POST UTME OAU 2018 Commerce | Objective

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Question 1
In a perfectly competitive market, the demand curve for a firm's product is its
Correct A. marginal revenue curve
B. marginal cost curve
C. average revenue curve
D. average cost curve

Correct Answer: A

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Question 2
A company's production function is given by Q = 2L^0.5K^0.5. If the company wants to produce 16 units of output, and the price of labor is ₦10 per unit, and the price of capital is ₦20 per unit, what is the minimum cost of production?
A. ₦160
B. ₦320
Correct C. ₦640
D. ₦1280

Correct Answer: C

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Question 3
A firm's demand function is given by Q = 100 - 2P. If the firm's marginal revenue function is MR = 200 - 4P, what is the firm's optimal price?
A. ₦20
B. ₦30
Correct C. ₦40
D. ₦50

Correct Answer: C

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Question 4
A consumer's indifference curve is given by U = 2X + 3Y. If the consumer's budget constraint is given by 2X + 3Y = 12, what is the consumer's optimal bundle of goods?
Correct A. (2, 4)
B. (4, 2)
C. (6, 0)
D. (0, 6)

Correct Answer: A

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Question 5
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm wants to produce 16 units of output, and the price of labor is ₦10 per unit, and the price of capital is ₦20 per unit, what is the minimum cost of production?
A. ₦160
B. ₦320
Correct C. ₦640
D. ₦1280

Correct Answer: C

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Question 6
A firm's production function is given by Q = 2L^0.5H^0.5, where Q is output, L is labor, and H is capital. If the firm wants to increase output by 20% while keeping labor constant at 100 units, how much capital should it invest?
Correct A. ( 100 sqrt{5} )
B. ( 50 sqrt{5} )
C. ( 200 sqrt{5} )
D. ( 500 sqrt{5} )

Correct Answer: A

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Question 7
A company uses the following budget constraint: 2X + 3Y = 12. The company wants to maximize its profit, which is given by P = 4X + 2Y. Using the method of substitution, find the optimal values of X and Y.
Correct A. ( X = 2, Y = 2 )
B. ( X = 1, Y = 3 )
C. ( X = 3, Y = 1 )
D. ( X = 4, Y = 0 )

Correct Answer: A

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Question 8
A firm's demand function is given by Q = 100 - 2P, where Q is quantity demanded and P is price. If the firm wants to maximize its revenue, which is given by R = PQ, what price should it charge?
Correct A. ( 20 )
B. ( 30 )
C. ( 40 )
D. ( 50 )

Correct Answer: A

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Question 9
A company uses the following production function: Q = 2L^0.5H^0.5, where Q is output, L is labor, and H is capital. If the company wants to increase output by 20% while keeping labor constant at 100 units, how much capital should it invest?
Correct A. ( 100 sqrt{5} )
B. ( 50 sqrt{5} )
C. ( 200 sqrt{5} )
D. ( 500 sqrt{5} )

Correct Answer: A

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Question 10
A firm's demand function is given by Q = 100 - 2P, where Q is quantity demanded and P is price. If the firm wants to maximize its revenue, which is given by R = PQ, what price should it charge?
Correct A. ( 20 )
B. ( 30 )
C. ( 40 )
D. ( 50 )

Correct Answer: A

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Question 11
In the context of international trade, what is the primary advantage of a country adopting a free trade policy?
A. Increased government revenue
Correct B. Reduced trade barriers
C. Protection of domestic industries
D. Increased employment opportunities

Correct Answer: B

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Question 12
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's labor and capital inputs are increased by 20% and 15% respectively, what is the percentage change in output?
A. 5%
B. 10%
Correct C. 15%
D. 20%

Correct Answer: C

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Question 13
A company's marketing mix is given by the 4 Ps: Product, Price, Place, and Promotion. Which of the following is NOT a characteristic of a product?
A. Quality
B. Design
C. Packaging
Correct D. Warranty

Correct Answer: D

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Question 14
A firm's cost function is given by C = 2L + 3K. If the firm's labor and capital inputs are increased by 10% and 5% respectively, what is the percentage change in total cost?
A. 5%
Correct B. 10%
C. 15%
D. 20%

Correct Answer: B

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Question 15
A company's financial statements show a net income of ₦1,000,000 and a total equity of ₦2,000,000. What is the company's return on equity (ROE)?
A. 50%
Correct B. 60%
C. 70%
D. 80%

Correct Answer: B

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Question 16
In a perfectly competitive market, the supply curve is a straight line with a positive slope. What is the implication of this on the equilibrium price and quantity?
Correct A. The equilibrium price and quantity will be at the intersection of the supply and demand curves.
B. The equilibrium price will be higher than the equilibrium quantity.
C. The equilibrium price and quantity will be at the midpoint of the supply and demand curves.
D. The equilibrium price will be lower than the equilibrium quantity.

Correct Answer: A

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Question 17
A firm's revenue is given by the equation R(x) = 2x^2 + 5x + 1. If the firm's marginal revenue is 10, what is the value of x?
A. 5
Correct B. 10
C. 15
D. 20

Correct Answer: B

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Question 18
A company has a warehouse with a capacity of 1000 units. The company's storage cost per unit is ₦10. If the company orders 500 units, what is the total storage cost?
Correct A. ₦5000
B. ₦50000
C. ₦500000
D. ₦5000000

Correct Answer: A

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Question 19
A firm's marketing budget is ₦100000. The firm wants to allocate the budget to advertising and promotion. If the firm allocates 20% of the budget to advertising, what is the amount allocated to promotion?
A. ₦20000
Correct B. ₦40000
C. ₦60000
D. ₦80000

Correct Answer: B

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Question 20
A company's sales data for the past 5 years is as follows: 2018: 1000 units, 2019: 1200 units, 2020: 1500 units, 2021: 1800 units, 2022: 2000 units. What is the average annual sales growth rate?
A. 10%
Correct B. 15%
C. 20%
D. 25%

Correct Answer: B

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Question 21
The concept of 'Gresham's Law' in economics states that bad money drives out good money. What is the primary reason for this phenomenon?
Correct A. Inflation
B. Deflation
C. Monetary policy
D. Supply and demand

Correct Answer: A

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Question 22
A company's marketing strategy involves a 20% increase in advertising expenditure. If the initial advertising expenditure was ₦1,500,000, what is the new expenditure?
Correct A. ₦1,800,000
B. ₦1,600,000
C. ₦1,200,000
D. ₦1,000,000

Correct Answer: A

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Question 23
A firm's production function is given by Q = 2L^0.5K^0.5, where Q is output, L is labor, and K is capital. If labor increases by 20% and capital remains constant, what is the percentage change in output?
A. 10%
Correct B. 20%
C. 30%
D. 40%

Correct Answer: B

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Question 24
A company's stock is priced at ₦50 per share. If the number of shares outstanding increases by 15%, what is the new market capitalization?
Correct A. ₦5,750,000
B. ₦5,250,000
C. ₦5,000,000
D. ₦4,750,000

Correct Answer: A

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Question 25
A firm's revenue function is given by R = 2pQ, where R is revenue, p is price, and Q is quantity sold. If price increases by 10% and quantity sold remains constant, what is the percentage change in revenue?
A. 5%
Correct B. 10%
C. 15%
D. 20%

Correct Answer: B

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