POST UTME LEAD CITY UNIVERSITY 2020 Commerce | Objective

Practice these randomly selected questions to test your readiness.

Question 1
The concept of diminishing marginal returns is related to the idea that as the quantity of a variable input increases, the marginal product of that input will
A. Increase
B. Decrease
C. Remain the same
D. Move to the left
Question 2
A company has a warehouse with a capacity of 10,000 units. If the company receives an order for 5,000 units, what is the new inventory level?
A. 5,000
B. 10,000
C. 15,000
D. 20,000
Question 3
The production function is a relationship between the quantity of inputs used in the production process and the quantity of output produced, which is typically represented by the equation
A. Q = f(L, K)
B. Q = L + K
C. Q = L - K
D. Q = L * K
Question 4
A company has two warehouses, A and B, with capacities of 1000 and 500 units respectively. Warehouse A has 800 units of stock, while warehouse B has 200 units. If the company wants to transfer 200 units from warehouse A to warehouse B, what is the maximum number of units that can be transferred?
A. 300
B. 400
C. 500
D. 600
Question 5
The concept of comparative advantage is based on the idea that countries should specialize in producing goods for which they have a
A. Absolute advantage
B. Comparative advantage
C. Opportunity cost
D. Law of diminishing returns
Question 6
A consumer is considering purchasing a product that has a price of ₦1000. The consumer's budget constraint is such that they can spend up to ₦2000. Which of the following is a correct description of the consumer's budget line?
A. The budget line is a horizontal line at a price of ₦1000.
B. The budget line is a vertical line at a quantity of 2 units.
C. The budget line is a downward-sloping line with a slope of -1.
D. The budget line is a horizontal line at a quantity of 2 units.
Question 7
A sole trader's business is registered under the sole trader's name. Which of the following is a characteristic of a sole trader's business?
A. The business is registered under the sole trader's name
B. The business is registered under a company name
C. The business is owned by multiple individuals
D. The business is owned by a partnership
Question 8
A company uses the just-in-time (JIT) inventory system. What is the primary advantage of this system?
A. Reduced inventory costs
B. Improved product quality
C. Increased production efficiency
D. Enhanced customer satisfaction
Question 9
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 value of the good in terms of other goods that could be produced instead
B. The cost of producing the good in terms of labor and resources
C. The price of the good in the market
D. The quantity of the good produced
Question 10
A company has a 10% dividend yield on its shares. If the company's share price is ₦100, what is the dividend per share?
A. ₦10
B. ₦20
C. ₦30
D. ₦40
Question 11
A company's financial statements are prepared in accordance with the Generally Accepted Accounting Principles (GAAP). Which of the following is a characteristic of GAAP?
A. GAAP is a set of rules that govern the preparation of financial statements
B. GAAP is a set of principles that guide the preparation of financial statements
C. GAAP is a set of standards that ensure the accuracy of financial statements
D. GAAP is a set of guidelines that promote transparency in financial reporting
Question 12
A company is considering the introduction of a new product line. The product has a high fixed cost of production, but the variable cost per unit is low. Which of the following is a correct description of the production cost structure?
A. The company has a high fixed cost and a low variable cost.
B. The company has a low fixed cost and a high variable cost.
C. The company has a high fixed cost and a high variable cost.
D. The company has a low fixed cost and a low variable cost.
Question 13
A firm has a production function given by Q = 2L^0.5K^0.5, where Q is the quantity produced, L is labor and K is capital. If the firm wants to produce 100 units of output, how much capital should it invest if it has 16 units of labor?
A. 16 units
B. 32 units
C. 64 units
D. 128 units
Question 14
A consumer is considering purchasing a product that has a price of ₦1000. The consumer's budget constraint is such that they can spend up to ₦2000. Which of the following is a correct description of the consumer's budget line?
A. The budget line is a horizontal line at a price of ₦1000.
B. The budget line is a vertical line at a quantity of 2 units.
C. The budget line is a downward-sloping line with a slope of -1.
D. The budget line is a horizontal line at a quantity of 2 units.
Question 15
A bank's cash reserve ratio is 20%. If the bank has ₦100,000 in cash reserves, how much can it lend out?
A. ₦400,000
B. ₦500,000
C. ₦600,000
D. ₦800,000

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