Practice post utme veritas university commerce 2018 Past Questions

Question 1

In a sole trade business, the owner's personal assets are not protected from business liabilities. What is the primary reason for this?

A. Limited liability protection

B. Separation of business and personal assets

Correct C. No distinction between business and personal finances

D. No need for business registration

Correct Answer: C

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Question 2

A company's production process involves the use of a machine that requires regular maintenance to prevent accidents. What type of risk is the company exposed to?

Correct A. Operational risk

B. Strategic risk

C. Financial risk

D. Compliance risk

Correct Answer: A

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Question 3

A company's marketing strategy involves the use of social media platforms to reach its target audience. What type of communication is being used?

A. Internal communication

Correct B. External communication

C. Vertical communication

D. Horizontal communication

Correct Answer: B

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Question 4

A company's production process involves the use of a machine that requires regular maintenance to prevent accidents. What type of risk is the company exposed to?

Correct A. Operational risk

B. Strategic risk

C. Financial risk

D. Compliance risk

Correct Answer: A

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Question 5

A company's marketing strategy involves the use of social media platforms to reach its target audience. What type of communication is being used?

A. Internal communication

Correct B. External communication

C. Vertical communication

D. Horizontal communication

Correct Answer: B

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Question 6

A firm specializes in producing a single product, which is sold in a competitive market. The firm's production function is given by Q = 100L^0.5, where Q is the quantity produced and L is the labor input. If the wage rate is ₦100 per hour, what is the firm's optimal labor input?

A. 10 hours

Correct B. 20 hours

C. 30 hours

D. 40 hours

Correct Answer: B

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Question 7

A company has two production plants, A and B. Plant A produces 200 units per day, while plant B produces 300 units per day. If the total demand is 500 units per day, what is the optimal allocation of production between the two plants?

A. Plant A produces 200 units, plant B produces 300 units

Correct B. Plant A produces 300 units, plant B produces 200 units

C. Plant A produces 400 units, plant B produces 100 units

D. Plant A produces 100 units, plant B produces 400 units

Correct Answer: B

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Question 8

A firm has a warehouse with a capacity of 1000 units. The firm receives an order for 800 units and wants to fill it immediately. However, the supplier is delayed, and the firm receives only 600 units. What is the optimal inventory level?

A. 400 units

Correct B. 600 units

C. 800 units

D. 1000 units

Correct Answer: B

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Question 9

A company is considering two investment projects, A and B. Project A has a net present value (NPV) of ₦100,000, while project B has an NPV of ₦120,000. However, project B requires an initial investment of ₦150,000, while project A requires an initial investment of ₦100,000. Which project should the company choose?

A. Project A

Correct B. Project B

C. Both projects

D. Neither project

Correct Answer: B

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Question 10

A consumer has a budget of ₦10,000 and wants to buy two products, A and B. Product A costs ₦5,000, while product B costs ₦3,000. However, the consumer also has to pay a sales tax of 10% on the total purchase. What is the maximum amount the consumer can spend on product B?

A. ₦1,500

B. ₦2,000

Correct C. ₦2,500

D. ₦3,000

Correct Answer: C

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Question 11

In a perfectly competitive market, the law of diminishing marginal utility implies that as the quantity of a good increases, the marginal utility of each additional unit will eventually decrease. However, this does not necessarily mean that the total utility of the good will also decrease. Explain why.

A. The total utility of the good will continue to increase as long as the marginal utility of each additional unit is positive.

B. The total utility of the good will eventually decrease as the marginal utility of each additional unit approaches zero.

C. The total utility of the good will remain constant as the marginal utility of each additional unit decreases.

Correct D. The total utility of the good will increase at a decreasing rate as the marginal utility of each additional unit decreases.

Correct Answer: D

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Question 12

A company is considering two different production processes for a new product. Process A requires an initial investment of ₦100,000 and produces 100 units per day, while Process B requires an initial investment of ₦150,000 and produces 120 units per day. If the company expects to produce the product for 5 years, which process should it choose?

A. Process A, because it requires a lower initial investment.

B. Process B, because it produces more units per day.

C. Process A, because it has a higher production rate per unit of investment.

Correct D. Process B, because it has a higher total production over the 5-year period.

Correct Answer: D

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Question 13

A consumer has a budget of ₦10,000 per month and is considering purchasing two different products. Product X costs ₦2,000 per unit and Product Y costs ₦3,000 per unit. If the consumer wants to purchase as many units of each product as possible, how many units of each product should they buy?

