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Free JAMB Past Question for commerce
Q.1What is the primary role of an organization like the National Agency for Food and Drug Administration and Control (NAFDAC) in consumer protection?
A. Regulating the prices of food and drugs.
B. Ensuring the safety and quality of food, drugs, and other regulated products.
C. Providing financial aid to consumers who have been defrauded.
D. Negotiating with companies on behalf of consumers.
What is the primary role of an organization like the National Agency for Food and Drug Administration and Control (NAFDAC) in consumer protection?
A. Regulating the prices of food and drugs.
B. Ensuring the safety and quality of food, drugs, and other regulated products.
C. Providing financial aid to consumers who have been defrauded.
D. Negotiating with companies on behalf of consumers.
Correct Answer: option b
Further reading: Consumer protection
Show explanation
NAFDAC is a Nigerian government agency responsible for regulating and controlling the manufacture, importation, exportation, advertisement, distribution, sale, and use of food, drugs, cosmetics, medical devices, chemicals, and packaged water
Q.2The practice of a business acting in a way that benefits society and the environment, beyond its legal obligations, is known as:
A. Profit maximization
B. Philanthropic consideration
C. Market segmentation
D. Tax evasion
The practice of a business acting in a way that benefits society and the environment, beyond its legal obligations, is known as:
A. Profit maximization
B. Philanthropic consideration
C. Market segmentation
D. Tax evasion
Correct Answer: option b
Further reading: Social responsibility
Show explanation
Philanthropic and societal considerations are part of a business's social responsibility. This includes actions like donating to charity, supporting community projects, and engaging in environmentally friendly practices
Q.3When a retailer wants to purchase goods, which of the following documents is used to request the price and terms of sale from a supplier?
A. Invoice
B. Quotation
C. Proforma Invoice
D. Enquiry
When a retailer wants to purchase goods, which of the following documents is used to request the price and terms of sale from a supplier?
A. Invoice
B. Quotation
C. Proforma Invoice
D. Enquiry
Correct Answer: option d
Further reading: Documentation in the purchase and sale of goods
Show explanation
An enquiry is the initial document or communication a potential buyer sends to a seller to ask for information about products, such as price, availability, and terms. It precedes a formal order and quotation
Q.4Which of the following is an essential element for a contract to be legally valid in Nigeria?
A. The contract must be in writing.
B. Both parties must be of legal age and sound mind.
C. It must be witnessed by a notary public.
D. It must be registered with the Corporate Affairs Commission.
Which of the following is an essential element for a contract to be legally valid in Nigeria?
A. The contract must be in writing.
B. Both parties must be of legal age and sound mind.
C. It must be witnessed by a notary public.
D. It must be registered with the Corporate Affairs Commission.
Correct Answer: option b
Further reading: Legal validity of a simple contract
Show explanation
A simple contract requires several key elements, including an offer, acceptance, consideration, and the intention to create legal relations. However, a crucial aspect is that all parties must have the legal capacity to contract, meaning they are not minors, mentally incapacitated, or under the influence.
Q.5What is the term for a sum of money paid by the insured to the insurer for an insurance policy?
A. Claim
B. Premium
C. Indemnity
D. Surrender value
What is the term for a sum of money paid by the insured to the insurer for an insurance policy?
A. Claim
B. Premium
C. Indemnity
D. Surrender value
Correct Answer: option b
Further reading: Insurance terms
Show explanation
The premium is the regular payment made by the policyholder to the insurance company to keep the insurance coverage active.
Q.6What is the primary role of a marketing mix?
A. To decide on the legal structure of a business.
B. To determine the financial resources needed for a business.
C. To combine the elements of product, price, place, and promotion to satisfy customer needs.
D. To analyze the economic and political environment of a business.
What is the primary role of a marketing mix?
A. To decide on the legal structure of a business.
B. To determine the financial resources needed for a business.
C. To combine the elements of product, price, place, and promotion to satisfy customer needs.
D. To analyze the economic and political environment of a business.
Correct Answer: option c
Further reading: Marketing mix (4Ps)
Show explanation
The marketing mix, often referred to as the "4Ps," is a framework used by businesses to effectively position a product in the market. It involves making strategic decisions about the product itself, its pricing, how it's distributed (place), and how it's advertised (promotion).
