This is the real Level 1 question set — 20 questions, free, no account needed.
Tap a question to check your answer and read the explanation.
1. Commerce can best be defined as all the activities connected with the
A. manufacturing of goods in a factory
B. buying and selling of goods and the aids that facilitate this exchange
C. extraction of raw materials from the soil
D. construction of roads and bridges
Explanation: Commerce is the branch of business activity concerned with the buying and selling of goods and services, together with all the activities (aids to trade) that make this exchange possible, such as transport, banking and insurance.
2. A poultry farmer in Ogun State who breeds chickens for eggs and meat is engaged in which type of industry?
A. Extractive industry
B. Genetic industry
C. Construction industry
D. Manufacturing industry
Explanation: Genetic industry involves the reproduction and multiplication of living things such as animals and plants, for example poultry farming, fish farming and crop cultivation.
3. The branch of business activity concerned with the extraction and production of goods is called
A. commerce
B. trade
C. industry
D. aids to trade
Explanation: Industry is that aspect of business concerned with the extraction of raw materials and the production or manufacture of goods, distinct from commerce which deals with distribution and exchange.
4. The movement of yam tubers from farms in Benue State to markets in Lagos is made possible by which aid to trade?
A. Transport
B. Insurance
C. Banking
D. Advertising
Explanation: Transport is the aid to trade that overcomes the problem of place by moving goods from where they are produced to where they are needed by consumers.
5. One of the major importance of commerce to a country such as Nigeria is that it
A. eliminates the need for money in transactions
B. bridges the gap between producers and consumers
C. prevents the extraction of raw materials
D. stops the manufacturing of goods
Explanation: One of the key roles of commerce is to bridge the gap between producers, who make goods, and consumers, who need them, through trade and the various aids to trade.
6. Which of the following activities falls within the scope of commerce?
A. Farming of cassava on a plantation
B. Mining of tin ore in Jos
C. Insurance of a trader's goods against fire outbreak
D. Fishing along the coast of Lagos
Explanation: Insurance is one of the aids to trade and falls under commerce because it helps traders manage risks associated with buying, selling and storing goods, unlike farming, mining and fishing which are extractive industry activities.
7. The two main branches of commerce are trade and
A. industry
B. aids to trade
C. production
D. occupation
Explanation: Commerce is divided into two main branches: trade (the actual buying and selling of goods) and aids to trade (activities such as banking, insurance, transport and warehousing that support trade).
8. Home trade in Nigeria consists mainly of
A. trade between Nigeria and Ghana
B. retail trade and wholesale trade carried out within the country
C. export of crude oil to other countries
D. importation of vehicles from Japan
Explanation: Home trade, also called internal or domestic trade, refers to the buying and selling of goods within the boundaries of a single country, and it is divided into wholesale and retail trade.
9. Which of the following is NOT considered an aid to trade?
A. Transport
B. Insurance
C. Advertising
D. Retailing
Explanation: Retailing is a form of trade itself (selling goods directly to final consumers), while transport, insurance and advertising are services that support and facilitate trade, hence they are aids to trade.
10. Which of the following is an obstacle in the distribution of goods that commerce helps to overcome?
A. Obstacle of place, which is solved through transport
B. Obstacle of profit, which is solved through taxation
C. Obstacle of language, which is solved through education
D. Obstacle of climate, which is solved through farming
Explanation: One of the obstacles in distribution is the obstacle of place, which arises because goods are produced far from where they are needed; this is overcome through transport, one of the aids to trade under commerce.
11. A trader who protects his goods against loss by fire by paying a periodic fee to an insurance company is making use of which aid to trade?
A. Insurance
B. Banking
C. Communication
D. Warehousing
Explanation: Insurance is an aid to trade that provides protection against risks such as fire, theft and accident, by pooling risks together in exchange for regular premium payments.
12. Which of the following is an example of an aid to trade rather than trade itself?
A. A trader selling rice in Onitsha market
B. A supermarket selling groceries to customers
C. A bank providing loans and safekeeping money for traders
D. A wholesaler selling cartons of soap to a retailer
Explanation: Banking is classified as an aid to trade because it supports commercial activities by providing finance and safekeeping, whereas the other options involve direct buying and selling of goods, which is trade.
13. A manufacturer who places a jingle on radio to inform the public about a new brand of soap is making use of which aid to trade?
A. Warehousing
B. Advertising
C. Insurance
D. Banking
Explanation: Advertising is the aid to trade concerned with informing and persuading potential buyers about the existence, qualities and availability of goods and services.
14. The two major branches of commerce are
A. trade and aids to trade
B. production and consumption
C. manufacturing and mining
D. agriculture and industry
Explanation: Commerce is broadly divided into trade (the actual buying and selling of goods) and aids to trade (services such as transport, banking, insurance, communication and warehousing that support trade).
15. Trade carried out between Nigeria and other countries of the world is referred to as
A. home trade
B. retail trade
C. foreign trade
D. wholesale trade
Explanation: Foreign trade, also called international trade, is trade between persons or businesses in one country and those in another country, such as Nigeria trading with China.
16. When a Nigerian company sells cocoa beans to a buyer in the Netherlands, this transaction is best described as
A. retail trade
B. home trade
C. export trade
D. wholesale trade
Explanation: Export trade involves selling goods produced in one's own country to buyers in other countries, as in the case of Nigeria selling cocoa to the Netherlands.
17. The aid to trade that solves the problem of storing goods until they are needed by consumers is
A. banking
B. insurance
C. warehousing
D. advertising
Explanation: Warehousing is an aid to trade concerned with the storage of goods from the time of production until they are required by consumers, thereby overcoming the problem of time.
18. A Nigerian company that buys cocoa from Ghana and re-sells it to buyers in Europe without processing it is engaged in
A. import trade
B. export trade
C. entrepot trade
D. retail trade
Explanation: Entrepot trade occurs when a country imports goods from one country and re-exports them to another country, often without significant processing, mainly for the purpose of trade.
19. In the chain of distribution, the middleman who buys goods in bulk from producers and sells in smaller quantities to retailers is called a
A. consumer
B. wholesaler
C. manufacturer
D. importer only
Explanation: The wholesaler is the middleman who buys goods in large quantities from producers or manufacturers and breaks them into smaller units for sale to retailers.
20. A trader who sells goods directly to the final consumer in small quantities, such as a provision store owner at Sabo market, is a
A. wholesaler
B. manufacturer
C. retailer
D. exporter
Explanation: A retailer buys goods, often from wholesalers, and sells them in small quantities directly to the final consumer, as seen with provision store owners in local markets.
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