Practice post utme redeemers university commerce 2020 Past Questions

Question 1

In a perfectly competitive market, the supply curve is horizontal and the demand curve is downward-sloping. What is the equilibrium price and quantity of a product in this market?

Correct A. ₦100, 100 units

B. ₦120, 80 units

C. ₦150, 60 units

D. ₦180, 40 units

Correct Answer: A

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Question 2

A company has a production function Q = 2L^0.4K^0.6, 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 3

A firm's cost function is given by C = 100 + 2L + 3K, where C is cost, L is labor, and K is capital. If labor increases by 10% and capital remains constant, what is the percentage change in cost?

A. +5%

Correct B. +10%

C. +15%

D. +20%

Correct Answer: B

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Question 4

A company has a revenue function R = 1000 + 20Q, where R is revenue and Q is quantity sold. If the price per unit increases by 10%, what is the percentage change in revenue?

A. +10%

Correct B. +20%

C. +30%

D. +40%

Correct Answer: B

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Question 5

A firm's profit function is given by π = 1000 + 20Q - 100 - 2L - 3K, where π is profit, Q is quantity sold, L is labor, and K is capital. If labor increases by 10% and capital remains constant, what is the percentage change in profit?

A. +5%

Correct B. +10%

C. +15%

D. +20%

Correct Answer: B

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Question 6

A company specializes in producing high-quality leather goods. It has two production lines: one for shoes and the other for handbags. The company uses a just-in-time inventory system to manage its stock. If the demand for shoes is 500 units per month and the production rate is 600 units per month, what is the maximum inventory level of shoes that the company can hold?

A. 200 units

B. 300 units

Correct C. 400 units

D. 500 units

Correct Answer: C

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Question 7

A firm is considering two investment options: Option A, which has a 10% chance of returning ₦100,000 and a 90% chance of returning ₦0, or Option B, which has a 20% chance of returning ₦80,000 and an 80% chance of returning ₦0. Which option has a higher expected return?

A. Option A

B. Option B

C. Option A and Option B are equal

Correct D. Option B is higher

Correct Answer: D

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Question 8

A bank offers a 5-year fixed deposit account with an interest rate of 12% per annum compounded annually. If the initial deposit is ₦100,000, what is the future value of the investment after 5 years?

Correct A. ₦163,922.71

B. ₦164,922.71

C. ₦165,922.71

D. ₦166,922.71

Correct Answer: A

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Question 9

A country has a trade deficit of ₦100 billion and a balance of payments deficit of ₦50 billion. If the country's GDP is ₦5 trillion, what is the country's current account deficit as a percentage of its GDP?

A. 2%

Correct B. 3%

C. 4%

D. 5%

Correct Answer: B

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Question 10

A sole trader has a business income of ₦500,000 and a business expense of ₦200,000. If the sole trader's personal income is ₦300,000, what is the sole trader's total income for the year?

A. ₦600,000

Correct B. ₦700,000

C. ₦800,000

D. ₦900,000

Correct Answer: B

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Question 11

In a perfectly competitive market, the supply curve is downward-sloping because

Correct A. Firms are willing to supply more at a lower price

B. Firms are willing to supply less at a higher price

C. Firms are willing to supply more at a higher price

D. Firms are willing to supply less at a lower price

Correct Answer: A

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Question 12

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's current labor and capital inputs are L = 16 and K = 9, respectively, what is the firm's current output?

A. 24

Correct B. 32

C. 48

D. 64

Correct Answer: B

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Question 13

A company is considering two different transportation modes to ship goods from point A to point B. Mode 1 has a fixed cost of ₦1000 and a variable cost of ₦500 per unit shipped. Mode 2 has a fixed cost of ₦500 and a variable cost of ₦750 per unit shipped. If the company ships 200 units, what is the total cost of shipping using Mode 1?

A. ₦100,000

Correct B. ₦120,000

C. ₦150,000

D. ₦180,000

Correct Answer: B

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Question 14

A firm's revenue function is given by R = 2Q^2. If the firm's current output is Q = 4, what is the firm's current revenue?

