Practice post utme summit university commerce 2024 Past Questions

Question 1

A firm specializes in producing only one product. This is an example of:

A. Product Diversification

B. Product Differentiation

C. Economies of Scale

Correct D. Monopolistic Competition

Correct Answer: D

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 2

A firm's production function is given by Q = 2L^0.5K^0.5. If the firm wants to increase its output by 20%, what should be the percentage increase in labor (L) and capital (K)?

A. 10% increase in L and 10% increase in K

Correct B. 20% increase in L and 20% increase in K

C. 10% increase in L and 20% increase in K

D. 20% increase in L and 10% increase in K

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 3

A firm is considering two different modes of transportation: road and rail. The cost of transporting a unit of goods by road is ₦500, while the cost of transporting the same unit by rail is ₦300. If the firm wants to minimize its transportation cost, what should it do?

A. Use road transportation for all units

B. Use rail transportation for all units

Correct C. Use a combination of road and rail transportation

D. Do not transport the goods

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 4

A firm has the following probability distribution for its output: P(X=10) = 0.2, P(X=20) = 0.5, P(X=30) = 0.3. What is the expected value of the firm's output?

A. 15

Correct B. 20

C. 25

D. 30

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 5

A firm is considering two different insurance policies: policy A and policy B. Policy A has a premium of ₦1000 and a deductible of ₦500, while policy B has a premium of ₦1500 and a deductible of ₦1000. If the firm wants to minimize its expected loss, what should it do?

Correct A. Choose policy A

B. Choose policy B

C. Choose neither policy

D. Do not insure the firm

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

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 statements best describes the opportunity cost of a country that specializes in producing a good?

Correct A. The opportunity cost is the value of the next best alternative good that could have been produced with the same resources.

B. The opportunity cost is the value of the next best alternative good that could have been produced with the same resources, but in a different time period.

C. The opportunity cost is the value of the next best alternative good that could have been produced with the same resources, but in a different location.

D. The opportunity cost is the value of the next best alternative good that could have been produced with the same resources, but in a different industry.

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 7

A firm's production function is given by Q = 2L + 3K, where Q is the quantity produced, L is the number of labor hours, and K is the amount of capital invested. If the firm wants to produce 10 units of output, how many labor hours are required if the amount of capital invested is 2?

A. 4

Correct B. 6

C. 8

D. 10

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 8

A company is considering two different marketing strategies: a high-low strategy and a penetration pricing strategy. Which of the following statements best describes the high-low strategy?

A. A high-low strategy involves setting a high price for a product in order to attract a small number of customers who are willing to pay a premium.

Correct B. A high-low strategy involves setting a low price for a product in order to attract a large number of customers who are price-sensitive.

C. A high-low strategy involves setting a high price for a product in order to attract a large number of customers who are willing to pay a premium.

D. A high-low strategy involves setting a low price for a product in order to attract a small number of customers who are price-sensitive.

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 9

A firm's revenue function is given by R = 2Q^2 + 3Q, where R is the revenue and Q is the quantity produced. If the firm produces 5 units of output, what is the revenue?

A. 25

B. 30

Correct C. 35

D. 40

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 10

A company is considering two different transportation modes: trucking and rail. Which of the following statements best describes the advantages of trucking?

A. Trucking is faster and more reliable than rail.

Correct B. Trucking is cheaper and more flexible than rail.

C. Trucking is more environmentally friendly than rail.

D. Trucking is more secure than rail.

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 11

A sole trader's business is considered a separate legal entity from its owner. However, in the event of the owner's death, the business is automatically dissolved. Which of the following is a correct statement regarding the dissolution of a sole trader's business?

Correct A. The business is automatically dissolved and the owner's estate is responsible for settling any outstanding debts.

B. The business is not dissolved and can continue to operate under the control of the owner's executors.

C. The business is not dissolved, but the owner's estate is responsible for paying any outstanding taxes.

D. The business is automatically dissolved, but the owner's estate is not responsible for settling any outstanding debts.

