POST UTME FUTO 2025 Commerce | Objective

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Question 1
In a perfectly competitive market, what is the relationship between the marginal revenue (MR) and the marginal cost (MC) of a firm?
A. MR > MC
B. MR < MC
Correct C. MR = MC
D. MR = MC + 10

Correct Answer: C

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Question 2
A company is considering two different production processes for a new 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 ₦80 per unit, which process should the company use?
Correct A. Process A
B. Process B
C. Both processes are equally profitable
D. Neither process is profitable

Correct Answer: A

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Question 3
A firm is considering two different advertising strategies. Strategy A costs ₦50,000 and is expected to increase sales by 10%. Strategy B costs ₦100,000 and is expected to increase sales by 20%. Which strategy should the firm use?
A. Strategy A
Correct B. Strategy B
C. Both strategies are equally effective
D. Neither strategy is effective

Correct Answer: B

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Question 4
A bank is considering two different loan options for a customer. Option A has a fixed interest rate of 10% and a variable interest rate of 5% per annum. Option B has a fixed interest rate of 15% and a variable interest rate of 3% per annum. Which option should the bank offer to the customer?
Correct A. Option A
B. Option B
C. Both options are equally attractive
D. Neither option is attractive

Correct Answer: A

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Question 5
A sole trader is considering two different business structures for a new venture. Structure A is a partnership with two partners, and Structure B is a limited company with 10 shareholders. Which structure should the sole trader use?
A. Structure A
Correct B. Structure B
C. Both structures are equally suitable
D. Neither structure is suitable

Correct Answer: B

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Question 6
A firm's production function is given by Q = 2L^0.5H^0.5, where Q is output, L is labor, and H is capital. If the firm wants to increase output by 20% while keeping labor constant at 100 units, how much capital (H) should it invest?
A. 150
B. 200
Correct C. 250
D. 300

Correct Answer: C

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Question 7
A company's profit function is given by π = 100Q - 2Q^2, where π is profit and Q is quantity sold. If the company wants to maximize its profit, what quantity should it produce?
A. 10
B. 20
Correct C. 30
D. 40

Correct Answer: C

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Question 8
A firm's revenue function is given by R = 2Q^2 - 5Q + 1, where R is revenue and Q is quantity sold. If the firm wants to increase revenue by 50%, what quantity should it produce?
A. 5
B. 10
Correct C. 15
D. 20

Correct Answer: C

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Question 9
A company's cost function is given by C = 100 + 2Q + 0.5Q^2, where C is cost and Q is quantity produced. If the company wants to minimize its cost, what quantity should it produce?
A. 10
Correct B. 20
C. 30
D. 40

Correct Answer: B

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Question 10
A firm's demand function is given by Q = 100 - 2P, where Q is quantity demanded and P is price. If the firm wants to maximize its revenue, what price should it charge?
A. 20
B. 30
Correct C. 40
D. 50

Correct Answer: C

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Question 11
A firm specializes in producing a single product, and its production function is given by the equation ( Q = 2L^2 + 3K ), where Q is the quantity produced, L is the labor input, and K is the capital input. If the firm's labor input is 4 units and its capital input is 5 units, what is the quantity produced?
A. 40
B. 50
Correct C. 60
D. 70

Correct Answer: C

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Question 12
A company uses the following marketing mix to promote its product: 4S (Sales Promotion, Salesmanship, Sales Support, and Sales Strategy). Which of the following is NOT a part of the 4S?
A. Sales Promotion
B. Salesmanship
C. Sales Support
Correct D. Sales Strategy

Correct Answer: D

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Question 13
A consumer protection agency is considering a new policy to regulate the sale of a particular product. The policy would require all sellers to provide a 10-year warranty on the product. What type of risk is the agency trying to mitigate?
Correct A. Physical Risk
B. Financial Risk
C. Operational Risk
D. Reputational Risk

