POST UTME FUTO 2024 Commerce | Objective

Are you preparing for POST UTME FUTO exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2024 Commerce (Objective) questions designed to simulate the real exam environment.

Practice these randomly selected questions to test your readiness.

Question 1
In a perfectly competitive market, the supply curve is horizontal and the demand curve is downward-sloping. What is the effect of an increase in the price of a complementary good on the demand for the product?
A. The demand for the product increases.
Correct B. The demand for the product decreases.
C. The demand for the product remains unchanged.
D. The demand for the product becomes perfectly inelastic.

Correct Answer: B

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Question 2
A firm is considering two different production processes: one that produces 100 units of output per hour with a fixed cost of ₦10,000 and a variable cost of ₦5 per unit, and another that produces 200 units of output per hour with a fixed cost of ₦20,000 and a variable cost of ₦3 per unit. Which production process should the firm choose if it wants to minimize its average cost?
Correct A. The first production process.
B. The second production process.
C. Both production processes have the same average cost.
D. Neither production process has the lowest average cost.

Correct Answer: A

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Question 3
A company is considering launching a new product in a market where there are already several established brands. The company's marketing manager has estimated that the new product will capture 10% of the market share in the first year, and 20% of the market share in the second year. What is the expected market share of the new product after two years?
A. 15%
Correct B. 20%
C. 25%
D. 30%

Correct Answer: B

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Question 4
A firm is considering two different advertising strategies: one that targets a specific demographic and another that targets a broader audience. The firm's marketing manager has estimated that the first strategy will reach 50,000 people and the second strategy will reach 100,000 people. However, the first strategy will cost ₦500,000 and the second strategy will cost ₦1,000,000. What is the expected return on investment (ROI) for each strategy?
A. The first strategy has a higher ROI.
Correct B. The second strategy has a higher ROI.
C. Both strategies have the same ROI.
D. Neither strategy has a positive ROI.

Correct Answer: B

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Question 5
A company is considering outsourcing its logistics to a third-party provider. The company's operations manager has estimated that the outsourcing will save ₦500,000 per year in costs, but will also result in a 10% decrease in customer satisfaction. What is the net effect of outsourcing on the company's profits?
A. The company's profits will increase by ₦500,000.
Correct B. The company's profits will decrease by ₦500,000.
C. The company's profits will remain unchanged.
D. The company's profits will increase by ₦50,000.

Correct Answer: B

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Question 6
A company's marketing strategy involves creating a sense of urgency among customers to purchase a product. This strategy is an example of which of the following?
A. Scarcity
Correct B. Limited-time offer
C. Price anchoring
D. Upselling

Correct Answer: B

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Question 7
A firm's revenue is calculated as the product of the number of units sold and the price per unit. If the firm sold 1000 units at ₦200 each, what is the total revenue?
Correct A. ₦200,000
B. ₦250,000
C. ₦300,000
D. ₦350,000

Correct Answer: A

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Question 8
A consumer protection agency wants to determine the average price of a product in a market. If the prices of 5 products are ₦100, ₦120, ₦150, ₦180, and ₦200, what is the average price?
A. ₦140
Correct B. ₦150
C. ₦160
D. ₦170

Correct Answer: B

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Question 9
A company wants to transport a shipment of goods from Lagos to Abuja. The distance between the two cities is 700 km, and the company has a truck that can travel at an average speed of 60 km/h. How long will it take to transport the shipment?
Correct A. 11.67 hours
B. 12.33 hours
C. 13.00 hours
D. 13.67 hours

Correct Answer: A

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Question 10
A firm wants to determine the cost of producing a product. The cost function is given by C(x) = 2x^2 + 5x + 10, where x is the number of units produced. If the firm produces 10 units, what is the total cost?
A. ₦250
B. ₦300
Correct C. ₦350
D. ₦400

