Business Paper 1 Questions and Answers - Form 3 End Term 1 Exams 2022

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INSTRUCTIONS TO CANDIDATES

  • Write your name admission number and class in the spaces provided.
  • Answer all questions in the spaces provided.
  1. State four reasons why land is considered a prime factor of production. (4mrks)
  2. Outline four measures being used by the government to control high rate of unemployment in Kenya. (4mrks)
  3. Highlight four reasons why the owner of a small business enterprise would prefer to a advertise his goods using posters (4mrks)
  4. State four challenges that a business with no plan will encounter in its operations. (4mrks)
  5. The diagram shows equilibrium price and quantity
    1
    Draw a new demand curve on the diagram above showing a decrease in demand and the Effect on: (4mks)
    1. Equilibrium price
    2. Equilibrium quantity
    3. Equilibrium point
  6. Mention four roles played by intermediaries in the chain of distribution (4mks)
  7. Give four factors that may determine the amount of premium payable in life assurance (4mks)
  8. Outline four features of oligopoly (4mks)
  9. Mention four pre requisites of transport (4mks)
  10. State four principles that govern the operation of cooperative societies in Kenya. (4 marks)
  11. Outline four criteria used in determining the size of the firm. (4 mks
  12. Highlight four problems encountered in measuring national income using the output approach method. (4 mks)
  13. Outline four reasons why there is need for ethical practices in business. (4 mks)
  14. Outline four roles played by the stock exchange market as a market for securities. (4 mk)
  15. Give four malpractices against which consumers may need protection. (4 marks)
  16. Outline four circumstances under which gaps in the market may be identified. (4 marks)
  17. State three injections into the circular flow of income. (3 marks)
  18. Outline four reasons why a cheque may be dishonored . (4 marks)
  19. Highlight four measures which a firm may take to improve its human resource productivity. (4 mark)
  20. Outline four circumstances under which verbal communication may be used. (4marks)
  21. State four essentials for a warehouse. (4 marks)
  22. State four types of internal economies of scale to a firm. (4 marks)
  23. Highlight four reasons for making choices between competing wants. (4mks)
  24. State four advantages of using credit cards as a means of payment. {4 marks}
  25. Indicate in the table below the office machine used to perform the following functions. (5 marks)
    Function Machine
    a)Folding documents, placing them in envelopes and sealing the envelopes.
    b)Making short hand dictations and recording information on tapes.
    c)Posting information to ledgers and preparation of pay rolls.
    d)For trimming documents into required shapes and sizes.
    e)Used to destroy unwanted papers
     

