POST UTME WELLSPRING UNIVERSITY 2020 Commerce | Objective

Are you preparing for POST UTME WELLSPRING UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2020 Commerce (Objective) questions designed to simulate the real exam environment.

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Question 1
A company's marketing strategy involves a mix of advertising, sales promotions, and public relations. Which of the following is NOT a characteristic of a successful marketing mix?
A. Being relevant to the target market
B. Being cost-effective
C. Being unique to the competition
Correct D. Being irrelevant to the target market

Correct Answer: D

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Question 2
A firm's break-even point is the point at which its total revenue equals its total fixed costs. If the firm's total fixed costs are ₦100,000 and its selling price per unit is ₦500, what is the break-even point in units?
A. 200 units
Correct B. 250 units
C. 300 units
D. 350 units

Correct Answer: B

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Question 3
A company's insurance policy covers losses due to fire, theft, and natural disasters. The policy has a deductible of ₦50,000 and a premium of ₦200,000 per year. If the company experiences a loss of ₦150,000 due to fire, how much will it pay out of pocket?
A. ₦0
B. ₦25,000
Correct C. ₦50,000
D. ₦75,000

Correct Answer: C

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Question 4
A consumer protection law requires that all goods sold in a particular market must be labeled with their country of origin. Which of the following is a benefit of this law?
A. It increases the cost of production
B. It reduces the quality of goods
Correct C. It helps consumers make informed purchasing decisions
D. It increases the risk of product liability

Correct Answer: C

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Question 5
A bank's balance sheet shows that its total assets are ₦500,000,000 and its total liabilities are ₦300,000,000. What is the bank's equity?
A. ₦100,000,000
B. ₦150,000,000
Correct C. ₦200,000,000
D. ₦250,000,000

Correct Answer: C

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Question 6
In a perfectly competitive market, the law of supply states that as the price of a commodity increases, the quantity supplied also increases. However, this is not always the case. What is the term for the phenomenon where an increase in price leads to a decrease in quantity supplied?
Correct A. Giffen Goods
B. Inferior Goods
C. Normal Goods
D. Substitutes

Correct Answer: A

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Question 7
A firm's production function is given by Q = 2L^0.5 + 3K^0.5, where Q is the quantity produced, L is labor, and K is capital. If the firm increases its labor from 4 units to 9 units, and its capital from 9 units to 16 units, what is the percentage change in output?
A. 10%
Correct B. 20%
C. 30%
D. 40%

Correct Answer: B

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Question 8
A consumer has a budget of ₦1000 and faces the following prices: Good A = ₦200, Good B = ₦300, and Good C = ₦400. If the consumer allocates 40% of their budget to Good A, 30% to Good B, and 30% to Good C, what is the total quantity of each good purchased?
Correct A. Good A = 2 units, Good B = 1 unit, Good C = 1 unit
B. Good A = 3 units, Good B = 2 units, Good C = 2 units
C. Good A = 4 units, Good B = 3 units, Good C = 3 units
D. Good A = 5 units, Good B = 4 units, Good C = 4 units

Correct Answer: A

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Question 9
A firm's demand function is given by Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the firm increases its price from ₦50 to ₦75, what is the percentage change in quantity demanded?
A. -20%
B. -30%
Correct C. -40%
D. -50%

Correct Answer: C

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Question 10
A consumer has a utility function given by U = 2x + 3y, where x and y are the quantities of two goods. If the consumer allocates 50% of their budget to Good A and 50% to Good B, and the prices of Good A and Good B are ₦200 and ₦300 respectively, what is the maximum utility the consumer can achieve?
A. 100
B. 200
Correct C. 300
D. 400

Correct Answer: C

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Question 11
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. Superior Goods

Correct Answer: C

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Question 12
A company's financial statements show that its total revenue is ₦1,500,000 and its total cost is ₦1,200,000. What is the company's profit?
Correct A. ₦300,000
B. ₦200,000
C. ₦100,000
D. ₦50,000

