Practice post utme covenant university commerce 2017 Past Questions

Question 1

A firm specializes in producing a single product, which is a type of commodity. The production process involves a series of stages, each with its own set of inputs and outputs. What is the primary advantage of specialization in this context?

Correct A. Increased efficiency due to division of labor

B. Reduced costs due to economies of scale

C. Improved product quality due to focus on a single product

D. Enhanced customer satisfaction due to tailored products

Correct Answer: A

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Question 2

A company uses a just-in-time (JIT) inventory system to manage its stock levels. What is the primary benefit of this approach?

A. Reduced inventory costs due to lower stock levels

B. Improved product quality due to reduced handling

C. Enhanced customer satisfaction due to faster delivery

Correct D. Increased flexibility due to reduced lead times

Correct Answer: D

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Question 3

A sole trader is a type of business organization that is owned and operated by a single individual. What is the primary advantage of this type of business?

Correct A. Increased flexibility due to single decision-maker

B. Reduced costs due to no need for formal management structure

C. Improved product quality due to focus on a single product

D. Enhanced customer satisfaction due to tailored products

Correct Answer: A

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Question 4

A company uses a warehouse management system to track its inventory levels. What is the primary benefit of this approach?

Correct A. Improved inventory accuracy due to real-time tracking

B. Reduced inventory costs due to lower stock levels

C. Enhanced customer satisfaction due to faster delivery

D. Increased flexibility due to reduced lead times

Correct Answer: A

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Question 5

A company purchases insurance to mitigate the risk of business interruption. What is the primary benefit of this approach?

Correct A. Reduced financial losses due to business interruption

B. Improved product quality due to reduced risk of damage

C. Enhanced customer satisfaction due to faster delivery

D. Increased flexibility due to reduced lead times

Correct Answer: A

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Question 6

In a perfectly competitive market, the law of supply states that as the price of a commodity increases, the quantity supplied will

A. increase

Correct B. decrease

C. remain constant

D. increase then decrease

Correct Answer: B

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Question 7

A firm's revenue is calculated as the product of the price per unit and the quantity sold. If a firm sells 100 units at ₦200 each, what is its total revenue?

A. ₦15,000

Correct B. ₦20,000

C. ₦25,000

D. ₦30,000

Correct Answer: B

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Question 8

A consumer protection agency is established to protect consumers from unfair business practices. Which of the following is a key function of this agency?

A. To promote fair competition among businesses

B. To educate consumers about their rights

Correct C. To investigate complaints from consumers

D. To impose fines on businesses that engage in unfair practices

Correct Answer: C

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Question 9

A firm's cost of production includes both fixed and variable costs. If a firm's fixed costs are ₦10,000 and its variable costs are ₦5 per unit, what is its total cost of production if it produces 1,000 units?

A. ₦15,000

B. ₦20,000

C. ₦25,000

Correct D. ₦30,000

Correct Answer: D

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Question 10

A firm's market share is the percentage of the total market that it controls. If a firm has a market share of 30% and the total market is ₦100 million, what is its revenue?

A. ₦30 million

B. ₦40 million

Correct C. ₦50 million

D. ₦60 million

Correct Answer: C

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Question 11

In a perfectly competitive market, the law of supply states that as the price of a good increases, the quantity supplied will

A. increase

Correct B. decrease

C. remain constant

D. move in the opposite direction

Correct Answer: B

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Question 12

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current labor and capital inputs are L = 16 and K = 9, respectively, what is the firm's current output?

A. 24

B. 32

Correct C. 48

D. 64

Correct Answer: C

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Question 13

A consumer has a budget constraint of 100, and the prices of two goods are 10 and 20, respectively. If the consumer's indifference curve is tangent to the budget line at the point where the consumer is consuming 5 units of the first good and 2 units of the second good, what is the consumer's marginal rate of substitution?

Correct A. 0.5

B. 1

C. 2

D. 5

Correct Answer: A

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Question 14

A firm has a production function Q = 2L^0.5K^0.5. If the firm's current labor and capital inputs are L = 16 and K = 9, respectively, what is the firm's current output?

A. 24

B. 32

Correct C. 48

D. 64

Correct Answer: C

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Question 15

A consumer has a budget constraint of 100, and the prices of two goods are 10 and 20, respectively. If the consumer's indifference curve is tangent to the budget line at the point where the consumer is consuming 5 units of the first good and 2 units of the second good, what is the consumer's marginal rate of substitution?

Correct A. 0.5

B. 1

C. 2

D. 5

Correct Answer: A

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Question 16

A company's marketing strategy involves a mix of advertising and personal selling. Which of the following is a characteristic of personal selling?

A. It is a one-to-one communication process

B. It is a mass communication process

C. It is a non-personal communication process

Correct D. It is a face-to-face communication process

Correct Answer: D

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Question 17

A sole trader's business is registered under which of the following?

A. Companies Act

B. Partnership Act

Correct C. Business Names Act

D. Sole Trader Act

Correct Answer: C

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Question 18

A bank's cash reserve ratio is 10%. If the bank has a cash reserve of ₦100,000, how much can it lend to customers?

A. ₦900,000

Correct B. ₦1,000,000

C. ₦1,100,000

D. ₦1,200,000

Correct Answer: B

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Question 19

A company's marketing mix involves a product with a unique selling proposition. Which of the following is a characteristic of a unique selling proposition?

A. It is a product feature

B. It is a product benefit

C. It is a product attribute

Correct D. It is a product advantage

Correct Answer: D

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Question 20

A bank's interest rate is 12% per annum. If a customer deposits ₦100,000 for 1 year, how much interest will the customer earn?

A. ₦12,000

Correct B. ₦12,500

C. ₦13,000

D. ₦13,500

Correct Answer: B

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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 the labor input, and K is the capital input. If the company increases its labor input from 100 to 121 units and its capital input from 100 to 121 units, by how many percentage points will its quantity produced increase?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 22

A firm's demand function is given by Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the firm increases its price from ₦10 to ₦12, by how many units will its quantity demanded decrease?

A. 20 units

Correct B. 30 units

C. 40 units

D. 50 units

Correct Answer: B

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Question 23

A consumer's utility function is given by U = 2x + 3y, where x and y are the quantities of two goods consumed. If the consumer's income is ₦100 and the prices of the two goods are ₦5 and ₦10 respectively, how much of good x should the consumer consume to maximize utility?

A. 10 units

Correct B. 20 units

C. 30 units

D. 40 units

Correct Answer: B

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Question 24

A firm's production function is given by Q = 100L^0.5K^0.5, where Q is the quantity produced, L is the labor input, and K is the capital input. If the firm increases its labor input from 100 to 121 units and its capital input from 100 to 121 units, by how many percentage points will its quantity produced increase?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 25

A firm's demand function is given by Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the firm increases its price from ₦10 to ₦12, by how many units will its quantity demanded decrease?

A. 20 units

Correct B. 30 units

C. 40 units

D. 50 units

Correct Answer: B

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