BUSINESS STUDIES FORM 3 END TERM EXAMS PLUS ANSWERS

ULTIMATE ACHIEVERS ACADEMY

 Name______________________________________________________Adm No_________

Date______________________________________ Signature_________________

END OF TERM EXAMINATION 

FORM THREE

BUSINESS STUDIES.

TIME: 2HRS

INSTRUCTIONS.

1. a) Write your name, class and admission number in the spaces provided above.
2. b) Answer all the questions.
3. c) Answers must be written in black or blue pen.

For Examiners use only.

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1). Highlight four challenges posed by a rapidly increasing population                                          (4mks)

1. a) ………………………………………………………………………………………………………
2. b) ………………………………………………………………………………………………………

c)……………………………………………………………………………………………………….

d)……………………………………………………………………………………………………….

2). Outline four ways in which consumers may benefit from warehousing                                     (4mks)

1. a) ………………………………………………………………………………………………………
2. b) ………………………………………………………………………………………………………

c)……………………………………………………………………………………………………….

d)……………………………………………………………………………………………………….

3).  Highlight four circumstances under which a cheque may be used as a means of payment (4mks)

1. a) ………………………………………………………………………………………………………
2. b) ………………………………………………………………………………………………………

c)……………………………………………………………………………………………………….

d)……………………………………………………………………………………………………….

4). Outline four characteristic of basic human wants                                                                       (4mks)

1. a) ………………………………………………………………………………………………………
2. b) ………………………………………………………………………………………………………

c)……………………………………………………………………………………………………….

d)……………………………………………………………………………………………………….

5). Highlight four benefits that accrue to a firm that files it’s documents properly                                    (4mks)

1. a) ………………………………………………………………………………………………………
2. b) ………………………………………………………………………………………………………

c)……………………………………………………………………………………………………….

d)……………………………………………………………………………………………………….

6). Outline four methods of government involvement in business.                                                  (4mks)

1. a) ………………………………………………………………………………………………………
2. b) ………………………………………………………………………………………………………

c)……………………………………………………………………………………………………….

d)……………………………………………………………………………………………………….

7). Outline four qualities of a good sales person                                                                               (4mks)

1. a) ………………………………………………………………………………………………………
2. b) ………………………………………………………………………………………………………

c)……………………………………………………………………………………………………….

d)……………………………………………………………………………………………………….

8). The figure below shows a decrease in demand for a certain commodity from D_oD_o to D₁D₁ . State four possible causes that might have led to this situation                                                                    (4mks)

1. a) ………………………………………………………………………………………………………
2. b) ………………………………………………………………………………………………………

c)……………………………………………………………………………………………………….

d)……………………………………………………………………………………………………….

9). The participants in a two-sector economy are households and firms identify the relevant participant in each of the statements given below.

10). Outline four reasons why a firm may remain small                                                                  (4mks)

1. a) ………………………………………………………………………………………………………
2. b) ………………………………………………………………………………………………………

c)……………………………………………………………………………………………………….

d)……………………………………………………………………………………………………….

11). Outline four types of business resources                                                                                   (4mks).

1. a) ………………………………………………………………………………………………………
2. b) ………………………………………………………………………………………………………

c)……………………………………………………………………………………………………….

d)……………………………………………………………………………………………………….

12). Highlight four advantages of using radio calls as a means of communication                         (4mks)

1. a) ………………………………………………………………………………………………………
2. b) ………………………………………………………………………………………………………

c)……………………………………………………………………………………………………….

d)……………………………………………………………………………………………………….

13).   Outline any four circumstances under which a firm may acquire monopoly power              (4mks)

1. a) ………………………………………………………………………………………………………
2. b) ………………………………………………………………………………………………………

c)……………………………………………………………………………………………………….

d)……………………………………………………………………………………………………….

14).Identify the production activity associated with each of the following types of utility            (4mks).

