POST UTME REDEEMERS UNIVERSITY 2022 Commerce | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A firm is considering two different production processes for its product. Process A requires an initial investment of ₦1.5 million and has a production cost of ₦200,000 per unit. Process B requires an initial investment of ₦2.0 million and has a production cost of ₦150,000 per unit. If the firm produces 10,000 units, what is the total cost of production for each process?
A. Process A: ₦1.5 million, Process B: ₦1.8 million
B. Process A: ₦1.8 million, Process B: ₦1.5 million
C. Process A: ₦1.2 million, Process B: ₦1.6 million
D. Process A: ₦1.6 million, Process B: ₦1.2 million
Question 2
A consumer's utility function is given by U(x, y) = 2x + 3y, where x is the number of units of good X and y is the number of units of good Y. If the consumer's budget is 100 and the prices of good X and good Y are 5 and 10 respectively, what is the optimal bundle of goods that maximizes the consumer's utility?
A. x = 10, y = 5
B. x = 15, y = 3
C. x = 20, y = 2
D. x = 25, y = 1
Question 3
A business has a specialization in producing goods that are in high demand. The business has a production capacity of 10,000 units of goods per month. What is the business's competitive advantage?
A. The business has a low production cost.
B. The business has a high production capacity.
C. The business has a specialization in producing goods that are in high demand.
D. The business has a low marketing cost.
Question 4
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)?
A. 6%
B. 8%
C. 10%
D. 12%
Question 5
A company is considering the introduction of a new product line. The product line has a high fixed cost but a low variable cost. Which of the following is a correct description of the product line?
A. A product line with a high fixed cost and a low variable cost is a characteristic of a high-fixed-cost product line.
B. A product line with a high fixed cost and a low variable cost is a characteristic of a low-fixed-cost product line.
C. A product line with a high fixed cost and a low variable cost is a characteristic of a high-variable-cost product line.
D. A product line with a high fixed cost and a low variable cost is a characteristic of a low-variable-cost product line.
Question 6
In a perfectly competitive market, the law of diminishing marginal utility is most relevant to the production of which of the following goods?
A. Giffen goods
B. Normal goods
C. Inferior goods
D. Veblen goods
Question 7
A consumer protection agency has received complaints about a company that is selling a product with a misleading label. The label claims that the product is '100% natural' when in fact it contains 20% artificial ingredients. What is the legal consequence of this action?
A. The company will be fined ₦1 million
B. The company will be required to recall the product
C. The company will be sued for damages
D. The company will be shut down
Question 8
A warehouse manager is responsible for maintaining a high level of inventory turnover. What is the primary strategy for achieving this goal?
A. Just-in-time inventory management
B. Economic order quantity (EOQ) calculation
C. Vendor-managed inventory (VMI)
D. Continuous inventory replenishment
Question 9
A company is considering the introduction of a new product line. The product line has a high fixed cost but a low variable cost. Which of the following is a correct description of the product line?
A. A product line with a high fixed cost and a low variable cost is a characteristic of a high-fixed-cost product line.
B. A product line with a high fixed cost and a low variable cost is a characteristic of a low-fixed-cost product line.
C. A product line with a high fixed cost and a low variable cost is a characteristic of a high-variable-cost product line.
D. A product line with a high fixed cost and a low variable cost is a characteristic of a low-variable-cost product line.
Question 10
A business has a warehouse with a capacity to store 10,000 units of goods. The business has received an order for 8,000 units of goods. What is the maximum number of units of goods that the business can store in the warehouse?
A. 8,000
B. 10,000
C. 12,000
D. 15,000
Question 11
A consumer protection agency has received a complaint about a business that has failed to deliver goods to a customer. The agency has the power to impose a fine of ₦10,000 on the business. What is the purpose of the fine?
A. To compensate the customer for the loss suffered.
B. To deter the business from engaging in similar conduct in the future.
C. To punish the business for its failure to deliver goods.
D. To refund the customer's money.
Question 12
A warehouse is storing a large quantity of perishable goods. The warehouse has a temperature control system that maintains a consistent temperature of 20°C. However, the system is not designed to handle extreme temperature fluctuations. Which of the following is the most appropriate control measure to implement in the warehouse?
A. Install a backup power generator to ensure the temperature control system remains operational during power outages.
B. Implement a temperature monitoring system to detect any deviations from the set temperature.
C. Use insulated storage containers to reduce heat transfer and maintain a consistent temperature.
D. Increase the temperature setpoint to 25°C to account for potential temperature fluctuations.
Question 13
A consumer's indifference curve is given by the equation 2x + 3y = 6, where x is the number of units of good X and y is the number of units of good Y. If the consumer's budget is 100 and the prices of good X and good Y are 5 and 10 respectively, what is the optimal bundle of goods that maximizes the consumer's utility?
A. x = 10, y = 5
B. x = 15, y = 3
C. x = 20, y = 2
D. x = 25, y = 1
Question 14
The concept of specialization in production is closely related to the idea of comparative advantage. Explain how a country can benefit from specializing in the production of a particular good, even if it is not the most efficient producer of that good.
A. By producing a good that is in high demand and has a high price elasticity of demand
B. By producing a good that is in low demand and has a low price elasticity of demand
C. By producing a good that is in high demand and has a low price elasticity of demand
D. By producing a good that is in low demand and has a high price elasticity of demand
Question 15
A production manager is considering outsourcing a critical component of their product. What is the primary advantage of outsourcing?
A. Increased control over production
B. Reduced production costs
C. Improved product quality
D. Enhanced brand reputation

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