Correct Answer: A

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Question 13
A sole trader, Mr. A, has a capital of ₦500,000. He also has a loan of ₦200,000 from a bank. What is his total capital?
Correct A. ₦700,000
B. ₦600,000
C. ₦500,000
D. ₦400,000

Correct Answer: A

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Question 14
A company's break-even point is at a sales volume of 5,000 units. If the selling price per unit is ₦100 and the variable cost per unit is ₦50, what is the company's contribution per unit?
A. ₦25
Correct B. ₦30
C. ₦35
D. ₦40

Correct Answer: B

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Question 15
A consumer protection agency has the power to investigate and prosecute any business that engages in unfair trade practices. What is the primary purpose of this agency?
Correct A. To protect consumers from unfair trade practices
B. To promote fair competition among businesses
C. To regulate the prices of goods and services
D. To provide financial assistance to small businesses

Correct Answer: A

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Question 16
In a perfectly competitive market, the supply curve is downward sloping due to the law of increasing costs. However, this law is not applicable in a market with a single firm. What is the name of this market structure?
A. Monopoly
B. Oligopoly
C. Monopolistic Competition
Correct D. Perfect Competition

Correct Answer: D

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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 500 units are added to the warehouse, what is the new percentage of the warehouse that is full?
A. 60%
Correct B. 65%
C. 70%
D. 75%

Correct Answer: B

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Question 18
A firm is considering two different production processes. Process A has a fixed cost of ₦100,000 and a variable cost of ₦50 per unit. Process B has a fixed cost of ₦150,000 and a variable cost of ₦30 per unit. If the firm produces 10,000 units, what is the total cost of production for Process A?
A. ₦500,000
B. ₦550,000
Correct C. ₦600,000
D. ₦650,000

Correct Answer: C

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Question 19
A company has a production function given by Q = 2L + 3K, where Q is the quantity produced, L is the number of labor hours, and K is the number of capital units. If the company has 10 labor hours and 5 capital units, what is the quantity produced?
A. 20
B. 25
Correct C. 30
D. 35

Correct Answer: C

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Question 20
A firm is considering two different pricing strategies. Strategy A involves charging a price of ₦100 per unit, while Strategy B involves charging a price of ₦120 per unit. If the firm produces 10,000 units, what is the total revenue under Strategy A?
Correct A. ₦1,000,000
B. ₦1,200,000
C. ₦1,500,000
D. ₦1,800,000

Correct Answer: A

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Question 21
In a perfectly competitive market, the law of supply states that as the price of a commodity increases, the quantity supplied will
A. decrease
Correct B. increase
C. remain constant
D. become negative

Correct Answer: B

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Question 22
A firm's production function is given by Q = 2L^0.5 + 3K^0.5. If the firm's labor and capital inputs are increased by 20% and 15% respectively, what is the percentage change in output?
A. 5%
Correct B. 10%
C. 15%
D. 20%

Correct Answer: B

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Question 23
A consumer's budget constraint is given by 2x + 3y = 12. If the consumer's income increases by 20% and the price of good x increases by 10%, what is the new budget constraint?
A. 2x + 3y = 14.4
Correct B. 2x + 3y = 16.8
C. 2x + 3y = 18.2
D. 2x + 3y = 20.6

Correct Answer: B

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Question 24
A firm's demand function is given by Q = 100 - 2P. If the firm's production cost is given by C = 20 + 5Q, what is the firm's profit-maximizing price?
A. 20
Correct B. 30
C. 40
D. 50

Correct Answer: B

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Question 25
A consumer's indifference curve is given by U = 2x + 3y. If the consumer's budget constraint is given by 2x + 3y = 12, what is the consumer's optimal bundle?
Correct A. (2, 4)
B. (4, 2)
C. (6, 0)
D. (0, 6)

Correct Answer: A

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