POST UTME RHEMA UNIVERSITY 2021 Commerce | Objective

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Question 1
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
Correct C. Inferior goods
D. Veblen goods

Correct Answer: C

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Question 2
A company's production function is given by Q = 2L^0.5 + 3K^0.5. If the price of labor is ₦50 per unit and the price of capital is ₦100 per unit, what is the optimal combination of labor and capital that minimizes the cost of production?
A. L = 4, K = 1
B. L = 1, K = 4
Correct C. L = 2, K = 2
D. L = 1, K = 1

Correct Answer: C

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Question 3
A firm has the following cost function: TC = 100 + 2L + 3K. If the price of labor is ₦20 per unit and the price of capital is ₦30 per unit, what is the marginal cost of producing the 10th unit?
A. ₦40
Correct B. ₦50
C. ₦60
D. ₦70

Correct Answer: B

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Question 4
A company has the following revenue function: R = 1000 + 20Q. If the price of the product is ₦50 per unit, what is the marginal revenue of producing the 20th unit?
A. ₦1000
Correct B. ₦2000
C. ₦3000
D. ₦4000

Correct Answer: B

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Question 5
A firm has the following production function: Q = 2L^0.5 + 3K^0.5. If the price of labor is ₦50 per unit and the price of capital is ₦100 per unit, what is the optimal combination of labor and capital that maximizes the profit?
A. L = 4, K = 1
B. L = 1, K = 4
Correct C. L = 2, K = 2
D. L = 1, K = 1

Correct Answer: C

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Question 6
A sole trader's business is considered a separate legal entity from its owner. Discuss the implications of this separation on the owner's personal liability.
A. The owner's personal assets are protected from business debts.
Correct B. The owner's personal assets are liable for business debts.
C. The business is responsible for its own debts, but the owner may be liable for certain obligations.
D. The owner's personal assets are not affected by business debts.

Correct Answer: B

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Question 7
A company's articles of association state that the company must maintain a minimum of ₦500,000 in its reserve fund. What is the purpose of this reserve fund?
A. To provide a source of funds for the company's operational expenses.
Correct B. To ensure the company's solvency and stability.
C. To provide a source of funds for the company's dividend payments.
D. To provide a source of funds for the company's expansion plans.

Correct Answer: B

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Question 8
A foreign trade agreement between two countries requires that all imports be subject to a 10% tariff. What is the effect of this tariff on the importing country's economy?
A. The tariff increases the importing country's GDP.
Correct B. The tariff decreases the importing country's GDP.
C. The tariff has no effect on the importing country's GDP.
D. The tariff increases the importing country's inflation rate.

Correct Answer: B

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Question 9
A company's transport manager is responsible for ensuring that all goods are transported safely and efficiently. What is the primary responsibility of the transport manager?
A. To ensure that all goods are transported on time.
Correct B. To ensure that all goods are transported safely.
C. To ensure that all goods are transported efficiently.
D. To ensure that all goods are transported at the lowest cost.

Correct Answer: B

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Question 10
A bank's risk management strategy involves diversifying its investments to minimize potential losses. What is the primary benefit of diversification in risk management?
A. To increase potential returns on investment.
Correct B. To minimize potential losses.
C. To reduce the risk of default by borrowers.
D. To increase the bank's liquidity.

Correct Answer: B

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Question 11
The Consumer Protection Act of 1999 provides for the establishment of a Consumer Protection Council to promote and protect the rights of consumers. Which of the following is a function of the Consumer Protection Council?
Correct A. To investigate complaints from consumers
B. To promote consumer education and awareness
C. To regulate the activities of businesses
D. To provide legal representation for consumers

Correct Answer: A

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Question 12
A company has a warehouse with a capacity of 10,000 units. If the company receives a shipment of 5,000 units, what is the new capacity of the warehouse?
A. 10,000
Correct B. 15,000
C. 5,000
D. 20,000

