POST UTME NOUN 2024 Commerce | Objective

Are you preparing for POST UTME NOUN exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2024 Commerce (Objective) questions designed to simulate the real exam environment.

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Question 1
In a perfectly competitive market, what is the relationship between the marginal revenue and marginal cost curves?
Correct A. They intersect at the equilibrium price and quantity
B. Marginal revenue is always greater than marginal cost
C. Marginal cost is always greater than marginal revenue
D. They are parallel to each other

Correct Answer: A

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Question 2
A company is considering two different production processes for its 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 ₦120 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 consumer has a budget of ₦10,000 and a preference for two goods, X and Y. The prices of the goods are ₦2,000 and ₦3,000 respectively. Using the indifference curve analysis, what is the maximum quantity of good X that the consumer can buy?
A. 500 units
Correct B. 750 units
C. 1,000 units
D. 1,500 units

Correct Answer: B

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Question 4
A firm is producing a product with a total revenue of ₦1,500,000 and a total cost of ₦1,200,000. Using the break-even analysis, what is the profit of the firm?
Correct A. ₦200,000
B. ₦300,000
C. ₦400,000
D. ₦500,000

Correct Answer: A

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Question 5
A company is considering a new investment opportunity with a required rate of return of 12%. Using the net present value (NPV) method, what is the minimum amount that the company should invest in the opportunity?
A. ₦100,000
Correct B. ₦200,000
C. ₦300,000
D. ₦400,000

Correct Answer: B

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Question 6
In the context of insurance and risk management, what is the primary purpose of a deductible in a policy?
A. To reduce the premium paid by the policyholder
B. To increase the likelihood of a claim being made
Correct C. To transfer some of the risk from the policyholder to the insurer
D. To provide a financial incentive for the policyholder to avoid making a claim

Correct Answer: C

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Question 7
A company is considering investing in a new project that has a projected return on investment (ROI) of 12% per annum. If the cost of capital is 8% per annum, what is the net present value (NPV) of the project after 5 years?
A. ₦10,000
Correct B. ₦20,000
C. ₦30,000
D. ₦40,000

Correct Answer: B

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Question 8
A consumer protection agency is investigating a complaint about a company's advertising practices. The company claims that its advertisement is a 'puffery' and therefore exempt from truth-in-advertising laws. What is the legal definition of 'puffery'?
A. A statement that is literally true but misleading in context
B. A statement that is obviously false but not actionable
Correct C. A statement that is subjective and cannot be proven true or false
D. A statement that is a clear misrepresentation of fact

Correct Answer: C

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Question 9
A company is considering exporting its products to a foreign market. What is the primary advantage of using a letter of credit (L/C) in international trade?
Correct A. It provides a guarantee of payment by the buyer's bank
B. It reduces the risk of non-payment by the buyer
C. It facilitates the exchange of goods and services between countries
D. It provides a means of financing the export transaction

Correct Answer: A

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Question 10
A company is considering investing in a new project that has a projected return on investment (ROI) of 15% per annum. If the cost of capital is 10% per annum, what is the internal rate of return (IRR) of the project?
A. 12%
Correct B. 15%
C. 18%
D. 20%

Correct Answer: B

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Question 11
In a sole trade business, the owner's personal assets are not protected from business liabilities. What is the primary reason for this?
A. Lack of separate business bank account
B. Insufficient business insurance
Correct C. No distinction between personal and business finances
D. Inadequate business registration

Correct Answer: C

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Question 12
A company has a capital structure consisting of 60% equity and 40% debt. If the company's cost of equity is 12% and the cost of debt is 6%, what is the weighted average cost of capital (WACC)?
Correct A. 8.4%
B. 9.6%
C. 10.8%
D. 11.2%

Correct Answer: A

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Question 13
A consumer purchases a product with a price of ₦1,500 and a 10% discount. If the consumer pays ₦1,350, what is the amount of the discount?
Correct A. ₦150
B. ₦200
C. ₦250
D. ₦300

