Practice post utme pan-atlantic university commerce 2020 Past Questions

Question 1

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. shift to the left

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 2

A firm's production function is given by Q = 10L^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?

Correct A. -10%

B. -5%

C. 0%

D. 5%

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 3

A consumer has a budget of ₦1000 and a preference for two goods, A and B. The prices of the goods are ₦200 and ₦300 respectively. Using the budget constraint, find the consumer's optimal consumption bundle.

Correct A. (2, 3)

B. (3, 2)

C. (4, 1)

D. (1, 4)

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 4

A firm's revenue function is given by R = 100Q - 2Q^2. Find the firm's marginal revenue function.

Correct A. 100 - 4Q

B. 100 + 4Q

C. -2Q

D. 2Q

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 5

A firm's cost function is given by C = 50 + 10Q + 0.5Q^2. Find the firm's average cost function.

Correct A. 50 + 10 + 0.5Q

B. 50 + 10Q + 0.5Q^2

C. 50 + 10 + 0.5Q^2

D. 50 + 10Q^2 + 0.5Q

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 6

In a perfectly competitive market, the law of one price dictates that the price of a commodity will be the same everywhere, ceteris paribus. However, in reality, prices may differ due to various factors. What is the primary reason for this price disparity?

A. Transportation costs

Correct B. Tariffs and trade barriers

C. Monopolistic competition

D. Government subsidies

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 7

A firm is considering two production processes: one that requires an initial investment of ₦10 million and another that requires an initial investment of ₦15 million. The first process has a variable cost of ₦5 per unit, while the second process has a variable cost of ₦3 per unit. If the selling price of the product is ₦20 per unit, what is the minimum number of units the firm must produce to break even?

A. 1000

B. 1500

Correct C. 2000

D. 2500

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 8

A company has a warehouse with a capacity to store 10,000 units of a product. The warehouse is currently 70% full, and the company wants to order more stock. If the company orders 2,000 units, what will be the new percentage of the warehouse that is full?

A. 50

Correct B. 60

C. 70

D. 80

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 9

A firm is considering two modes of transportation: road and rail. The cost of transporting a unit of goods by road is ₦10, while the cost of transporting a unit of goods by rail is ₦8. If the firm needs to transport 1,000 units of goods, what is the total cost of transportation by road?

A. ₦8000

Correct B. ₦10000

C. ₦12000

D. ₦15000

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 10

A company exports 50% of its production to foreign countries. If the company produces 10,000 units of a product, how many units will be exported?

Correct A. 2500

B. 5000

C. 7500

D. 10000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 11

In a sole trade business, what is the primary advantage of using a sole proprietorship structure?

A. Limited liability

B. Easy setup and registration

C. Tax benefits

Correct D. Flexibility in decision-making

Correct Answer: D

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 12

A company has a capital structure consisting of 60% debt and 40% equity. If the company's cost of debt is 8% and the cost of equity is 12%, what is the company's weighted average cost of capital (WACC)?

Correct A. 6%

B. 8%

C. 10%

D. 12%

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 13

A marketing manager is considering two advertising campaigns: Campaign A and Campaign B. Campaign A has a fixed cost of ₦100,000 and a variable cost of ₦50 per unit sold, while Campaign B has a fixed cost of ₦150,000 and a variable cost of ₦30 per unit sold. If the company sells 10,000 units, which campaign is more profitable?

Correct A. Campaign A

B. Campaign B

C. Both campaigns are equally profitable

D. Neither campaign is profitable

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 14

A consumer protection agency receives a complaint from a customer who was sold a defective product. The agency finds that the product was sold with a warranty that was not clearly disclosed to the customer. What is the agency's likely course of action?

A. The agency will order the company to refund the customer's money

B. The agency will order the company to replace the defective product

Correct C. The agency will order the company to pay compensation to the customer

D. The agency will close the case without taking any action

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 15

A bank offers a loan with a 5-year term and an annual interest rate of 10%. If the borrower pays ₦100,000 as the principal amount, how much will the borrower pay in total at the end of the 5-year term?

Correct A. ₦163,918.62

B. ₦164,918.62

C. ₦165,918.62

D. ₦166,918.62

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 16

A company's production function is given by the Cobb-Douglas production function: Q = 10L^0.4K^0.6. If the company's labor and capital inputs are increased by 20% and 15% respectively, what is the percentage change in output?

A. 12%

B. 15%

Correct C. 18%

D. 20%

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 17

A firm is considering two different marketing strategies: A and B. Strategy A has a probability of success of 0.7 and a probability of failure of 0.3. Strategy B has a probability of success of 0.8 and a probability of failure of 0.2. If the firm's objective is to maximize expected profit, which strategy should it choose?

A. Strategy A

Correct B. Strategy B

C. Both strategies are equally profitable

D. Neither strategy is profitable

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 18

A bank's balance sheet is given by the following equation: Assets = Liabilities + Equity. If the bank's assets increase by 10% and its liabilities increase by 5%, what is the percentage change in equity?

A. 5%

B. 10%

Correct C. 15%

D. 20%

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 19

A company's foreign exchange risk can be hedged using a forward contract. If the company expects to receive 100,000 in 6 months and the spot exchange rate is 1 = ₦200, what is the value of the forward contract?

A. ₦120,000

B. ₦140,000

Correct C. ₦160,000

D. ₦180,000

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 20

A firm's production function is given by the following equation: 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. 12%

B. 15%

Correct C. 18%

D. 20%

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 21

In a just-in-time (JIT) inventory system, the primary goal is to maintain a low level of inventory to minimize holding costs. However, this approach can lead to stockouts, which can result in lost sales and damage to customer relationships. Which of the following is a potential consequence of a JIT inventory system?

A. Increased inventory turnover

B. Reduced inventory holding costs

Correct C. Higher stockout rates

D. Improved supply chain efficiency

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 22

A company uses a first-in-first-out (FIFO) inventory system to manage its inventory. If the company purchases 100 units of a product at 10 each and later purchases 50 units of the same product at 12 each, what is the total cost of the inventory using the FIFO method?

A. ₦1500

Correct B. ₦1600

C. ₦1700

D. ₦1800

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 23

A company uses a just-in-time (JIT) inventory system to manage its inventory. Which of the following is a key benefit of a JIT inventory system?

A. Reduced inventory holding costs

Correct B. Improved supply chain efficiency

C. Increased inventory turnover

D. Higher stockout rates

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 24

A company uses a first-in-first-out (FIFO) inventory system to manage its inventory. If the company purchases 100 units of a product at 10 each and later purchases 50 units of the same product at 12 each, what is the total cost of the inventory using the FIFO method?

A. ₦1500

Correct B. ₦1600

C. ₦1700

D. ₦1800

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 25

A company uses a just-in-time (JIT) inventory system to manage its inventory. Which of the following is a potential consequence of a JIT inventory system?

A. Increased inventory turnover

B. Reduced inventory holding costs

Correct C. Higher stockout rates

D. Improved supply chain efficiency

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

POST UTME PAN-ATLANTIC UNIVERSITY 2020 Commerce | Objective

Master the Exam!

Help others prepare! Share this practice hub: