Practice post utme ksu commerce 2018 Past Questions

Question 1

A sole trader's business is registered under which of the following?

A. Partnership

B. Company

Correct C. Sole Trader

D. Limited Liability Partnership

Correct Answer: C

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Question 2

A company's articles of association can be amended by a majority vote of the shareholders at a general meeting. What is the type of company?

A. Public Company

Correct B. Private Company

C. Quoted Company

D. Unquoted Company

Correct Answer: B

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Question 3

A consumer protection law that prohibits unfair contract terms is the Unfair Contract Terms Act 1977. What is the type of contract that is protected by this law?

Correct A. Consumer Contract

B. Business-to-Business Contract

C. Employment Contract

D. Lease Contract

Correct Answer: A

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Question 4

A company's production process involves the use of a machine that produces a product with a high level of specialization. What is the type of production process?

A. Mass Production

B. Batch Production

Correct C. Job Production

D. Continuous Production

Correct Answer: C

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Question 5

A bank's reserve requirement is 10%. If the bank has a cash reserve of ₦100,000, what is the maximum amount of loans it can give out?

Correct A. ₦900,000

B. ₦1,000,000

C. ₦1,100,000

D. ₦1,200,000

Correct Answer: A

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Question 6

In a perfectly competitive market, the supply curve is horizontal and the demand curve is downward-sloping. What is the equilibrium price and quantity in this market?

A. ₦100, 100 units

Correct B. ₦120, 80 units

C. ₦150, 60 units

D. ₦180, 40 units

Correct Answer: B

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Question 7

A company has the following budget constraint: 2x + 3y = 12. If the price of x is ₦2 and the price of y is ₦3, what is the optimal combination of x and y?

A. x = 2, y = 2

Correct B. x = 3, y = 1

C. x = 4, y = 0

D. x = 0, y = 4

Correct Answer: B

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Question 8

A firm's production function is given by Q = 2L + 3K. If the price of labor is ₦10 and the price of capital is ₦20, what is the optimal combination of labor and capital?

A. L = 2, K = 1

Correct B. L = 3, K = 2

C. L = 4, K = 3

D. L = 5, K = 4

Correct Answer: B

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Question 9

A company has the following cost function: C = 2L + 3K. If the price of labor is ₦10 and the price of capital is ₦20, what is the minimum cost of production?

A. ₦30

Correct B. ₦40

C. ₦50

D. ₦60

Correct Answer: B

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Question 10

A firm's revenue function is given by R = 2Q - 3Q^2. If the price of the good is ₦10, what is the maximum revenue?

A. ₦20

B. ₦30

Correct C. ₦40

D. ₦50

Correct Answer: C

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Question 11

In a perfectly competitive market, what is the relationship between the supply curve and the marginal cost curve?

A. The supply curve is steeper than the marginal cost curve.

B. The supply curve is flatter than the marginal cost curve.

Correct C. The supply curve is identical to the marginal cost curve.

D. The supply curve is a horizontal line below the marginal cost curve.

Correct Answer: C

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Question 12

A company has the following cost structure: Fixed Costs = ₦100,000, Variable Costs = ₦50 per unit, and Selling Price = ₦75 per unit. What is the break-even point?

A. 500 units

Correct B. 750 units

C. 1000 units

D. 1250 units

Correct Answer: B

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Question 13

A firm is considering two production methods: Method A, which costs ₦100 per unit, and Method B, which costs ₦120 per unit. If the market price is ₦150 per unit, which method should the firm use?

Correct A. Method A

B. Method B

C. Either method is acceptable

D. Neither method is acceptable

Correct Answer: A

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Question 14

A company has the following balance sheet: Assets = ₦500,000, Liabilities = ₦200,000, and Equity = ₦300,000. What is the company's debt-to-equity ratio?

A. 0.5

Correct B. 1.0

C. 1.5

D. 2.0

Correct Answer: B

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Question 15

A firm is considering two investment opportunities: Opportunity A, which has a 10% chance of earning ₦100,000 and a 90% chance of earning ₦0, and Opportunity B, which has a 20% chance of earning ₦50,000 and an 80% chance of earning ₦0. Which opportunity should the firm choose?

Correct A. Opportunity A

B. Opportunity B

C. Either opportunity is acceptable

D. Neither opportunity is acceptable

Correct Answer: A

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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 is automatically dissolved. Which of the following is a correct statement regarding the dissolution of a sole trader's business?

Correct A. The business is automatically dissolved and the assets are distributed among the creditors.

B. The business is automatically dissolved and the assets are distributed among the shareholders.

C. The business is not automatically dissolved and the assets are distributed among the creditors.

D. The business is not automatically dissolved and the assets are distributed among the shareholders.

Correct Answer: A

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Question 17

A company's Memorandum of Association is a document that outlines the company's constitution and the rights and duties of its members. Which of the following is a correct statement regarding the Memorandum of Association?

Correct A. It outlines the company's constitution and the rights and duties of its members.

B. It outlines the company's constitution and the rights and duties of its directors.

C. It outlines the company's constitution and the rights and duties of its creditors.

D. It outlines the company's constitution and the rights and duties of its shareholders.

Correct Answer: A

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Question 18

A company's Articles of Association is a document that outlines the company's internal management and the rules governing its members. Which of the following is a correct statement regarding the Articles of Association?

Correct A. It outlines the company's internal management and the rules governing its members.

B. It outlines the company's internal management and the rules governing its directors.

C. It outlines the company's internal management and the rules governing its creditors.

D. It outlines the company's internal management and the rules governing its shareholders.

Correct Answer: A

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Question 19

A company's Memorandum of Association and Articles of Association are two separate documents that outline the company's constitution and internal management. Which of the following is a correct statement regarding these documents?

Correct A. They are two separate documents that outline the company's constitution and internal management.

B. They are two separate documents that outline the company's constitution and internal management, but are not publicly available.

C. They are two separate documents that outline the company's constitution and internal management, but are not required by law.

D. They are two separate documents that outline the company's constitution and internal management, but are not binding on the company's members.

Correct Answer: A

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Question 20

A company's Memorandum of Association and Articles of Association are two separate documents that outline the company's constitution and internal management. Which of the following is a correct statement regarding these documents?

Correct A. They are two separate documents that outline the company's constitution and internal management.

B. They are two separate documents that outline the company's constitution and internal management, but are not publicly available.

C. They are two separate documents that outline the company's constitution and internal management, but are not required by law.

D. They are two separate documents that outline the company's constitution and internal management, but are not binding on the company's members.

Correct Answer: A

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Question 21

A company's foreign trade policy is primarily influenced by its

A. domestic market conditions

B. government regulations

Correct C. international market conditions

D. industry standards

Correct Answer: C

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Question 22

A warehouse's inventory management system is designed to minimize

A. inventory holding costs

B. ordering costs

C. stockout costs

Correct D. all of the above

Correct Answer: D

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Question 23

A company's risk management strategy involves

A. hedging against market fluctuations

B. diversifying its investments

C. insuring against potential losses

Correct D. all of the above

Correct Answer: D

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Question 24

A transportation company's logistics management system is designed to optimize

A. route planning

B. vehicle utilization

C. inventory management

Correct D. all of the above

Correct Answer: D

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Question 25

A communication network's reliability is measured by its

A. bandwidth

B. latency

C. throughput

Correct D. availability

Correct Answer: D

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