MARKING SCHEME

  1. Reasons why land is considered as a prime factor of production
    • It provides space /surface on which production takes place.
    • It is a source of all raw materials.
    • It is a home of human being.
    • It acts as a source of power.
    • It contains natural resources
  2. Measures being used by the government to control high rate of unemployment in Kenya.
    • Providing relevant education system to equip the youth with relevant skills required to be self-employment.
    • Controlling population growth rate to match with the rate of job creation.
    • Adopting /using appropriate technology in order to generate more jobs.
    • Establishing youth development funds as sources of capital to start their own business.
    • Maximum utilization of natural resources eg utilizing all idle land.
    • Increasing the informal/Jua kali sector since it encourages self-employment.
    • Controlling inflation to make labour affordable by many firms / increases demand.
  3. Reasons why the owner of a small business enterprise would prefer to advertise his goods using posters.
    • Posters can be pinned on strategic places to attract the attention of many people.
    • Posters can be distributed over a big geographical region.
    • They are relatively cheap to print.
    • Suitable for both literate and illiterate audiences especially those with pictures.
    • The use of different colours can make them attractive and eye catching.
  4. Challenges that a business without a plan will encounter in its operations.
    • Lack of staff motivation
    • Inability to obtain loan and other credit facilities.
    • Inability to evaluate performance.
    • Lack of basis of evaluation
    • Poor budget estimate.
  5. Price DO SO
    2
  6. Role of intermediaries in the chain of distribution
    • Breaking the bulk
    • Accumulating bulk
    • Product promotion
    • Provide variety of goods
    • Passing information to the consumers/producers
    • Reducing the transactions between producers and consumers
    • Avail financiers
  7. Factors that determine premiums under life assurance
    • Age of the person
    • Type of the policy
    • Income of the person
    • The residence
    • Health of the person
    • Type of occupation
  8. Features of oligopoly
    • There are a few large sellers in the market
    • The firms produce homogenous products
    • There is interdependence among firms
    • There is price rigidity
  9. Pre requisites of transport
    • The way
    • Method of propulsion
    • The terminals
    • Units of carriage
  10. Principles of cooperatives
    • Democratic administration
    • Open and voluntary membership
    • Education, training and information
    • Cooperation with other cooperatives
    • Member economic participation
    • Limited interest on capital
  11. Determining size of a firm
    • Volume of output
    • Floor area covered
    • Size of labour force
    • Level of technology
    • Volume of sales
    • Size of market served
    • Capital invested
    • Profits generated
  12. Problems encountered when using output approach to measure national income
    • Problem of illegal activities
    • Problem of valuing output from subsistence sector
    • Valuing of government output
    • Problem of fluctuating prices
    • Differentiating primary inputs from intermediary inputs
  13. Need for ethical practices in business
    • To ensure rights of workers are protected
    • To avoid unorthodox means to achieve unfair competition against others
    • Ensure client confidentiality is observed
    • There is a good relationship among workers and between workers and management
    • Make sure that the business complies with the law of land
    • Consumers are protected from exploitation
    • Workers are treated equally in terms of training and promotions
    • Make sure professionals relate professionally with their clients
  14. Role played by stock exchange market
    • Source of employment
    • Provides important information to investors for decision making
    • Provide important indicator of how the economy is performing
    • Gives an opportunity for companies to raise capital
    • Fixes the prices for securities
    • Raises revenue for the government
    • Cultivates a culture of savings
    • Safeguards investors interest
  15. Ways in which consumers can be exploited
    • 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.
  16. Identifying market gaps
    • When goods offered in the market are inadequate / not enough.
    • When goods offered are of poor quality.
    • Where goods are not available in the market.
    • When prices charged for goods are high.
    • When the services needed by consumers are lacking e.g. credit facilities, after-sale services etc.
  17. State three injections into the circular flow of income. (3 marks)
    • Government expenditure
    • Investments
    • Exports
  18. Outline four reasons why a cheque may be dishonored . (4 marks)
    • Alterations on the cheque which are not countersigned
    • Specimen signature differing with the signature
    • If the cheque is stale
    • Postdated cheque
    • Insufficient funds in the drawers account
  19. Highlight four measures which a firm may take to improve its human resource productivity. (4 marks)
    • Good remuneration of all workers
    • In service training for workers (refresher course)
    • Motivation of workers through provision of social facilities
    • Effective supervision of management of workers
    • Fair and regular promotion of workers
  20. Outline four circumstances under which verbal communication may be used. (4marks)
    • Circumstances under which verbal communication may be used
    • Where the sender wants to convince, persuade the receives.
    • When the message is urgent and requires quick communication
    • When the message to be communicated is confidential.
    • When immediate feedback is required.
    • When the message is to be delivered accurately.
    • When the distance between the sender and receiver is not big.
  21. State four essentials for a warehouse. (4 marks)
    • Essentials of a warehouse
    • Suitable and adequate premises
    • Proper and adequate handling equipment
    • Convenient location to users
    • Specials facilities to cater for special goods
    • Qualified and competent staff
    • Compliance with legal requirements
    • Clear and proper stock control system.
  22. State four types of internal economies of scale to a firm. (4 marks)
    • Type of economies of scale to a firm.
    • Buying economies / purchasing economies
    • Marketing economics
    • Transportation economies
    • Financial economies
    • Technological economies
    • Managerial economies
    • Research economies
    • Risk bearing economies
    • Welfare economies (1 x 4 =4mks)
  23. Highlight four reasons for making choices between competing wants. (4mks)
    • Some wants are essential for survival thus cannot be postponed.
    • Means of satisfying wants are limited due to scarcity of resources.
    • Wants vary in urgency and intensity.
    • Wants are unlimited in number
    • Wants are habitual.
    • Wants are recurring.
  24. State four advantages of using credit cards as a means of payment. (4 marks)
    • It is portable hence easy to carry in making purchase
    • It enables its holder to obtain credit
    • It can be used to get cash from bank out lets
    • It can be used to make large purchases
    • It is more secure than cash
    • It is fashionable, prestigious way of making payments
  25. Indicate in the table below the office machine used to perform the following functions. (5 marks)
    Function Machine
    a)Folding documents, placing them in envelopes and sealing the envelopes.
    b)Making short hand dictations and recording information on tapes.
    c)Posting information to ledgers and preparation of pay rolls.
    d)For trimming documents into required shapes and sizes.
    e)Used to destroy unwanted papers
    Composite machine
    Dictaphone
    Accounting machine
    Guillotine
    Paper shredder

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