POST UTME OSUSTECH 2021 Commerce | Objective

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Question 1
In a perfectly competitive market, what is the relationship between the marginal revenue product (MRP) and the marginal factor cost (MFC)?
A. MRP > MFC
B. MRP < MFC
Correct C. MRP = MFC
D. MRP and MFC are unrelated

Correct Answer: C

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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 ₦80 per unit, which process should the company use to maximize its profit?
A. Process A
Correct B. Process B
C. Both processes are equally profitable
D. Neither process is profitable

Correct Answer: B

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Question 3
A firm is operating in a market with a demand curve given by Q = 100 - 2P. If the firm's marginal cost (MC) is ₦20, what is the optimal price it should charge for its product?
A. ₦40
Correct B. ₦50
C. ₦60
D. ₦70

Correct Answer: B

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Question 4
A company is considering launching a new product in a market where the demand curve is given by Q = 100 - 2P. If the company's marginal cost (MC) is ₦20 and the fixed cost is ₦50,000, what is the minimum price it should charge for the product to break even?
A. ₦30
Correct B. ₦40
C. ₦50
D. ₦60

Correct Answer: B

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Question 5
A firm is operating in a market with a demand curve given by Q = 100 - 2P. If the firm's marginal cost (MC) is ₦20 and the fixed cost is ₦50,000, what is the optimal quantity it should produce?
A. 50 units
B. 75 units
Correct C. 100 units
D. 125 units

Correct Answer: C

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Question 6
In a consumer protection scenario, a company is liable for damages caused by a defective product. However, the company claims that the product was modified by the consumer, which led to the defect. The consumer, on the other hand, argues that the modification was necessary to make the product usable. Which of the following legal principles is most relevant to this scenario?
A. Product Liability Act
Correct B. Consumer Protection Act
C. Contract Law
D. Tort Law

Correct Answer: B

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Question 7
A bank offers a credit card with an annual interest rate of 18% and a minimum payment of 2% of the outstanding balance. If the customer has an outstanding balance of ₦50,000 and makes a minimum payment of ₦1,000, how much interest will be charged in the first year?
Correct A. ₦8,100
B. ₦9,000
C. ₦9,900
D. ₦10,800

Correct Answer: A

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Question 8
A company has a business interruption insurance policy that covers losses due to unforeseen events. The policy has a deductible of ₦100,000 and a coverage limit of ₦500,000. If the company experiences a loss of ₦750,000, how much will be paid out by the insurer?
Correct A. ₦350,000
B. ₦400,000
C. ₦450,000
D. ₦500,000

Correct Answer: A

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Question 9
A company is considering investing in a new project that has a projected return on investment (ROI) of 15%. If the company's cost of capital is 10%, is the project a good investment opportunity?
Correct A. Yes
B. No
C. Maybe
D. Depends on other factors

Correct Answer: A

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Question 10
A company is considering entering into a contract with a supplier. The contract includes a clause that requires the company to pay a penalty of ₦50,000 if the company fails to meet the delivery deadline. If the company is 90% sure that it will meet the deadline, what is the expected value of the penalty?
A. ₦45,000
Correct B. ₦50,000
C. ₦55,000
D. ₦60,000

Correct Answer: B

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Question 11
In a perfectly competitive market, what is the relationship between the marginal revenue (MR) and marginal cost (MC) curves?
A. MR > MC
B. MR < MC
Correct C. MR = MC
D. MR > MC > AC

Correct Answer: C

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Question 12
What is the primary function of the International Chamber of Commerce (ICC)?
Correct A. To promote international trade
B. To establish trade agreements
C. To provide arbitration services
D. To regulate international business

Correct Answer: A

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Question 13
A company is considering two different production processes. 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 is ₦80 per unit, which process should the company choose?
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 14
A firm is considering investing in a new project. The project has a net present value (NPV) of ₦500,000 and a payback period of 5 years. What is the internal rate of return (IRR) of the project?
A. 10%
B. 15%
Correct C. 20%
D. 25%

Correct Answer: C

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Question 15
A bank is considering lending to a customer who has a credit score of 600. The bank's lending policy requires a minimum credit score of 700. What should the bank do?
A. Approve the loan
Correct B. Decline the loan
C. Request additional information
D. Refer the customer to a credit counselor

Correct Answer: B

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Question 16
A bank's return on assets (ROA) is calculated as net income divided by total assets. If a bank has a net income of ₦120 million and total assets of ₦2.5 billion, what is its ROA?
Correct A. 0.048
B. 0.05
C. 0.06
D. 0.08

Correct Answer: A

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Question 17
A company's production function is given by Q = 100L^0.5K^0.5, where Q is output, L is labor, and K is capital. If labor and capital are increased by 20% and 15% respectively, what is the percentage change in output?
A. 10%
B. 12%
Correct C. 15%
D. 18%

Correct Answer: C

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Question 18
A firm's demand function is given by Q = 100 - 2P, where Q is quantity demanded and P is price. If the price is increased by 20%, what is the new quantity demanded?
A. 80
B. 90
C. 100
Correct D. 110

Correct Answer: D

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Question 19
A company's marketing mix is given by the 4 Ps: Product, Price, Place, and Promotion. If a company wants to increase sales by 20%, which of the following strategies would be most effective?
A. Increase price by 10%
Correct B. Increase advertising budget by 20%
C. Improve product quality
D. Increase distribution channels

Correct Answer: B

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Question 20
A bank's cash management system involves the following steps: cash receipt, cash disbursement, cash reconciliation, and cash forecasting. Which of the following is NOT a part of cash management?
A. Cash receipt
B. Cash disbursement
C. Cash reconciliation
Correct D. Accounts payable

Correct Answer: D

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Question 21
A firm's marketing strategy involves a combination of product, price, place, and promotion. Which of the following is NOT a characteristic of a product?
A. Quality
B. Brand
C. Packaging
Correct D. Warranty

Correct Answer: D

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Question 22
A company's financial statements include the balance sheet, income statement, and cash flow statement. Which of the following is NOT a type of financial statement?
A. Balance Sheet
B. Income Statement
C. Cash Flow Statement
Correct D. Statement of Changes in Equity

Correct Answer: D

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Question 23
A firm's marketing mix involves a combination of product, price, place, and promotion. Which of the following is NOT a characteristic of a product?
A. Quality
B. Brand
C. Packaging
Correct D. Warranty

Correct Answer: D

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Question 24
A company's financial statements include the balance sheet, income statement, and cash flow statement. Which of the following is NOT a type of financial statement?
A. Balance Sheet
B. Income Statement
C. Cash Flow Statement
Correct D. Statement of Changes in Equity

Correct Answer: D

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Question 25
A firm's marketing strategy involves a combination of product, price, place, and promotion. Which of the following is NOT a characteristic of a product?
A. Quality
B. Brand
C. Packaging
Correct D. Warranty

Correct Answer: D

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