Business Studies Questions and Answers - Form 2 Term 3 Opener Exams 2022

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INSTRUCTIONS TO CANDIDATES.

  • Answer all questions in Section A and three in Section B
  • Answers must be written in English.
  • Avoid one word answers.

Section A: Attempt all questions in this section

  1. Give any four reasons why a person may engage in business. (4 Mks)
  2. Outline four reasons why a person may find it better to buy goods from a kiosk instead of a supermarket.
    (4 Mks)
  3. Highlight four methods used by the government to regulate business activities in Kenya. (4 Mks)
  4. Outline three clauses found in the memorandum of association. (3 Mks)
  5. Highlight three benefits of warehousing to the consumer. (3 Mks)
  6. Give four characteristics of human wants. (4 Mks)
  7. Highlight four benefits of a business plan to an entrepreneur. (4 Mks)
  8. State four ways in which a good filing system may facilitate the operations of an office. (4 Mks)
  9. State three reasons for privatising public corporations. (3 Mks)
  10. Outline four services offered by wholesalers to retailers. (4 Mks)
  11. In the table below, outline three distinctions between Direct and Indirect production. (3 Mks)
     Direct Production   Indirect Production 
       
       
       
  12. Outline four reasons why a trader may prefer to transport his goods by train. (4 Mks)
  13. State four benefits of running a sole proprietorship business. (4 Mks)\
  14. Highlight four factors that a trader may consider when determining the appropriate means of transport.(4 Mks)
  15. State four advantages of written communication. (4 Mks)
  16. Give four malpractices against which consumers may need protection. (4Mks)
  17. State three circumstances under which cash terms may be used. (3 Mks)
  18. Highlight three duties of commercial attaches in trade promotion. (3Mks)
  19. Highlight three circumstances when one can convey verbal communication. (3Mks)

Section B: Attempt any three questions

  1. Describe five characteristics of services. (10 Mks)
  2. Explain five factors that may promote entrepreneurship in Kenya. (10 Mks)
  3. Highlight five circumstances in which the government may be involved in business. (10 Mks)
  4. Describe any five internal factors that may encourage the achievement of business goals. (4 Mks)


