Business Studies Questions and Answers - Form 2 Term 3 Opener Exams 2023

INSTRUCTIONS:

• ANSWER ALL THE QUESTIONS IN THE SPACES PROVIDED

1. State the term given to each of the following descriptions. (4mks)
   1. Systematic way of recording business activities …………………………….
   2. Ability to organize other factors of production in the right proportion in order to start and run a business ……………………
   3. Study of how human beings strive to satisfy their unlimited wants using scarce resources ……………………………….
   4. Activities that are carried out in an office ……………………………………..
2. Highlight four features of basic human wants. (4mks)
3. Highlight four sources of capital for companies. (4mks)
4. Outline four documents used in the delivery process in home trade. (4mks)
5. Outline four features of labour as a factor of production. (4mks)
6. Highlight four reasons why the government regulates business activities in the country (4mks)
7. Mr. Sudi started a business a year ago. The business started experiencing problems in the second year and shortly thereafter closed its doors. Outline four possible reasons why the business failed. (4mks)
8. State four benefits of a good transport system to an entrepreneur. (4mks)
9. Name the type of economic resources described by the following features. (4mks)
   1. There are resources whose use can be restored or used again …………………….
   2. They are resources created by the man to assist in further production ……………….
   3. Are physical or mental efforts rendered by a human being in production ……………..
   4. Are resources provided by the nature and are referred to as gifts of nature …………...
10. Outline four activities that take place in a ware house. (4mks)
11. State the level of production in each of the following activities.(4mks)
    

    Activity	Level of production
    a) Cooking meals for students
    b) Harvesting maize
    c) Distribution of kerosene
    d) Boiling milk using electricity

12. Highlight four barriers to effective communication. (4mks)
13. Highlight four importance of entrepreneurship to the growth of the economy. (4mks)
14. Highlight four reasons why Kenya needs to encourage the use of pipeline transport. (4mks)
15. Outline the functions of the following office machines. (4mks)
    1. Shredder ..…………………………………………………………………..
    2. Franking machine ………………………………………………………….
    3. Cash register ……………………………………………………………….
    4. Cell phone ………………………………………………………………….
16. Outline four reasons why producer cooperatives are popular in Kenya. (4mks)
17. James is an employee in XYZ company limited. He has not been performing his duties well and customers keep on complaining. Outline four personal attributes he should improve on to perform his duties well. (4mks)
18. State four circumstances under which hire purchase may be used to acquire goods. (4mks)
19. State four malpractices against which consumers may need protection. (4mks)
20. Classify each of the following activities as either business activity or non- business activity. (4mks)
    1. Going to the stadium. .…………………………………………………………….
    2. Buying mangoes to eat …………………………………………………………….
    3. Selling maize for a fee …………………………………………………………….
    4. Buying tomatoes for selling ……………………………………………………….
21. Explain five elements of communication. (10mks)
22. Explain five macro environments that may influence the operations of a business positively. (10mks)

MARKING SCHEME

1. State the term given to each of the following descriptions. (4mks)
   1. Systematic way of recording business activities accounting
   2. Ability to organize other factors of production in the right proportion in order to start and run a business entrepreneurship
   3. Study of how human beings strive to satisfy their unlimited wants using scarce resources economics
   4. Activities that are carried out in an office -office practice
2. Highlight four features of basic human wants. (4mks)
   • They are felt needs
   • They cannot be postponed
   • They are essential for human survival
   • They are satisfied before secondary wants
   • They are universal
3. Highlight four sources of capital for companies. (4mks)
   • Sales of shares
   • Borrowing from financial institutions eg. Banks
   • Profits ploughed back
   • Trade credit
   • Leasing of property
   • Debentures
   • Bank overdraft
   • Renting of property
   • Acquiring property through hire purchase
4. Outline four documents used in the delivery process in home trade. (4mks)
   • Packing note
   • Advise note
   • Delivery note
   • Consignment note
5. Outline four features of labour as a factor of production. (4mks)
   • Labour is perishable /cannot be stored
   • It is not separable from the labourer/provider
   • The quality of labour is valuable/ cannot be standardized
   • It is mobile/can move from one place to another (geographically mobile)
   • It is a basic factor of production
   • Quality of labour can be improved through training
   • It earns salary, wages, commission
6. Highlight four reasons why the government regulates business activities in the country (4mks)
   • To control unhealthy/wasteful competition
   • To curb illegal business
   • To protect consumers against malpractices by traders
   • To control environmental degradation
7. Mr. Sudi started a business a year ago. The business started experiencing problems in the second year and shortly thereafter closed its doors. Outline four possible reasons why the business failed. (4mks)
   • Lack of market for the business products
   • Lack of resources to finance the business operations
   • Lack of managerial skills required
   • Poor allocation of resources
   • Stiff competition from other retailers
   • Poor location of business making it inaccessible to customers
   • Insecurity
   • Lack of commitment from Sudi to the business
   • Poor customer relations
   • Inappropriate pricing strategies
   • Poor record keeping on the business activities
   • Political instability/wars
   • Unfavorable government policies eg. High taxation
   • Inadequate stock
   • Unsuitable labor
8. State four benefits of a good transport system to an entrepreneur. (4mks)
   • Access to wider market
   • Able to get adequate labour easily
   • Helps reduce the cost of transporting goods
   • Enables easy access to social services and other aids to trade
   • Enables the entrepreneur to safeguard surplus from damage and wastage.
9. Name the type of economic resources described by the following features. (4mks)
   1. There are resources whose use can be restored or used again renewable resources
   2. They are resources created by the man to assist in further production manmade/artificial resources
   3. Are physical or mental efforts rendered by a human being in production human resources
   4. Are resources provided by the nature and are referred to as gifts of nature natural resources
10. Outline four activities that take place in a ware house. (4mks)
    • Receiving goods
    • Storing goods
    • Documentation
    • Releasing/issuing of goods
    • Sorting goods
    • Blending goods
    • Packing goods
11. State the level of production in each of the following activities. (4mks)
    