Q.7An agreement where one party grants another the right to use their intellectual property (e.g., brand name, patents) in return for a fee is known as:
A. Hire purchase
B. Consignment
C. Agency
D. Licensing
An agreement where one party grants another the right to use their intellectual property (e.g., brand name, patents) in return for a fee is known as:
A. Hire purchase
B. Consignment
C. Agency
D. Licensing
Correct Answer: option d
Further reading: Legal aspects of business
Show explanation
Licensing is a legal agreement where a business (the licensor) allows another business (the licensee) to use its intellectual property under specific terms and conditions, typically in exchange for a royalty payment.
Q.8What is the primary role of a Bureau de Change in the Nigerian economy?
A. Regulating the banking sector.
B. Issuing new currency notes.
C. Facilitating foreign currency exchange at market-determined rates.
D. Providing long-term loans to businesses.
What is the primary role of a Bureau de Change in the Nigerian economy?
A. Regulating the banking sector.
B. Issuing new currency notes.
C. Facilitating foreign currency exchange at market-determined rates.
D. Providing long-term loans to businesses.
Correct Answer: option c
Further reading: The role of Bureau de Change in an economy
Show explanation
A Bureau de Change is a licensed business that buys and sells foreign currencies, providing a service for individuals and businesses who need to convert currency for travel, trade, or other purposes.
Q.9What is the primary challenge faced by commercial banks in Nigeria?
A. Over-regulation by the government.
B. Low customer base and lack of deposits.
C. High levels of non-performing loans and fraud.
D. Lack of modern technology for transactions.
What is the primary challenge faced by commercial banks in Nigeria?
A. Over-regulation by the government.
B. Low customer base and lack of deposits.
C. High levels of non-performing loans and fraud.
D. Lack of modern technology for transactions.
Correct Answer: option c
Further reading: Challenges of banking
Show explanation
Non-performing loans (NPLs), where borrowers default on their payments, and various forms of fraud are significant challenges for banks in Nigeria, impacting their profitability and stability
Q.10What is the primary function of a Stock Exchange?
A. To provide loans to companies.
B. To regulate the banking industry.
C. To facilitate the buying and selling of securities.
D. To act as a central bank for the government.
What is the primary function of a Stock Exchange?
A. To provide loans to companies.
B. To regulate the banking industry.
C. To facilitate the buying and selling of securities.
D. To act as a central bank for the government.
Correct Answer: option c
Further reading: Functions of the Stock Exchange
Show explanation
The Stock Exchange is a formal marketplace where investors can buy and sell financial instruments like stocks, shares, and bonds. This provides liquidity for investors and allows companies to raise capital.
Q.11What is the term for the global network of computers that allows users to access and share information?
A. Intranet
B. Extranet
C. Local Area Network (LAN)
D. Internet
What is the term for the global network of computers that allows users to access and share information?
A. Intranet
B. Extranet
C. Local Area Network (LAN)
D. Internet
Correct Answer: option d
Further reading: ICT terms
Show explanation
The Internet is a vast, interconnected global network that links billions of devices and allows for the exchange of data and information worldwide. An intranet is a private network for an organization's employees, and LAN is a local network for a specific area
Q.12The principle of management that states that the number of subordinates a manager can effectively supervise is known as:
A. Unity of command
B. Span of control
C. Delegation of authority
D. Chain of command
The principle of management that states that the number of subordinates a manager can effectively supervise is known as:
A. Unity of command
B. Span of control
C. Delegation of authority
D. Chain of command
Correct Answer: option b
Further reading: Principles of management (span of control)
Show explanation
Span of control refers to the number of employees a manager is responsible for. A narrow span of control means a manager oversees few employees, while a wide span of control means they oversee many
Q.13In the communication process, a major barrier is when the receiver does not understand the message due to different interpretations of words or symbols. This is known as:
A. Noise
B. Semantic barrier
C. Physical barrier
D. Psychological barrier
In the communication process, a major barrier is when the receiver does not understand the message due to different interpretations of words or symbols. This is known as:
A. Noise
B. Semantic barrier
C. Physical barrier
D. Psychological barrier
Correct Answer: option b
Further reading: Barriers to communication
Show explanation
A semantic barrier occurs when words, phrases, or symbols used in communication have different meanings for the sender and receiver. This can lead to misinterpretation and a breakdown in communication.