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 12

A company's memorandum of association is a document that outlines the company's objectives, powers, and rules for its management. Which of the following is NOT a purpose of a company's memorandum of association?

A. To outline the company's objectives and powers.

B. To outline the rules for the company's management.

C. To provide a framework for the company's financial transactions.

Correct D. To provide a framework for the company's human resources management.

Correct Answer: D

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 13

A bank's primary function is to act as a financial intermediary between savers and borrowers. Which of the following is a type of financial intermediary?

A. A commercial bank.

B. A central bank.

Correct C. A non-bank financial institution.

D. A stock exchange.

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 14

A warehouse is a type of storage facility used to store goods and merchandise. Which of the following is a benefit of using a warehouse?

A. To reduce the risk of damage to goods.

B. To increase the speed of delivery.

C. To reduce the cost of storage.

Correct D. To increase the security of goods.

Correct Answer: D

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 15

A stock exchange is a marketplace where securities are bought and sold. Which of the following is a type of security traded on a stock exchange?

A. Common stock.

B. Preferred stock.

C. Bonds.

Correct D. All of the above.

Correct Answer: D

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 16

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

A. ₦100, 100 units

Correct B. ₦120, 80 units

C. ₦150, 60 units

D. ₦180, 40 units

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 17

A company is considering two different production processes for its product. Process A has a fixed cost of ₦500,000 and a variable cost of ₦10 per unit. Process B has a fixed cost of ₦750,000 and a variable cost of ₦8 per unit. If the selling price of the product is ₦20 per unit, which process should the company use?

Correct A. Process A

B. Process B

C. Both processes are equally profitable

D. Neither process is profitable

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 18

A firm is producing a good with a production function of Q = 2L + 3K, where L is labor and K is capital. If the price of labor is ₦10 per hour and the price of capital is ₦20 per unit, and the firm is currently producing 100 units of the good, what is the marginal product of labor?

A. 10 units

Correct B. 20 units

C. 30 units

D. 40 units

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 19

A country is experiencing a trade deficit due to a high demand for imports. Which of the following policies would help to reduce the trade deficit?

A. Increase the value of the currency

Correct B. Decrease the value of the currency

C. Increase the price of imports

D. Decrease the price of imports

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 20

A company is considering investing in a new project with a required rate of return of 12%. If the project has a net present value of ₦100,000, what is the expected return on investment?

A. 10%

Correct B. 12%

C. 15%

D. 18%

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 21

A company's sole trader has a warehouse with a capacity of 10,000 units. If the company's current stock level is 8,000 units, what is the maximum number of units that can be added to the warehouse without exceeding its capacity?

Correct A. 2,000

B. 8,000

C. 10,000

D. 12,000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 22

A consumer protection agency receives a complaint about a company's misleading advertisement. The advertisement claims that a product is '99% effective' when, in reality, it is only 90% effective. What is the correct statement regarding the company's advertisement?

Correct A. The advertisement is misleading because it exaggerates the product's effectiveness.

B. The advertisement is not misleading because it provides a clear explanation of the product's effectiveness.

C. The advertisement is misleading because it uses a different unit of measurement.

D. The advertisement is not misleading because it is a common practice in the industry.

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 23

A company's sole trader has a warehouse with a capacity of 10,000 units. If the company's current stock level is 8,000 units, what is the maximum number of units that can be added to the warehouse without exceeding its capacity?

Correct A. 2,000

B. 8,000

C. 10,000

D. 12,000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 24

A company's sole trader has a warehouse with a capacity of 10,000 units. If the company's current stock level is 8,000 units, what is the maximum number of units that can be added to the warehouse without exceeding its capacity?

Correct A. 2,000

B. 8,000

C. 10,000

D. 12,000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 25

A company's sole trader has a warehouse with a capacity of 10,000 units. If the company's current stock level is 8,000 units, what is the maximum number of units that can be added to the warehouse without exceeding its capacity?

Correct A. 2,000

B. 8,000

C. 10,000

D. 12,000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

POST UTME SUMMIT UNIVERSITY 2024 Commerce | Objective

Master the Exam!

Help others prepare! Share this practice hub: