POST UTME LEAD CITY UNIVERSITY 2025 Commerce | Objective

Are you preparing for POST UTME LEAD CITY UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2025 Commerce (Objective) questions designed to simulate the real exam environment.

Practice these randomly selected questions to test your readiness.

Question 1
In a market with perfect competition, 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 = 0

Correct Answer: C

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Question 2
A company is considering two investment projects, A and B. Project A has a net present value (NPV) of ₦1,500,000 and a payback period of 5 years. Project B has an NPV of ₦1,200,000 and a payback period of 4 years. Which project should the company choose?
Correct A. Project A
B. Project B
C. Both projects are equally attractive
D. Neither project is attractive

Correct Answer: A

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Question 3
A consumer is considering purchasing a product with a price of ₦5,000. The consumer's budget constraint is given by the equation: 2x + 3y = 10, where x is the number of units of the product purchased and y is the number of units of a complementary good purchased. What is the maximum number of units of the product that the consumer can purchase?
A. 5
Correct B. 6
C. 7
D. 8

Correct Answer: B

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Question 4
A company is considering launching a new product. The company's marketing manager has estimated that the product's demand will follow a linear demand curve given by the equation: Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the company wants to maximize its revenue, what price should it charge for the product?
A. ₦20
Correct B. ₦30
C. ₦40
D. ₦50

Correct Answer: B

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Question 5
A sole trader is considering expanding its business by hiring additional employees. The sole trader's current profit is ₦500,000 and its current fixed costs are ₦200,000. If the sole trader hires an additional employee at a wage of ₦50,000 per month, what will be the new profit of the business?
A. ₦450000
B. ₦500000
Correct C. ₦550000
D. ₦600000

Correct Answer: C

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Question 6
In a sole trade business, what is the primary advantage of adopting a sole proprietorship structure?
A. Limited liability
B. Easy to establish
Correct C. Flexibility in decision-making
D. No tax benefits

Correct Answer: C

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Question 7
A company has a share capital of ₦1,000,000, divided into 100,000 ordinary shares of ₦10 each. If the company issues 50,000 shares at a premium of ₦5 per share, what is the total amount received from the issue of shares?
A. ₦500,000
B. ₦750,000
Correct C. ₦1,250,000
D. ₦1,500,000

Correct Answer: C

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Question 8
A consumer purchases a product for ₦10,000. If the product is defective and the consumer returns it, what is the consumer's entitlement under the Consumer Protection Act?
Correct A. A full refund of ₦10,000
B. A partial refund of ₦5,000
C. A replacement product
D. No entitlement

Correct Answer: A

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Question 9
A company's marketing strategy involves a 20% discount on all products for the first week of sales. If a product is originally priced at ₦5,000, what is the discounted price?
A. ₦4,000
Correct B. ₦4,500
C. ₦5,000
D. ₦5,500

Correct Answer: B

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Question 10
A sole trader's business is affected by a natural disaster, resulting in a loss of ₦200,000. If the sole trader has a personal liability of ₦50,000, what is the amount of the loss that the sole trader must bear?
A. ₦150,000
Correct B. ₦200,000
C. ₦250,000
D. ₦300,000

Correct Answer: B

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Question 11
A company's marketing strategy involves creating a sense of urgency among customers to purchase a product. This is an example of which of the following marketing tactics?
A. Scarcity
B. Exclusivity
C. Social Proof
Correct D. Sense of Urgency

Correct Answer: D

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Question 12
A warehouse manager wants to optimize storage space by arranging boxes in a rectangular prism shape. If the length, width, and height of the prism are 5, 3, and 2 meters respectively, what is the volume of the prism in cubic meters?
A. 30
B. 40
Correct C. 50
D. 60

Correct Answer: C

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Question 13
A consumer protection agency receives a complaint about a company's misleading advertising. The agency's primary goal is to protect the consumer's right to truthful information. Which of the following is a key principle of consumer protection?
A. Consumer sovereignty
B. Free market competition
Correct C. Truthful information
D. Consumer choice

