. 2
C. 3
D. 4

Correct Answer: B

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Question 3
A company is considering two different modes of transportation for its goods: trucking and rail. The cost of trucking is ₦500 per unit, while the cost of rail is ₦300 per unit. If the company expects to transport 100 units, what is the total cost of transportation using rail?
Correct A. ₦30,000
B. ₦30,500
C. ₦31,000
D. ₦31,500

Correct Answer: A

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Question 4
A firm's demand function is given by Q = 100 - 2P. If the firm's current price is ₦50, what is the quantity demanded?
A. 50
Correct B. 75
C. 100
D. 125

Correct Answer: B

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Question 5
A company is considering two different marketing strategies: product differentiation and market segmentation. Which strategy is most likely to increase the company's market share?
Correct A. Product differentiation
B. Market segmentation
C. Both strategies
D. Neither strategy

Correct Answer: A

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Question 6
A commercial bank's primary function is to act as a _______ between savers and borrowers.
A. agent
Correct B. intermediary
C. facilitator
D. regulator

Correct Answer: B

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Question 7
The _______ of a business refers to the process of creating and distributing value to customers.
A. production
Correct B. marketing
C. distribution
D. consumption

Correct Answer: B

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Question 8
A _______ is a type of insurance policy that provides financial protection against loss or damage to property.
A. life insurance
Correct B. property insurance
C. liability insurance
D. health insurance

Correct Answer: B

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Question 9
The _______ of a business refers to the process of creating and maintaining a positive image in the minds of customers.
A. production
Correct B. marketing
C. distribution
D. consumption

Correct Answer: B

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Question 10
A _______ is a type of business organization that is owned and controlled by its members.
A. partnership
B. corporation
Correct C. cooperative
D. sole proprietorship

Correct Answer: C

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Question 11
A company is considering two different production methods for its new product. Method A involves a higher initial investment but lower production costs, while Method B involves a lower initial investment but higher production costs. If the company expects to produce 10,000 units per year for 5 years, and the market price of the product is ₦200 per unit, which production method should the company choose?
Correct A. Method A
B. Method B
C. Both methods are equally profitable
D. Neither method is profitable

Correct Answer: A

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Question 12
A firm is considering exporting its product to a foreign market. The firm's production costs are ₦100 per unit, and the market price in the foreign market is ₦250 per unit. If the firm expects to sell 5,000 units per year for 3 years, what is the minimum amount of foreign currency the firm needs to earn per year to break even?
Correct A. ₦1,250,000
B. ₦1,500,000
C. ₦1,750,000
D. ₦2,000,000

Correct Answer: A

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Question 13
A company is considering investing in a new project. The project requires an initial investment of ₦5 million and is expected to generate a profit of ₦2 million per year for 5 years. If the company's cost of capital is 10% per annum, what is the net present value of the project?
Correct A. ₦8,000,000
B. ₦9,000,000
C. ₦10,000,000
D. ₦11,000,000

Correct Answer: A

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Question 14
A firm is considering importing a raw material from a foreign supplier. The cost of the raw material is ₦150 per unit, and the firm expects to use 10,000 units per year for 3 years. If the exchange rate is ₦500 per US dollar, and the supplier is offering a 10% discount on the total cost, what is the minimum amount the firm should pay per unit?
Correct A. ₦1,400
B. ₦1,500
C. ₦1,600
D. ₦1,700

Correct Answer: A

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Question 15
A company is considering investing in a new project. The project requires an initial investment of ₦3 million and is expected to generate a profit of ₦1.5 million per year for 5 years. If the company's cost of capital is 12% per annum, what is the internal rate of return (IRR) of the project?
Correct A. 15%
B. 16%
C. 17%
D. 18%

Correct Answer: A

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Question 16
A firm's marketing strategy involves creating a unique selling proposition (USP) to differentiate its product from competitors. Which of the following is a characteristic of a USP?
Correct A. It is a statement that highlights the benefits of a product.
B. It is a statement that highlights the features of a product.
C. It is a statement that highlights the price of a product.
D. It is a statement that highlights the quality of a product.

Correct Answer: A

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Question 17
A company is considering a new investment opportunity in a foreign country. The company's financial manager has identified the following risks associated with the investment: political risk, economic risk, and exchange rate risk. Which of the following is a way to mitigate exchange rate risk?
Correct A. Hedging
B. Diversification
C. Risk avoidance
D. Risk reduction

Correct Answer: A

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Question 18
A consumer protection agency has received a complaint from a customer who purchased a product online. The customer alleges that the product was not as described and was defective. Which of the following is a right that the consumer has under the Consumer Protection Act?
A. The right to a refund
B. The right to a replacement
C. The right to compensation
Correct D. All of the above

Correct Answer: D

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Question 19
A company is considering a new marketing strategy that involves partnering with a popular influencer on social media. Which of the following is a benefit of partnering with an influencer?
A. Increased brand awareness
B. Improved customer engagement
C. Enhanced product credibility
Correct D. All of the above

Correct Answer: D

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Question 20
A firm's financial manager is considering a new investment opportunity in a foreign country. The manager has identified the following risks associated with the investment: political risk, economic risk, and exchange rate risk. Which of the following is a way to mitigate political risk?
A. Hedging
B. Diversification
Correct C. Risk avoidance
D. Risk reduction

Correct Answer: C

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Question 21
A company's production function is given by Q = 100L^0.5K^0.5, where Q is the quantity produced, L is labor, and K is capital. If the company wants to increase its production by 20% while keeping labor constant, what percentage increase in capital is required?
A. 10%
Correct B. 20%
C. 30%
D. 40%

Correct Answer: B

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Question 22
A firm is considering two investment projects, A and B. Project A has a 5-year lifespan and requires an initial investment of ₦10 million. Project B has a 3-year lifespan and requires an initial investment of ₦5 million. If the firm expects to earn a 15% return on investment for both projects, which project should it choose?
Correct A. Project A
B. Project B
C. Both projects are equally attractive
D. Neither project is attractive

Correct Answer: A

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Question 23
A company's marketing strategy involves a 20% discount on all products for the first week of sales. If the original price of a product is ₦1,000, what is the new price after the discount?
Correct A. ₦800
B. ₦900
C. ₦1,000
D. ₦1,200

Correct Answer: A

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Question 24
A bank offers a 5-year fixed deposit account with a 12% annual interest rate. If a customer deposits ₦100,000, how much will they receive at the end of the 5-year period?
A. ₦132,000
B. ₦135,000
C. ₦137,000
Correct D. ₦140,000

Correct Answer: D

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Question 25
A firm's production function is given by Q = 2L^0.5K^0.5, where Q is the quantity produced, L is labor, and K is capital. If the firm wants to increase its production by 50% while keeping labor constant, what percentage increase in capital is required?
A. 25%
B. 30%
C. 35%
Correct D. 40%

Correct Answer: D

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