Correct A. 10 units of Product X and 3 units of Product Y.

B. 8 units of Product X and 2 units of Product Y.

C. 6 units of Product X and 1 unit of Product Y.

D. 4 units of Product X and 0 units of Product Y.

Correct Answer: A

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Question 14

A company is considering two different marketing strategies for a new product. Strategy A involves a high level of advertising and promotion, while Strategy B involves a low level of advertising and promotion. If the company expects to sell 10,000 units of the product per month, which strategy should it choose?

A. Strategy A, because it will result in higher sales.

B. Strategy B, because it will result in lower costs.

Correct C. Strategy A, because it will result in higher profits.

D. Strategy B, because it will result in higher customer satisfaction.

Correct Answer: C

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Question 15

A company is considering two different distribution channels for a new product. Channel A involves selling the product directly to consumers, while Channel B involves selling the product to retailers who will then sell it to consumers. If the company expects to sell 10,000 units of the product per month, which channel should it choose?

A. Channel A, because it will result in higher sales.

B. Channel B, because it will result in lower costs.

Correct C. Channel A, because it will result in higher profits.

D. Channel B, because it will result in higher customer satisfaction.

Correct Answer: C

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Question 16

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 compared to other countries. Which of the following is a correct example of comparative advantage?

A. Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 50 units of wheat and 100 units of cloth.

Correct B. Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 50 units of wheat and 150 units of cloth.

C. Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 100 units of wheat and 50 units of cloth.

D. Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 50 units of wheat and 200 units of cloth.

Correct Answer: B

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Question 17

A company has a warehouse with a capacity of 10,000 units. The warehouse is currently 70% full. If the company receives a new shipment of 5,000 units, what is the new percentage of the warehouse that is full?

A. 30

B. 40

Correct C. 50

D. 60

Correct Answer: C

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Question 18

A bank has a reserve requirement of 10% for its customers. If a customer has a deposit of ₦100,000, how much must the bank reserve?

Correct A. ₦10,000

B. ₦20,000

C. ₦30,000

D. ₦40,000

Correct Answer: A

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Question 19

A company has a production cost of ₦50 per unit for a product. If the selling price is ₦75 per unit, what is the profit per unit?

A. ₦25

Correct B. ₦30

C. ₦35

D. ₦40

Correct Answer: B

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Question 20

A life insurance policy has a premium of ₦10,000 per year. If the policyholder dies after 5 years, the insurance company pays ₦200,000 to the beneficiary. What is the return on investment (ROI) for the policyholder?

A. 20%

Correct B. 25%

C. 30%

D. 35%

Correct Answer: B

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Question 21

A company is considering two different transportation modes to deliver goods from a warehouse to a customer. Mode A involves using a truck with a capacity of 100 units, while Mode B involves using a train with a capacity of 500 units. If the company needs to deliver 750 units, what is the minimum number of trips required to deliver all the units using Mode A?

Correct A. 8

B. 9

C. 10

D. 11

Correct Answer: A

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Question 22

A firm is considering two different storage facilities to store its products. Facility A has a capacity of 2000 units, while Facility B has a capacity of 5000 units. If the firm needs to store 3000 units, what is the minimum number of facilities required to store all the units?

Correct A. 2

B. 3

C. 4

D. 5

Correct Answer: A

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Question 23

A company is considering two different trade agreements with a foreign country. Agreement A involves a tariff of 10% on all imports, while Agreement B involves a tariff of 20% on all imports. If the company imports goods worth ₦100,000, what is the total amount paid in tariffs under Agreement A?

Correct A. ₦10,000

B. ₦20,000

C. ₦30,000

D. ₦40,000

Correct Answer: A

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Question 24

A consumer is considering two different products to purchase. Product A has a price of ₦50,000, while Product B has a price of ₦60,000. If the consumer has a budget of ₦80,000, what is the maximum number of units of Product A that the consumer can purchase?

Correct A. 1

B. 2

C. 3

D. 4

Correct Answer: A

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Question 25

A company is considering two different production processes to manufacture a product. Process A involves a fixed cost of ₦50,000 and a variable cost of ₦20 per unit, while Process B involves a fixed cost of ₦30,000 and a variable cost of ₦30 per unit. If the company needs to produce 1000 units, what is the total cost of production under Process A?

Correct A. ₦70,000

B. ₦80,000

C. ₦90,000

D. ₦100,000

Correct Answer: A

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