POST UTME ESUT 2018 Commerce | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A company is considering the introduction of a new product. The product has a high fixed cost of production, but the variable cost per unit is low. Which of the following is a characteristic of the product?
A. Economies of scale
B. Diseconomies of scale
C. Constant returns to scale
D. Increasing returns to scale
Question 2
A company is considering the introduction of a new product. The product has a high fixed cost of production, but the variable cost per unit is low. Which of the following is a characteristic of the product?
A. Economies of scale
B. Diseconomies of scale
C. Constant returns to scale
D. Increasing returns to scale
Question 3
A bank's return on equity (ROE) is a measure of its profitability. If a bank has an ROE of 12% and its equity is ₦1.2 billion, what is its net income?
A. ₦144 million
B. ₦144.8 million
C. ₦145.6 million
D. ₦146.4 million
Question 4
A company's marketing strategy involves a mix of advertising, sales promotion, and public relations. Which of the following is NOT a characteristic of a successful marketing strategy?
A. It is customer-centric
B. It is focused on short-term gains
C. It is adaptable to changing market conditions
D. It is solely dependent on advertising
Question 5
A company is considering exporting its products to a foreign market. Which of the following is a major advantage of exporting?
A. Increased competition
B. Reduced market share
C. Access to new markets and customers
D. Lower production costs
Question 6
A company's sole trader is considering the purchase of a liability insurance policy to cover potential losses from a business interruption. The policy has a premium of ₦250,000 and a deductible of ₦50,000. If the company's expected loss from business interruption is ₦200,000, what is the expected value of perfect insurance?
A. ₦125,000
B. ₦150,000
C. ₦175,000
D. ₦200,000
Question 7
A company has a turnover of ₦5,000,000 and a profit of ₦1,200,000. What is the company's profit margin?
A. 24%
B. 25%
C. 26%
D. 27%
Question 8
A consumer protection agency is investigating a complaint about a company's unfair contract terms. The contract states that the consumer must pay a penalty of ₦10,000 for every day late in payment. If the consumer is 30 days late, what is the total penalty payable?
A. ₦250,000
B. ₦300,000
C. ₦350,000
D. ₦400,000
Question 9
A company's production process involves the use of specialized equipment and machinery. What is the primary benefit of this type of production process?
A. It increases labor costs
B. It reduces product quality
C. It increases efficiency and productivity
D. It decreases product variety
Question 10
A business owner purchases insurance to protect against potential losses. What is the primary purpose of this type of insurance?
A. To increase revenue
B. To reduce expenses
C. To protect against financial losses
D. To increase market share
Question 11
In a perfectly competitive market, the supply curve is upward-sloping because firms are willing to supply more of a good as its price increases. However, this is not the case in a monopoly market. Explain why the supply curve in a monopoly market is downward-sloping.
A. The monopolist has a fixed cost of production that increases as output increases.
B. The monopolist has a decreasing marginal cost of production that increases as output increases.
C. The monopolist has a decreasing marginal revenue that increases as output increases.
D. The monopolist has a fixed price that decreases as output increases.
Question 12
The Central Bank of Nigeria (CBN) uses the monetary policy instrument of reserve requirement to control the money supply in the economy. If the CBN increases the reserve requirement ratio from 10% to 15%, what is the likely effect on the money supply?
A. The money supply will increase
B. The money supply will decrease
C. The money supply will remain unchanged
D. The money supply will fluctuate
Question 13
A consumer's budget constraint is a horizontal line because the consumer has a fixed income that can be spent on any combination of goods. Explain why this is the case.
A. Because the consumer's income is fixed and can be spent on any combination of goods.
B. Because the consumer's income is variable and can be spent on any combination of goods.
C. Because the consumer's income is fixed and can only be spent on one good.
D. Because the consumer's income is variable and can only be spent on one good.
Question 14
A company has a warehouse with a capacity of 10,000 units. The company receives an order for 5,000 units, but the warehouse is already 75% full. What is the maximum number of units that the company can store in the warehouse?
A. 3,750 units
B. 4,000 units
C. 4,500 units
D. 5,000 units
Question 15
A firm's revenue is maximized when the marginal revenue (MR) equals the marginal cost (MC). Explain why this is the case.
A. Because the firm's total revenue is maximized when the marginal revenue equals the marginal cost.
B. Because the firm's total cost is minimized when the marginal revenue equals the marginal cost.
C. Because the firm's profit is maximized when the marginal revenue equals the marginal cost.
D. Because the firm's output is maximized when the marginal revenue equals the marginal cost.

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