Business Studies Questions and Answers - Form 1 End Term 1 2021

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BUSINESS STUDIES
FORM 1
END TERM EXAM
TERM 1 2021

INSTRUCTIONS

  • Answer all the questions
  1. Define the following terms as applied in business studies (4mks)
    1. Accounting
    2. Production
    3. Utility
    4. Human wants
  2. State five challenges encountered in the satisfaction of human wants (5mks)
  3. State four reasons as to why a poorly laid out business structure is likely to lead to failure of a business (4mks)
  4.    
    1. Differentiate between generic and enterprise competition (2mks)
    2. Classify each of the following into generic or enterprise competition (3mks)
      ACTIVITY FORM OF COMPETITION
      A coffee seller competing with a tea seller  
      A television station competing with a radio station
      in enterpreneuring customers
       
      Kenya Literature Bureau competing with longhorn publishers
      in book selling
       
  5.    
    1. Differentiate between consumer goods and capital goods. Give an example in each case.(4mks)
    2. Define the term opportunity cost (2mks)
    3. Complete the table below (4mks)
      Activity Form of utility
      Delivering milk to a customer  
      Making uniform to a student  
      Keeping savings in a bank  
      Selling books to a student  
  6. State four components of business studies (4mks)
  7. List down four factors of production and the reward for each (4mks)
  8. Identify by use of a tick (√) whether the following resources are renewable or non renewable (4mks)
    Resource Renewable Non- renewable
    Wood    
    Natural gas    
    Soda ash    
    Aluminium    

SECTION B (30MKS)

  1. State six characteristics of labour as a factor of production (6mks
  2. Differentiate between division of labour and specialization (4mks)
  3. Discuss five categories of goods and services produced in an economy (10mks)
  4.    
    1. Name two categories of tertiary level of production (2mks)
    2. State five characteristics of economic resources(5mks)
    3. Name three external environments likely to affect operations of a business (3mks)


MARKING SCHEME

  1. Define the following terms as applied in business studies (4mks)
    1. Accounting-a systematic way of recording business activities which are used for decision making
    2. Production-Creation of goods and services or increasing their usefulness through activities such as transporting them to where they are required
    3. Utility-ability of a good or service to satisfy human wants
    4. Human wants-the desires that human beings strive to satisfy by using goods and services
  2. State five challenges encountered in the satisfaction of human wants (5mks)
    • Too many to be fully satisfied
    • Resources acquired are scarce
    • Some are complementary and attract other wants
    • Some are habitual yet habits are hard to break
    • Are repetitive hence cannot be satisfied once and for all
      NB do not accept general characteristics of human wants. The challenge must be brought out.
  3. State four reasons as to why a poorly laid out business structure is likely to lead to failure of a business (4mks)
    • There will be conflicts or confusion among the workers
    • There is likely to be poor team work
    • Improper control leading to inefficiency
    • Each employee would not know what is expected of him/ her
  4.     
    1. Differentiate between generic and enterprise competition (2mks)
      • Generic competition refers to competition where products are used for the same purpose though the products are different while enterprise competition is found where a firm’s products are similar to those of the other firms.
    2. Classify each of the following into generic or enterprise competition (3mks)
      ACTIVITY FORM OF COMPETITION
      A coffee seller competing with a tea seller  Generic
      A television station competing with a radio station
      in entertaining customers
       Generic
      Kenya Literature Bureau competing with longhorn publishers
      in book selling
       Enterprise
  5.    
    1. Differentiate between consumer goods and capital goods. Give an example in each case.(4mks)
      • Consumer goods are consumed directly by the consumer while capital goods are used to produce other goods and services
      • Capital goods- machines, tools
      • Consumer goods- food, clothes etc
      • Difference (2mks) Examples (2mks)
    2. Define the term opportunity cost (2mks)
      • value of the forgone return / altanative where a choice has been made
    3. Complete the table below (4mks)
      Activity Form of utility
      Delivering milk to a customer Place 
      Making uniform to a student Form
      Keeping savings in a bank Time
      Selling books to a student Possession 
  6. State four components of business studies (4mks)
    • Economics
    • Accounting
    • Commerce
    • Entrepreneurship
    • Office practice
  7. List down four factors of production and the reward for each (4mks)
    • Land - Rent
    • Capital -  Interest
    • Labour - Wages and salaries
    • Entrepreneur - Profit
  8. Identify by use of a tick (√) whether the following resources are renewable or non renewable (4mks)
    Resource Renewable Non- renewable
    Wood  √  
    Natural gas    √
    Soda ash  √  
    Aluminium    √

SECTION B (30MKS)

  1. State six characteristics of labour as a factor of production (6mks)
    • It’s a basic factor of production
    • Cannot be stored , effort is wasted if if a labourer is idle
    • Labour cannot be separated from the labourer
    • Labourers sell their labour and not themselves
    • It is human with ability to think and capacity to get annoyed
    • Labour is mobile, a labourer can move from place to place of from one job to another
  2. Differentiate between division of labour and specialization (4mks)
    • Division of labour is where a production process is broken down into stages and each stage is assigned to an individual or a group of individuals while specialization refers to where one concentrates in the production of what he she can produce best leaving other people to produce other commodities
  3. Discuss five categories of goods and services produced in an economy (10mks)
    • free goods and economic goods-free goods are those goods that are available in abundance as gifts of nature and have no price. Economic goods are those that are scarce in supply and have money value, thus human effort is required to obtain them.
    • producer goods and consumer goods –producer goods are those produced to be used used in producing others. They include Machines, equipments and tools such as tractors andhammers. Consumer goods are goods that are mainly usable by the final consumer (user) .They include food, clothing etc
    • perishable goods and durable goods-perishable goods are goods that go bad easily unless stored using special facilities. They include tomatoes, fruits and flowers. Durable goods are those that will continue giving service for a long time and can resist spoilage caused by agents such as wear and tear.
    • public goods and private goods-public goods are those that belong to no one in particular, but are owned by the government or by all of us eg roads, airports, rivers etc, private goods are owned by individuals or group of individuals in their private capacities eg private schools.
    • material goods & commodities that are tangible like food, books, chairs etc non material goods are services (intangible items ) such as teaching, nursing etc
  4.    
    1. Name two categories of tertiary level of production (2mks)
      • Commercial services
      • Direct personal services
    2. State five characteristics of economic resources(5mks)
      • scarce in supply
      • have money value
      • unevenly distributed
      • have utility
      • have alternative uses
      • can change ownership
    3. Name three external environments likely to affect operations of a business (3mks)
      • economic environment
      • demographic environment
      • technological environment
      • legal- political environment
      • cultural environment

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