POST UTME FUTA 2021 Commerce | Objective

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Question 1
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 much will the quantity produced increase?
A. 10%
B. 20%
C. 30%
D. 40%
Question 2
A company is considering entering into a contract with a supplier. The contract specifies that the supplier will deliver a certain quantity of goods to the company within a specified timeframe. What is the primary factor that the company should consider when deciding whether to enter into the contract?
A. The price of the goods
B. The quality of the goods
C. The reliability of the supplier
D. The delivery timeframe
Question 3
A firm's demand function is given by P = 100 - 2Q, where P is the price and Q is the quantity demanded. If the firm's marginal revenue is given by MR = 200 - 4Q, what is the firm's optimal quantity?
A. 10
B. 20
C. 30
D. 40
Question 4
A company is considering two different production processes to manufacture a product. Process A has a fixed cost of ₦100,000 and a variable cost of ₦50 per unit. Process B has a fixed cost of ₦150,000 and a variable cost of ₦30 per unit. If the selling price of the product is ₦120 per unit, which process should the company use to maximize its profit?
A. Process A
B. Process B
C. Both processes are equally profitable
D. Neither process is profitable
Question 5
A company's production function is given by Q = 100L^0.5K^0.25, where Q is the quantity produced, L is the labor input, and K is the capital input. If the company increases labor input from 4 to 9 units, and capital input from 16 to 25 units, by how much does the quantity produced increase?
A. 10
B. 20
C. 30
D. 40
Question 6
A company is considering a new marketing strategy that involves offering a 10% discount to customers who purchase a product online. What is the expected effect on the company's revenue?
A. Increase by 5%
B. Decrease by 5%
C. Increase by 10%
D. Decrease by 10%
Question 7
A company's insurance policy covers the following risks: fire, theft, and liability. Which of the following types of insurance is most likely to cover these risks?
A. Fire Insurance
B. Theft Insurance
C. Liability Insurance
D. All Risk Insurance
Question 8
A firm is producing a product with the following demand function: Q = 100 - 2P. If the firm's cost function is C(x) = 2x^2 + 100x + 5000, what is the optimal price to charge to maximize profit?
A. ₦50
B. ₦60
C. ₦70
D. ₦80
Question 9
A firm's revenue function is given by R = 100Q - 2Q^2, where R is the total revenue and Q is the quantity sold. If the firm's marginal revenue is given by MR = 100 - 4Q, what is the firm's optimal quantity?
A. 10
B. 20
C. 30
D. 40
Question 10
A company's warehouse is designed to store the following products: raw materials, work-in-progress, and finished goods. Which of the following types of storage is most likely to be used for these products?
A. First-In-First-Out (FIFO)
B. Last-In-First-Out (LIFO)
C. First-Come-First-Served (FCFS)
D. Just-In-Time (JIT)
Question 11
In a perfectly competitive market, the supply curve is upward-sloping because of the law of increasing costs. What is the primary reason for this upward-sloping supply curve?
A. The law of diminishing marginal returns
B. The law of increasing costs
C. The law of supply and demand
D. The law of diminishing returns
Question 12
In a perfectly competitive market, the supply curve is upward sloping because of the law of increasing
A. diminishing marginal opportunity cost
B. increasing marginal opportunity cost
C. decreasing marginal opportunity cost
D. constant marginal opportunity cost
Question 13
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 14
A consumer protection law requires businesses to provide a 30-day cooling-off period for customers to return goods. What is the primary purpose of this law?
A. To protect consumers from faulty goods.
B. To protect businesses from fraudulent customers.
C. To provide consumers with a chance to review goods before purchasing.
D. To promote competition among businesses.
Question 15
A company is considering outsourcing its production to a foreign country. What is the primary benefit of outsourcing?
A. Reduced labor costs
B. Increased market share
C. Improved quality control
D. Enhanced brand reputation

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