1. a) ………………………………………………………………………………………………………
2. b) ………………………………………………………………………………………………………

c)……………………………………………………………………………………………………….

d)……………………………………………………………………………………………………….

15). Outline four features of a private limited company                                                                  (4mks)

1. a) ………………………………………………………………………………………………………
2. b) ………………………………………………………………………………………………………

c)……………………………………………………………………………………………………….

d)……………………………………………………………………………………………………….

16). Outline four factors that may make a producer to by-pass the wholesaler when distributing goods

(4mks)

1. a) ………………………………………………………………………………………………………
2. b) ………………………………………………………………………………………………………

c)……………………………………………………………………………………………………….

d)……………………………………………………………………………………………………….

17). Unemployment is a major problem that the Kenyan government is working to eradicate. Highlight any four ways that the government may adopt to reduce the level of unemployment               (4mks)

1. a) ………………………………………………………………………………………………………
2. b) ………………………………………………………………………………………………………

c)……………………………………………………………………………………………………….

d)……………………………………………………………………………………………………….

18). List any four sources of business ideas                                                                                      (4mks)

1. a) ………………………………………………………………………………………………………
2. b) ………………………………………………………………………………………………………

c)……………………………………………………………………………………………………….

d)……………………………………………………………………………………………………….

19. Four businesses A, B C and D have their assets, liabilities and capital as shown in the table  below . Find the values of W, X, Y and Z                                                                                                       (4mks)

20). Kiogora started a Kinyozi in January 2018 and in April 2019, he closed down the Kinyozi. Highlight any four factors that may have led to this                                                                                  (4mks)

1. a) ………………………………………………………………………………………………………
2. b) ………………………………………………………………………………………………………

c)……………………………………………………………………………………………………….

d)……………………………………………………………………………………………………….

21).Nyaboke intends to transport her bananas from Kisii to Nairobi. Outline any four factors she should consider when choosing a means of transport to use                                                                  (4mks).

1. a) ………………………………………………………………………………………………………
2. b) ………………………………………………………………………………………………………

c)……………………………………………………………………………………………………….

d)……………………………………………………………………………………………………….

22). Kanyakine enterprises acquired a building valued at shs. 1,000,000 on 1^st January 2007. The building was insured with two insurance companies, Zebra and Simba for shs. 600,000 and shs.400,000respectively.Inmay 2007,the building was damaged by fire causing Kanyakine enterprises to suffer a loss of 20% of the value of the building. Determine the compensation made by simba and zebra to cover the loss.                                                                                                                                       (4mks)

23). Outline four factors that influence the location of a firm                                                         (4mks)

1. a) ………………………………………………………………………………………………………
2. b) ………………………………………………………………………………………………………

c)……………………………………………………………………………………………………….

d)……………………………………………………………………………………………………….

24). Highlight any four factors that may cause the supply curve to shift to the right                      (4mks)

1. a) ………………………………………………………………………………………………………
2. b) ………………………………………………………………………………………………………

c)……………………………………………………………………………………………………….

d)……………………………………………………………………………………………………….

25). List four types of utility                                                                                                             (4mks)

1. a) ………………………………………………………………………………………………………
2. b) ………………………………………………………………………………………………………

c)……………………………………………………………………………………………………….

d)……………………………………………………………………………………………………….

BUSINESS STUDIES

MARKING SCHEME

1. Challenges of rapidly increasing population
2. Low living standards.
3. Low capital formation.
4. Increase in the level of unemployment.
5. Problems of land fragmentation which results in low production.
6. Increase in dependency ratio.
7. Increase in social problems e.g. prostitution.
8. High expenditure on imports.
9. Use of human labour instead of machine labour
10. Ways in which consumers may benefit from warehousing.
11. It helps maintain/improve quality of goods.
12. Ensure constant supply of goods.
13. Preparation of goods for sale.
14. Availability of seasonally produced goods.
15. Stabilizes prices of goods
16. Creates time utility.
17. Availing variety of goods.
18. Providing security to goods
19. Providing safety/avoiding damage to goods.
20. Enables goods to be inspected.