MARKING SCHEME

Section A: Attempt all questions in this section

  1. Give any four reasons why a person may engage in business. (4 Mks)
    • Provision of goods/services
    • Creation of employment for community members
    • To earn profits/make money
    • To make use of their leisure/spare time
    • To be held in prestige by society members
    • To take advantage of government incentives (Uwezo Fund/ Youth Fund/Women Fund)
    • To be own boss
    • To make use of available resources
  2. Outline four reasons why a person may find it better to buy goods from a kiosk instead of a supermarket.4 Mks
    • Kiosks are closer to many in the estates/villages
    • Kiosks sell at quantities that are small and convenient to many
    • Kiosks owner has very close personal touch with the customers
    • Kiosks can be accessed beyond normal working hours
    • Kiosks may allow the customer to bargain
    • Customer may obtain goods on credit from the kiosk
    • The kiosk owner may offer better advice to the local consumer
  3. Highlight four methods used by the government to regulate businessactivities in Kenya (4 Mks)
    • Through licensing
    • By controlling the prices of products
    • Enforcement of laws
    • By taxing business
    • By offering subsidies
    • Imposing bans on particular products/businesses
    • Enacting laws to regulate business
    • Setting production quotas
  4. Outline three clauses found in the memorandum of association (3Mks)
    • Name clause
    • Liability clause
    • Objects/objective clause
    • Declaration clause
    • Situation clause
    • Association/subscription clause
  5. Highlight three benefits of warehousing to the consumer (3Mks)
    • Ensures constant supply of goods
    • Allows goods to be prepared for consumer
    • Enhances stability of consumer prices in the market
    • Ensures the consumer can access seasonal goods out of season
    • Ensures availability of variety of goods
    • Ensures the consumer can access the goods at appropriate time
    • Enhances breaking of bulk thus consumer gets convenient quantity of goods
  6. Give four characteristics of human wants (4 Mks)
    • They are many/Numerous/unlimited
    • Change in time/age/weather/gender
    • They are habit forming
    • They are universal
    • They vary in intensity
    • They are insatiable
    • They are recurrent/repetitive
    • Some are complementary
    • They vary in intensity /urgency
    • Require resources to be fulfilled
  7. Highlight four benefits of a business plan to an entrepreneur. (4 Mks)
    • Facilitates acquisition of loans from financial institutions and other financiers
    • Provides guidance for opening new or expanding existing business /adaptability
    • It acts as a management tool for the business / monitoring tool / identifies strengths
    • It’s a tool for evaluating business performance
    • It lays the strategy to be used in marketing the products
    • It enhances the credibility of the business
    • It’s a motivational tool
    • To avoid mistakes
    • Proper allocation of resources
    • To determine how much resources are required e.g. labour, capital etc /source of capital
    • Will help to identify the nature and scope of the market.
  8. State four ways in which a good filing system may facilitate the operations of an office. (4 Mks)
    • Easy retrieval of information.
    • Office is kept tidy.
    • Information is preserved for future reference.
    • Security of documents is ensured.
    • Facilitates quicker decision making.
    • Ensures confidentiality of information by restricting access by unauthorized people
  9. State three reasons for privatising public corporations. (3Mks)
    • To improve efficiency in their operations.
    • To generate revenue to the government through sale of shares and taxes.
    • To enhance competition.
    • To increase public participation in economic activities of the country.
    • To reduce government expenditure.
    • To comply with conditions set by development partners and international donor agencies.
    • To enable the government to concentrate on other state responsibilities.
    • To minimize political interference.
  10. Outline four services offered by wholesalers to retailers. (4 Mks)
    • Offer transport facilities.
    • Break bulk for benefit of retailers.
    • May offer advice to retailer for example on offer available.
    • Conduct sales promotion hence saving retailers the problem of having to do so.
    • Avail goods at places convenient to retailers.
    • They grade, sort, blend, pack and brand goods.
    • Stock a variety of goods therefore the retailer does not have to move to different producers.
  11. In the table below, outline threedistinctions between Direct and Indirect production (3 Mks)
     Direct Production    Indirect Production 
     Goods produced mainly for self-use   Production is for commercial purposes
     Usually carried out in small- scale  Production is on large scale
     Involves little or no specialization  Extensive specialisation is applied
     Quality produced is relatively low  Quality of product is high
     Its labour intensive production  Its capital intensive production
     Leads to high wastage of resources  Enhances efficient use of resources/minimal wastage occurs
  12. Outline four reasons why a trader may prefer to transport his goods by train. (4 Mks)
    • If goods are heavy and bulky.
    • If goods are durable.
    • If the value of goods is high since cases of theft are rare.
    • When goods are not urgently needed.
    • When the distance is relatively long.
    • In case of large quantities because it has large carrying capacity.
    • Railway transport is cheap and economical over long distances.
    • In case the trader wants to make advance plans for movement of goods because trains follow regular timetables.
    • Railways stations have warehouses to store goods before they are collected by owners.
    • Railway stations have many cargo handling facilities for loading and off-loading of goods hence saves time
  13. State four benefits of running a sole proprietorship business. (4 Mks)
    • Decision making and implementation is fast.
    • Owner exercises direct personal control on the business at all times.
    • Owner has close and personal contacts with customers.
    • The trader is accountable to himself/herself.
    • Trader enjoys profit alone.
    • Flexibility of business.
    • Can keep business secrets/high level of confidentiality.
    • Few legal procedures are required.
    • Trader can get assistance from family members.
  14. Highlight four factors that a trader may consider when determining the appropriate means of transport. (4 Mks)
    • Cost of means
    • Distance to be covered.
    • Nature / Type of goods to be transported
    • Value of goods to be transported
    • Terminals
    • Urgency of the goods
    • Speed of the means.
  15. State four advantages of written communication. (4 Mks)
    • Can be retained for future reference.
    • It is suitable for confidential messages.
    • Can be used as evidence.
    • Can be addressed to many people.
    • Message cannot be distorted.
    • Can be used to communicate complicated messages.
    • Suitable if the message is detailed.
    • It is relatively cheap.
  16. Give four malpractices against which consumers may need protection. (4Mks)
    • Overcharging / overpricing.
    • Poor / inferior quality goods.
    • Hoarding of goods.
    • Wrong measurements e.g. underweight goods.
    • Misleading advertisements / false advertising.
    • Unhygienic goods.
    • Breach of contact.
    • Expired goods.
  17. State three circumstances under which cash terms may be used. (3Mks)
    • Where the amount of money involved is small/low
    • Where it is the policy of the business.
    • Where the seller urgently needs/requires cash.
    • Where the credit worthiness of the buyer is in doubt.
    • Where the buyer is new to the seller/not known to the seller.
    • Where the seller is operating a mail-order business
    • Where the buyer is not a regular customer.
  18. Highlight threeduties of commercial attaches in trade promotion. (3Mks)
    • Publish and advertise their country’s exports in business journals and magazines.
    • Select buyers, agents and distributors of the home country’s exports.
    • Explore and identify new markets for more exports opportunities.
    • Research and analyze markets for exports from their home countries.
    • Keep statistics of products such as volume s, packaging sizes and methods of manufacturing.
    • Assist sales missions from home countries by organizing educational tours for them.
    • Inform traders in their home countries of standards required for exports
  19. Highlight three circumstances when one can convey verbal communication. (3Mks)
    • When the sender wants to convince and persuade the recipient.
    • When distance between the sender and the recipient is not long.
    • When the message is to be delivered accurately.
    • When immediate feedback is required.
    • When the message to be communicated is confidential.
    • Where the message is urgent and required quick communication.