Q.14The economic environment of a business includes factors such as:
A. Government policies and regulations.
B. Consumer lifestyles and social trends.
C. Inflation, unemployment, and interest rates.
D. The level of technology available in a country.
The economic environment of a business includes factors such as:
A. Government policies and regulations.
B. Consumer lifestyles and social trends.
C. Inflation, unemployment, and interest rates.
D. The level of technology available in a country.
Correct Answer: option c
Further reading: Types of business environment
Show explanation
The economic environment encompasses all the macro-economic factors that can influence a business's operations and profitability, such as economic growth, inflation, interest rates, and consumer spending patterns.
Q.15A farmer cultivating cassava for commercial purposes is engaged in what type of production?
A. Secondary production
B. Tertiary production
C. Quaternary production
D. Primary production
A farmer cultivating cassava for commercial purposes is engaged in what type of production?
A. Secondary production
B. Tertiary production
C. Quaternary production
D. Primary production
Correct Answer: option d
Further reading: Types of production
Show explanation
Primary production involves the extraction or harvesting of raw materials from the natural environment. Farming, fishing, and mining are all examples of primary production.
Q.16A key function of commerce is to differentiate between goods and services, but its primary role is to overcome barriers related to the exchange of goods and services. Which barrier is tackled by advertising?
A. Barrier of person
B. Barrier of finance
C. Barrier of knowledge
D. Barrier of place
A key function of commerce is to differentiate between goods and services, but its primary role is to overcome barriers related to the exchange of goods and services. Which barrier is tackled by advertising?
A. Barrier of person
B. Barrier of finance
C. Barrier of knowledge
D. Barrier of place
Correct Answer: option c
Further reading: Functions of commerce, Aids-to-trade, Advertising
Show explanation
Advertising informs potential customers about the existence, features, and benefits of products and services, thus overcoming the barrier of knowledge between producers and consumers. Without advertising, consumers might not know what's available to them.
Q.17A person purchases a fire insurance policy for their house. Which insurance principle requires that the insured has a financial stake in the property?
A. Utmost good faith
B. Indemnity
C. Insurable interest
D. Subrogation
A person purchases a fire insurance policy for their house. Which insurance principle requires that the insured has a financial stake in the property?
A. Utmost good faith
B. Indemnity
C. Insurable interest
D. Subrogation
Correct Answer: option c
Further reading: Principles of insurance
Show explanation
The principle of insurable interest states that the policyholder must be in a position to suffer a financial loss if the insured event occurs. You can't insure a property you don't own because you would have no financial interest in it.
Q.18Which of the following is a disadvantage of a wholesaler to a retailer?
A. They allow retailers to buy in small quantities.
B. They offer retailers a wide variety of goods.
C. They may delay the delivery of goods.
D. They provide credit facilities to retailers.
Which of the following is a disadvantage of a wholesaler to a retailer?
A. They allow retailers to buy in small quantities.
B. They offer retailers a wide variety of goods.
C. They may delay the delivery of goods.
D. They provide credit facilities to retailers.
Correct Answer: option c
Further reading: Advantages and disadvantages of wholesalers
Show explanation
While wholesalers provide many benefits, delays in delivery can be a disadvantage, potentially leading to a loss of sales for the retailer and frustrating customers
Q.19The importance of tourism in Nigeria includes promoting cultural exchange. Which agency is primarily responsible for promoting tourism in Nigeria?
A. Nigerian Tourism Development Corporation (NTDC)
B. National Council for Arts and Culture (NCAC)
C. Nigerian Ports Authority (NPA)
D. Nigerian Civil Aviation Authority (NCAA)
The importance of tourism in Nigeria includes promoting cultural exchange. Which agency is primarily responsible for promoting tourism in Nigeria?
A. Nigerian Tourism Development Corporation (NTDC)
B. National Council for Arts and Culture (NCAC)
C. Nigerian Ports Authority (NPA)
D. Nigerian Civil Aviation Authority (NCAA)
Correct Answer: option a
Further reading: Agencies that promote tourism in Nigeria
Show explanation
The NTDC is the government agency mandated to promote, market, and develop tourism within Nigeria. While other agencies may be involved, the NTDC is the primary one.
Q.20A business merger where two companies in completely different industries combine is known as a:
A. Horizontal merger
B. Vertical merger
C. Conglomerate merger
D. Lateral merger
A business merger where two companies in completely different industries combine is known as a:
A. Horizontal merger
B. Vertical merger
C. Conglomerate merger
D. Lateral merger
Correct Answer: option c
Further reading: Business mergers and reasons for merging
Show explanation
A conglomerate merger involves firms that are unrelated to each other, unlike horizontal mergers (competitors) or vertical mergers (suppliers and customers). This type of merger is often done for diversification.