POST UTME EKSU 2018 Commerce | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A firm is considering two different marketing strategies: one that involves a high level of advertising and another that involves a low level of advertising. If the firm's demand function is given by Q = 100 - 2P and the price elasticity of demand is 0.5, which strategy should the firm choose?
A. High advertising
B. Low advertising
C. Both strategies are equally effective
D. Neither strategy is effective
Question 2
A bank's cash reserve ratio is 10%. If the bank has 100,000 in deposits, how much cash must it hold in reserve?
A. 10,000
B. 20,000
C. 30,000
D. 40,000
Question 3
A firm's cost function is given by C = 100 + 2L + 3K. If the firm wants to minimize its costs and the price of labor is ₦500 per hour, what is the optimal level of capital?
A. 10 units
B. 20 units
C. 30 units
D. 40 units
Question 4
In a perfectly competitive market, the law of supply states that as the price of a good increases, the quantity supplied will
A. increase
B. decrease
C. remain constant
D. shift to the left
Question 5
The concept of 'agency' in business refers to:
A. A person or organization acting on behalf of another.
B. A business entity with a separate legal identity.
C. A type of business ownership where multiple individuals share profits and losses.
D. A contract between two parties where one party agrees to perform a service for the other.
Question 6
A sole trader's business is best described as a:
A. Partnership between two or more individuals.
B. Company with limited liability and a separate legal entity.
C. Business owned and operated by one individual.
D. Cooperative society with shared ownership and decision-making.
Question 7
In a perfectly competitive market, what is the relationship between the marginal revenue product of labor (MRP) and the marginal factor cost of labor (MFC)?
A. MRP > MFC
B. MRP < MFC
C. MRP = MFC
D. MRP and MFC are unrelated
Question 8
The concept of 'limited liability' in a company is best described as:
A. The company is responsible for all debts and liabilities of its members.
B. The company's liability is limited to the amount of its share capital.
C. The company's members are personally liable for its debts and liabilities.
D. The company's liability is unlimited and its members have no protection.
Question 9
The concept of comparative advantage in international trade was first introduced by which of the following economists?
A. Adam Smith
B. David Ricardo
C. Thomas Malthus
D. John Stuart Mill
Question 10
A firm's supply curve is upward-sloping. What does this indicate about the firm's production costs?
A. The firm's production costs are increasing
B. The firm's production costs are decreasing
C. The firm's production costs are constant
D. The firm's production costs are unrelated to supply
Question 11
A company's Articles of Association is a document that:
A. Outlines the company's objectives and scope of business.
B. Specifies the company's share capital and its division among shareholders.
C. Provides details of the company's directors and their roles.
D. Contains the company's Memorandum of Association.
Question 12
A consumer has a utility function U = 2X + 3Y, where X and Y are goods. If the consumer's budget constraint is 2X + 3Y = 12, find the consumer's optimal bundle of goods.
A. (X = 2, Y = 2)
B. (X = 3, Y = 1)
C. (X = 4, Y = 0)
D. (X = 0, Y = 4)
Question 13
A company is considering the introduction of a new product line. The product line has a high fixed cost, but a low variable cost. Which of the following marketing strategies would be most appropriate for this product line?
A. Penetration pricing
B. Skim pricing
C. Bundle pricing
D. Value-based pricing
Question 14
A sole trader's business is not affected by the death of the owner because the business is a
A. partnership
B. company
C. proprietorship
D. joint venture
Question 15
In a perfectly competitive market, the law of diminishing marginal utility leads to a decrease in the marginal revenue product of a firm's inputs. What is the likely consequence of this decrease?
A. An increase in the firm's output
B. A decrease in the firm's output
C. No change in the firm's output
D. An increase in the firm's price

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