Practice post utme redeemers university commerce 2024 Past Questions

Question 1

In a perfectly competitive market, the supply curve is downward sloping because of the law of increasing

Correct A. marginal opportunity cost

B. marginal utility

C. marginal benefit

D. marginal revenue

Correct Answer: A

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Question 2

A company's break-even point is the point at which its total revenue equals its total

A. fixed costs

B. variable costs

Correct C. total costs

D. net income

Correct Answer: C

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Question 3

A sole trader is a business owned and operated by one person, known as the

A. partner

B. director

Correct C. proprietor

D. shareholder

Correct Answer: C

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Question 4

A company's financial statements include the balance sheet, income statement, and

A. cash flow statement

Correct B. statement of changes in equity

C. statement of cash flows

D. statement of retained earnings

Correct Answer: B

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Question 5

A bank's primary function is to act as a

A. pawnbroker

B. insurance company

C. investment firm

Correct D. financial intermediary

Correct Answer: D

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Question 6

The concept of comparative advantage in international trade is based on the idea that countries should specialize in producing goods for which they have a lower opportunity cost. Which of the following is a correct example of comparative advantage?

A. Country A producing 100 units of wheat and 50 units of cloth

B. Country B producing 100 units of wheat and 50 units of cloth

C. Country A producing 100 units of wheat and 100 units of cloth

Correct D. Country B producing 50 units of wheat and 100 units of cloth

Correct Answer: D

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Question 7

A company's financial leverage ratio is 2:1. If the company's total debt is ₦1,000,000, what is the total value of its assets?

A. ₦1,500,000

Correct B. ₦2,000,000

C. ₦2,500,000

D. ₦3,000,000

Correct Answer: B

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Question 8

A sole trader's business is registered under the name 'ABC Enterprises'. Which of the following is a correct statement about the business?

A. The business is a partnership

B. The business is a limited company

Correct C. The business is a sole trader

D. The business is a cooperative society

Correct Answer: C

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Question 9

A company's cost of capital is 10% per annum. If the company's required rate of return is 12% per annum, what is the company's cost of equity?

Correct A. 8%

B. 10%

C. 12%

D. 15%

Correct Answer: A

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Question 10

A company's dividend payout ratio is 40%. If the company's net income is ₦1,000,000, what is the company's dividend payment?

Correct A. ₦400,000

B. ₦500,000

C. ₦600,000

D. ₦800,000

Correct Answer: A

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Question 11

The Consumer Protection Act of 1999 provides for the establishment of the Consumer Protection Council. What is the primary function of the Consumer Protection Council?

A. To promote consumer awareness and education

B. To investigate consumer complaints and resolve disputes

C. To regulate consumer transactions and enforce consumer rights

Correct D. To provide consumer protection and advocacy services

Correct Answer: D

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Question 12

A company has a sole trader business structure. What is the primary advantage of this structure?

A. Limited liability for the owner

Correct B. Easy to set up and maintain

C. Flexibility in decision-making

D. No requirement for formal accounting records

Correct Answer: B

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Question 13

A consumer purchases a product online and receives a defective item. What is the consumer's right under the Consumer Protection Act?

A. To return the product for a full refund

B. To exchange the product for a similar item

Correct C. To claim damages for the defective product

D. To cancel the purchase and receive a full refund

Correct Answer: C

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Question 14

A company is considering setting up a business in Nigeria. What is the primary advantage of registering as a private company?

Correct A. Limited liability for the shareholders

B. Easy to set up and maintain

C. Flexibility in decision-making

D. No requirement for formal accounting records

Correct Answer: A

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Question 15

A consumer is considering purchasing a product from a company that has a poor reputation for customer service. What is the consumer's right under the Consumer Protection Act?

