POST UTME REDEEMERS UNIVERSITY 2018 Commerce | Objective

Are you preparing for POST UTME REDEEMERS UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2018 Commerce (Objective) questions designed to simulate the real exam environment.

Practice these randomly selected questions to test your readiness.

Question 1
In a perfectly competitive market, the supply curve is upward-sloping because
Correct A. Firms are willing to supply more of the good as its price increases.
B. Firms are willing to supply less of the good as its price increases.
C. Firms are willing to supply the same quantity of the good regardless of its price.
D. Firms are unwilling to supply any of the good at any price.

Correct Answer: A

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Question 2
A firm's cost of capital is the minimum return required by investors for
Correct A. Investing in the firm's equity
B. Investing in the firm's debt
C. Investing in the firm's retained earnings
D. Investing in the firm's preferred stock

Correct Answer: A

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Question 3
A firm's break-even point is the point at which its total revenue equals its
A. Total fixed costs
B. Total variable costs
Correct C. Total costs
D. Total revenue

Correct Answer: C

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Question 4
A firm's cash flow is the difference between its cash inflows and its
Correct A. Cash outflows
B. Operating expenses
C. Capital expenditures
D. Depreciation

Correct Answer: A

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Question 5
A firm's return on investment (ROI) is calculated as the ratio of its net income to its
Correct A. Total assets
B. Total liabilities
C. Total equity
D. Total revenue

Correct Answer: A

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Question 6
A firm specializes in producing a particular product. The production function is given by Q = 100L^0.5K^0.5, where Q is the quantity produced, L is the number of labor units, and K is the number of capital units. If the firm wants to produce 100 units of the product, and it has 4 labor units and 9 capital units available, what is the opportunity cost of using the last labor unit?
A. ₦50
Correct B. ₦100
C. ₦200
D. ₦500

Correct Answer: B

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Question 7
A company has the following budget constraint: 2X + 3Y = 12. If the price of X is ₦2 and the price of Y is ₦3, what is the opportunity cost of producing one more unit of X?
A. ₦1
Correct B. ₦2
C. ₦3
D. ₦4

Correct Answer: B

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Question 8
A firm has the following production function: Q = 2L + 3K, where Q is the quantity produced, L is the number of labor units, and K is the number of capital units. If the firm wants to produce 10 units of the product, and it has 3 labor units and 2 capital units available, what is the opportunity cost of using the last labor unit?
A. ₦2
Correct B. ₦3
C. ₦4
D. ₦5

Correct Answer: B

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Question 9
A company has the following budget constraint: X + 2Y = 8. If the price of X is ₦2 and the price of Y is ₦3, what is the opportunity cost of producing one more unit of Y?
A. ₦1
Correct B. ₦2
C. ₦3
D. ₦4

Correct Answer: B

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Question 10
A firm specializes in producing a particular product. The production function is given by Q = 100L^0.5K^0.5, where Q is the quantity produced, L is the number of labor units, and K is the number of capital units. If the firm wants to produce 100 units of the product, and it has 4 labor units and 9 capital units available, what is the opportunity cost of using the last capital unit?
A. ₦50
Correct B. ₦100
C. ₦200
D. ₦500

Correct Answer: B

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Question 11
A company's sole trader is considering the purchase of a new warehouse to store its inventory. The warehouse has a capacity of 10,000 units and costs ₦5 million to purchase. The company's current warehouse has a capacity of 5,000 units and costs ₦2 million to rent. If the company expects to increase its sales by 20% in the next year, what is the minimum amount of money the company should save each month to afford the new warehouse?
A. ₦125,000
Correct B. ₦150,000
C. ₦175,000
D. ₦200,000

Correct Answer: B

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Question 12
A foreign company is considering exporting its products to Nigeria. The company's products are currently priced at 100 per unit in the foreign market. The Nigerian government imposes a 20% tariff on imported goods. If the company wants to make a profit of 30% on its sales, what should be the minimum price it should charge for its products in Nigeria?
A. 120
B. 130
Correct C. 140
D. 150