Correct Answer: B

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Question 13
A business has a contract with a supplier to purchase 100 units of a product at ₦500 per unit. If the supplier delivers 120 units, what is the total cost of the delivery?
Correct A. ₦60,000
B. ₦55,000
C. ₦50,000
D. ₦45,000

Correct Answer: A

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Question 14
A company uses a just-in-time inventory system to manage its stock. What is the primary advantage of this system?
Correct A. Reduced inventory costs
B. Improved customer satisfaction
C. Increased efficiency
D. Enhanced product quality

Correct Answer: A

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Question 15
A business uses a transportation mode that involves the movement of goods by road. What is the primary advantage of this mode?
Correct A. Flexibility in routing
B. Reduced transportation costs
C. Improved security
D. Increased speed

Correct Answer: A

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Question 16
Under the Consumer Protection Act, what is the primary responsibility of a consumer in a transaction?
Correct A. To ensure the product is of satisfactory quality
B. To verify the authenticity of the product
C. To check the product's compliance with industry standards
D. To inspect the product's packaging

Correct Answer: A

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Question 17
A firm specializes in producing only one product, which is a type of electronic component. What is the primary advantage of this specialization?
A. Increased production costs
B. Reduced product variety
Correct C. Improved product quality
D. Enhanced marketing efforts

Correct Answer: C

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Question 18
A warehouse has a storage capacity of 10,000 units. If 8,000 units are already stored, what percentage of the warehouse is occupied?
A. 20%
B. 30%
Correct C. 40%
D. 50%

Correct Answer: C

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Question 19
A firm uses the following transportation modes: road, rail, and air. What is the primary advantage of using rail transportation?
Correct A. Reduced transportation costs
B. Increased transportation speed
C. Improved product safety
D. Enhanced customer satisfaction

Correct Answer: A

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Question 20
A firm exports goods to a foreign country. What is the primary responsibility of the firm in complying with foreign trade regulations?
Correct A. To ensure compliance with local regulations
B. To verify the authenticity of the product
C. To check the product's compliance with industry standards
D. To inspect the product's packaging

Correct Answer: A

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Question 21
A company is considering two different marketing strategies for its new product. Strategy A involves a high initial investment in advertising, but the company expects a high return on investment (ROI) of 30%. Strategy B involves a lower initial investment in advertising, but the company expects a lower ROI of 15%. If the company has a budget of ₦1,000,000 for advertising, which strategy should it choose?
Correct A. Strategy A
B. Strategy B
C. Both strategies are equally effective
D. Neither strategy is effective

Correct Answer: A

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Question 22
A bank is considering offering a new type of loan to its customers. The loan will have a fixed interest rate of 12% per annum, compounded annually. If the loan amount is ₦500,000 and the loan term is 5 years, what will be the total amount paid by the customer at the end of the loan term?
A. ₦750,000
B. ₦800,000
Correct C. ₦850,000
D. ₦900,000

Correct Answer: C

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Question 23
A company has a production process that involves two stages: Stage 1 and Stage 2. Stage 1 has a production capacity of 100 units per hour, and Stage 2 has a production capacity of 80 units per hour. If the company wants to produce a total of 1,000 units per hour, what is the maximum number of hours it will take to produce 10,000 units?
A. 10 hours
B. 12 hours
Correct C. 15 hours
D. 20 hours

Correct Answer: C

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Question 24
A sole trader has a business that generates a profit of ₦200,000 per year. The sole trader's personal income tax rate is 20%. What is the sole trader's personal income tax liability for the year?
A. ₦40,000
Correct B. ₦50,000
C. ₦60,000
D. ₦80,000

Correct Answer: B

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Question 25
A company has a business unit that operates in a competitive market. The company's market share is 20%, and the industry growth rate is 5% per annum. What is the company's expected market share after 5 years?
A. 15%
B. 20%
Correct C. 25%
D. 30%

Correct Answer: C

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