Correct Answer: C

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Question 14
A company's insurance policy covers losses due to fire, theft, and natural disasters. The policy has a deductible of ₦10,000 and a premium of ₦50,000 per year. If the company experiences a loss of ₦150,000 due to fire, what is the total amount the company must pay?
A. ₦40,000
B. ₦50,000
C. ₦60,000
Correct D. ₦70,000

Correct Answer: D

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Question 15
A business owner wants to calculate the break-even point for a new product. The product's selling price is ₦20,000, and the fixed costs are ₦50,000 per month. If the variable costs are ₦10,000 per unit, what is the break-even point in units?
A. 1000
B. 2000
Correct C. 3000
D. 4000

Correct Answer: C

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Question 16
A company's production function is given by Q = 100L^0.5K^0.5, where Q is the quantity produced, L is the labor hours, and K is the capital invested. If the company wants to increase its production by 20% while keeping labor hours constant, what percentage increase in capital investment is required?
A. 10%
Correct B. 20%
C. 30%
D. 40%

Correct Answer: B

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Question 17
A firm is considering two marketing strategies: Strategy A, which involves a 10% increase in advertising expenditure, and Strategy B, which involves a 5% increase in sales promotion expenditure. If the firm's current advertising expenditure is ₦1,000,000 and its current sales promotion expenditure is ₦500,000, what is the total increase in expenditure under Strategy A?
A. ₦110,000
Correct B. ₦120,000
C. ₦130,000
D. ₦140,000

Correct Answer: B

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Question 18
A sole trader, Mr. A, has a business income of ₦500,000 and a business expenditure of ₦300,000. If he also has a personal income of ₦200,000 and a personal expenditure of ₦150,000, what is his total tax liability?
A. ₦0
B. ₦50,000
Correct C. ₦100,000
D. ₦150,000

Correct Answer: C

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Question 19
A company is considering exporting its products to a foreign market. The company's current price is ₦100 per unit, and the foreign market price is ₦120 per unit. If the company's transportation cost is ₦20 per unit and the exchange rate is 1 USD = ₦200, what is the company's profit per unit if it exports 1,000 units?
A. ₦80
B. ₦90
C. ₦100
Correct D. ₦110

Correct Answer: D

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Question 20
A firm is considering two production processes: Process A, which involves a fixed cost of ₦100,000 and a variable cost of ₦50 per unit, and Process B, which involves a fixed cost of ₦150,000 and a variable cost of ₦30 per unit. If the firm produces 1,000 units, what is the total cost under Process A?
A. ₦150,000
Correct B. ₦160,000
C. ₦170,000
D. ₦180,000

Correct Answer: B

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Question 21
The Central Bank of Nigeria (CBN) uses the monetary policy instrument of Open Market Operations (OMO) to influence the money supply in the economy. Which of the following is a correct statement about OMO?
Correct A. The CBN buys government securities from commercial banks to increase the money supply.
B. The CBN sells government securities to commercial banks to reduce the money supply.
C. The CBN lends money to commercial banks to increase the money supply.
D. The CBN borrows money from commercial banks to reduce the money supply.

Correct Answer: A

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Question 22
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 based on the cash basis of accounting.
B. GAAP is based on the accrual basis of accounting.
Correct C. GAAP is based on the historical cost basis of accounting.
D. GAAP is based on the current cost basis of accounting.

Correct Answer: C

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Question 23
A consumer protection law requires that all goods sold in the market must be accompanied by a warranty. Which of the following is a type of warranty?
Correct A. Express warranty
B. Implied warranty
C. Statutory warranty
D. Consequential warranty

Correct Answer: A

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Question 24
A company is considering exporting its products to a foreign country. Which of the following is a type of export?
Correct A. Direct export
B. Indirect export
C. Export through a trading company
D. Export through a joint venture

Correct Answer: A

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Question 25
A sole trader's business is considered a separate legal entity from the owner. Which of the following is a characteristic of a sole trader?
A. The business is a separate legal entity from the owner.
Correct B. The business is not a separate legal entity from the owner.
C. The business is a partnership between the owner and other individuals.
D. The business is a company registered with the Corporate Affairs Commission.

Correct Answer: B

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