Correct Answer: A

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Question 14
A business law firm is considering a new contract with a client. The contract includes a clause that requires the client to pay a penalty of ₦100,000 if they fail to meet their obligations. What type of contract is this?
A. Fixed-Price Contract
B. Cost-Plus Contract
Correct C. Penalty-Based Contract
D. Time-and-Materials Contract

Correct Answer: C

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Question 15
A company is considering a new business strategy that involves producing a new product. The product requires a significant investment in research and development, but it has the potential to generate high profits. What type of risk is the company taking on?
A. Market Risk
B. Operational Risk
C. Financial Risk
Correct D. Strategic Risk

Correct Answer: D

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Question 16
A sole trader's business is considered a separate legal entity from its owner. However, in the event of the owner's death, the business may be affected by the following legal principle:
A. The business is automatically dissolved.
Correct B. The business is transferred to the owner's estate.
C. The business continues to operate as usual.
D. The business is taken over by the owner's spouse.

Correct Answer: B

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Question 17
A company's production process involves the following steps:
A. Raw materials → Machine → Finished goods
B. Raw materials → Worker → Finished goods
Correct C. Raw materials → Machine → Worker → Finished goods
D. Raw materials → Worker → Machine → Finished goods

Correct Answer: C

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Question 18
A business owner has taken out an insurance policy to cover the following risks:
Correct A. Fire, theft, and liability
B. Fire, theft, and business interruption
C. Liability, business interruption, and cybercrime
D. Cybercrime, business interruption, and employee dishonesty

Correct Answer: A

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Question 19
A company is considering exporting its products to a foreign market. The following factors may affect its decision:
A. Tariffs, taxes, and transportation costs
Correct B. Currency exchange rates, trade agreements, and cultural differences
C. Market size, competition, and regulatory environment
D. Language barriers, cultural differences, and logistics

Correct Answer: B

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Question 20
A business is considering implementing a just-in-time inventory system. The following benefits may result:
Correct A. Reduced inventory costs, improved customer service, and increased efficiency
B. Improved quality control, reduced waste, and increased productivity
C. Reduced lead times, improved forecasting, and increased flexibility
D. Improved supplier relationships, reduced inventory levels, and increased cash flow

Correct Answer: A

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Question 21
A company's primary objective is to maximize shareholder wealth. However, this may lead to a conflict with consumer protection laws. Which of the following best describes this conflict?
A. The company's objective is to maximize profits, which may lead to a conflict with consumer protection laws.
B. The company's objective is to minimize costs, which may lead to a conflict with consumer protection laws.
Correct C. The company's objective is to maximize shareholder wealth, which may lead to a conflict with consumer protection laws.
D. The company's objective is to maximize consumer satisfaction, which may lead to a conflict with consumer protection laws.

Correct Answer: C

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Question 22
A warehouse has a capacity of 10,000 units. If 8,000 units are already stored, what is the remaining capacity?
Correct A. 2,000
B. 5,000
C. 8,000
D. 10,000

Correct Answer: A

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Question 23
A company exports goods worth ₦1,000,000 to a foreign country. If the exchange rate is 1 USD = ₦400, what is the value of the goods in USD?
A. 2,500
Correct B. 2,500.00
C. 2,500.00 USD
D. 2,500.00 USD

Correct Answer: B

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Question 24
A company uses the following transportation costs: ₦1,000 per unit for the first 1,000 units, ₦500 per unit for the next 2,000 units, and ₦200 per unit for the remaining units. If the company ships 5,000 units, what is the total transportation cost?
A. ₦1,250,000
Correct B. ₦1,250,000.00
C. ₦1,250,000.00
D. ₦1,250,000.00

Correct Answer: B

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Question 25
A company has a warehouse with a capacity of 10,000 units. If 8,000 units are already stored, what is the percentage of the remaining capacity?
Correct A. 20%
B. 25%
C. 30%
D. 40%

Correct Answer: A

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