POST UTME MOUNTAIN TOP UNIVERSITY 2021 Commerce | Objective

Are you preparing for POST UTME MOUNTAIN TOP UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2021 Commerce (Objective) questions designed to simulate the real exam environment.

Practice these randomly selected questions to test your readiness.

Question 1
A firm specializes in producing a single product, which is a type of commodity. What is the primary advantage of this specialization?
Correct A. Economies of scale
B. Increased competition
C. Reduced production costs
D. Improved product quality

Correct Answer: A

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Question 2
A company is considering entering a new market. What type of market research would be most appropriate for this situation?
A. Secondary research
Correct B. Primary research
C. Market segmentation
D. Target market analysis

Correct Answer: B

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Question 3
A consumer is considering purchasing a product that has a 20% discount. If the original price is ₦1000, what is the new price after the discount?
Correct A. ₦800
B. ₦900
C. ₦1000
D. ₦1200

Correct Answer: A

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Question 4
A firm is considering outsourcing a production process. What is the primary advantage of outsourcing?
Correct A. Reduced production costs
B. Increased competition
C. Improved product quality
D. Economies of scale

Correct Answer: A

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Question 5
A consumer is considering purchasing a product that has a 10% sales tax. If the original price is ₦500, what is the new price after the tax?
Correct A. ₦550
B. ₦500
C. ₦450
D. ₦400

Correct Answer: A

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Question 6
The concept of specialization in production is closely related to the idea of comparative advantage. Explain how a country can benefit from specialization in production, using the example of Nigeria producing cotton and importing textiles.
A. By producing cotton, Nigeria can save on foreign exchange and create employment opportunities.
Correct B. Nigeria can benefit from economies of scale by producing cotton and importing textiles.
C. Specialization in production leads to a decrease in the overall cost of production.
D. Nigeria can increase its GDP by producing cotton and importing textiles.

Correct Answer: B

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Question 7
A company is considering the introduction of a new product line. The product has a high fixed cost of production, but a low variable cost. The company expects to sell 1000 units of the product per month at a price of ₦500 per unit. Calculate the contribution margin per unit and the break-even point in units.
Correct A. ₦400
B. ₦450
C. ₦500
D. ₦550

Correct Answer: A

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Question 8
A consumer protection agency has received a complaint from a customer who was sold a defective product. The product was purchased for ₦10,000 and the customer is seeking a refund of ₦8,000. The agency has determined that the product was indeed defective and has ordered the seller to refund the customer. However, the seller is refusing to comply. What action can the agency take to enforce the refund?
A. The agency can issue a warning to the seller and monitor their compliance.
B. The agency can impose a fine on the seller and order them to refund the customer.
Correct C. The agency can take the seller to court and seek a court order to enforce the refund.
D. The agency can negotiate a settlement with the seller and the customer.

Correct Answer: C

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Question 9
A company is considering the introduction of a new product line. The product has a high fixed cost of production, but a low variable cost. The company expects to sell 1000 units of the product per month at a price of ₦500 per unit. Calculate the contribution margin per unit and the break-even point in units.
Correct A. ₦400
B. ₦450
C. ₦500
D. ₦550

Correct Answer: A

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Question 10
A consumer protection agency has received a complaint from a customer who was sold a defective product. The product was purchased for ₦10,000 and the customer is seeking a refund of ₦8,000. The agency has determined that the product was indeed defective and has ordered the seller to refund the customer. However, the seller is refusing to comply. What action can the agency take to enforce the refund?
A. The agency can issue a warning to the seller and monitor their compliance.
B. The agency can impose a fine on the seller and order them to refund the customer.
Correct C. The agency can take the seller to court and seek a court order to enforce the refund.
D. The agency can negotiate a settlement with the seller and the customer.

