Business Studies Questions and Answers - Form 2 Mid Term 2 2022

Share via Whatsapp


  1. Outline four benefits of pooling of risks to an insurances company (4 marks) 
    • Enables the company meet its operating costs.
    • Enables the company determine the premiums to be charged
    • Enables an insurance company to create a common pool of funds
    • Enables insurance company to compensate those who suffer losses when risk occur
  2. Highlight four essentials of warehouse (4 marks)
    • The warehouse staff should be well trained and efficient for proper management of goods stored.
    • There should be a proper recording system in a warehouse to ensure movement of goods is monitored properly.
    • It should have adequate space/size.
    • Its operations and goods stored should be within the requirement of the law.
  3. Outline four reasons why Star of the Sea would prefer to transport its 60 students to music festival in Nairobi by train rather than public Bus (4 marks)
    • Rail has lower fuel costs compared to road transport, especially when shipping a high volume of freight.
    • Rail also has less costs associated with drivers and typically has better costs for drop trailer programs.
    • Shipping via train is more environmentally friendly.
    • Trains burn less fuel per ton mile than trucks
    • Rail transport can be cost effective. Shippers who convert long-haul freight from road to rail, can save 10-40%. Rail has lower fuel costs compared to road transport, especially when shipping a high volume of freight. Rail also has less costs associated with drivers and typically has better costs for drop trailer programs.
    • Shipping via train is more environmentally friendly. Trains burn less fuel per ton mile than trucks. According to the Association of American Railroads (AAR), freight railroads can move one ton of freight an average of 479 miles on a single gallon of fuel. On top of that, using rail transport over road transport can lower greenhouse gas emissions by 75%.
    • Trains are capable of hauling large loads. Trains can handle high volumes of freight. In fact, one double-stacked train can hold approximately the same amount as 280 trucks. This can be very beneficial for shippers with large loads.
    • Railways are reliable. Railways have standardized transit schedules and don’t share their tracks with the public like trucks do with the road. For that reason, trains aren’t hindered by traffic and weather the same way trucks are.
    • Rail freight can be efficient. For many types of loads, the average transit time is comparable to that of road transport. While rail shouldn’t be used for time-sensitive shipments, it can provide very similar transit times for longer hauls.
    • Rail options provide you with access to capacity. OTR capacity is tight. The driver shortage, HOS restrictions, and current market demand can make it hard for shippers to find a truck when they need it without paying an arm and a leg. Since rail transport can be more efficient and doesn’t have the same kind of limitations, this is a great way for shippers to find capacity
  4. Outline four circumstances under which the government may find it necessary to participate in business activities (4 marks)
    • When there is need to protect citizens from exploitation by private entrepreneurs.
    • When the government desires to create employment for the citizens.
    • When the government needs to generate income through revenue collection.
    • When there is need to safeguard national security.
  5. Highlight four factors that may interfere with the effectives of face to face communication (4 marks)
      • Where there is age difference
      • Where the language has semantic problems/different languages
      • Where there exists a difference in frame of reference
      • Where the credibility of the communicating parties is in question/negative attitude/bias/prejudice
      • Where the receiver has a problem in hearing/hearing insparent
      • Unfamiliar/difficult terminologies
      • Noise
      • Pronunciation problems
      • Timing 
      • Inability to understand gestures
      • Emotional responses shynels/ fear etc
  6. Outline four features of labour as a factor of production (4 makrs)
    • Labour is original and indispensable factor of production 
    • Labour is an active factor of production 
    • Labour is perishable than any other commodity 
    • Labour cannot be separated from the labourer and Others
    • Labour is less mobile:
    • Labour supply is inelastic:
    • A labourer sells his labour and not himself:
    • Labour has weak bargaining power:
    • Labour is both the beginning and the end of production:
    • Efficiency of labour differs:
    • Labour cannot be engaged continuously in production like machine:
    • Labour creates capital:
    • It is difficult to calculate the cost of production of labour:
    • Labour has no tangible form:
  7. A farmer s house valued at ksh 1,200,000 was insured against fire for sh 900,000 under the “with average clause”. Fire occurred and damaged the house causing a loss of ksh. 500,000. Determine the value of compensation  due to the farmer (3 marks)
    • Claim = Loss Suffered x Insured Value/Total Cost.
      = 500,000 x 900,000/1,200,000
      claim = 375,000
      According to the average clause in the fire insurance policy, If the actual cost of the goods/property is higher than the sum insured for such goods/property, then the insured has to bear the difference.
  8. Outline four factors that an entrepreneurs  should consider before setting up a manufacturing business (4 marks)
    • A Business Idea
    • Knowledge or Expertise
    • Market or Demand
    • Start-up Costs
    • Capital and Finance
    • Competition
    • Location
    • Staff
    • Technology

Download Business Studies Questions and Answers - Form 2 Mid Term 2 2022.

Tap Here to Download for 50/-

Why download?

  • ✔ To read offline at any time.
  • ✔ To Print at your convenience
  • ✔ Share Easily with Friends / Students

Join our whatsapp group for latest updates
Subscribe now

access all the content at an affordable rate
Buy any individual paper or notes as a pdf via MPESA
and get it sent to you via WhatsApp


What does our community say about us?

Join our community on:

  • easyelimu app
  • Telegram
  • facebook page
  • twitter page
  • Pinterest