Business Studies Questions and Answers - Form 3 Term 1 Opener Exams 2021 Featured

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  1. Explain the term demand (2mks)
  2. Give 3 functions of co-operative societies.(3mks)
  3. Explain the concept of scarcity, choice and opportunity cost.(3mks)
  4. Give the 2 types of goods which may NOT be affected by the law of demand.(2mks)
  5. Give four factors that may affect the demand of a commodity.(4mks)
  6. The diagram below represents a shift on the supply curve.
    diagram reppresentiing shift on the supply curve
    Give 4 reasons why SS has shifted to S1S1.( 4mks)
  7. Give three other methods that may be used in determining the price other than through the forces of demand and supply.( 4mks)
  8. Give 4 incentives those can be given by the government to encourage development of firms .(4mks)
  9. Briefly 4 explain factors to be considered by a firm before embarking on the production of a particular product. (8mks)
  10. Explain 4 disadvantages of firm delocalization. (8mks)
  11. Explain 4 factors which have contributed to existence of small firms in any economy dominated by big businesses.(8mks)


Marking Scheme

  1. Explain the term demand (2mks)
    • Refers to the quantity of a Commodity that buyers are willing to and able to buy at a given price over a given period of time
  2. Give 3 functions of co-operative societies.(3mks)
    • Offering credit facilities to members
    • Negotiating for better prices for the members products
    • Providing education and better production methods
    • Looking for markets
    • Offer transport/storage facilities
  3. Explain the concept of scarcity, choice and opportunity cost.(3mks)
    • Scarcity is a situation where by resources are scarce in comparison to human needs/wants which are unlimited.
    • Choice- human beings have to make on what to buy with the scarce resources.
    • Opportunity cost- whatever one buys , he foregoes the other. This is the alternative on the values foregone.
  4. Give the 2 types of goods which may NOT be affected by the law of demand.(2mks)
    • Inferior goods
    • Prestigious/ostentatious goods
  5. Give four factors that may affect the demand of a commodity.(4mks)
    • Price of the commodity
    • Level of consumer income
    • Prices of other related goods
    • Changes in fashion, tastes and preferences
    • Government policy
    • Changes in population
    • Seasonal changes
    • Distribution of incomes
  6. The diagram below represents a shift on the supply curve.
    Give 4 reasons why SS has shifted to S1S1.( 4mks)
    • Improved technology on production
    • Favourable weather conditions
    • Favourable changes in government policy
    • A decrease in cost of production
    • Expected fall in price in the future
  7. Give three other methods that may be used in determining the price other than through the forces of demand and supply.( 4mks)
    • Government intervention
    • Haggling/bargaining
    • Auction
    • tendering
  8. Give 4 incentives those can be given by the government to encourage development of firms.(4mks)
    • Offering cheap /free land
    • Reduction of taxes
    • Offering subsidies
    • Offering financial assistance
    • Improving infrastructure ,security e.t.c
  9. Briefly 4 explain factors to be considered by a firm before embarking on the production of a particular product. (8mks)
    • Profitability
    • Level of competition
    • Availability of resources
    • Government policy
    • Cost of production
    • Demand/market for the product
      n.b each point must be fully explained
  10. Explain 4 disadvantages of firm delocalization. (8mks)
    • Spread of pollution
    • Skilled labour may not be easily available
    • Security may be a problem in some areas
    • Service industries may not be available.
      n.b each point must be fully explained
  11. Explain 4 factors which have contributed to existence of small firms in any economy dominated by big businesses.(8mks)
    • Size of market
    • Nature of products
    • Simplicity of the organisation
    • Flexibility of the firms
    • Quick decision making
    • More manageable
    • Retain control
    • Few legal processes
      n.b each point must be fully explained
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