Correct Answer: A

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Question 14
A company exports goods worth ₦5 million to a foreign country. If the exchange rate is 1 USD = 420 Naira, what is the value of the export in USD?
Correct A. 11,904.76 USD
B. 12,000 USD
C. 12,096.19 USD
D. 12,192.38 USD

Correct Answer: A

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Question 15
A warehouse has a storage capacity of 10,000 units. If the warehouse is currently 75% full, how many units can be stored in the warehouse?
A. 7,500 units
B. 8,000 units
Correct C. 8,750 units
D. 9,000 units

Correct Answer: C

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Question 16
In a perfectly competitive market, the law of supply states that as the price of a good increases, the quantity supplied will
A. increase
Correct B. decrease
C. remain constant
D. move in the opposite direction

Correct Answer: B

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Question 17
A company's marketing mix can be described by the 4 Ps, which are
Correct A. Product, Price, Place, Promotion
B. Product, Price, Place, People
C. Product, Price, Place, Process
D. Product, Price, Place, Packaging

Correct Answer: A

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Question 18
A firm's production function can be described by the Cobb-Douglas production function, which is given by
Correct A. Q = AK^αL^β
B. Q = AK^αL^β + C
C. Q = AK^αL^β - C
D. Q = AK^αL^β / C

Correct Answer: A

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Question 19
A bank's balance sheet can be described by the following equation: Assets = Liabilities + Equity. What is the value of Equity?
Correct A. Assets - Liabilities
B. Liabilities - Assets
C. Assets + Liabilities
D. Liabilities - Equity

Correct Answer: A

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Question 20
A company's cash flow statement can be described by the following equation: Cash Flow = Net Income + Depreciation + Change in Working Capital. What is the value of Net Income?
Correct A. Cash Flow - Depreciation - Change in Working Capital
B. Cash Flow + Depreciation + Change in Working Capital
C. Cash Flow - Depreciation + Change in Working Capital
D. Cash Flow + Depreciation - Change in Working Capital

Correct Answer: A

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Question 21
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. Which of the following is a correct example of comparative advantage?
A. Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 50 units of wheat and 100 units of cloth.
B. Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 50 units of wheat and 150 units of cloth.
Correct C. Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 50 units of wheat and 50 units of cloth.
D. Country A produces 100 units of wheat and 150 units of cloth, while Country B produces 50 units of wheat and 100 units of cloth.

Correct Answer: C

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Question 22
A firm's break-even point is the point at which its total revenue equals its total fixed costs. What is the break-even point for a firm with a fixed cost of ₦100,000 and a variable cost of ₦50 per unit, if it sells 200 units?
A. ₦150,000
Correct B. ₦200,000
C. ₦250,000
D. ₦300,000

Correct Answer: B

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Question 23
A company has a production function given by Q = 2L^0.5K^0.5, where Q is the quantity produced, L is the labor input, and K is the capital input. If the company uses 100 units of labor and 100 units of capital, what is the quantity produced?
A. 100
B. 200
Correct C. 300
D. 400

Correct Answer: C

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Question 24
A firm has a probability distribution of its profits as follows: P(Profit = ₦100,000) = 0.2, P(Profit = ₦200,000) = 0.3, P(Profit = ₦300,000) = 0.5. What is the expected value of the firm's profits?
A. ₦150,000
B. ₦200,000
Correct C. ₦250,000
D. ₦300,000

Correct Answer: C

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Question 25
A company has a portfolio of assets with the following returns: Asset A has a return of 10% per annum, Asset B has a return of 12% per annum, and Asset C has a return of 15% per annum. If the company allocates 30% of its portfolio to Asset A, 40% to Asset B, and 30% to Asset C, what is the expected return on the portfolio?
A. 11%
B. 12%
Correct C. 13%
D. 14%

Correct Answer: C

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