Business Studies Questions and Answers - Form 3 Term 1 Opener Exams 2023

1. Outline four types of business activities. (4mks)
2. Mention four method used to determine the price of goods other than forces of demand and supply. (4mks)
3. Highlight four characteristics of liners. (4mks)
4. Outline four advantages of producer co-operative society. (4mks)
5. The diagram below shows a supply curve.
        
   Highlight four factors that could have led to the above behavior. (4mks)
6. State four characteristics of services. (4mks)
7. Give four reasons why government issues license to business. (4mks)
8. Outline four limitations of using pipeline transports.  (4mks
9. Highlight four factors that influence the location of a firm.  4mks
10. Highlight four factors to consider when selecting a means of communication. (4mks)
11. Give four advantages of bonded warehouse to the government. (4mks)
12. Highlight four characteristics of indirect production. (4mks)
13. Outline four public utilities provided by the county Government. (4mks)
14. State four contents of a business plan. (4mks)
15. Give differences between a Public and Private limited company. (4mks)
16. State the factors of production that each of the following resources relates to.  (3mks)
    Resource                   factor of production
    Manager                             -
    Quarry                                -
    Vehicle                                -
17. Give three reasons for existence of small firms. (3mks)
18. Differentiate between Joint demand and Derived demand. (4mks)

MARKING SCHEME

1. Outline four types of business activities. (4mks)
   • Manufacturing
   • Processing
   • Construction
   • Trader
2. Mention four method used to determine the price of goods other than forces of demand and supply. (4mks)
   • Auctioning
   • Tendering
   • Government intervention
   • Haggling
3. Highlight four characteristics of liners. (4mks)
   • Have fixed routes
   • Follow fixed timetable
   • Charges are fixed
   • Travel at regular intervals
4. Outline four advantages of producer co-operative society. (4mks)
   • Better storage facilities for the products
   • Obtaining better prices for their products
   • Providing loans to members.
   • Education to members on better methods of production.
5. The diagram below shows a supply curve.
   Highlight four factors that could led to the above behaviour. (4mks)
   • Decrease in the cost of production
   • Availability of factors of production
   • Future expectation of a decrease in price.
   • Favourable government policies.
6. State four characteristics of services. (4mks)
   • Are intangible
   • Cannot be stored
   • Quality cannot be standardized
   • Instable from the provider.
7. Give four reasons why government issues license to business. (4mks)
   • To regulate the number of business in a given area.
   • To control the types of goods entering and leaving the country.
   • To ensure those who engage in professional activities meet the requirements of their profession.
   • To control entry of harmful goods in the country
8. Outline four limitations of using pipeline transports.
   • Initial construction is very high
   • Not flexible
   • Accidental leakage may lead to environmental pollution.
   • May lead to unemployment
9. Highlight four factors that influence the location of a firm.
   • Availability of material
   • Level of competition
   • Availability of resources
   • Government policy
10. Highlight four factors to consider when selecting a means of communication. (4mks)
    • Speed
    • Cost
    • Confidentiality
    • Evidence
11. Give four advantages of bonded warehouse to the government. (4mks)
    • Source of government revenue
    • Government is able to control entry of harmful goods in the country.
    • Government is able to control quality of goods entering the country.
    • Verify documents for goods in transit.
12. Highlight four characteristics of indirect production.
    • Quality goods are produced
    • Goods produced are of high quantity
    • Encourages specialization.
    • Encourages invention and innovation.
13. Outline four public utilities provided by the county Government. (3mks)
    • Health
    • transport
    • Water
    • Sewerage
14. State four contents of a business plan. (4mks)
    • Name of the business
    • Product to be sold
    • Personnel to manage the business
    • Amount of finance required
15. Give differences between a Public and Private limited company.
    

    Public limited company	Private company
    -Easy transfer of shares  -Managed by board of directors -Can start operations after receiving certificate of trading.   -Formed by a minimum of 7 shareholders	-Restrct transfer of shares -Managed by one or two directors -Can start operations’ after receiving a certificate of incorporation. -Managed by a minimum of two shareholders holders.

16. State the factors of production that each of the following resources relates to.
    Resources    Factors of production
    -Manager            - Labour
    - Quarry              - lan
    - Vehicle              - capital
17. Give four reasons for existence of small firms. (4mks)
    • Requires less capital to start
    • Limited menace
    • Simplicity in organization
    • Small firms are more flexible
    • Belief that small firms are more manageable
18. Differentiate between Joint demand and Derived demand. (4mks)
    1. Joint demand – demand for commodities that are consumed together. e.g a car and fuel.
    2. Derived demand- demand that give rise to what is actually demanded.