Any 4×1= 4mks)

3. Circumstances under which a cheque is appropriate as a means of payment.
4. Where the amount of money involved is large.
5. Where the policy of the business demands so.
6. Where the cheque is the only means of payment available.
7. Where there is need to avoid risks associated with other means of payment.

Any 4×1 = 4mk

4. Characteristics of Basic human wants.
5. One cannot do without them.
6. They are felt needs.
7. They cannot be postponed.
8. They are satisfied before secondary wants.
9. They are universal. (any 4×1 = 4mks)

5. Benefits of proper filing.
6. Vital documents will be kept for future reference.
7. Easy retrieval and accessibility of documents.
8. Economic use of available space.
9. Documents are kept safe from damage.
10. Limit accessibility of documents to only authorized person.
11. May help the organization to keep some documents for the length of time as specified in law.
12. Keep the documents neat.
13. Documents are secured from loss. (any 4×1 = 4mks)

6. Methods of Government involvement in business.
9. Trade promotion.
10. Provision of public utilities.
11. Provision of a viable working environment. (any 4×1 = 4mks)

7. Qualities of a good sales person.
8. Has adequate product knowledge.
9. Is a good communicator.
10. Is sensitive to customer needs/ability to assess customer’s psychology.
11. High sense of integrity/honesty.
12. Is presentable/neat and well groomed.
13. Is persuasive/convincing.
14. Has a high level of commitment/hardworking.
15. Good listener.
16. Good command of the language.
17. Polite/courteous/relates well with customers.
18. Persistent/patient. (any 4×1 = 4mks)

8. Possible causes that may have led to this situation.
9. Unfavorable seasonal changes.
10. A fall in household income.
11. Expected fall in the price of the product.
12. A fall in the price of substitutes.
13. Negative change in taste/preference/fashion.
14. Unfavorable terms of payment (any 4×1 = 4mks)

9. a) Households.
10. b) Households.
11. c) Firms.
12. d) Firms (any 4×1= 4mks)

10. Reasons why a firm may remain small.
11. When the target market is small.
12. Limited production capacity.
13. Nature of the product.e.g. Personalized services to ensure customer satisfaction e.g barber shop.
14. Owners decision to remain small.
15. Inadequate appropriate technology.
16. It is flexible.
17. For fast decision making.
18. Need for secrecy.
19. Are easier to manage.
20. To have personal touch with the customers, (any 4×1 = 4mks)

11. Types of business resources.
12. Human resources.
13. Physical resources.
14. Financial resources.
15. Technology resources. (any 4×1 = 4mks)

12. Advantages of radio call.
13. Immediate feedback is given.
14. Fast to send urgent messages.
15. Suitable for remote areas.
16. It can be used for short and long distances.
17. It has a personal appeal. (any 4×1 = 4mks)
18. Circumstance under which a firm may acquire monopoly power.
19. If a firm has secretive production technique.
20. When a firm has a control over strategic input/raw materials.
21. If the venture requires large capital.
22. If the firm enjoys substantial economies of scale.
23. If the firm is set up as state monopoly/given exclusive legal rights of production.
24. When firm merge/amalgamate/combines.
25. If the market is best served by one firm more economically.
26. When the firm has a patent right/copy right. (any 4×1 = 4mks)

14 a) Ware housing/storage.

