BUSINESS STUDIES Paper 1 Questions and Answers - Form 3 End Term 1 Exams 2023

ANSWER ALL THE QUESTIONS

1. Name the discipline described below that is part of the subject Business Studies (4mks)
2. The diagram below shows a shift of the demand give of a commodity from dodo to d1d1. Outline any four factors that could have led to the shift (4mks)
   
3. Highlight four factors that may make communication in an organization to be ineffective(4mks)
4. Give four circumstances under which a cooperative society may be dissolved (4mks)
5. Outline any four characteristics of an imperfect competition market (4mks)
6. Write down the meaning of the following terms as used in business (4mks)
7. Give four benefits of electronic filing in an office (4mks)
8. Give four reasons why business firms advertise their products (4mks)
9. Mr Kigen is the managing director of Mbau furniture ltd, which has a large, well equipped workshop with expensive machines. The company handles large sums of money. Outline four insurance policies that the company may have.(4mks)
10. Outline four benefits to a firm that uses modern technology in its production activities (4mks)
11. Highlight four benefits to a retailer who uses a public warehouse to store goods (4mks)
12. A business wishes to communicate the arrival of much waited stock of goods to its customers. Give four reasons why it might describe to write a short text message(sms) to the customers instead of a business letter. (4mks)
13. Outline any four advantages of using intermediaries in the chain of distribution (4mks)
14. List down four assumptions of the circular flow of income in a two sector economy (4mks)
15. Give any four challenges faced by human beings in their endevour to satisfy human wants(4mks)
16. Highlight any four benefits that the recently launched standard gauge railway from Mombasa to Kisumu would bring to Kenya’s economy (4mks)
17. Name any four occupations that are found at the extractive level of production (4mks)
18. Outline any four advantages of small-scale retailers over large-scale retailers (4mks)
19. Highlight any four methods used to determine prices of goods and services in the economy(4mks)
20. Outline any four challenges that entrepreneurs face in Kenya (4mks)
21. Highlight four characteristics of free resources (4mks)
22. Give four advantages of self employment (4mks)
23. Outline any four duties of an office receptionist (4mks)
24. Name the types of advertising that are described below (4mks)
    1. Brand name and other features of the brand features more prominently –
    2. Advertising that aims at popularizing a new product –
    3. Advertising that popularizes the business organization–
    4. Used by organization that deals with similar products to convince potential customers to buy their products and not the other
25. Highlight any characteristics of subsistence production in Kenya (4mks)

MARKING SCHEME

1. Name the discipline described below that is part of the subject Business Studies (4mks)
   1. Study of all activities that take place in an office
      • Office practice
   2. Study of trade and aids to trade
      • Commerce
   3. Study of the process of identifying business opportunities andstarting a business
      • entrepreneurship
   4. Study of the systematic ways of recording business transactions
      • Accounting
2. The diagram below shows a shift of the demand give of a commodity from dodo to d1d1. Outline any four factors that could have led to the shift (4mks)
   