Correct Answer: C

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Question 11
In a perfectly competitive market, what is the relationship between the marginal revenue product of labor and the marginal factor cost of labor?
A. MRP = MFC
B. MRP > MFC
Correct C. MRP < MFC
D. MRP = AFC

Correct Answer: C

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Question 12
A firm's production function is given by Q = 2L^0.5K^0.5. If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, what is the optimal combination of labor and capital that minimizes the cost of production?
A. L = 4, K = 1
Correct B. L = 2, K = 2
C. L = 1, K = 4
D. L = 0, K = 0

Correct Answer: B

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Question 13
A consumer has a utility function given by U = 2x + 3y, where x and y are the quantities of two goods consumed. If the prices of the two goods are ₦50 and ₦75 respectively, and the consumer has a budget of ₦300, what is the optimal combination of x and y that maximizes utility?
A. x = 2, y = 2
Correct B. x = 4, y = 1
C. x = 1, y = 4
D. x = 0, y = 0

Correct Answer: B

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Question 14
A firm has a production function given by Q = 2L^0.5K^0.5. If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, what is the optimal combination of labor and capital that minimizes the cost of production?
A. L = 4, K = 1
Correct B. L = 2, K = 2
C. L = 1, K = 4
D. L = 0, K = 0

Correct Answer: B

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Question 15
A consumer has a utility function given by U = 2x + 3y, where x and y are the quantities of two goods consumed. If the prices of the two goods are ₦50 and ₦75 respectively, and the consumer has a budget of ₦300, what is the optimal combination of x and y that maximizes utility?
A. x = 2, y = 2
Correct B. x = 4, y = 1
C. x = 1, y = 4
D. x = 0, y = 0

Correct Answer: B

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Question 16
A firm's production function is given by Q = 2L^0.5K^0.5. If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, what is the optimal combination of labor and capital that minimizes the cost of production?
A. L = 4, K = 1
Correct B. L = 2, K = 2
C. L = 1, K = 4
D. L = 0, K = 0

Correct Answer: B

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Question 17
A consumer has a utility function given by U = 2x + 3y, where x and y are the quantities of two goods consumed. If the prices of the two goods are ₦50 and ₦75 respectively, and the consumer has a budget of ₦300, what is the optimal combination of x and y that maximizes utility?
A. x = 2, y = 2
Correct B. x = 4, y = 1
C. x = 1, y = 4
D. x = 0, y = 0

Correct Answer: B

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Question 18
A firm's production function is given by Q = 2L^0.5K^0.5. If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, what is the optimal combination of labor and capital that minimizes the cost of production?
A. L = 4, K = 1
Correct B. L = 2, K = 2
C. L = 1, K = 4
D. L = 0, K = 0

Correct Answer: B

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Question 19
A company's production function is given by Q = 100L^0.5K^0.5, where Q is the quantity produced, L is the labor input, and K is the capital input. If the company increases its labor input from 100 units to 121 units, and its capital input from 100 units to 121 units, by how many percentage points will the quantity produced increase?
A. 10%
Correct B. 20%
C. 30%
D. 40%

Correct Answer: B

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Question 20
A firm's revenue function is given by R(x) = 2x^2 + 10x, where x is the number of units sold. If the firm sells 5 units, what is its total revenue?
A. ₦125
Correct B. ₦150
C. ₦175
D. ₦200

Correct Answer: B

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Question 21
A company has a warehouse with a capacity of 1000 units. It currently has 500 units in stock. If it receives a shipment of 300 units, what is the new stock level?
A. 500
B. 600
Correct C. 700
D. 800

Correct Answer: C

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Question 22
A firm's cost function is given by C(x) = 2x^2 + 5x, where x is the number of units produced. If the firm produces 4 units, what is its total cost?
A. ₦50
B. ₦60
Correct C. ₦70
D. ₦80

Correct Answer: C

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Question 23
A company has a production function given by Q = 100L^0.5K^0.5, where Q is the quantity produced, L is the labor input, and K is the capital input. If the company increases its labor input from 100 units to 121 units, and its capital input from 100 units to 121 units, by how many percentage points will the quantity produced increase?
A. 10%
Correct B. 20%
C. 30%
D. 40%

Correct Answer: B

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Question 24
A firm's revenue function is given by R(x) = 2x^2 + 10x, where x is the number of units sold. If the firm sells 5 units, what is its total revenue?
A. ₦125
Correct B. ₦150
C. ₦175
D. ₦200

Correct Answer: B

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Question 25
A company has a warehouse with a capacity of 1000 units. It currently has 500 units in stock. If it receives a shipment of 300 units, what is the new stock level?
A. 500
B. 600
Correct C. 700
D. 800

Correct Answer: C

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