POST UTME CRAWFORD UNIVERSITY 2022 Commerce | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A company is considering the use of a foreign exchange risk management strategy to mitigate the impact of exchange rate fluctuations on its exports. Which of the following strategies would be most effective?
A. Hedging
B. Speculation
C. Diversification
D. Exporting to multiple countries
Question 2
A firm has a risk management policy that requires it to pay a premium of ₦500 for every ₦1000 of assets. If the firm has ₦500,000 in assets, how much premium will the firm pay?
A. ₦2500
B. ₦5000
C. ₦7500
D. ₦10,000
Question 3
A consumer is considering purchasing a product that has a 5-year warranty. What is the primary implication of this warranty?
A. The product is of high quality.
B. The product is of average quality.
C. The product is of low quality.
D. The product is of unknown quality.
Question 4
A consumer has a budget constraint of ₦10,000 and a preference for two goods, A and B. The prices of the goods are ₦5,000 and ₦3,000, respectively. Using the budget constraint and indifference curves, determine the consumer's optimal consumption bundle.
A. A = 2 units, B = 1 unit
B. A = 1 unit, B = 2 units
C. A = 3 units, B = 0 units
D. A = 0 units, B = 3 units
Question 5
A company is considering two different marketing strategies for its new product. Strategy A involves a high upfront cost of ₦1,500,000, but is expected to generate ₦3,000,000 in revenue over the first year. Strategy B involves a lower upfront cost of ₦500,000, but is expected to generate ₦2,000,000 in revenue over the first year. Which strategy should the company choose?
A. Strategy A
B. Strategy B
C. Both strategies are equally viable
D. Neither strategy is viable
Question 6
A sole trader's business is considered a separate legal entity from its owner. However, the owner's personal assets are still at risk in case of business debts. What is the name of this type of risk?
A. Unlimited liability
B. Limited liability
C. Personal liability
D. Business liability
Question 7
A company is considering the implementation of a just-in-time (JIT) inventory system. What is the primary benefit of this system?
A. Reduced inventory costs.
B. Improved product quality.
C. Increased production efficiency.
D. Enhanced customer satisfaction.
Question 8
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. What is the opportunity cost of producing a good?
A. The cost of producing the good in terms of other goods that could be produced instead
B. The cost of producing the good in terms of labor hours
C. The cost of producing the good in terms of raw materials
D. The cost of producing the good in terms of capital investment
Question 9
A company is considering implementing a new marketing strategy that involves offering a discount to customers who purchase a certain product. The company estimates that the discount will result in a 10% increase in sales, but will also result in a 5% decrease in profit margins. What is the net effect of implementing the new marketing strategy on the company's profits?
A. The company's profits will increase by ₦100,000
B. The company's profits will decrease by ₦100,000
C. The company's profits will remain the same
D. The company's profits will increase by ₦500,000
Question 10
A producer's production function is given by the equation Q = 2L^0.5 * K^0.5. What is the marginal product of labor?
A. \frac{L^{0.5}}{2K^{0.5}}
B. \frac{2L^{0.5}K^{0.5}}{K}
C. \frac{2L^{0.5}K^{0.5}}{L}
D. \frac{L^{0.5}}{K^{0.5}}
Question 11
A firm has a warehouse with a capacity of 1000 units. The firm currently has 500 units of good X and 300 units of good Y in the warehouse. If the firm receives an order for 200 units of good X and 150 units of good Y, what is the total capacity of the warehouse after fulfilling the order?
A. 1200
B. 1300
C. 1400
D. 1500
Question 12
The concept of 'Gresham's Law' in international trade is closely related to the idea of 'bad money driving out good money'. What is the primary reason for this phenomenon?
A. The devaluation of a currency leads to a decrease in the value of exports.
B. The overproduction of a currency leads to a decrease in its value.
C. The hoarding of a currency leads to a decrease in its value.
D. The devaluation of a currency leads to an increase in the value of imports.
Question 13
A company is considering the formation of a joint venture with a foreign partner. What is the primary advantage of this arrangement?
A. Reduced financial risk.
B. Increased market share.
C. Improved product quality.
D. Enhanced customer satisfaction.
Question 14
A producer's total revenue function is given by the equation TR = 100Q - 2Q^2. What is the marginal revenue?
A. 100 - 4Q
B. 100 + 4Q
C. 100Q - 2Q^2
D. 2Q^2 - 100Q
Question 15
In a monopolistically competitive market, a firm's demand curve is downward sloping due to the presence of close substitutes. However, the firm's marginal revenue curve is not necessarily downward sloping. Explain why.
A. The firm's marginal revenue curve is downward sloping because the firm is a price taker.
B. The firm's marginal revenue curve is downward sloping because the firm is a price setter.
C. The firm's marginal revenue curve is downward sloping because the firm is a monopolist.
D. The firm's marginal revenue curve is downward sloping because the firm is a perfect competitor.

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