   1. Increase in taxes
   2. Decrease in consumer’s level of income
   3. Decrease in population
   4. Changes in consumer tastes and preferences against the product
   5. Future expectation of decrease in price of commodity
   6. Expectation that the quantities supplied will increase in future.
3. Highlight four factors that may make communication in an organization to be ineffective (4mks)
   1. Use of inappropriate language/language barrier
   2. Poor listening
   3. Wrong timing of the message
   4. Misinterpretation of non-verbal signals
   5. Prejudice/prejudgment
   6. Choice of wrong medium of communication
   7. Emotional response
4. Give four circumstances under which a cooperative society may be dissolved (4mks)
   • If there is an order by the commissioner of cooperatives to dissolve
   • members voluntarily dissolve the cooperative
   • Where members withdraw leaving less than ten members
   • If the cooperative society is declared bankrupt.
5. Outline any four characteristics of an imperfect competition market(4mks)
   • There are many buyers and sellers
   • Product are differentiated
   • There is freedom of entry and exit
   • Sellers and buyers have perfect knowledge of the market
6. Write down the meaning of the following terms as used in business(4mks)
   1. Warehousing- process of storing goods until they are required.
   2. Transport – process of moving goods or people from one place to another.
   3. Product promotion –Communication/activities intended to inform, educate persuade or remind customers of a product
   4. Communication – process of passing information from one person to another
7. Give four benefits of electronic filing in an office (4mks)
   • It stores a lot of information
   • Its easer/quicker to retrieve information
   • Save a lot of space
   • Office looks tidy and neat
8. Give four reasons why business firms advertise their products (4mks)
   • To inform customers e.g of changes in prices, availability of products
   • To persuade customers/expand their markets
   • To educate customers eg of uses and usage of products
   • To remind/ retain customers
9. Mr Kigen is the managing director of Mbau furniture ltd. Which has a large, well equipped workshop with expensive machines. The company handles large sums of money. Outline four insurance policies that the company may have (4mks)
   • Fire insurance policy
   • Workmen compensation policy
   • Cash and goods on transit policy
   • Theft and burglary policy
   • Bad debts policy
   • Fidelity guarantee policy
10. Outline four benefits to a firm that uses modern technology in its production activities(4mks)
    • It saves on labour costs
    • Improves quality of goods and services
    • Ensures comfortable working environment
    • Its efficient/saves time/work is done faster
11. Highlight four benefits to a retailer who uses a public warehouse to store goods (4mks)
    • Can rent space if he/she doesn’t have enough
    • Can blend and repack goods before selling
    • Can sell goods while they are still in the warehouse
    • Goods in a public warehouse are insured.
    • Doesn’t have to construct a private warehouse
12. A business wishes to communicate the arrival of much waited stock of goods to its customers. Give four reasons why it might describe to write a short text message(sms) to the customers instead of a business letter (4mks)
    • Its more economical/cheaper
    • Its faster to write and send than a business letter
    • Has an immediate feedback
    • Can be sent to many business at the same time (bulk sms)
13. Outline any four advantages of using intermediaries in the chain of distribution (4mks)
    • They break bulk
    • They provide the much needed capital
    • Some accumulate bulk
    • They take risks on behalf of producer
    • They pass information/engage in product promotion
    • They provide variety of goods to consumer
    • Reduce transaction between producers and customers.
14. List down four assumptions of the circular flow of income in a two sector economy (4mks)
    • There are only two sectors in the economy i.e firms of households
    • Households spend all their incomes in buying goods and services
    • Firms spend all their incomes paying for factors of production
    • There’s no government intervention
    • There is no foreign trade/closed economy
15. Give any four challenges faced by human beings in their endevour to satisfy human wants (4mks)
    • Human wants are unlimited
    • Human wants recur therefore can’t be fully satisfied
    • Resources to satisfy human wants are scarce.
    • Wants are competitive and have to be prioritized.
16. Highlight any four benefits that the recently launched standard gauge railway from Mombasa to Kisumu would bring to Kenya’s economy (4mks)
    • Will ease traffic on roads
    • Will save time on movement of goods
    • Will open up/widen product
    • Will lead to development of areas it passes through
    • Will reduce cost of transported goods.
17. Name any four occupations that are found at the extractive level of production (4mks)
    • Farming
    • Mining
    • Lumbering
    • Fishing
18. Outline any four advantages of small-scale retailers over large-scale retailers (4mks)
    • Small scale retailers require small amount of capital
    • Risks involved are smaller
    • Small scale retailers are more flexible.
    • Small scale business is simpler and easier to operate
    • Small-scale retailers have low overhead costs e.g rent, wages etc.
19. Highlight any four methods used to determine prices of goods and services in the economy (4mks)
    • Bargaining/haggling
    • Government polices e.g price controls and price guidelines
    • Price mechanism/interaction between demand and supply
    • Tendering
    • Auctioning
20. Outline any four challenges that entrepreneurs face in Kenya (4mks)
    • High taxes charged
    • Poor infrastructure e.g roads to transport raw materials and finished goods
    • Long procedure of starting businesses
    • Lacks access to cheap credit
    • Stiff competition
21. Highlight four characteristics of free resources (4mks)
    • They are gifts of nature
    • They are provided and consumed freely
    • hey are plenty in supply/abundant
    • They have no money value
22. Give four advantages of self employment (4mks)
    • A person becomes own boss
    • There is independence
    • There is self satisfaction
    • There’s job security
23. Outline any four duties of an office receptionist (4mks)
    • Supervision of messengers
    • Receiving and directing visitors
    • Keeping visitors record book
    • Taking and passing messages
24. Name the types of advertising that are described below (4mks)
    1. Brand name and other features of the brand features more prominently – product advertising
    2. Advertising that aims at popularizing a new product – informative/primary demand advertising
    3. Advertising that popularizes the business organization – institutional advertising
    4. Used by organization that deals with similar products to convince potential customers to buy their products and not the other – competitive/persuasive advertising
25. Highlight any characteristics of subsistence production in Kenya (4mks)
    • Goods are produced for personal use
    • There is low output/carried out in small-scale
    • Poor methods of production are used
    • There is little or no specialization