A. 16

B. 32

Correct C. 64

D. 128

Correct Answer: C

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Question 15

A company is considering two different investment projects. Project A has a 5-year life, an initial investment of ₦100,000, and annual cash inflows of ₦20,000. Project B has a 3-year life, an initial investment of ₦50,000, and annual cash inflows of ₦15,000. Which project has a higher net present value?

Correct A. Project A

B. Project B

C. Both projects have the same NPV

D. Neither project has a positive NPV

Correct Answer: A

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Question 16

A company has a production function given by Q = 100L^0.5K^0.5, where Q is the quantity produced, L is the labor input, and K is the capital input. If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, and the company wants to maximize its profit, what is the optimal level of labor and capital?

A. L = 100, K = 100

Correct B. L = 50, K = 200

C. L = 200, K = 50

D. L = 100, K = 50

Correct Answer: B

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Question 17

A consumer has a utility function given by U = 2x + 3y, where x and y are the quantities of two goods consumed. If the price of good x is ₦50 per unit and the price of good y is ₦100 per unit, and the consumer's income is ₦1000, what is the optimal bundle of goods?

Correct A. x = 10, y = 5

B. x = 5, y = 10

C. x = 15, y = 3

D. x = 20, y = 2

Correct Answer: A

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Question 18

A firm has a production function given by Q = 2L + 3K, where Q is the quantity produced, L is the labor input, and K is the capital input. If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, and the firm wants to minimize its cost, what is the optimal level of labor and capital?

A. L = 50, K = 100

Correct B. L = 100, K = 50

C. L = 200, K = 20

D. L = 150, K = 30

Correct Answer: B

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Question 19

A consumer has a utility function given by U = x^2 + 2y, where x and y are the quantities of two goods consumed. If the price of good x is ₦50 per unit and the price of good y is ₦100 per unit, and the consumer's income is ₦1000, what is the optimal bundle of goods?

Correct A. x = 10, y = 5

B. x = 5, y = 10

C. x = 15, y = 3

D. x = 20, y = 2

Correct Answer: A

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Question 20

A firm has a production function given by Q = 3L + 2K, where Q is the quantity produced, L is the labor input, and K is the capital input. If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, and the firm wants to maximize its profit, what is the optimal level of labor and capital?

A. L = 50, K = 100

Correct B. L = 100, K = 50

C. L = 200, K = 20

D. L = 150, K = 30

Correct Answer: B

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Question 21

A consumer has a utility function given by U = 2x + 3y, where x and y are the quantities of two goods consumed. If the price of good x is ₦50 per unit and the price of good y is ₦100 per unit, and the consumer's income is ₦1000, what is the optimal bundle of goods?

Correct A. x = 10, y = 5

B. x = 5, y = 10

C. x = 15, y = 3

D. x = 20, y = 2

Correct Answer: A

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Question 22

A firm has a production function given by Q = 2L + 3K, where Q is the quantity produced, L is the labor input, and K is the capital input. If the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, and the firm wants to minimize its cost, what is the optimal level of labor and capital?

A. L = 50, K = 100

Correct B. L = 100, K = 50

C. L = 200, K = 20

D. L = 150, K = 30

Correct Answer: B

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Question 23

A consumer has a utility function given by U = x^2 + 2y, where x and y are the quantities of two goods consumed. If the price of good x is ₦50 per unit and the price of good y is ₦100 per unit, and the consumer's income is ₦1000, what is the optimal bundle of goods?

A. x = 10, y = 5

B. x = 5, y = 10

C. x = 15, y = 3

D. x = 20, y = 2

Correct Answer: VIEW ANSWER

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Question 24

A company specializes in producing and selling high-quality leather goods. The company's production process involves several stages, including cutting, stitching, and finishing. The company uses a just-in-time (JIT) inventory system to manage its inventory levels. Which of the following is a benefit of the JIT system?

Correct A. Reduced inventory costs

B. Improved product quality

C. Increased production efficiency

D. Enhanced customer satisfaction

Correct Answer: A

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Question 25

A consumer purchases a product from a retailer, but the product is defective. The consumer returns the product to the retailer, who offers a replacement or a refund. Which of the following is a type of consumer protection?

A. Product liability

Correct B. Consumer rights

C. Warranty

D. Return policy

Correct Answer: B

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