1. b) Transport/distribution.
2. c) Manufacturing/processing/construction.
3. d) Trade/exchange. (any 4×1 = 4mks)

15. Features of a private LTD company.
16. Must have at least one director.
17. Shares are not freely transferable.
18. Public is not allowed to subscribe to their shares.
19. Minimum membership is two.
20. Can start trading on receiving certificate of incorporation.
21. No need to have authorized minimum share capital.
22. Maximum membership is 50. (any 4×1 = 4mks)

16. Factors that may make a producer to by-pass the wholesaler when distributing goods.
17. When producer has his/her retail outlet.
18. When dealing with perishable goods like bread which requires shorter channel.
19. When dealing with technical goods which require elaborate after sale service.
20. Where the consumers and retailers are buying in large quantity.
21. Where there is a need to keep the prices of goods low.
22. If market spread is geographically limited.
23. Where government policy dictates.
24. When producer has enough storage facilities.
25. Where goods are produced according to customers specifications.
26. When the producer is able to promote his/her product.
27. Where the producer has enough capital.
28. Where the producer does not prepare goods for sale. (any 4×1 = 4mks)

17. Ways of reducing level of unemployment in Kenya.
18. Expanding market for goods and services.
19. Exporting, surplus manpower.
20. Encouraging self-employment/entrepreneurship.
21. Imparting right skills through education and training.
22. Creating conducive environment for private sector.
23. Controlling population.
24. Increasing capital expenditure e.g. through infrastructure and irrigation schemes.
25. Delocalization of firms.
26. Diversification of economic activities.
27. Utilization of local resources.
28. Establishment of more labour-intensive industries. (any 4×1 = 4mks)
29. Source of Business ideas.
30. Reading magazines, newspapers and journals.
31. Listening to what people say/complaints.
32. Conducting surveys.
33. Recycling waste products.
34. Spotting a market gap.
35. From vocational training and experience.
36. From hobbies
37. Form shows and exhibitions. (any 4×1 = 4mk

• a) W – 180,000

1. b) X – 1440,000
2. c) Y – 1050,000
3. d) Z – 800,000 (4×1 = 4mks)

20. Causes of business failure.
21. Poor location that makes the business inaccessible.
22. Stiff competition from other business.
23. Inadequate finance to meet the obligations of the business.
24. Lack of commitment to business.
25. Improper management practices.
26. Poor customer relations.
27. Inappropriate pricing
28. Political instability/wars.
29. Poor market/low demand. (any 4×1 = 4mks)

21. Factors to consider when choosing a means of transport.
22. Nature /type of goods to be transported.
23. Cost of the means.
24. Urgency/speed.
25. Reliability of the means.
26. Distance to be covered.
29. Value of the goods/services.
31. Availability of the means.
33. Volume/quantity of goods and services.
34. (any 4×1 = 4mks)

22. Compensation = sum insured x actual loss

Value of the property.

Actual loss = 20/100 x 1000,000√

=200,000√

Contribution by

1. Zebra = 600,000 x 200,000 √= 120,000√

1000,000√

1. Simba = 400,000 √x 200,000 = 80,000√

1000,000√

8 x ½    = 4mks

23. Factors to consider when locating a business organization.
24. Nearness to raw materials.
25. Supply of labour.
26. Nearness to the market.
27. Availability of social amenities.
28. Availability of auxiliary services.
29. Nearness to fuel and power.
30. Nearness to water source.
31. Good transport network
32. Government policy.
33. Availability of security services
34. Availability of room for expansion.
35. Favouralbe climatic conditions. (any 4×1 = 4mks)

24. Factors that may cause the supply curve to shift to the right.
25. Reduced cost of production.
26. Bumper harvest/favorable climatic conditions/in season.
27. Increase in prices of jointly produced goods.
28. Government incentives to producers eg subsidies.
29. Entry of new firm into the market.
30. Improved production methods.
31. Reduced incidences of industrial strikes.
32. Availability of enough factors of production.
33. Future expectations of fall in prices.
34. Reduced prices of competitively produced goods.
35. Future expectation of increase in quantity supplied in the market.
36. Enough time. (any 4×1 = 4mks)

25. Types of utilities
26. Place utility.
27. Time utility
28. Possession utility.
29. Form utility. (any 4×1 = 4mks)