Correct Answer: C

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Question 13
A consumer protection agency has received a complaint from a customer who was sold a defective product by a company. The customer paid ₦50,000 for the product, but it was found to be defective after only 6 months of use. The company offers a 1-year warranty on its products. What is the maximum amount of money the company can claim from the customer as compensation for the defective product?
A. ₦20,000
B. ₦30,000
Correct C. ₦40,000
D. ₦50,000

Correct Answer: C

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Question 14
A company has two branches, one in Lagos and one in Abuja. The Lagos branch has a sales revenue of ₦10 million and a cost of ₦5 million, while the Abuja branch has a sales revenue of ₦8 million and a cost of ₦4 million. What is the total profit of the company?
A. ₦3 million
B. ₦4 million
Correct C. ₦5 million
D. ₦6 million

Correct Answer: C

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Question 15
A bank offers a loan of ₦1 million to a customer at an interest rate of 15% per annum. The loan is repayable in 5 years. What is the total amount the customer will pay to the bank at the end of the loan period?
A. ₦1.5 million
B. ₦1.6 million
C. ₦1.7 million
Correct D. ₦1.8 million

Correct Answer: D

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Question 16
A company is considering the introduction of a new product line. The product has a high fixed cost of ₦500,000 and a variable cost of ₦200 per unit. The selling price of the product is ₦300 per unit. If the company expects to sell 2,000 units, what is the minimum price at which the product must be sold to break even?
A. ₦250
B. ₦275
Correct C. ₦300
D. ₦325

Correct Answer: C

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Question 17
A firm is considering the introduction of a new product line. The product has a high fixed cost of ₦500,000 and a variable cost of ₦200 per unit. The selling price of the product is ₦300 per unit. If the company expects to sell 2,000 units, what is the minimum price at which the product must be sold to break even?
A. ₦250
B. ₦275
Correct C. ₦300
D. ₦325

Correct Answer: C

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Question 18
A company is considering the introduction of a new product line. The product has a high fixed cost of ₦500,000 and a variable cost of ₦200 per unit. The selling price of the product is ₦300 per unit. If the company expects to sell 2,000 units, what is the minimum price at which the product must be sold to break even?
A. ₦250
B. ₦275
Correct C. ₦300
D. ₦325

Correct Answer: C

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Question 19
A firm is considering the introduction of a new product line. The product has a high fixed cost of ₦500,000 and a variable cost of ₦200 per unit. The selling price of the product is ₦300 per unit. If the company expects to sell 2,000 units, what is the minimum price at which the product must be sold to break even?
A. ₦250
B. ₦275
Correct C. ₦300
D. ₦325

Correct Answer: C

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Question 20
A company is considering the introduction of a new product line. The product has a high fixed cost of ₦500,000 and a variable cost of ₦200 per unit. The selling price of the product is ₦300 per unit. If the company expects to sell 2,000 units, what is the minimum price at which the product must be sold to break even?
A. ₦250
B. ₦275
Correct C. ₦300
D. ₦325

Correct Answer: C

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Question 21
In a sole trade business, what is the primary advantage of using a sole trader structure?
A. Limited liability
B. Easy to set up
Correct C. Flexibility in decision-making
D. No tax benefits

Correct Answer: C

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Question 22
A company has a share capital of ₦1,000,000, divided into 100,000 ordinary shares of ₦10 each. What is the company's issued share capital?
A. ₦500,000
Correct B. ₦1,000,000
C. ₦1,500,000
D. ₦2,000,000

Correct Answer: B

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Question 23
A consumer purchases a product for ₦5,000 and pays a 5% sales tax. What is the amount of sales tax paid?
Correct A. ₦200
B. ₦250
C. ₦300
D. ₦350

Correct Answer: A

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Question 24
A company's warehouse has a capacity of 10,000 units. If the current stock level is 8,000 units, what is the percentage of the warehouse that is currently occupied?
Correct A. 80%
B. 85%
C. 90%
D. 95%

Correct Answer: A

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Question 25
A bank offers a 5-year fixed deposit account with an interest rate of 10% per annum. If the initial deposit is ₦100,000, what will be the total amount after 5 years?
Correct A. ₦163,922
B. ₦164,000
C. ₦164,100
D. ₦164,200

Correct Answer: A

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