The fundamental economic problem that necessitates choice is:
Scarcity, the limited availability of resources relative to unlimited wants, forces individuals and societies to make choices about resource allocation.
Which of the following is NOT a primary industry?
Primary industries extract natural resources (e.g., fishing, agriculture, mining). Manufacturing is a secondary industry, processing raw materials into finished goods.
A retailer buys goods worth ₦300,000 with a 10% trade discount. If a 5% cash discount is offered for payment within 7 days, calculate the amount paid with both discounts.
Trade discount = 10% of ₦300,000 = ₦30,000. Price after trade discount = ₦270,000. Cash discount = 5% of ₦270,000 = ₦13,500. Amount paid = ₦270,000 - ₦13,500 = ₦256,500.
A business owned and controlled by two to twenty persons is a:
A partnership involves 2–20 persons sharing profits and liabilities, distinct from sole proprietorship (one owner) or companies.
A sleeping partner in a business is one who:
A sleeping partner invests capital but does not engage in daily management, unlike active partners.
Which document defines the objectives and scope of a company’s operations?
The Memorandum of Association outlines a company’s objectives, scope, and powers, serving as its external constitution.
The process of moving goods from production to consumption is:
Transportation physically moves goods from producers to consumers, a key part of the distribution process.
A large-scale retailer offering a wide variety of goods in different departments under one roof is a:
Department stores provide diverse goods in specialized departments, unlike supermarkets (groceries) or specialty stores (specific products).
Which is a modern trend in commerce?
E-commerce and online transactions have transformed commerce, enabling global reach and convenience.
A characteristic of money as a medium of exchange is:
Money must be generally accepted to function as a medium of exchange in transactions.
Which principle of insurance requires full disclosure of all relevant information?
Utmost good faith requires both parties in an insurance contract to disclose all material facts honestly.
Which is a key element of the promotion mix?
Advertising is a core component of the promotion mix, used to inform and persuade customers.
Public relations activities primarily aim to:
Public relations foster goodwill and a positive image among stakeholders, enhancing trust.
A function of top-level management is:
Top-level management sets strategic goals and policies to guide the organization.
A common source of finance for a new business is:
Personal savings provide initial capital for new ventures, avoiding external debt.
The basic accounting equation is:
Assets = Liabilities + Owner’s Equity balances a business’s resources and claims.
A function of commercial banks is:
Commercial banks facilitate financial intermediation by accepting deposits and providing loans.
A company has current assets of ₦400,000, including ₦100,000 inventory, and current liabilities of ₦200,000. Calculate the quick ratio.
Quick assets = ₦400,000 - ₦100,000 = ₦300,000. Quick ratio = ₦300,000 / ₦200,000 = 1.5:1.
A tool of monetary policy used by the central bank is:
Open market operations involve buying/selling securities to control money supply.
The exchange of goods and services across national borders is:
International trade involves cross-border exchange, promoting global economic integration.
An argument against free trade is:
Free trade can challenge domestic industries with cheaper foreign imports.
A restriction on the quantity of goods imported is a:
A quota limits the quantity of imported goods to protect domestic markets.
A key principle of cooperative societies is:
Cooperative societies allow open and voluntary membership for eligible individuals.
An example of sustainable resource management is:
Recycling and waste reduction conserve resources and reduce environmental impact.
A fundamental consumer right is:
The right to safety protects consumers from dangerous products.
A characteristic of monopolistic competition is:
Monopolistic competition involves many small firms selling differentiated products.
Market research primarily aims to:
Market research helps businesses understand consumer preferences to tailor products.
Goods worth $10,000 are imported at ₦400/$1. If the Naira depreciates by 5%, calculate the new cost in Naira.
Original cost = $10,000 × ₦400 = ₦4,000,000. New rate = ₦400 × 1.05 = ₦420. New cost = $10,000 × ₦420 = ₦4,200,000.
A high initial price set for a new product to maximize revenue is:
Price skimming sets high initial prices to capture revenue from willing buyers.
A key function of warehousing is:
Warehousing stores goods until needed, ensuring availability and protection.
A disadvantage of rail transport is:
Rail transport’s high infrastructure costs are a significant drawback.
A company issues 3,000 shares at a ₦10 premium, with a ₦50 par value. Calculate the total amount raised.
Issue price = ₦50 + ₦10 = ₦60. Total raised = 3,000 × ₦60 = ₦180,000.
A written order to pay a sum to a payee is a:
A bill of exchange orders payment of a specified sum, used in trade.
The stock exchange primarily facilitates:
The stock exchange enables trading of shares and securities, raising capital.
A form of direct marketing is:
Email marketing targets specific customers directly with personalized messages.
Costs that remain constant regardless of production level are:
Fixed costs (e.g., rent) do not vary with production levels.
A warehouse has 2,500 units opening inventory, receives 6,000 units, and issues 5,000 units. What is the closing inventory?
Closing inventory = 2,500 + 6,000 - 5,000 = 3,500 units.
A key aspect of the controlling function of management is:
Controlling involves comparing actual performance with set standards.
₦50,000 is invested at 8% compound interest per annum. Calculate the amount after 2 years.
A = ₦50,000 × (1.08)^2 = ₦50,000 × 1.1664 = ₦58,320.
A country with exports exceeding imports has a:
A trade surplus occurs when exports exceed imports, improving the trade balance.
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