Section B: Attempt any three questions

  1. Describe five characteristics of services. (10 Mks)
    • Difficult standardize/ heterogeneous due to varying quality (over time)/ the quality cannot be uniform (from time to time) may be offered by different people.
    • Service cannot be stored for future use/ service is only consumed at the time it is being offered/service capacity cannot be stored.
    • Service cannot be touched/ it is intangible/ invisible can only be felt/ experienced
    • Services cannot be separated from the provider the provider must directly offer the service to the user.
    • Service are highly perishable: can only be enjoyed at the time the provider is available/ it expires after it is provided.
    • Services cannot be owned by the buyer/ownership cannot be transferred as the buyer only pays for the experience
    • Services are highly mobile since they can be received/ provided at different places/locations
      Underlined is the mention (1 Mk) otherwise 2mks
  2. Explain Five factors that may promote entrepreneurship in Kenya. (10 Mks)
    • Government support/ favourable government policies/ funding regulation (of business activities) may encourage the emergence/ expansion of business venture.
    • Training/ entrepreneurial education/ trainees are equipped with skills/ knowledge to undertake entrepreneurial activities to start businesses.
    • Positive entrepreneurial culture/ cultural practices that encourage entrepreneurship through early exposure to business activities opportunities/ positive attitude towards business.
    • Presence of role model/interaction with successful business people who may inspire/ create interest in entrepreneurship/ business ownership.
    • Availability of capital/ loans/ credit facilities for starting/ expanding a business (may facilitate entrepreneurship).
    • Political stability/ non-political interference that creates a conducive environment for starting/ running/ expanding business.
    • Availability of market/ market information- to create demand for the product.
    • Availability of security- that ensure safety of businesses/ property/ business owners.
    • Healthy/ fair competition that business owners can withstand/be safe with.
    • Good governance that ensures accountability in conducting business activities/ minimises embezzlement of funds.
    • Availability of technology/innovations that can lead to the production of desired quality/ quantity of goods/services.
      Underlined is the mention (1 Mk) otherwise 2mks
  3. Highlight five circumstances in which the government may be involved in business. (10 Mks)
    • When a business venture requires investment of large sums of money which individual entrepreneurs may not afford
    • When the goods or services to be provided are essential to the welfare of majority of the citizens.
    • When there is need to protect citizens from exploitation by private entrepreneurs.
    • When the government desires to create employment for the citizens by starting projects/businesses that create employment
    • When the government needs to generate income through revenue collected/sales proceeds.
    • When the goods are too sensitive to be left in the hands of the private sector: to safeguard national security
    • When the venture is strategic but provides low profits hence unattractive to private investors.
    • Where there are monopolies in the economy, the government gets involved in business to increase competition.
    • Where there is need to balance regional development by starting enterprises/projects in different parts of the country/delocalisation.
    • To reduce foreign dominance in the economy to save on imports/reduce reliance on foreign products.
    • Where there is need to attract foreign investment which brings capital needed to the country.
  4. Describe any five internal factors that may encourage the achievement of business goals. (4 Mks)
    • Proper human resource management ensures work is effectively done with efficient use of organisational resources.
    • Well trained /skilled labour-who provide productive labour
    • Well laid down business structure allows proper flow of instructions and team work within the organization.
    • Adequate finance/proper finance management allows acquisition of assets/stock/ expansion of business.
    • Adequate physical resources such as buildings, machines/furniture.
    • Developed business culture with proper values that promoted hard work with minimal supervision.
    • Well laid out / set-out objectives of the business to guide activities in the organization.
    • Committed/qualified/experienced owner who are able to make sound decisions, provide resources etc

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