    

    Activity	Level of production
    a) Cooking meals for students	Tertiary
    b) Harvesting maize	Primary
    c) Distribution of kerosene	Tertiary
    d) Boiling milk using electricity	Primary

12. Highlight four barriers to effective communication. (4mks)
    • Inappropriate language
    • Wrong attitude
    • Wrong timing
    • Poor listening
    • Choice of the wrong medium
    • Prejudice
    • Emotional response
    • Presence of noise
    • Misinterpretation of non-verbal signs
13. Highlight four importance of entrepreneurship to the growth of the economy. (4mks)
    • Create employment
    • Make use of locally available resources
    • Improve citizens standards of living
    • Saves the country’s foreign exchange
    • Promotes technological advancement
    • Promote entrepreneurial culture
    • Promote formation of capital
    • Promote development of infrastructure
    • Reduces rural-urban migration
    • Reduces foreign dominance of the economy
    • Sources of government revenue eg. Taxes, fees
14. Highlight four reasons why Kenya needs to encourage the use of pipeline transport. (4mks)
    • It is cheap to maintain after construction
    • Its labor saving as it is capital intensive
    • Large volume of the product is delivered quickly
    • Can deliver the product for 24hours daily
    • Its environmental- friendly as pipes are laid underground
    • Reduces accidents on our roads by tankers
    • Reduces congestion on our roads
15. Outline the functions of the following office machines. (4mks)
    1. Shredder - tearing /cutting unwanted documents into small pieces discarding them
    2. Franking machine - printing postage impressions on letters and parcels for postage
    3. Cash register -used to print cash sales receipts and record the transactions
    4. Cell phone - used to make calls and send or receive short written message (SMS)in the office
16. Outline four reasons why producer cooperatives are popular in Kenya. (4mks)
    • Because they can get better prices for their members
    • They can get better storage facilities for their products
    • They can provide better and reliable transport means for moving the products from the sources to the market and building feeder wads.
    • They can provide loans to the members.
    • They can provide farm inputs on credit to members
    • They can educate members on better methods of production through seminars, field trips etc.
17. James is an employee in XYZ company limited. He has not been performing his duties well and customers keep on complaining. Outline four personal attributes he should improve on to perform his duties well. (4mks)
    • Be smartly dressed and tidy in appearance
    • Keep high standards of body cleanliness/hygiene
    • Ensure good body health
    • Maintain good posture in style of walking, sitting and body mannerism
    • Maintain high standards of moral behavior
    • Ensure and display high standards of neatness, accuracy and organization at work.
18. State four circumstances under which hire purchase may be used to acquire goods. (4mks)
    • Where the buyer does not have enough money to pay at once.
    • Where the goods are expensive
    • When the buyer wants to use the item immediately before completing paying
    • When the buyer is a salaried employee/has regular income
    • When the buyer desires to own luxurious items
19. State four malpractices against which consumers may need protection. (4mks)
    • Overcharging/overpricing
    • Poor/inferior quality goods
    • Hoarding of goods
    • Wrong/incorrect measurements
    • Misleading /false advertisements
    • Unhygienic goods
    • Breach of contract
    • Expired goods
20. Classify each of the following activities as either business activity or non- business activity. (4mks)
    1. Going to the stadium non-business
    2. Buying mangoes to eat non-business
    3. Selling maize for a fee business
    4. Buying tomatoes for selling business
21. Explain five elements of communication. (10mks)
    • Sender -the person from whom the message originates
    • Message -the information to be sent
    • Medium/channel -the means through which the message is sent
    • Receiver-this is the person or people from whom the messages are intended
    • Feedback-refers to the reaction of the receiver to the message.
      5*2=10mks
22. Explain five macro environments that may influence the operations of a business positively. (10mks)
    • Demographic environment- a high population creates a wider market and hence more sales
    • Economic environment(favorable)- economic situations that increase a consumers’ purchasing power
    • Advancement in technology- this leads to better quality of goods/services and reduced cost of production
    • Favorable legal environment -laws and policies made by the government should be favorable eg. Low taxation, ease of licensing
    • Favorable cultural environment- where customs values and beliefs of the society are for the products
    • Fair competition- this will enable the business to cope with its competitors and remain in operation.
    • Ideal/favorable physical environment-when climate, relief/infrastructure is ideal, it enables the business to operate efficiently