Correct Answer: C

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Question 11
A company is considering two different marketing strategies for its new product. Strategy A involves a high level of advertising and promotion, while Strategy B involves a low level of advertising and promotion. If the company expects to sell 1000 units of the product at a price of ₦500 per unit, which strategy would result in the highest revenue?
Correct A. Strategy A
B. Strategy B
C. Both strategies would result in the same revenue
D. Neither strategy would result in the highest revenue

Correct Answer: A

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Question 12
A sole trader has a business income of ₦1,000,000 and expenses of ₦800,000. What is the sole trader's profit?
Correct A. ₦200,000
B. ₦300,000
C. ₦400,000
D. ₦500,000

Correct Answer: A

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Question 13
A company produces two products, X and Y. The production process for product X requires 2 hours of labor and 1 hour of machine time, while the production process for product Y requires 1 hour of labor and 2 hours of machine time. If the company has 8 hours of labor and 6 hours of machine time available, how many units of product X and product Y can be produced?
A. 10 units of X and 6 units of Y
Correct B. 8 units of X and 4 units of Y
C. 6 units of X and 2 units of Y
D. 4 units of X and 8 units of Y

Correct Answer: B

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Question 14
A bank offers a loan of ₦1,000,000 at an interest rate of 10% per annum. If the loan is repayable in 5 years, what is the total amount to be repaid?
A. ₦1,100,000
B. ₦1,200,000
Correct C. ₦1,300,000
D. ₦1,400,000

Correct Answer: C

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Question 15
A company has a market share of 20% in a market with a total demand of 100 units. If the company increases its market share by 5%, what is the new market share?
A. 25%
Correct B. 30%
C. 35%
D. 40%

Correct Answer: B

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Question 16
In a consumer protection context, what is the primary purpose of the Consumer Protection Act 1999?
A. To regulate consumer credit
Correct B. To protect consumers from unfair trade practices
C. To promote consumer education
D. To establish consumer tribunals

Correct Answer: B

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Question 17
A company's marketing strategy involves creating a new product line. Which of the following is a key consideration in this decision?
Correct A. Market research
B. Product life cycle
C. Target market
D. Competitor analysis

Correct Answer: A

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Question 18
A business owner purchases a liability insurance policy to protect against potential lawsuits. What is the primary benefit of this policy?
Correct A. Financial protection against lawsuits
B. Reduced business costs
C. Increased customer trust
D. Improved employee morale

Correct Answer: A

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Question 19
A company's introduction to commerce involves understanding the concept of supply and demand. What is the law of supply?
A. The higher the price, the higher the quantity supplied
B. The lower the price, the higher the quantity supplied
Correct C. The higher the price, the lower the quantity supplied
D. The lower the price, the lower the quantity supplied

Correct Answer: C

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Question 20
A bank's financial institution involves managing risk. What is the primary goal of risk management?
A. To maximize profits
Correct B. To minimize losses
C. To maintain liquidity
D. To increase market share

Correct Answer: B

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Question 21
The concept of 'just-in-time' inventory management is most closely associated with which of the following transportation modes?
A. Air Freight
B. Land Freight
Correct C. Sea Freight
D. Rail Freight

Correct Answer: C

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Question 22
A company's decision to use a particular mode of transportation is influenced by the following factors EXCEPT:
A. Cost
B. Speed
C. Reliability
Correct D. Environmental Impact

Correct Answer: D

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Question 23
The diagram below illustrates a type of insurance policy that is commonly used to cover against the risk of loss or damage to goods during transportation. What is the name of this type of policy?
Correct A. All-Risk Policy
B. Cargo Insurance Policy
C. Marine Insurance Policy
D. Transportation Insurance Policy

Correct Answer: A

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Question 24
A bank's decision to provide a loan to a customer is influenced by the following factors EXCEPT:
A. Creditworthiness
B. Collateral
C. Interest Rate
Correct D. Environmental Impact

Correct Answer: D

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Question 25
The diagram below illustrates a type of banking service that is commonly used to facilitate international trade. What is the name of this type of service?
Correct A. Letter of Credit
B. Bank Guarantee
C. Trade Finance
D. International Money Transfer

Correct Answer: A

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