Correct A. To cancel the purchase and receive a full refund

B. To exchange the product for a similar item

C. To claim damages for the company's poor reputation

D. To return the product for a full refund

Correct Answer: A

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Question 16

A firm specializes in producing a single product, which is a type of commodity. The firm's production function is given by the equation ( Q = 100L^0.5K^0.25 ), where Q is the quantity produced, L is the labor input, and K is the capital input. If the firm wants to produce 100 units of the commodity, and the wage rate is ₦100 per hour, while the rental rate for capital is ₦50 per hour, what is the minimum cost of production?

A. ₦10,000

Correct B. ₦12,500

C. ₦15,000

D. ₦17,500

Correct Answer: B

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Question 17

A consumer has a budget constraint of ₦1,000, and the prices of two goods are ₦200 and ₦300, respectively. If the consumer's indifference curve is given by the equation ( U = 2x + 3y ), where x and y are the quantities of the two goods consumed, what is the consumer's optimal bundle of goods?

Correct A. x = 2, y = 3

B. x = 3, y = 2

C. x = 4, y = 1

D. x = 1, y = 4

Correct Answer: A

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Question 18

A firm is considering two different production technologies: one that uses labor and capital as inputs, and another that uses only labor as an input. The production function for the first technology is given by the equation ( Q = 100L^0.5K^0.25 ), while the production function for the second technology is given by the equation ( Q = 50L^0.5 ). If the firm wants to produce 100 units of the commodity, and the wage rate is ₦100 per hour, while the rental rate for capital is ₦50 per hour, which technology should the firm choose?

Correct A. First technology

B. Second technology

C. Both technologies are equally efficient

D. Neither technology is efficient

Correct Answer: A

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Question 19

A consumer has a budget constraint of ₦1,000, and the prices of two goods are ₦200 and ₦300, respectively. If the consumer's indifference curve is given by the equation ( U = 2x + 3y ), where x and y are the quantities of the two goods consumed, and the consumer's initial bundle of goods is x = 2, y = 3, what is the consumer's optimal bundle of goods after a price increase?

Correct A. x = 1, y = 4

B. x = 2, y = 3

C. x = 3, y = 2

D. x = 4, y = 1

Correct Answer: A

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Question 20

A firm is considering two different production technologies: one that uses labor and capital as inputs, and another that uses only labor as an input. The production function for the first technology is given by the equation ( Q = 100L^0.5K^0.25 ), while the production function for the second technology is given by the equation ( Q = 50L^0.5 ). If the firm wants to produce 100 units of the commodity, and the wage rate is ₦100 per hour, while the rental rate for capital is ₦50 per hour, what is the minimum cost of production for each technology?

Correct A. First technology: ₦10,000, Second technology: ₦5,000

B. First technology: ₦5,000, Second technology: ₦10,000

C. First technology: ₦12,500, Second technology: ₦6,250

D. First technology: ₦6,250, Second technology: ₦12,500

Correct Answer: A

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Question 21

A company's marketing strategy involves a mix of advertising, sales promotions, and public relations. Which of the following is a key benefit of using a mix of these strategies?

A. Increased brand awareness

B. Improved customer engagement

Correct C. Enhanced product differentiation

D. Better market segmentation

Correct Answer: C

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Question 22

A sole trader's business is exposed to various risks, including market risk, credit risk, and operational risk. Which of the following is a way to manage these risks?

A. Diversification

Correct B. Hedging

C. Risk avoidance

D. Risk transfer

Correct Answer: B

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Question 23

A company is considering exporting its products to a foreign market. Which of the following is a key factor to consider when deciding whether to export?

A. Market size and growth rate

B. Competitor analysis

Correct C. Trade agreements and regulations

D. Transportation costs

Correct Answer: C

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Question 24

A company's financial statements show a high level of debt. Which of the following is a potential consequence of this?

A. Increased profitability

B. Improved credit rating

Correct C. Reduced financial flexibility

D. Enhanced market position

Correct Answer: C

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Question 25

A company is considering investing in a new project. Which of the following is a key factor to consider when evaluating the project's potential return on investment?

A. Project duration

B. Project cost

Correct C. Expected cash flows

D. Risk assessment

Correct Answer: C

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